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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 18, 2023
Celcuity
Inc.
(Exact
name of Registrant as Specified in its Charter)
Delaware |
|
001-38207 |
|
82-2863566 |
(State
or Other Jurisdiction
of
Incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
16305
36th Avenue North; Suite 100
Minneapolis,
Minnesota 55446
(Address
of Principal Executive Offices and Zip Code)
(763)
392-0767
(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:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, $0.001 par value per share |
|
CELC |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 | Entry
Into a Material Definitive Agreement. |
Private
Placement
On
October 18, 2023, Celcuity Inc., a Delaware corporation (the “Company”), entered into a securities purchase agreement (the
“Securities Purchase Agreement”) with certain investors (the “Investors”) pursuant to which the Company agreed
to sell to the Investors in a private placement (the “Private Placement”) pre-funded warrants (the “Warrants”)
to purchase up to 5,747,787 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”).
Each Warrant to purchase one share has a purchase price of $8.699 per share, and an exercise price of $0.001 per share for the Common
Stock issuable upon exercise of the Warrant (the “Warrant Shares” and together with the Warrants, the “Securities”)
(for aggregate consideration equating to $8.70 per Warrant Share).
The
closing of the Private Placement occurred on October 20, 2023 (the “Closing Date”) and resulted in gross proceeds to the
Company of approximately $50 million, before deducting offering expenses payable by the Company. The Company expects to use the net proceeds
to advance clinical development of gedatolisib and for general corporate purposes.
Each
Warrant is immediately exercisable and will not expire. Under the terms of the Warrants, the Company may not effect the exercise of any
such Warrant, and a holder will not be entitled to exercise any portion of any Warrant, if, upon giving effect to such exercise, the
aggregate number of shares of Common Stock beneficially owned by the holder (together with its affiliates, other persons acting or who
could be deemed to be acting as a group together with the holder or any of the holder’s affiliates, and any other persons whose
beneficial ownership of Common Stock would or could be aggregated with the holder’s or any of the holder’s affiliates for
purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) would exceed
4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Securities and Exchange Commission
(the “Maximum Percentage”). A holder may reset the Maximum Percentage to a higher percentage (not to exceed 19.99%), effective
61 days after written notice to the Company, or a lower percentage, effective immediately upon written notice to the Company. Any such
increase or decrease will apply only to that holder and not to any other holder of Warrants.
The
Securities Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing,
indemnification obligations of the Company, other obligations of the parties and termination provisions.
Registration
Rights Agreement
On
October 18, 2023, in connection with the Securities Purchase Agreement, the Company entered into a registration rights agreement (the
“Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to register for resale the (i)
Warrant Shares then issued or issuable upon exercise of the Warrants and (ii) any other securities issued or issuable with respect to,
in exchange for or in replacement of, the Warrant Shares issued and sold pursuant to the Securities Purchase Agreement (collectively,
the “Registrable Securities”). Under the Registration Rights Agreement, the Company has agreed to file a registration statement
covering the resale by the Investors of the Registrable Securities no later than 30 days following the Closing Date (the “Filing
Deadline”). The Company has agreed to use commercially reasonable efforts to cause such registration statement to become effective
and to keep such registration statement effective until such time as there are no longer Registrable Securities held by the Investors.
The Company has agreed to be responsible for all fees and expenses incurred in connection with the registration of the Registrable Securities.
In
the event that a registration statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline,
or if (A) a registration statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i)
five business days after the SEC informs the Company that no review of such registration statement will be made or that the SEC has no
further comments on such registration statement and (ii) the 60th day after the Closing Date (or the 90th day if the SEC reviews such
registration statement), or (B) after a registration statement has been declared effective by the SEC, sales cannot be made pursuant
to such registration statement for any reason (including without limitation by reason of a stop order, or the Company’s failure
to update such registration statement), but excluding any Allowed Delay (as defined in the Registration Rights Agreement) or, if the
registration statement is on Form S-1, for a period of 20 days following the date on which the Company files a post-effective amendment
to incorporate the Company’s Annual Report on Form 10-K, then the Company has agreed to make pro rata payments to each holder as
liquidated damages in an amount equal to 1.0% of the aggregate amount paid pursuant to the Securities Purchase Agreement by such Investor
for each 30-day period or pro rata for any portion thereof for each such month during which such event continues, provided that the maximum
aggregate amounts payable as liquidated damages shall not exceed 6.0% of the aggregate amount invested by each such holder in the Registrable
Securities then held by the holder.
The
Company has granted the Investors customary indemnification rights in connection with the registration statement, including for liabilities
arising under the Securities Act of 1933, as amended (the “Securities Act”). The Investors have also granted the Company
customary indemnification rights in connection with the registration statement.
The
representations, warranties and covenants contained in the Warrants, the Securities Purchase Agreement and the Registration Rights Agreement
were made solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties. The
foregoing summaries do not purport to be complete and are qualified in their entirety by reference to the full text of the form of Warrant,
the Securities Purchase Agreement, and the Registration Rights Agreement, which are filed as Exhibits 4.1, 10.1, and 10.2 hereto, respectively,
and incorporated herein by reference.
Item
3.02 | Unregistered
Sales of Equity Securities. |
The
information contained above in Item 1.01 related to the Private Placement is hereby incorporated by reference into this Item 3.02.
Based
in part upon the representations of the Investors in the Securities Purchase Agreement, the offering and sale of the Securities is exempt
from registration under Section 4(a)(2) of the Securities Act, Rule 506 of Regulation D promulgated under the Securities Act, and corresponding
provisions of state securities or “blue sky” laws. The sale of the Securities by the Company in the Private Placement was
not registered under the Securities Act or any state securities laws and the Securities may not be offered or sold in the United States
absent registration with the SEC or an applicable exemption from the registration requirements. The sale of the Securities did not involve
a public offering and was made without general solicitation or general advertising. In the Securities Purchase Agreement, each Investor
represented that it is an accredited investor, as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and was
acquiring the Securities for investment purposes only and not with a view to any resale, distribution or other disposition of the Securities
in violation of the United States federal securities laws.
On
October 18, 2023, the Company issued a press release announcing the Private Placement. The full text of the press release is attached
as Exhibit 99.1 to this Current Report on Form 8-K.
This
Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the Securities discussed herein,
nor shall there be any offer, solicitation, or sale of such Securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any such state.
Item 9.01 |
Financial Statements and Exhibits. |
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 hereunto duly authorized.
Date:
October 23, 2023
|
CELCUITY
INC. |
|
|
|
By: |
/s/
Brian F. Sullivan |
|
|
Brian
F. Sullivan |
|
|
Chief
Executive Officer |
Exhibit 4.1
FORM
OF PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK
Number
of Shares: [ ]1
(subject
to adjustment)
Warrant No. |
Original Issue Date: October 20, 2023 |
Celcuity
Inc.
Celcuity
Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [Baker Bros Advisors, LP] or its registered assigns (the “Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company up to a total of [ ] shares of common stock, $0.001 par
value per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all
such shares, the “Warrant Shares”) at an exercise price equal to $0.001 per share (as adjusted from time to time as
provided in Section 9 herein, the “Exercise Price”), upon surrender of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”)
at any time and from time to time on or after the date hereof (the “Original Issue Date”), subject to the following
terms and conditions:
1.
Definitions. For purposes of this Warrant, the following terms shall have the following meanings:
(a)
“Affiliate” means any Person directly or indirectly controlled by, controlling or under common control with, a Holder,
but only for so long as such control shall continue. For purposes of this definition, “control” (including, with correlative
meanings, “controlled by”, “controlling” and “under common control with”) means, with respect to
a Person, possession, direct or indirect, of (a) the power to direct or cause direction of the management and policies of such Person
(whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), or (b) at least 50%
of the voting securities (whether directly or pursuant to any option, warrant or other similar arrangement) or other comparable equity
interests.
(b)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any direct or indirect Affiliates
of the Holder, (ii) any Person acting or who could be deemed to be acting as a Section 13(d) “group” together with the Holder
or any Attribution Parties and (iii) any other Persons whose beneficial ownership of the Company’s Common Stock would or could
be aggregated with the Holder’s and/or any other Attribution Parties for purposes of Section 13(d) or Section 16 of the Exchange
Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum
Percentage.
(c)
“Commission” means the United States Securities and Exchange Commission.
(d)
“Closing Sale Price” means, for any security as of any date, the last trade price for such security on the Principal
Trading Market for such security, as reported by Bloomberg Financial Markets, or, if such Principal Trading Market begins to operate
on an extended hours basis and does not designate the last trade price, then the last trade price of such security prior to 4:00 P.M.,
New York City time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last trade price of such security
in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets. If the
Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of
such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the
Holder are unable to agree upon the fair market value of such security, then the Board of Directors of the Company shall use its good
faith judgment to determine the fair market value. The Board of Directors’ determination shall be binding upon all parties absent
demonstrable error. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period.
(e)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
1
NTD: See entity names and allocations in SPA.
(f)
“Group” shall have the meaning ascribed to it in Section 13(d) of the Exchange Act, and all related rules, regulations
and jurisprudence.
(f)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity and a government or any department or agency thereof.
(g)
“Principal Trading Market” means the national securities exchange or other trading market on which the Common Stock
is primarily listed on and quoted for trading, which, as of the Original Issue Date, shall be the Nasdaq Capital Market.
(h)
“Purchase Agreement” means that certain Securities Purchase Agreement dated as of October 18, 2023, by and among the
Company and each of the investors party thereto.
(i)
“Securities Act” means the Securities Act of 1933, as amended.
(j)
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, for the
Principal Trading Market with respect to the Common Stock that is in effect on the date of delivery of an applicable Exercise Notice,
which as of the Issuance Date was “T+2.”
(k)
“Trading Day” means any weekday on which the Principal Trading Market is normally open for trading.
(l)
“Transfer Agent” means Continental Stock Transfer & Trust, the Company’s transfer agent and registrar for
the Common Stock, and any successor appointed in such capacity.
2.
Issuance of Securities; Registration of Warrants. The Company shall register ownership of this Warrant, upon records to be maintained
by the Company for that purpose (the “Warrant Register”), in the name of the record Holder (which shall include the
initial Holder or, as the case may be, any assignee to which this Warrant is permissibly assigned hereunder) from time to time. The Company
may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary. This Warrant and the Warrant Shares shall not be sold
or transferred unless either (i) they first shall have been registered under the Securities Act, (ii) such securities may be sold pursuant
to Rule 144, (iii) the Company first shall have been furnished with an opinion of legal counsel, reasonably satisfactory to the Company,
if reasonably requested by the Company, to the effect that such sale or transfer is exempt from the registration requirements of the
Securities Act or (iv) the securities are transferred without consideration to an Affiliate of such Holder or a custodial nominee (which
for the avoidance of doubt shall require neither consent nor the delivery of an opinion). The Holder acknowledges and agrees that the
Warrant Shares shall be subject to the restrictive legend requirements set forth in the Purchase Agreement.
3.
Registration of Transfers. Subject to compliance with all applicable securities laws, the Company shall, or will cause its Transfer
Agent to, register the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, and payment
for all applicable transfer taxes (if any). Upon any such registration or transfer, a new warrant to purchase Common Stock in substantially
the form of this Warrant (any such new warrant, a “New Warrant”) evidencing the portion of this Warrant so transferred
shall be issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall
be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant. The Company
shall, or will cause its Transfer Agent to, prepare, issue and deliver at the Company’s own expense any New Warrant under this
Section 3. Until due presentment for registration of transfer, the Company may treat the registered Holder hereof as the owner
and holder for all purposes, and the Company shall not be affected by any notice to the contrary.
4.
Exercise of Warrants.
(a)
All or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by this Warrant (including Section
11) at any time and from time to time on or after the Original Issue Date, and such rights shall not expire.
(b)
The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as Schedule 1 hereto
(the “Exercise Notice”), completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant
Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the
Exercise Notice pursuant to Section 10 below), and the date on which the last of such items is delivered to the Company (as determined
in accordance with the notice provisions hereof) is an “Exercise Date.” The Holder shall not be required to deliver
the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect
as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant
Shares, if any.
5.
Delivery of Warrant Shares.
(a)
Upon exercise of this Warrant, the Company shall promptly (but in no event later than the number of Trading Days comprising the Standard
Settlement Period following the Exercise Date), upon the request of the Holder, credit such aggregate number of shares of Common Stock
specified by the Holder in the Exercise Notice and to which the Holder is entitled pursuant to such exercise (the “Exercise
Shares”) to the Holder’s or its designee’s balance account with The Depository Trust Company (“DTC”)
through its Deposit Withdrawal At Custodian system, or if the Transfer Agent is then a participant in the DTC Fast Automated Securities
Transfer Program (the “FAST Program”) and either (A) there is an effective registration statement permitting the issuance
of the Warrant Shares to or the resale of such Warrant Shares by the Holder or (B) the Exercise Shares are eligible for resale by the
Holder without volume or manner-of-sale restrictions pursuant to Rule 144 promulgated under the Securities Act (assuming cashless exercise
of this Warrant). If the Transfer Agent is not a member of the FAST Program or if (A) and (B) above are not true, the Transfer Agent
will either (i) record the Exercise Shares in the name of the Holder or its designee on the certificates reflecting the Exercise Shares
with an appropriate legend regarding restriction on transferability, which shall be issued and dispatched by overnight courier to the
address as specified in the Exercise Notice, and on the Company’s share register or (ii) issue such Exercise Shares in the name
of the Holder or its designee in restricted book-entry form in the Company’s share register. The Holder, or any natural person
or legal entity (each, a “Person”) so designated by the Holder to receive Warrant Shares, shall be deemed to have
become the holder of record of such Warrant Shares as of the Exercise Date, irrespective of the date such Warrant Shares are credited
to the Holder’s DTC account, the date of the book entry positions or the date of delivery of the certificates evidencing such Exercise
Shares, as the case may be.
(b)
If the Company fails to deliver to the Holder or its designee Exercise Shares in the manner required pursuant to Section 5(a)
within the Standard Settlement Period following the Exercise Date and the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”) but did not receive within the Standard Settlement Period, then the Company shall,
within two (2) Trading Days after the Holder’s request and in the Holder’s sole discretion, either (1) pay in cash to the
Holder an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased, at which point the Company’s obligation to issue and deliver such Exercise Shares shall terminate or (2) promptly
honor its obligation to deliver to the Holder or its designee the Exercise Shares pursuant to Section 5(a) and pay cash to the
Holder in an amount equal to the excess (if any) of Holder’s total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased in the Buy-In, less the product of (A) the number of shares of Common Stock purchased in the
Buy-In, times (B) the Closing Sale Price of a share of Common Stock on the Exercise Date.
(c)
To the extent permitted by law and subject to Section 5(b), the Company’s obligations to issue and deliver Warrant Shares
in accordance with and subject to the terms hereof (including the limitations set forth in Section 11 below) are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision
hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Subject to Section 5(b), nothing herein
shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common
Stock upon exercise of the Warrant as required pursuant to the terms hereof.
6.
Charges, Taxes and Expenses. Issuance and delivery for shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, transfer agent fee or other incidental tax or expense (excluding any applicable stamp
duties) in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided,
however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the
registration of any Warrant Shares or the Warrants in a name other than that of the Holder or an Affiliate thereof. The Holder shall
be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares
upon exercise hereof.
7.
Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued
in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and, in each case,
a customary and reasonable contractual indemnity, if requested by the Company. If a New Warrant is requested as a result of a mutilation
of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s
obligation to issue the New Warrant.
8.
Reservation of Warrant Shares. The Company covenants that it will, at all times while this Warrant is outstanding, reserve and
keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling
it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are initially issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons
other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant
Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and non-assessable. The Company will take all such action as may be reasonably
necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed. The Company
further covenants that it will not, without the prior written consent of the Holder, take any actions to increase the par value of the
Common Stock at any time while this Warrant is outstanding.
9.
Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 9.
(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock issued and outstanding on the Original Issue Date and in accordance
with the terms of such stock on the Original Issue Date or as amended, that is payable in shares of Common Stock, (ii) subdivides its
outstanding shares of Common Stock into a larger number of shares of Common Stock, (iii) combines its outstanding shares of Common Stock
into a smaller number of shares of Common Stock or (iv) issues by reclassification of shares of capital stock any additional shares of
Common Stock of the Company, then in each such case the Exercise Price shall be multiplied by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately before such event and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution,
provided, however, that if such record date shall have been fixed and such dividend is not fully paid on the date fixed therefor, the
Exercise Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Exercise Price shall
be adjusted pursuant to this paragraph as of the time of actual payment of such dividends. Any adjustment pursuant to clause (ii), (iii)
or (iv) of this paragraph shall become effective immediately after the effective date of such subdivision, combination or issuance.
(b)
Pro Rata Distributions. If, on or after the Original Issue Date, the Company shall declare or make any dividend or other pro rata
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any
other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction,
but, for the avoidance of doubt, excluding any distribution of shares of Common Stock subject to Section 9(a), any distribution
of Purchase Rights (as defined below) subject to Section 9(c) and any Fundamental Transaction (as defined below) subject to Section
9(d)) (a “Distribution”) then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage (as defined below)) immediately before the date on which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, that to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Distribution to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of
such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding
the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made
on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no
such limitation).
(c)
Purchase Rights. If at any time on or after the Original Issue Date, the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property, in each case pro rata to the record holders of any class
of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this
Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are
to be determined for the grant, issuance or sale of such Purchase Rights (provided, that to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership
of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent
shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder
and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and
any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in
abeyance) to the same extent as if there had been no such limitation). As used in this Section 9(c), (i) “Options” means
any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities and (ii) “Convertible
Securities” mean any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable
for shares of Common Stock.
(d)
Fundamental Transactions. If, at any time while this Warrant is outstanding (i) the Company effects any merger or consolidation
of the Company with or into another Person, in which the Company is not the surviving entity or in which the stockholders of the Company
immediately prior to such merger or consolidation do not own, directly or indirectly, at least 50% of the voting power of the surviving
entity immediately after such merger or consolidation, (ii) the Company effects any sale to another Person of all or substantially all
of its assets in one or a series of related transactions, (iii) pursuant to any tender offer or exchange offer (whether by the Company
or another Person), holders of capital stock tender shares representing more than 50% of the voting power of the capital stock of the
Company and the Company or such other Person, as applicable, accepts such tender for payment, (iv) the Company consummates a stock purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with another Person whereby such other Person acquires more than the 50% of the voting power of the capital stock of the Company (except
for any such transaction in which the stockholders of the Company immediately prior to such transaction maintain, in substantially the
same proportions, the voting power of such Person immediately after the transaction) or (v) the Company effects any reclassification
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section
9(a) above) (in any such case, a “Fundamental Transaction”), then following such Fundamental Transaction the Holder
shall have the right to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would
have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant without regard to any limitations
on exercise contained herein (the “Alternate Consideration”). The Company shall not effect any Fundamental Transaction
in which the Company is not the surviving entity or the Alternate Consideration includes securities of another Person unless (i) the
Alternate Consideration is solely cash and the Company provides for the simultaneous “cashless exercise” of this Warrant
pursuant to Section 10 below or (ii) prior to or simultaneously with the consummation thereof, any successor to the Company, surviving
entity or other Person (including any purchaser of assets of the Company) shall assume the obligation to deliver to the Holder such Alternate
Consideration as, in accordance with the foregoing provisions, the Holder may be entitled to receive, and the other obligations under
this Warrant. The provisions of this paragraph (c) shall similarly apply to subsequent transactions analogous of a Fundamental Transaction
type.
(d)
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 9, the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall be the same as
the aggregate Exercise Price in effect immediately prior to such adjustment.
(e)
Calculations. All calculations under this Section 9 shall be made to the nearest one-tenth of one cent or the nearest share,
as applicable.
(f)
Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will,
at the written request of the Holder, promptly compute such adjustment, in good faith, in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type
of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise
to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly
deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.
(g)
Notice of Corporate Events. If, while this Warrant is outstanding, the Company (i) declares a dividend or any other distribution
of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or warrants
to subscribe for or purchase any capital stock of the Company or any subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation
or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice of such transaction at least ten (10)
days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or
vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect
the validity of the corporate action required to be described in such notice. In addition, if while this Warrant is outstanding, the
Company authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction
contemplated by Section 9(c), other than a Fundamental Transaction under clause (iii) of Section 9(c), the Company shall
deliver to the Holder a notice of such Fundamental Transaction at least thirty (30) days prior to the date such Fundamental Transaction
is consummated. Holder agrees to maintain any information disclosed pursuant to this Section 9(g) in confidence until such information
is publicly available, and shall comply with applicable law with respect to trading in the Company’s securities following receipt
of any such information.
10.
Payment of Exercise Price. Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion,
satisfy its obligation to pay the Exercise Price through a “cashless exercise”, in which event the Company shall issue to
the Holder the number of Warrant Shares in an exchange of securities effected pursuant to Section 3(a)(9) of the Securities Act, as determined
as follows:
X
= Y [(A-B)/A]
where:
“X”
equals the number of Warrant Shares to be issued to the Holder;
“Y”
equals the total number of Warrant Shares with respect to which this Warrant is then being exercised;
“A”
equals the Closing Sale Price of the shares of Common Stock (as reported by Bloomberg Financial Markets) as of the Trading Day on the
date immediately preceding the Exercise Date; and
“B”
equals the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
For
purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued
in a “cashless exercise” transaction shall be deemed to have been acquired by the Holder, and the holding period for the
Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued (provided that the Commission continues
to take the position that such treatment is proper at the time of such exercise). In the event that a registration statement registering
the issuance of Warrant Shares is, for any reason, not effective at the time of exercise of this Warrant, then the Warrant may only be
exercised through a cashless exercise, as set forth in this Section 10. If the Warrant Shares are issued in such a cashless exercise,
the Company acknowledges and agrees that, in accordance with Section 3(a)(9) of the Securities Act, the Exercise Shares issued in such
exercise shall take on the registered characteristics of the Warrants being exercised and may be tacked on to the holding period of the
Warrants being exercised. Except as set forth in Section 5(b) (Buy-In remedy) and Section 12 (payment of cash in lieu of fractional shares),
in no event will the exercise of this Warrant be settled in cash.
11.
Limitations on Exercise.
(a)
Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant,
and the Holder of the Warrant shall not have the right to exercise any portion of the Warrant, and any such exercise shall be null and
void ab initio and treated as if the exercise had not been made, to the extent that immediately prior to or following such exercise,
the Holder, together with the Attribution Parties, beneficially owns or would beneficially own as determined in accordance with Section
13(d) of the Exchange Act and the rules promulgated thereunder, in excess of 4.99% (the “Maximum Percentage”)
of the Common Stock that would be issued and outstanding following such exercise. For purposes of calculating beneficial ownership for
determining whether the Maximum Percentage is or will be exceeded, the aggregate number of shares of Common Stock held and/or beneficially
owned by the Holder together with the Attribution Parties, shall include the number of shares of Common Stock held and/or beneficially
owned by the Holder together with the Attribution Parties plus the number of shares of Common Stock issuable upon exercise of the relevant
Warrant with respect to which the determination is being made but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, unexercised Warrant held and/or beneficially owned by the Holder or the Attribution Parties and (ii)
exercise or conversion of the unexercised or unconverted portion of any other securities of the Company held and/or beneficially owned
by such Holder or any Attribution Party (including, without limitation, any convertible notes, convertible stock or warrants) that are
subject to a limitation on conversion or exercise analogous to the limitation contained herein. For purposes of this Paragraph 11(a),
beneficial ownership of the Holder or the Attribution Parties shall, except as set forth in the immediately preceding sentence, be calculated
and determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder. For purposes of the Warrant,
in determining the number of outstanding shares of Common Stock, a Holder of the Warrant may rely on the number of outstanding shares
of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public
filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any
other notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding (such
issued and outstanding shares, the “Reported Outstanding Share Number”). For any reason at any time, upon the written
or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the
Holder the number of shares of Common Stock then outstanding. The Holder shall disclose to the Company the number of shares of Common
Stock that it, together with the Attribution Parties holds and/or beneficially owns and has the right to acquire through the exercise
of derivative securities and any limitations on exercise or conversion analogous to the limitation contained herein contemporaneously
or immediately prior to submitting an Exercise Notice for the relevant Warrant. If the Company receives an Exercise Notice from the Holder
at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company
shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise
Notice would otherwise cause the Holder’s, together with the Attribution Parties’, beneficial ownership, as determined pursuant
to this Section 11(a), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to
be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”)
and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction
Shares. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise
of securities of the Company, including this Warrant, by the Holder and the Attribution Parties since the date as of which the Reported
Outstanding Share Number was reported. In the event that the issuance of Common Stock to the Holder upon exercise of this Warrant results
in the Holder, together with the Attribution Parties, being deemed to beneficially own, in the aggregate, more than the Maximum Percentage
of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so
issued by which the Holder’s, together with the Attribution Parties’, aggregate beneficial ownership exceeds the Maximum
Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder and/or the
Attribution Parties shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance
of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for
the Excess Shares. By written notice to the Company, a Holder of the Warrant may from time to time increase or decrease the Maximum Percentage
to any other percentage not in excess of 19.99% specified in such notice; provided that any increase in the Maximum Percentage will not
be effective until the sixty-first (61st) day after such notice is delivered to the Company and shall not negatively affect any partial
exercise effected prior to such change.
(b)
This Section 11 shall not restrict the number of shares of Common Stock which a Holder or the Attribution Parties may receive
or beneficially own in order to determine the amount of securities or other consideration that such Holder or the Attribution Parties
may receive in the event of a Fundamental Transaction as contemplated in Section 9(c) of this Warrant. For purposes of clarity,
the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to
be beneficially owned by the Holder or the Attribution Parties for any purpose including for purposes of Section 13(d) of the Exchange
Act and the rules promulgated thereunder or Section 16 of the Exchange Act and the rules promulgated thereunder, including Rule 16a-1(a)(1).
No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of
this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this Section 11(a) to the extent necessary to correct
this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation
contained in this Section 11(a) or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
12.
No Fractional Shares. No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of
any fractional shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the next whole
number and the Company shall pay the Holder in cash the fair market value (based on the Closing Sale Price) for any such fractional shares.
13.
Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice)
shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered confirmed e-mail at the e-mail address specified in the books and records of the Transfer Agent prior to 5:30 P.M., New
York City time, on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered
via confirmed e-mail at the e-mail address specified in the books and records of the Transfer Agent on a day that is not a Trading Day
or later than 5:30 P.M., New York City time, on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally
recognized overnight courier service specifying next business day delivery, or (iv) upon actual receipt by the Person to whom such notice
is required to be given, if by hand delivery.
14.
Warrant Agent. The Company shall initially serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the
Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or
any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to
which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice
of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address
as shown on the Warrant Register.
15.
Miscellaneous.
(a)
No Rights as a Stockholder. Except as otherwise set forth in this Warrant, the Holder, solely in such Person’s capacity
as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, amalgamation, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder
of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant
or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
(b)
Authorized Shares. (i) Except and to the extent as waived or consented to by the Holder, the Company shall not by any action,
including, without limitation, amending its certificate or articles of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant
against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action
as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Warrant Shares
upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under
this Warrant.
(ii)
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.
(c)
Successors and Assigns. Subject to compliance with applicable securities laws, this Warrant may be assigned by the Holder. This
Warrant may not be assigned by the Company without the written consent of the Holder, except to a successor in the event of a Fundamental
Transaction. This Warrant shall be binding on and inure to the benefit of the Company and the Holder and their respective successors
and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company
and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder, or their successors and assigns.
(d)
Amendment and Waiver. Except as otherwise provided herein, the provisions of the Warrants may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the
written consent of the Holder.
(e)
Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions
contained herein.
(f)
Governing Law; Jurisdiction. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW THEREOF. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL
OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PERSON AT THE ADDRESS IN EFFECT FOR NOTICES TO IT AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY
WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL
BY JURY.
(g)
Headings. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit
or affect any of the provisions hereof.
(h)
Severability. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the
validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby,
and the Company and the Holder will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.
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CELCUITY
INC. |
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SCHEDULE
1
FORM
OF EXERCISE NOTICE
[To
be executed by the Holder to purchase shares of Common Stock under the Warrant]
Ladies
and Gentlemen:
(1)
The undersigned is the Holder of Warrant No. __ (the “Warrant”) issued by Celcuity Inc., a Delaware corporation (the “Company”).
Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Warrant.
(2)
The undersigned hereby exercises its right to purchase Warrant Shares pursuant to the Warrant.
(3)
The Holder intends that payment of the Exercise Price shall be made as (check one):
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“Cashless
Exercise” under Section 10 of the Warrant |
(4)
If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $____ in immediately available funds to the Company in accordance
with the terms of the Warrant.
(5)
Pursuant to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares determined in accordance with the terms of the
Warrant.
(6)
By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise
evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (as determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under Section 11(a) of the Warrant to which
this notice relates.
Dated: |
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Name
of Holder: |
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By: |
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Name: |
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Title: |
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(Signature
must conform in all respects to name of Holder as specified on the face of the Warrant)
Exhibit
10.1
SECURITIES
PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of October 18, 2023, by and among Celcuity
Inc., a Delaware corporation (the “Company”), and the Investors identified on Exhibit A attached hereto (each
an “Investor” and collectively the “Investors”).
Recitals
A.
The Company and the Investors are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the provisions of Section 4(a)(2) of the 1933 Act (as defined below), and Rule 506 of Regulation D (“Regulation
D”) as promulgated by the SEC (as defined below) under the 1933 Act;
B.
The Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, upon the terms and subject
to the conditions stated in this Agreement, pre-funded warrants to purchase shares of the Company’s Common Stock, par value $0.001
per share, in the form attached hereto as Exhibit B (each, a “Pre-Funded Warrant” and collectively, the “Pre-Funded
Warrants”); and
C.
Contemporaneously with the sale of the Pre-Funded Warrants, the parties hereto will execute and deliver a Registration Rights Agreement,
in the form attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant to which the Company
will agree to provide certain registration rights in respect of the Warrant Shares (as defined below) under the 1933 Act and applicable
state securities laws.
In
consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1.
Definitions. For the purposes of this Agreement, the following terms shall have the meanings set forth below:
“Affiliate”
means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled
by, or is under common Control with such Person.
“Agreement”
has the meaning set forth in the first paragraph.
“Business
Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of
business.
“Bylaws”
means the Bylaws of the Company, as in effect of the date hereof.
“Certificate
of Incorporation” means the Certificate of Incorporation of the Company and Certificate of Designation of the Company, as amended,
as in effect on the date hereof.
“Closing”
has the meaning set forth in Section 3.1.
“Closing
Date” has the meaning set forth in Section 3.1.
“Common
Stock” has the meaning set forth in the recitals to this Agreement.
“Common
Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible
into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company”
has the meaning set forth in the first paragraph.
“Company
Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under the
1933 Act, any Person listed in the first paragraph of Rule 506(d)(1).
“Company’s
Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company.
“Control”
(including the terms “controlling,” “controlled by” or “under common control with”) means the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership
of voting securities, by contract or otherwise.
“Disqualification
Event” has the meaning set forth in Section 4.33.
“DTC”
has the meaning set forth in Section 7.1(b).
“EDGAR
system” has the meaning set forth in Section 4.9.
“Effective
Date” has the meaning set forth in Section 7.1(b).
“Environmental
Laws” has the meaning set forth in Section 4.15.
“GAAP”
has the meaning set forth in Section 4.17.
“Intellectual
Property” has the meaning set forth in Section 4.14.
“Investor”
has the meaning set forth in the first paragraph.
“Material
Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations, financial condition
or business of the Company taken as a whole, (ii) the legality or enforceability of any of the Transaction Documents or (iii) the ability
of the Company to perform its obligations under the Transaction Documents, except that for purposes of Section 6.1(i) of this Agreement,
in no event shall a change in the market price of the Common Stock alone constitute a “Material Adverse Effect.”
“Material
Contract” means any contract, instrument or other agreement to which the Company is a party or by which it is bound that has
been filed or was required to have been filed as an exhibit to the SEC Filings pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation
S-K.
“Nasdaq”
means the Nasdaq Capital Market.
“Person”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint
venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed
herein.
“Placement
Securities” means the Pre-Funded Warrants.
“Pre-Funded
Warrants” has the meaning set forth in the recitals to this Agreement.
“Press
Release” has the meaning set forth in Section 9.7.
“Principal
Trading Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as
of the date of this Agreement and the Closing Date, shall be the Nasdaq Capital Market.
“Registration
Rights Agreement” has the meaning set forth in the recitals to this Agreement.
“Regulation
D” has the meaning set forth in the recitals to this Agreement.
“Regulatory
Authorities” has the meaning set forth in Section 4.30.
“Required
Investors” has the meaning set forth in the Registration Rights Agreement.
“SEC”
means the U.S. Securities and Exchange Commission.
“SEC
Filings” has the meaning set forth in Section 4.8.
“Securities”
means the Placement Securities and the Warrant Shares.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the 1934 Act (but shall not be deemed
to include the location and/or reservation of borrowable shares of Common Stock).
“Trading
Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market or (ii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported
in the “pink sheets” by OTC Markets Group Inc. (or any similar organization or agency succeeding to its functions of reporting
prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i) or (ii) hereof, then Trading Day
shall mean a Business Day.
“Trading
Market” means whichever of the New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global
Market or the Nasdaq Capital Market on which the Common Stock is listed or quoted for trading on the date in question.
“Transfer
Agent” has the meaning set forth in Section 7.1(a).
“Transaction
Documents” means this Agreement, the Pre-Funded Warrants and the Registration Rights Agreement.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants.
“1933
Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
“1934
Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated
thereunder.
2.
Purchase and Sale of the Placement Securities. On the Closing Date, upon the terms and subject to the conditions set forth herein,
the Company will issue and sell, and the Investors will purchase, severally and not jointly, a Pre-Funded Warrant to purchase the number
of Warrant Shares set forth opposite the name of such Investor under the heading “Number of Warrant Shares Underlying Pre-Funded
Warrant Purchased” on Exhibit A attached hereto. The purchase price per Pre-Funded Warrant shall be $8.699. The Pre-Funded
Warrants shall have an exercise price equal to $0.001 per Warrant Share.
3.
Closing.
3.1.
Upon the satisfaction of the conditions set forth in Section 6, the completion of the purchase and sale of the Placement Securities
(the “Closing”) shall occur remotely via exchange of documents and signatures at a time (the “Closing Date”)
to be agreed to by the Company and the Investors but (i) in no event earlier than the second Business Day after the date hereof and (ii)
in no event later than the third Trading Day after the date hereof.
3.2.
On or before the Closing Date, each Investor shall deliver or cause to be delivered to the Company, via wire transfer of immediately
available funds pursuant to the wire instructions delivered to such Investor by the Company on or prior to the Closing Date, an amount
equal to the purchase price to be paid by the Investor for the Placement Securities to be acquired by it as set forth opposite the name
of such Investor under the heading “Aggregate Purchase Price of Placement Securities” on Exhibit A attached hereto.
3.3.
At the Closing, the Company shall deliver or cause to be delivered to each Investor a Pre-Funded Warrant, registered in the name of the
Investor (or its nominee in accordance with its delivery instructions), to purchase up to the number of Warrant Shares set forth opposite
the name of such Investor under the heading “Number of Warrant Shares Underlying Pre-Funded Warrant Purchased” on Exhibit
A attached hereto.
4.
Representations and Warranties of the Company. The Company hereby represents and warrants to the Investors that, except as described
in the Company’s SEC Filings (excluding (i) any exhibits to any Company SEC Filings and (ii) any risk factor disclosures contained
under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer),
each of which qualify these representations and warranties in their entirety:
4.1.
Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business
as now conducted and to own or lease its properties. The Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification
or leasing necessary unless the failure to so qualify has not had and would not reasonably be expected to have a Material Adverse Effect.
The Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint
venture, limited liability company, association, or other business entity. The Company is not a participant in any joint venture, partnership
or similar arrangement.
4.2.
Authorization. The Company has the requisite corporate power and authority and has taken all requisite corporate action necessary
for, and no further action on the part of the Company, its officers, directors and stockholders is necessary for, (i) the authorization,
execution and delivery of the Transaction Documents, (ii) the authorization of the performance of all obligations of the Company hereunder
or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Placement Securities. The Transaction
Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability,
relating to or affecting creditors’ rights generally and to general equitable principles.
4.3.
Capitalization. The Company is authorized under its Certificate of Incorporation to issue 65,000,000 shares of Common Stock and
2,500,000 shares of Preferred Stock, of which 1,850,000 shares are designated as Series A Convertible Preferred Stock. The Company’s
disclosure of its issued and outstanding capital stock in its most recent SEC Filing containing such disclosure was accurate in all material
respects as of the date indicated in such SEC Filing. All of the issued and outstanding shares of the Company’s capital stock have
been duly authorized and validly issued and are fully paid and nonassessable; none of such shares were issued in violation of any preemptive
rights; and such shares were issued in compliance in all material respects with applicable state and federal securities law and any rights
of third parties. No Person is entitled to preemptive or similar statutory or contractual rights with respect to the issuance by the
Company of any securities of the Company, including, without limitation, the Placement Securities. Except for stock options and restricted
stock units approved pursuant to the Company stock-based compensation plans described in the SEC Filings, there are no outstanding warrants,
options, convertible securities or other rights, agreements or arrangements of any character under which the Company is or may be obligated
to issue any equity securities of any kind, except as contemplated by this Agreement. There are no voting agreements, buy-sell agreements,
option or right of first purchase agreements or other similar agreements among the Company and any of the securityholders of the Company
relating to the securities of the Company held by them. Except as provided in (a) the Registration Rights Agreement and that certain
Registration Rights Agreement dated May 15, 2022 by and among the Company and certain investors signatory thereto, no Person has the
right to require the Company to register any securities of the Company under the 1933 Act, whether on a demand basis or in connection
with the registration of securities of the Company for its own account or for the account of any other Person.
The
issuance and sale of the Placement Securities hereunder will not obligate the Company to issue shares of Common Stock or other securities
to any other Person (other than the Investors) and will not result in the adjustment of the exercise, conversion, exchange or reset price
of any outstanding security.
The
Company does not have outstanding stockholder purchase rights or a “poison pill” or any similar arrangement in effect giving
any Person the right to purchase any equity interest in the Company upon the occurrence of certain events.
4.4.
Valid Issuance. The Warrant Shares have been duly and validly authorized and reserved for issuance and, upon exercise of the Pre-Funded
Warrants in accordance with their terms, including the payment of any exercise price therefor, will be validly issued, fully paid and
nonassessable and will be free and clear of all encumbrances and restrictions (other than those created by the Investors), except for
restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.
4.5.
Consents. Subject to the accuracy of the representations and warranties of each Investor set forth in Section 5 hereof, the execution,
delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of the Placement Securities require
no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than (a) filings
that have been made pursuant to applicable state securities laws, (b) post-sale filings pursuant to applicable state and federal securities
laws, (c) filings pursuant to the rules and regulations of Nasdaq and (d) filing of the registration statement required to be filed by
the Registration Rights Agreement, each of which the Company has filed or undertakes to file within the applicable time. Subject to the
accuracy of the representations and warranties of each Investor set forth in Section 5 hereof, the Company has taken all action necessary
to exempt (i) the issuance and sale of the Placement Securities and (ii) the other transactions contemplated by the Transaction Documents
from the provisions of any stockholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination
or control share law or statute binding on the Company or to which the Company or any of its assets and properties is subject that is
or could reasonably be expected to become applicable to the Investors as a result of the transactions contemplated hereby, including
without limitation, the issuance of the Placement Securities and the ownership, disposition or voting of the Warrant Shares by the Investors
or the exercise of any right granted to the Investors pursuant to this Agreement or the other Transaction Documents.
4.6.
Use of Proceeds. The net proceeds of the sale of the Placement Securities hereunder shall be used by the Company for working capital
and general corporate purposes.
4.7.
No Material Adverse Change. Since June 30, 2023, except as identified and described in the SEC Filings, there has not been:
(i)
any change in the assets, liabilities, financial condition or operating results of the Company from that reflected in the financial statements
included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, except for changes in the ordinary
course of business which have not had and would not reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate;
(ii)
any declaration or payment by the Company of any dividend, or any authorization or payment by the Company of any distribution, on any
of the capital stock of the Company, or any redemption or repurchase by the Company of any securities of the Company;
(iii)
any material damage, destruction or loss, whether or not covered by insurance, to any assets or properties of the Company;
(iv)
any waiver, not in the ordinary course of business, by the Company of a material right or of a material debt owed to it;
(v)
any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company, except in the ordinary course
of business and which is not material to the assets, properties, financial condition, operating results or business of the Company (as
such business is presently conducted);
(vi)
any change or amendment to the Company’s Certificate of Incorporation or Bylaws, or material change to any material contract or
arrangement by which the Company is bound or to which any of its assets or properties is subject;
(vii)
any material labor difficulties or, to the Company’s Knowledge, labor union organizing activities with respect to employees of
the Company;
(viii)
any material transaction entered into by the Company other than in the ordinary course of business;
(ix)
the loss of the services of any key employee, or material change in the composition or duties of the senior management of the Company;
or
(x)
any other event or condition of any character that has had or would reasonably be expected to have a Material Adverse Effect.
4.8.
SEC Filings. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company
under the 1933 Act and the 1934 Act, including pursuant to Section 13(a) or 15(d) thereof, for the one year period preceding the date
hereof (or such shorter period as the Company was required by law or regulation to file such material) (collectively, the “SEC
Filings”). At the time of filing thereof, the SEC Filings complied in all material respects with the requirements of the 1933
Act or the 1934 Act, as applicable, and the rules and regulations of the SEC thereunder.
4.9.
No Conflict, Breach, Violation or Default. The execution, delivery and performance of the Transaction Documents by the Company
and the issuance and sale of the Placement Securities in accordance with the provisions thereof will not, except (solely in the case
of clauses (i)(b) and (ii)) for such violations, conflicts or defaults as would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, (i) conflict with or result in a breach or violation of (a) any of the terms and provisions of, or
constitute a default under, the Company’s Certificate of Incorporation or the Company’s Bylaws, both as in effect on the
date hereof (true and complete copies of which have been made available to the Investors through the Electronic Data Gathering, Analysis,
and Retrieval system (the “EDGAR system”)), or (b) assuming the accuracy of the representations and warranties in
Section 5, any applicable statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company, or any of its assets or properties, or (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the creation of any lien, encumbrance or other adverse claim
upon any of the properties or assets of the Company or give to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any Material Contract. This Section 4.9 does not relate to matters with respect to
tax status, which are the subject of Section 4.10, employee relations and labor matters, which are the subject of Section 4.13, or environmental
matters, which are the subject of Section 4.15.
4.10.
Tax Matters. The Company has timely prepared and filed all material tax returns required to have been filed by it with all appropriate
governmental agencies and timely paid all material taxes shown thereon or otherwise owed by it. There are no material unpaid assessments
against the Company nor, to the Company’s Knowledge, any audits by any federal, state or local taxing authority. All material taxes
that the Company is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper governmental
entity or third party when due. There are no tax liens pending or, to the Company’s Knowledge, threatened against the Company or
any of its assets or property. With the exception of agreements or other arrangements that are not primarily related to taxes entered
into in the ordinary course of business, there are no outstanding tax sharing agreements or other such arrangements between the Company
and any other corporation or entity.
4.11.
Title to Properties. The Company has good and marketable title to all real properties and all other material properties and assets
owned by it, in each case free from liens, encumbrances and defects, except such as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect; and the Company holds any leased real or personal property under valid and enforceable
leases with no exceptions, except such as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect.
4.12.
Certificates, Authorities and Permits. The Company possesses adequate certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now operated by it, except where failure to so possess would not reasonably
be expected, individually or in the aggregate, to result in a Material Adverse Effect. The Company has not received any written notice
of proceedings relating to the revocation or modification of any such certificate, authority or permit that would reasonably be expected
to have a Material Adverse Effect, individually or in the aggregate, on the Company.
4.13.
Labor Matters.
(a)
The Company is not party to or bound by any collective bargaining agreements or other agreements with labor organizations. To the Company’s
Knowledge, the Company has not violated in any material respect any laws, regulations, orders or contract terms affecting the collective
bargaining rights of employees or labor organizations, or any laws, regulations or orders affecting employment discrimination, equal
opportunity employment, or employees’ health, safety, welfare, wages and hours.
(b)
No material labor dispute with the employees of the Company, or with the employees of any principal supplier, manufacturer, customer
or contractor of the Company, exists or, to the Company’s Knowledge, is threatened or imminent.
4.14.
Intellectual Property. The Company owns, possesses, licenses or has other rights to use, all patents, patent applications, trade
and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how
and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of the Company’s
business in all material respects as now conducted or as proposed in the SEC Filings to be conducted; and (a) there are no rights of
third parties to any such Intellectual Property, including no liens, security interests or other encumbrances; (b) to the Company’s
Knowledge, there is no material infringement by third parties of any such Intellectual Property; (c) 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 such Intellectual
Property; (d) such Intellectual Property that is described in the SEC Filings has not been adjudged by a court of competent jurisdiction
invalid or unenforceable, in whole or in part; (e) there is no pending or, to the Company’s Knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any such Intellectual Property that is owned or licensed by the Company,
including interferences, oppositions, reexaminations or government proceedings; (f) there is no pending or, to the Company’s Knowledge,
threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates, or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others; and (g) to the Company’s Knowledge, each Company employee
involved with the development of Intellectual Property has entered into an invention assignment agreement with the Company.
4.15.
Environmental Matters. The Company is not in violation of any statute, rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental
Laws”), has not released any hazardous substances regulated by Environmental Laws onto any real property that it owns or operates
and has not received any written notice or claim it is liable for any off-site disposal or contamination pursuant to any Environmental
Laws, which violation, release, notice, claim, or liability would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, and to the Company’s Knowledge, there is no pending or threatened investigation that would reasonably
be expected to lead to such a claim.
4.16.
Legal Proceedings. There are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which
the Company is or may reasonably be expected to become a party or to which any property of the Company is or may reasonably be expected
to become the subject that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
4.17.
Financial Statements. The financial statements included in each SEC Filing comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing (or to the extent corrected
by a subsequent restatement) and present fairly, in all material respects, the financial position of the Company as of the dates shown
and its results of operations and cash flows for the periods shown, subject in the case of unaudited financial statements to normal,
immaterial year-end audit adjustments, and such financial statements have been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”) (except as may be disclosed
therein or in the notes thereto, and except that the unaudited financial statements may not contain all footnotes required by GAAP, and,
in the case of quarterly financial statements, except as permitted by Form 10-Q under the 1934 Act). Except as set forth in the financial
statements of the Company included in the SEC Filings filed prior to the date hereof, the Company has not incurred any liabilities, contingent
or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since
the date of such financial statements, none of which, individually or in the aggregate, have had or would reasonably be expected to have
a Material Adverse Effect.
4.18.
Insurance Coverage. The Company maintains in full force and effect insurance coverage that is customary for comparably situated
companies for the business being conducted and properties owned or leased by the Company, and the Company reasonably believes such insurance
coverage to be adequate against all liabilities, claims and risks against which it is customary for comparably situated companies to
insure.
4.19.
Compliance with Nasdaq Continued Listing Requirements. The Company is in compliance with applicable Nasdaq continued listing requirements.
There are no proceedings pending or, to the Company’s Knowledge, threatened against the Company relating to the continued listing
of the Common Stock on Nasdaq and the Company has not received any notice of, nor to the Company’s Knowledge is there any reasonable
basis for, the delisting of the Common Stock from Nasdaq.
4.20.
Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid
right, interest or claim against or upon the Company or an Investor for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of the Company. No Investor shall have any obligation with respect to any fees,
or with respect to any claims made by or on behalf of other Persons for fees, in each case of the type contemplated by this Section 4.20
that may be due in connection with the transactions contemplated by this Agreement or the Transaction Documents.
4.21.
No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person acting on its behalf has conducted any
general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of
the Placement Securities.
4.22.
No Integrated Offering. Neither the Company nor any Person acting on its behalf has, directly or indirectly, made any offers or
sales of any Company security or solicited any offers to buy any Company security, under circumstances that would adversely affect reliance
by the Company on Section 4(a)(2) and Regulation D for the exemption from registration for the transactions contemplated hereby or would
require registration of the Placement Securities under the 1933 Act.
4.23.
Private Placement. Assuming the accuracy of the representations and warranties of the Investors set forth in Section 5, the offer
and sale of the Placement Securities to the Investors and the exercise of the Pre-Funded Warrants as contemplated hereby are exempt from
the registration requirements of the 1933 Act. The issuance and sale of the Placement Securities and the exercise of the Pre-Funded Warrants
do not contravene the rules and regulations of Nasdaq.
4.24.
Questionable Payments. Neither the Company nor, to the Company’s Knowledge, any of its current or former directors, officers,
employees, agents or other Persons acting on behalf of the Company, has on behalf of the Company in connection with its business: (a)
used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity;
(b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established or
maintained any unlawful or unrecorded fund of corporate monies or other assets which is in violation of law; (d) made any false or fictitious
entries on the books and records of the Company; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment of any nature.
4.25.
Transactions with Affiliates. None of the executive officers or directors of the Company and, to the Company’s Knowledge,
none of the employees of the Company is presently a party to any transaction with the Company (other than as holders of stock options,
restricted stock units, warrants and/or restricted stock, and for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to
or from, or otherwise requiring payments to or from any officer, director or such employee or, to the Company’s Knowledge, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.
4.26.
Internal Controls. The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-15 and
15d-15 under the 1934 Act), which are designed to ensure that material information relating to the Company is made known to the Company’s
principal executive officer and its principal financial officer by others within those entities. Since the end of the Company’s
most recent audited fiscal year, there have been no material weaknesses in the Company’s internal control over financial reporting
(whether or not remediated) and no change in the Company’s internal control over financial reporting that has materially affected,
or would reasonably be expected to materially affect, the Company’s internal control over financial reporting. The Company is not
aware of any change in its internal controls over financial reporting that has occurred during its most recent fiscal quarter that has
materially affected, or would reasonably be expected to materially affect, the Company’s internal control over financial reporting.
4.27.
Disclosures. Neither the Company nor any Person acting on its behalf has provided the Investors or their agents or counsel with
any information that constitutes or would reasonably be expected to constitute material nonpublic information concerning the Company,
other than with respect to the transactions contemplated hereby, which will be disclosed in the Press Release. The SEC Filings do not
contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not misleading. The Company understands and confirms that the Investors
will rely on the foregoing representations in effecting transactions in securities of the Company.
4.28.
Required Filings. Except for the transactions contemplated by this Agreement, including the acquisition of the Placement Securities
contemplated hereby, no event or circumstance has occurred or information exists with respect to the Company or its business, properties,
operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the
Company but which has not been so publicly announced or disclosed (assuming for this purpose that the SEC Filings are being incorporated
by reference into an effective registration statement filed by the Company under the 1933 Act).
4.29.
Investment Company. The Company is not required to be registered as, and immediately following the Closing will not be required
to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
4.30.
Tests and Preclinical and Clinical Trials. (i) The preclinical studies and clinical trials conducted by or, to the Company’s
Knowledge, on behalf of or sponsored by the Company, or in which the Company has participated, that are described in the SEC Filings,
or the results of which are referred to in the SEC Filings, as applicable, were, and if still pending are, being conducted in all material
respects in accordance with standard medical and scientific research standards and procedures for products or product candidates comparable
to those being developed by the Company and all applicable statutes and all applicable rules and regulations of the U.S. Food and Drug
Administration and comparable regulatory agencies outside of the United States to which they are subject, including the European Medicines
Agency (collectively, the “Regulatory Authorities”) and Good Clinical Practice and Good Laboratory Practice requirements;
(ii) the descriptions in the SEC Filings of the results of such studies and trials are accurate and complete descriptions in all material
respects and fairly present the data derived therefrom; (iii) to the Company’s Knowledge, there are no other studies or trials
not described in the SEC Filings, the results of which the Company believes are inconsistent with or reasonably call into question the
results described or referred to in the SEC Filings; (iv) the Company has operated at all times and are currently in compliance with
all applicable statutes, rules and regulations of the Regulatory Authorities, except where such non-compliance would not, individually
or in the aggregate, have a Material Adverse Effect; and (v) the Company has not received any written notices, correspondence or other
communications from the Regulatory Authorities or any other governmental agency requiring or threatening the termination, material modification
or suspension of any preclinical studies or clinical trials that are described in the SEC Filings or the results of which are referred
to in the SEC Filings, other than ordinary course communications with respect to modifications in connection with the design and implementation
of such studies or trials, and, to the Company’s Knowledge, there are no reasonable grounds for the same.
4.31.
Manipulation of Price. The Company has not taken, and, to the Company’s Knowledge, no Person acting on its behalf has taken,
directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the Securities.
4.32.
Anti-Bribery and Anti-Money Laundering Laws. Each of the Company, and its officers, directors, supervisors, managers, agents,
or employees are and have at all times been in compliance with and their participation in the offering will not violate: (A) anti-bribery
laws, including but not limited to, any applicable law, rule, or regulation of any locality, including but not limited to any law, rule,
or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act 2010,
or any other law, rule or regulation of similar purposes and scope or (B) anti-money laundering laws, including, but not limited to,
applicable federal, state, international, foreign or other laws, regulations or government guidance regarding anti-money laundering,
including, without limitation, Title 18 US. Code sections 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money
laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering,
of which the United States is a member and with which designation the United States representative to the group or organization continues
to concur, all as amended, and any Executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any
orders or licenses issued thereunder.
4.33.
No Bad Actors. No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the 1933 Act (a “Disqualification
Event”) is applicable to the Company or, to the Company’s Knowledge, any Company Covered Person, except for a Disqualification
Event as to which Rule 506(d)(2)(ii–iv) or (d)(3) is applicable.
4.34.
No Additional Agreements. The Company has no other agreements or understandings (including, without limitation, side letters)
with any Investor to purchase Placement Securities on terms more favorable to such Investor than as set forth herein.
4.35.
Shell Company Status. The Company is not, and has never been, an issuer identified in Rule 144(i)(1).
5.
Representations and Warranties of the Investors. Each of the Investors hereby severally, and not jointly, represents and warrants
to the Company that:
5.1.
Organization and Existence. Such Investor is a duly incorporated or organized and validly existing corporation, limited partnership,
limited liability company or other legal entity, has all requisite corporate, partnership or limited liability company power and authority
to enter into and consummate the transactions contemplated by the Transaction Documents and to carry out its obligations hereunder and
thereunder, and to invest in the Securities pursuant to this Agreement, and is in good standing under the laws of the jurisdiction of
its incorporation or organization.
5.2.
Authorization. The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is
a party have been duly authorized and each has been duly executed and when delivered will constitute the valid and legally binding obligation
of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally,
and general principles of equity.
5.3.
Purchase Entirely for Own Account. The Securities to be received by such Investor hereunder will be acquired for such Investor’s
own account, not as nominee or agent, for the purpose of investment and not with a view to the resale or distribution of any part thereof
in violation of the 1933 Act, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing
the same in violation of the 1933 Act without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose
of all or any part of such Securities in compliance with applicable federal and state securities laws. The Placement Securities are being
purchased by such Investor in the ordinary course of its business. Nothing contained herein shall be deemed a representation or warranty
by such Investor to hold the Securities for any period of time. Such Investor is not a broker-dealer registered with the SEC under the
1934 Act or an entity engaged in a business that would require it to be so registered.
5.4.
Investment Experience. Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the
Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks
of the investment contemplated hereby.
5.5.
Disclosure of Information. Such Investor has had an opportunity to receive, review and understand all information related to the
Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms
and conditions of the offering of the Securities, and has conducted and completed its own independent due diligence. Such Investor acknowledges
that copies of the SEC Filings are available on the EDGAR system. Based on the information such Investor has deemed appropriate, it has
independently made its own analysis and decision to enter into the Transaction Documents. Such Investor is relying exclusively on its
own investment analysis and due diligence (including professional advice it deems appropriate) with respect to the execution, delivery
and performance of the Transaction Documents, the Securities and the business, condition (financial and otherwise), management, operations,
properties and prospects of the Company, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.
Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, limit or otherwise affect such
Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.
5.6.
Restricted Securities. Such Investor understands that the Securities are characterized as “restricted securities”
under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such Securities may be resold without registration under the 1933 Act only in certain
limited circumstances.
5.7.
Legends. It is understood that, except as provided below, certificates or book-entry records evidencing the Securities may bear
the following or any similar legend:
(a)
“The securities represented hereby and the securities issuable upon exercise of these securities have not been registered with
the Securities and Exchange Commission or the securities commission of any state in reliance upon an exemption from registration under
the Securities Act of 1933, as amended, and, accordingly, may not be transferred unless (i) such securities have been registered for
sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144, (iii) the Company has
received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities
Act of 1933, as amended, or (iv) the securities are transferred without consideration to an affiliate of such holder or a custodial nominee
(which for the avoidance of doubt shall require neither consent nor the delivery of an opinion).”
(b)
If required by the authorities of any state in connection with the issuance or sale of the Securities, the legend required by such state
authority.
5.8.
Accredited Investor. Such Investor is an “accredited investor” within the meaning of Rule 501(a) of Regulation D.
Such investor is a sophisticated institutional investor with sufficient knowledge and experience in investing in private equity transactions
to properly evaluate the risks and merits of its purchase of the Securities. Such Investor has determined based on its own independent
review and such professional advice as it deems appropriate that its purchase of the Securities and participation in the transactions
contemplated by the Transaction Documents (i) are fully consistent with its financial needs, objectives and condition, (ii) comply and
are fully consistent with all investment policies, guidelines and other restrictions applicable to such Investor, (iii) have been duly
authorized and approved by all necessary action, (iv) do not and will not violate or constitute a default under such Investor’s
charter, bylaws or other constituent document or under any law, rule, regulation, agreement or other obligation by which such Investor
is bound and (v) are a fit, proper and suitable investment for such Investor, notwithstanding the substantial risks inherent in investing
in or holding the Securities.
5.9.
No General Solicitation. Such Investor did not learn of the investment in the Securities as a result of any general or public
solicitation or general advertising, or publicly disseminated advertisements or sales literature, including (a) any advertisement, article,
notice or other communication published in any newspaper, magazine, website, or similar media, or broadcast over television or radio,
or (b) any seminar or meeting to which such Investor was invited by any of the foregoing means of communications.
5.10.
Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid
right, interest or claim against or upon the Company or an Investor for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of such Investor.
5.11.
Short Sales and Confidentiality Prior to the Date Hereof. Other than consummating the transactions contemplated hereunder, such
Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, directly or indirectly
executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time
that such Investor first communicated with the Company regarding the transactions contemplated hereby and ending immediately prior to
the date hereof. Notwithstanding the foregoing, in the case of an Investor that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Investor’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of such Investor’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement. Other than to other Persons party to this Agreement and other than to such Person’s outside
attorney, accountant, auditor or investment advisor only to the extent necessary to permit evaluation of the investment, and the performance
of the necessary or required tax, accounting, financial, legal, or administrative tasks and services and other than as may be required
by law, such Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute
a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available
shares to borrow in order to effect Short Sales or similar transactions in the future.
5.12.
No Government Recommendation or Approval. Such Investor understands that no United States federal or state agency, or similar
agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase
of the Securities.
5.13.
No Intent to Effect a Change of Control. Such Investor has no present intent to effect a “change of control” of the
Company as such term is understood under the rules promulgated pursuant to Section 13(d) of the 1934 Act.
5.14.
Residency. Such Investor’s office in which its investment decision with respect to the Securities was made is located at
the address immediately below such Investor’s name on its signature page hereto.
5.15.
No Conflicts. The execution, delivery and performance by such Investor of the Transaction Documents and the consummation by such
Investor of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such
Investor or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which such Investor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Investor, except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect
on the ability of such Investor to perform its obligations hereunder.
6.
Conditions to Closing.
6.1.
Conditions to the Investors’ Obligations. The obligation of each Investor to purchase Placement Securities at the Closing
is subject to the fulfillment to such Investor’s satisfaction, on or prior to the Closing Date, of the following conditions, any
of which may be waived by such Investor (as to itself only):
(a)
The representations and warranties made by the Company in Section 4 hereof shall be true and correct in all material respects as of the
date hereof and as of the Closing Date, as though made on and as of such date, except to the extent any such representation or warranty
expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects
as of such earlier date. The Company shall have performed in all material respects all obligations and covenants herein required to be
performed by it on or prior to the Closing Date.
(b)
The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary for the consummation of
the purchase and sale of the Placement Securities and the consummation of the other transactions contemplated by the Transaction Documents,
all of which shall be in full force and effect.
(c)
The Company shall have executed and delivered the Registration Rights Agreement.
(d)
The Company shall have filed with Nasdaq a Listing of Additional Shares notice form for the listing of the Warrant Shares.
(e)
No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court
or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction
Documents.
(f)
The Company shall have delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial
Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in subsections (a), (b), (d), (e) and
(j) of this Section 6.1.
(g)
The Company shall have delivered a Certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date, certifying
the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement, the other
Transaction Documents and the issuance of the Placement Securities, certifying the current versions of the Certificate of Incorporation
and Bylaws of the Company and certifying as to the signatures and authority of persons signing the Transaction Documents and related
documents on behalf of the Company.
(h)
The Investors shall have received an opinion from Fredrikson & Byron, P.A., the Company’s counsel, dated as of the Closing
Date, in form and substance reasonably acceptable to the Investors.
(i)
There shall have been no Material Adverse Effect with respect to the Company since the date hereof.
(j)
No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any other governmental or regulatory body with respect
to public trading in the Common Stock.
6.2.
Conditions to Obligations of the Company. The Company’s obligation to sell and issue the Placement Securities at the Closing
is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of
which may be waived by the Company:
(a)
The representations and warranties made by the Investors in Section 5 hereof shall be true and correct as of the date hereof, and shall
be true and correct as of the Closing Date with the same force and effect as if they had been made on and as of such date. The Investors
shall have performed in all material respects all obligations and covenants herein required to be performed by them on or prior to the
Closing Date.
(b)
Each Investor shall have executed and delivered the Registration Rights Agreement.
(c)
Any Investor purchasing Placement Securities at the Closing shall have paid in full its purchase price to the Company.
6.3.
Termination of Obligations to Effect Closing; Effects.
(a)
The obligations of the Company, on the one hand, and the Investors, on the other hand, to effect the Closing shall terminate as follows:
(i)
Upon the mutual written consent of the Company and Investors that agreed to purchase a majority of the Placement Securities to be issued
and sold pursuant to this Agreement;
(ii)
By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been
waived by the Company;
(iii)
By an Investor (with respect to itself only) if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment,
and shall not have been waived by the Investor; or
(iv)
By either the Company or any Investor (with respect to itself only) if the Closing has not occurred on or prior to the third Trading
Day following the date of this Agreement;
provided,
however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not
then be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction
Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect
the Closing.
(b)
In the event of termination by the Company or any Investor of its obligations to effect the Closing pursuant to this Section 6.3, written
notice thereof shall be given to the other Investors by the Company and the other Investors shall have the right to terminate their obligations
to effect the Closing upon written notice to the Company and the other Investors. Nothing in this Section 6.3 shall be deemed to release
any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents
or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the
other Transaction Documents.
7.
Covenants and Agreements of the Company.
7.1.
Removal of Legends.
(a)
In connection with any sale, assignment, transfer or other disposition of the Warrant Shares by an Investor pursuant to Rule 144 or pursuant
to any other exemption under the 1933 Act such that the purchaser acquires freely tradable shares and upon compliance by the Investor
with the requirements of this Agreement, if requested by the Investor, the Company shall request the transfer agent for the Common Stock
(the “Transfer Agent”) to remove any restrictive legends related to the book entry account holding such Warrant Shares
and make a new, unlegended entry for such book entry shares sold or disposed of without restrictive legends within two (2) Trading Days
of any such request therefor from such Investor, provided that the Company has timely received from the Investor customary representations
and such other customary documentation reasonably acceptable to the Company in connection therewith.
(b)
Subject to receipt from the Investor by the Company of the customary representations and such other customary documentation reasonably
acceptable to the Company (which the Company shall promptly deliver to the Transfer Agent), upon the earliest of such time as the Warrant
Shares (i) have been sold or transferred pursuant to an effective registration statement, (ii) have been sold pursuant to Rule 144, or
(iii) are eligible for resale under Rule 144(b)(1) or any successor provision (such earliest date, the “Effective Date”),
the Company shall, in accordance with the provisions of this Section 7.1(b) and within two (2) Trading Days of any request therefor from
an Investor accompanied by such customary and reasonably acceptable documentation referred to above, (A) deliver to the Transfer Agent
irrevocable instructions that the Transfer Agent shall make a new, unlegended entry for such book entry Warrant Shares, and (B) cause
its counsel to deliver to the Transfer Agent one or more opinions to the effect that the removal of such legends in such circumstances
may be effected under the 1933 Act if required by the Transfer Agent to effect the removal of the legend in accordance with the provisions
of this Agreement. At the direction of the Investor, Warrant Shares subject to legend removal hereunder may be transmitted by the Transfer
Agent to the Investor by crediting the account of the Investor’s prime broker with the Depository Trust Company’s (“DTC”)
system as directed by such Investor. The Company shall be responsible for the fees of its Transfer Agent and all DTC fees associated
with such issuance.
(c)
Each Investor, severally and not jointly with the other Investors, agrees with the Company (i) that such Investor will sell any Securities
only pursuant to either the registration requirements of the 1933 Act, including any applicable prospectus delivery requirements, or
an exemption therefrom, (ii) that if Warrant Shares are sold pursuant to a registration statement, they will be sold in compliance with
the plan of distribution set forth therein and (iii) that if, after the effective date of the registration statement covering the resale
of the Warrant Shares, such registration statement ceases to be effective and the Company has provided notice to such Investor to that
effect, such Investor will sell the Warrant Shares only in compliance with an exemption from the registration requirements of the 1933
Act.
(d)
Breach. The Company acknowledges that a breach by it of its obligations under this Section 7.1 will cause irreparable harm to
an Investor. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 7.1 will
be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 7.1, that an
Investor shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required,
to the extent permitted by applicable law.
7.2.
Subsequent Equity Sales.
(a)
From the date hereof until thirty (30) days following the date on which the registration statement required to be filed by the Registration
Rights Agreement is declared effective by the SEC, without the consent of the Required Investors, the Company shall not (A) issue shares
of Common Stock or Common Stock Equivalents, (B) effect a reverse stock split, recapitalization, share consolidation, reclassification
or similar transaction affecting the outstanding Common Stock or (C) file with the SEC a registration statement under the 1933 Act relating
to any shares of Common Stock or Common Stock Equivalents, except pursuant to the terms of the Registration Rights Agreement and any
other agreements to which the Company is currently a party. Notwithstanding the foregoing, the provisions of this Section 7.2 shall not
apply to (i) the issuance of the Securities hereunder, (ii) the issuance of Common Stock or Common Stock Equivalents upon the conversion
or exercise of any securities of the Company outstanding on the date hereof or outstanding pursuant to clause (iii) below, (iii) the
issuance of any Common Stock or Common Stock Equivalents pursuant to any Company stock-based compensation plans or in accordance with
Nasdaq Stock Market Rule 5635(c)(4), or (iv) the filing of a registration statement on Form S-8 under the 1933 Act to register the offer
and sale of securities on an equity incentive plan or employee stock purchase plan.
(b)
The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act) that will
be integrated with the offer or sale of the Placement Securities in a manner that would require the registration under the 1933 Act of
the sale of the Placement Securities to the Investors, or that will be integrated with the offer or sale of the Placement Securities
for purposes of the rules and regulations of any trading market such that it would require stockholder approval prior to the closing
of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.
7.3.
Fees. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s
commissions (other than for Persons engaged by any Investor) relating to or arising out of the transactions contemplated hereby.
7.4.
Short Sales and Confidentiality After the Date Hereof. Each Investor covenants that neither it nor any Affiliates acting on its
behalf or pursuant to any understanding with it will trade in the securities of the Company or execute any Short Sales during the period
from the date hereof until the earlier of such time as (i) the transactions contemplated by this Agreement are first publicly announced
or (ii) this Agreement is terminated in full. Each Investor covenants that until such time as the transactions contemplated by this Agreement
are publicly disclosed by the Company, such Investor and its Affiliates will maintain the confidentiality of the existence and terms
of this Agreement, other than, in each case, to such Person’s outside attorney, accountant, auditor or investment advisor only
to the extent necessary to permit evaluation of the investment, and the performance of the necessary or required tax, accounting, financial,
legal, or administrative tasks and services and other than as may be required by law. Each Investor understands and acknowledges that
the SEC currently takes the position that coverage of Short Sales of shares of the Common Stock “against the box” prior to
effectiveness of a resale registration statement with securities included in such registration statement would be a violation of Section
5 of the 1933 Act, as set forth in Item 239.10 of the Securities Act Sections Compliance and Disclosure Interpretations compiled by the
Office of Chief Counsel, Division of Corporation Finance.
7.5.
Nasdaq Listing. The Company will use commercially reasonable efforts to continue the listing and trading of its Common Stock on
Nasdaq and, in accordance therewith, will use commercially reasonable efforts to comply in all material respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of such market or exchange, as applicable.
8.
Survival and Indemnification.
8.1.
Survival. The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the
transactions contemplated by this Agreement for the applicable statute of limitations.
8.2.
Indemnification. The Company agrees to indemnify and hold harmless each Investor and its Affiliates, and their respective directors,
officers, trustees, members, managers, employees, investment advisers and agents, from and against any and all losses, claims, damages,
liabilities and expenses (including without limitation reasonable and documented attorney fees and disbursements and other documented
out-of-pocket expenses reasonably incurred in connection with investigating, preparing or defending any action, claim or proceeding,
pending or threatened and the costs of enforcement thereof) to which such Person may become subject as a result of any breach of representation,
warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse
any such Person for all such amounts as they are incurred by such Person solely to the extent such amounts have been finally judicially
determined not to have resulted from such Person’s fraud or willful misconduct.
8.3.
Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt written
notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled
to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed in writing to pay
such fees or expenses, (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict
of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies
the indemnifying party in writing that such person 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 such claim on behalf of such person); and provided, further, that the failure
of any indemnified party to give written notice as provided herein shall not relieve the indemnifying party of its obligations hereunder,
except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any
such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction,
be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying
party will, except with the consent of the indemnified party, which consent shall not be unreasonably withheld, conditioned or delayed,
consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. No indemnified
party will, except with the consent of the indemnifying party, which consent shall not be unreasonably withheld, conditioned or delayed,
consent to entry of any judgment or enter into any settlement.
9.
Miscellaneous.
9.1.
Successors and Assigns. This Agreement may not be assigned by a party hereto without the prior written consent of the Company
or each of the Investors, as applicable, provided, however, that an Investor may assign its rights and delegate its duties hereunder
in whole or in part to an Affiliate or to a third party acquiring some or all of its Securities in a transaction complying with applicable
securities laws without the prior written consent of the Company or the other Investors, provided such assignee agrees in writing to
be bound by the provisions hereof that apply to Investors. The provisions of this Agreement shall inure to the benefit of and be binding
upon the respective permitted successors and assigns of the parties. Without limiting the generality of the foregoing, in the event that
the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock
is converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall,
by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall
be deemed to refer to such Person and the term “Securities” shall be deemed to refer to the securities received by the Investors
in connection with such transaction. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the
parties hereto or their respective permitted successors and assigns any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
9.2.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including
pdf or any electronic signatures complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method
and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
9.3.
Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.
9.4.
Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such
delivery, (ii) if given by facsimile or e-mail, then such notice shall be deemed given upon receipt of confirmation of complete facsimile
transmittal or confirmation of receipt of an e-mail transmission, (iii) if given by mail, then such notice shall be deemed given upon
the earlier of (A) receipt of such notice by the recipient or (B) three (3) days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one
(1) Business Day after delivery to such carrier. All notices shall be addressed to the party to be notified at the address as follows,
or at such other address as such party may designate by ten (10) days’ advance written notice to the other party:
If
to the Company:
Celcuity
Inc.
16305
36th Avenue North, Suite 100
Minneapolis,
MN 55446
Attention:
Brian F. Sullivan and Vicky Hahne
E-mail:
bsullivan@celcuity.com; vhahne@celcuity.com
With
a copy (which will not constitute notice) to:
Fredrikson
& Byron, P.A.
200
South Sixth Street, Suite 4000
Minneapolis,
MN 55402
Facsimile:
(612) 492-7077
Attention:
Eric O. Madson
E-mail:
emadson@fredlaw.com
If
to the Investors:
Only
to the addresses set forth on the signature pages hereto.
9.5.
Expenses. The parties hereto shall pay their own costs and expenses in connection herewith regardless of whether the transactions
contemplated hereby are consummated, except that the Company has agreed to reimburse the Investors in an aggregate amount of up to $100,000
for Investors’ reasonable and documented legal fees at the time of Closing.
9.6.
Amendments and Waivers. Prior to Closing, no amendment or waiver of any provision of this Agreement will be effective with respect
to any party unless made in writing and signed by a duly authorized representative of such party. Following the Closing, any term of
this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the Company and the Required Investors. Notwithstanding
the foregoing, this Agreement may not be amended and the observance of any term of this Agreement may not be waived with respect to any
Investor without the written consent of such Investor unless such amendment or waiver applies to all Investors in the same fashion. Any
amendment or waiver effected in accordance with this paragraph shall be binding upon (i) prior to Closing, each Investor that signed
such amendment or waiver and (ii) following the Closing, each holder of any Securities purchased under this Agreement at the time outstanding,
and in each case, each future holder of all such Securities and the Company.
9.7.
Publicity. Except as set forth below, no public release or announcement concerning the transactions contemplated hereby shall
be issued by the Investors without the prior consent of the Company, except as such release or announcement may be required by law or
the applicable rules or regulations of any securities exchange or securities market, in which case the Investors shall allow the Company
reasonable time to comment on such release or announcement in advance of such issuance. Notwithstanding the foregoing, each Investor
may identify the Company and the value of such Investor’s security holdings in the Company in accordance with applicable investment
reporting and disclosure regulations or internal policies without prior notice to or consent from the Company (including, for the avoidance
of doubt, filings pursuant to Sections 13 and 16 of the 1934 Act). The Company shall not include the name of any Investor or any Affiliate
or investment adviser of such Investor in any press release or public announcement (which, for the avoidance of doubt, shall not include
any SEC Filing to the extent such disclosure is required by SEC rules and regulations) without the prior written consent of such Investor.
No later than the Business Day immediately following the date hereof, the Company shall issue a press release disclosing all material
terms of the transactions contemplated by this Agreement and any material nonpublic information that the Company may have provided any
Investor in connection with the transactions contemplated by this Agreement at any time prior to the issuance of the press release (the
“Press Release”). In addition, the Company will make such other filings and notices in the manner and time required
by the SEC or Nasdaq.
9.8.
Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be
interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable
in any respect.
9.9.
Entire Agreement. This Agreement, including the signature pages and Exhibits, and the other Transaction Documents between the
Company and each Investor constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter
hereof and thereof.
9.10.
Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions
as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein
contained.
9.11.
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. Service
of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement.
9.12.
Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document
are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance
of the obligations of any other Investor under any Transaction Document. The decision of each Investor to purchase Placement Securities
pursuant to the Transaction Documents has been made by such Investor independently of any other Investor. Nothing contained herein or
in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership,
an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert
or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor acknowledges
that no other Investor has acted as agent for such Investor in connection with making its investment hereunder and that no Investor will
be acting as agent of such Investor in connection with monitoring its investment in the Securities or enforcing its rights under the
Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation,
the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor
to be joined as an additional party in any proceeding for such purpose. The Company acknowledges that each of the Investors has been
provided with the same Transaction Documents for the purpose of closing a transaction with multiple Investors and not because it was
required or requested to do so by any Investor. It is expressly understood and agreed that each provision contained in this Agreement
is between the Company and an Investor, solely, and not between the Company and the Investors collectively and not between and among
the Investors.
[remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the
date first above written.
COMPANY: |
CELCUITY INC. |
|
|
|
By: |
/s/
Brian F. Sullivan |
|
Name: |
Brian F. Sullivan |
|
Title: |
Chief Executive Officer
|
[Company
signature page to Securities Purchase Agreement]
IN
WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the
date first above written.
INVESTORS:
667,
L.P.
By:
Baker Bros. Advisors LP, management company and
investment adviser to 667, L.P., pursuant to authority granted to it by Baker Biotech Capital, L.P., general partner to 667, L.P.,
and not as the general partner.
By: |
/s/
Scott Lessing |
|
Scott Lessing |
|
President |
|
BAKER
BROTHERS LIFE SCIENCES, L.P.
By:
BAKER BROS. ADVISORS LP, management company and investment adviser to Baker Brothers Life Sciences, L.P., pursuant to authority
granted to it by Baker Brothers Life Sciences Capital, L.P., general partner to Baker Brothers Life Sciences, L.P., and not as the general
partner.
By: |
/s/
Scott Lessing |
|
Scott Lessing |
|
President |
|
[Investor
signature page to Securities Purchase Agreement]
EXHIBIT
A
Schedule
of Investors
Investor Name | |
Number of Warrant Shares Underlying Pre-Funded Warrant Purchased | | |
Aggregate Purchase Price of Pre-Funded Warrants | |
667, L.P. | |
| 447,718 | | |
$ | 3,894,698.88 | |
Baker Brothers Life Sciences, L.P. | |
| 5,300,069 | | |
$ | 46,105,300.23 | |
TOTAL | |
| 5,747,787 | | |
$ | 49,999,999.11 | |
EXHIBIT
B
Form
of Pre-Funded Warrant
EXHIBIT
C
Form
of Registration Rights Agreement
Exhibit
10.2
REGISTRATION RIGHTS
AGREEMENT
This REGISTRATION RIGHTS AGREEMENT
(this “Agreement”) is made and entered into as of October 18, 2023, by and among Celcuity Inc., a Delaware corporation
(the “Company”), and the “Investors” named in the Securities Purchase Agreement, dated as of the
date hereof, by and among the Company and the Investors identified on Exhibit A attached thereto (the “Purchase Agreement”).
Capitalized terms used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.
The parties hereby agree as follows:
1.
Certain Definitions. As used in this Agreement, the following terms shall have the following meanings:
“Closing Date”
has the meaning ascribed to it in the Purchase Agreement.
“Common Stock”
means the Company’s Common Stock, par value $0.001 per share.
“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“Investors” means
the Investors identified in the Purchase Agreement and any Affiliate or permitted transferee of any such Investor who is a subsequent
Holder of Registrable Securities.
“Pre-Funded Warrants”
has the meaning ascribed to it in the Purchase Agreement.
“Prospectus”
means (i) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus,
and (ii) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.
“Register,” “registered”
and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document
in compliance with the 1933 Act, and the declaration or ordering of effectiveness of such Registration Statement or document.
“Registrable Securities”
means (i) the Warrant Shares then issued or issuable upon exercise of the Pre-Funded Warrants (assuming the Pre-Funded Warrants are exercisable
in full without regard to any exercise limitations therein), and (ii) any other securities issued or issuable with respect to, in exchange
for or in replacement of, the Warrant Shares issued and sold pursuant to the Purchase Agreement; provided, however, that any such Registrable
Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file
another, Registration Statement hereunder with respect thereto) upon the first to occur of (A) a Registration Statement with respect to
the sale of such Registrable Securities being declared effective by the SEC under the 1933 Act and such Registrable Securities having
been disposed of by the Holder thereof in accordance with such effective Registration Statement, (B) such Registrable Securities having
been sold in accordance with Rule 144 (or another exemption from the registration requirements of the 1933 Act), and (C) such Registrable
Securities becoming eligible for resale without volume or manner-of-sale restrictions and without current public information requirements
pursuant to Rule 144 as set forth in a written opinion letter of Company Counsel to such effect, addressed, delivered and acceptable to
the Transfer Agent and the affected Holders. For the avoidance of doubt, any provision herein requiring the calculation of the number
of Registrable Securities as of any date, or the computation of a percentage of Registrable Securities, shall be deemed to refer to the
number of shares of Common Stock constituting Registrable Securities as of such date, assuming the Pre-Funded Warrants are exercisable
in full without regard to any exercise limitations therein.
“Registration Statement”
means any registration statement of the Company under the 1933 Act that covers the resale of any of the Registrable Securities pursuant
to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all
exhibits and all material incorporated by reference in such Registration Statement.
“Required Investors”
means the Investors holding a majority of the Registrable Securities outstanding from time to time.
“SEC” means the
U.S. Securities and Exchange Commission.
“SEC Guidance”
means (i) any publicly-available written or oral guidance of the SEC staff, or any comments, requirements or requests of the SEC staff
and (ii) the 1933 Act.
“Securities”
means, collectively, the Pre-Funded Warrants and the Warrant Shares.
“Selling Stockholder Questionnaire”
means the Selling Stockholder Notice and Questionnaire, in the form attached hereto as Annex B (or similar form reasonably satisfactory
to the Company and sufficient in substance for the Company to obtain the information necessary to effect the transactions contemplated
by the Transaction Documents).
“Transaction Documents”
means this Agreement and the Purchase Agreement.
“Warrant Shares”
means shares of Common Stock issuable upon exercise of the Pre-Funded Warrants.
2.
Registration.
(a) Registration Statements.
(i) Promptly following the Closing
Date but no later than thirty (30) calendar days after the Closing Date (the “Filing Deadline”), the Company shall
prepare and file with the SEC one Registration Statement covering the resale of all of the Registrable Securities which, for the avoidance
of doubt, may also register the sale or issuance of primary securities. Subject to any SEC comments, such Registration Statement shall
include the plan of distribution, substantially in the form and substance attached hereto as Annex A. Such Registration Statement
also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate
number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable
Securities. Such Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness
thereof) shall be provided in accordance with Section 3(c) to the Investors prior to its filing or other submission. If a Registration
Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, the Company will make pro
rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1% of the aggregate amount paid pursuant
to the Purchase Agreement by such Investor for each 30-day period or pro rata for any portion thereof following the Filing Deadline for
which no Registration Statement is filed with respect to the Registrable Securities. Such payments shall constitute the Investors’
exclusive monetary remedy for such events, but shall not affect the right of the Investors to seek injunctive relief. Such payments shall
be made to each Investor in cash no later than five (5) Business Days after the end of each such 30-day period (the “Payment
Date”). Interest shall accrue at the rate of 1% per month on any such liquidated damages payments that shall not be paid by
the Payment Date until such amount is paid in full. Notwithstanding the foregoing, the Company will not be liable for any liquidated damages
under this Section 2(a)(i) with respect to any Warrant Shares prior to the issuance thereof.
(ii) The Company shall take reasonable
efforts to register the Registrable Securities on Form S-3 if such form is available for use by the Company, provided that if at such
time the Registration Statement is on Form S-1, the Company shall maintain the effectiveness of the Registration Statement then in effect
until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.
(b) Expenses. The Company
will pay all expenses associated with each Registration Statement, including filing and printing fees, the Company’s counsel and
accounting fees and expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws
and listing fees, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry
professionals with respect to the Registrable Securities being sold. Except as provided in Section 6 hereof and in the Purchase Agreement,
the Company shall not be responsible for legal fees incurred by Holders of Registrable Securities in connection with the performance of
its rights and obligations under the Transaction Documents.
(c) Effectiveness.
(i) The Company shall use commercially
reasonable efforts to have the Registration Statements declared effective as soon as reasonably practicable after the filing thereof.
The Company shall notify the Investors by facsimile or e-mail as promptly as practicable, and in any event, within forty-eight (48) hours,
after any Registration Statement is declared effective and shall simultaneously provide the Investors with access to a copy of any related
Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. Subject to Section 2(d), if
(A) a Registration Statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i) five
(5) Business Days after the SEC informs the Company that no review of such Registration Statement will be made or that the SEC has no
further comments on such Registration Statement and (ii) the 60th day after the Closing Date (or the 90th day if the SEC reviews such
Registration Statement) (the “Effectiveness Deadline”), or (B) after a Registration Statement has been declared effective
by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including without limitation by reason of a stop
order, or the Company’s failure to update such Registration Statement), but excluding any Allowed Delay (as defined below) or, if
the Registration Statement is on Form S-1, for a period of twenty (20) days following the date on which the Company files a post-effective
amendment to incorporate the Company’s Annual Report on Form 10-K (a “Maintenance Failure”), then the Company
will make pro rata payments to each Investor then holding Registrable Securities, as liquidated damages and not as a penalty, in an amount
equal to 1% of the aggregate amount paid pursuant to the Purchase Agreement by such Investor for such Registrable Securities then held
by such Investor for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should
have been effective (the “Blackout Period”). Such payments shall constitute the Investors’ exclusive monetary
remedy for such events, but shall not affect the right of the Investors to seek injunctive relief. The amounts payable as liquidated damages
pursuant to this paragraph shall be paid in cash no later than five (5) Business Days after each such 30-day period following the commencement
of the Blackout Period until the termination of the Blackout Period (the “Blackout Period Payment Date”). Interest
shall accrue at the rate of 1% per month on any such liquidated damages payments that shall not be paid by the Blackout Payment Date until
such amount is paid in full. Notwithstanding the foregoing, the Company will not be liable for any liquidated damages under this Section
2(c)(i) with respect to any Warrant Shares prior to the issuance thereof.
(ii) Notwithstanding anything
to the contrary contained herein, (i) the Company shall not be required to file a Registration Statement (or any amendment thereto) or,
if a Registration Statement has been filed but not declared effective by the SEC, request effectiveness of such Registration Statement,
for a period of up to forty-five (45) days, if (A) the Company determines in good faith that a postponement is in the best interest of
the Company and its stockholders generally due to a pending transaction involving the Company (including a pending securities offering
by the Company, or any proposed financing, acquisition, merger, tender offer, business combination, corporate reorganization, consolidation
or other significant transaction involving the Company), (B) the Company determines such registration would render the Company unable
to comply with applicable securities laws, (C) the Company determines such registration would require disclosure of material information
that the Company has a bona fide business purpose for preserving as confidential, or (D) audited financial statements as of a date other
than the fiscal year end of the Company would be required to be prepared; and (ii) the Company may, upon written notice to any Holder
of Registrable Securities included in a Registration Statement, suspend the use of any Registration Statement, including any Prospectus
that forms a part of a Registration Statement, if the Company (X) determines that it would be required to make disclosure of material
information in the Registration Statement that the Company has a bona fide business purpose for preserving as confidential, (Y) the Company
determines it must amend or supplement the Registration Statement or the related Prospectus so that such Registration Statement or Prospectus
shall not include 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 case of the Prospectus in light of the circumstances under which they were made, not misleading or
(Z) the Company has experienced or is experiencing some other material non-public event, including a pending transaction involving the
Company, the disclosure of which at such time, in the good faith judgment of the Company, would adversely affect the Company; provided,
however, in no event shall Holders of Registrable Securities be suspended from selling Registrable Securities pursuant to the Registration
Statement for a period that exceeds 30 consecutive Trading Days or 60 total Trading Days in any twelve (12) month period (any such suspension
contemplated by this Section 2(c)(ii), an “Allowed Delay”). Upon disclosure of such information or the termination
of the condition described above, the Company shall provide prompt notice to Holders whose Registrable Securities are included in the
Registration Statement, but shall not (without the prior written consent of a Holder) disclose to such Holder any material nonpublic information
giving rise to an Allowed Delay, and shall use commercially reasonable efforts to promptly terminate an Allowed Delay and take such other
reasonable actions to permit registered sales of Registrable Securities as contemplated hereby.
(d) Rule 415; Cutback. If
at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not
eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act (provided, however, the Company
shall be obligated to use commercially reasonable efforts to advocate with the SEC for the registration of all of the Registrable Securities
in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09) or requires any Investor
to be named as an “underwriter,” the Company shall (i) promptly notify each Holder of Registrable Securities thereof and (ii)
make commercially reasonable efforts to persuade the SEC that the offering contemplated by such Registration Statement is a valid secondary
offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Investors is an “underwriter.”
The Investors shall have the right to select one legal counsel designated by the Required Investors, at such Investors’ expense,
to review and oversee any registration or matters pursuant to this Section 2(d), including participation in any meetings or discussions
with the SEC regarding the SEC’s position and to comment on any written submission made to the SEC with respect thereto. No such
written submission with respect to this matter shall be made to the SEC to which the Investors’ counsel reasonably objects. In the
event that, despite the Company’s commercially reasonable efforts and compliance with the terms of this Section 2(d), the SEC refuses
to alter its position, the Company shall (i) remove from such Registration Statement such portion of the Registrable Securities (the “Cut
Back Shares”) as provided below and/or (ii) agree to such restrictions and limitations on the registration and resale of the
Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively,
the “SEC Restrictions”); provided, however, that the Company shall not agree to name any Investor as an “underwriter”
in such Registration Statement without the prior written consent of such Investor. Any cut-back imposed on the Investors pursuant to this
Section 2(d) shall be allocated among the Investors on a pro rata basis and shall be applied first to any of the Registrable Securities
of such Investor as such Investor shall designate, unless the SEC Restrictions otherwise require or provide or the Investors otherwise
agree. No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration
of such Cut Back Shares in accordance with any SEC Restrictions applicable to such Cut Back Shares (such date, the “Restriction
Termination Date”). In furtherance of the foregoing, each Investor shall provide the Company with prompt written notice of its
sale of substantially all of the Registrable Securities under such Registration Statement such that the Company will be able to file one
or more additional Registration Statements covering the Cut Back Shares. From and after the Restriction Termination Date applicable to
any Cut Back Shares, all of the provisions of this Section 2 (including the Company’s obligations with respect to the filing of
a Registration Statement and its obligations to use reasonable efforts to have such Registration Statement declared effective within the
time periods set forth herein and the liquidated damages provisions relating thereto) shall again be applicable to such Cut Back Shares;
provided, however, that (i) the Filing Deadline for such Registration Statement including such Cut Back Shares shall be ten (10) Business
Days after such Restriction Termination Date, and (ii) the date by which the Company is required to obtain effectiveness with respect
to such Cut Back Shares shall be the 60th day immediately after the Restriction Termination Date (or the 90th day if the SEC reviews such
Registration Statement).
(e) Other Limitations. Notwithstanding
any other provision herein or in the Purchase Agreement, (i) the Filing Deadline and each Effectiveness Deadline for a Registration Statement
shall be extended and any Maintenance Failure shall be automatically waived by no action of the Investors, in each case, without default
by or liquidated damages payable by the Company to an Investor hereunder in the event that the Company’s failure to make such filing
or obtain such effectiveness or a Maintenance Failure results from the failure of such Investor to timely provide the Company with information
requested by the Company and necessary to complete a Registration Statement in accordance with the requirements of the 1933 Act (in which
case any such deadline would be extended, and a Maintenance Failure waived, with respect to all Registrable Securities until such time
as the Investor provides such requested information), it being understood that the failure of such Investor to timely provide such information
to the Company shall not affect the rights of other Investors herein, and (ii) in no event shall the aggregate amount of liquidated damages
(or interest thereon) paid under this Agreement to any Investor exceed, in the aggregate, 6% of the aggregate purchase price of the Securities
purchased by such Investor under the Purchase Agreement or pursuant to the exercise of the Pre-Funded Warrants.
3.
Company Obligations. The Company will use commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:
(a) use commercially reasonable
efforts to cause such Registration Statement to become effective and to remain continuously effective until such time as there are no
longer Registrable Securities held by the Investors (the “Effectiveness Period”) and advise the Investors promptly
in writing when the Effectiveness Period has expired;
(b) prepare and file with the SEC
such amendments and post-effective amendments to such Registration Statement and the related Prospectus as may be necessary to keep such
Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with
respect to the distribution of all of the Registrable Securities covered thereby;
(c) provide via email to the Investors
who have supplied the Company with email addresses each Registration Statement and all amendments and supplements thereto not less than
three (3) Trading Days prior to their filing with the SEC and reflect in each such document when so filed with the SEC such comments regarding
the Investors and the plan of distribution as the Investors may reasonably and promptly propose no later than two (2) Trading Days after
the Investors have been so furnished with copies of such documents as aforesaid;
(d) furnish to each Investor whose
Registrable Securities are included in any Registration Statement (i) promptly after the same is prepared and filed with the SEC, if requested
by such Investor, one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and
each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each
item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion
of any thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of
a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as each Investor
may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor (it being understood
and agreed that such documents, or access thereto, may be provided electronically);
(e) use commercially reasonable
efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the
withdrawal of any such order at the earliest possible moment;
(f) prior to any public offering
of Registrable Securities, use reasonable best efforts to assist or cooperate with the Investors and their counsel in connection with
their registration or qualification of such Registrable Securities for the offer and sale under the securities or blue sky laws of such
jurisdictions reasonably requested by the Investors; provided, however, that the Company shall not be required in connection therewith
or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this
Section 3(f), or (iii) file a general consent to service of process in any such jurisdiction;
(g) use commercially reasonable
efforts to cause all Registrable Securities covered by a Registration Statement to be listed on The Nasdaq Capital Market (or the primary
securities exchange, interdealer quotation system or other market on which the Common Stock is then listed);
(h) promptly notify the Investors,
at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which,
the Prospectus contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then existing, and as promptly as reasonably practicable,
prepare, file with the SEC and furnish to such Holder a supplement to or an amendment of such Prospectus as may be necessary so that such
Prospectus shall not include 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 not misleading in light of the circumstances then existing;
(i) comply with all applicable rules
and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the 1933 Act, file any final
Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform the Investors
in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as
a result thereof, the Investors are required to deliver a Prospectus in connection with any disposition of Registrable Securities and
take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and
(j) with a view to making available
to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit
the Investors to sell shares of Common Stock to the public without registration, the Company covenants and agrees to: (i) make and keep
public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date
as all of the Registrable Securities may be sold without restriction by the Holders thereof pursuant to Rule 144 or any other rule of
similar effect or (B) such date as there are no longer Registrable Securities; (ii) file with the SEC in a timely manner all reports and
other documents required of the Company under the 1934 Act; and (iii) furnish electronically to each Investor upon request, as long as
such Investor owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements
of the 1934 Act, (B) a copy of or electronic access to the Company’s most recent Annual Report on Form 10-K or Quarterly Report
on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail such Investor of any rule or regulation
of the SEC that permits the selling of any such Registrable Securities without registration.
4.
Due Diligence Review; Information. If any Investor is required under applicable securities laws to be described in a Registration
Statement as an “underwriter,” the Company shall, upon reasonable prior notice, make available, during normal business hours,
for inspection and review by the Investors, advisors to and representatives of the Investors (who may or may not be affiliated with the
Investors and who are reasonably acceptable to the Company) (collectively, the “Inspectors”), all pertinent financial
and other records, and all other corporate documents and properties of the Company (collectively, the “Records”) as
may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a
reasonable time period, to supply all such information reasonably requested by the Inspectors (including, without limitation, in response
to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and
effectiveness of such Registration Statement for the sole purpose of enabling such Investor and its accountants and attorneys to conduct
such due diligence solely for the purpose of establishing a due diligence defense to underwriter liability under the 1933 Act; provided,
however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to such Investor) or use
of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors
are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally
available to the public other than by disclosure in violation of this Agreement or the Purchase Agreement. Each Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through
other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between
the Company and any Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws and regulations.
Notwithstanding the foregoing,
the Company shall not disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors,
unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides
the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information
for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with
respect thereto.
5.
Obligations of the Investors.
(a) Each Investor shall execute
and deliver a Selling Stockholder Questionnaire prior to the Closing Date. Each Investor shall additionally furnish in writing to the
Company such other information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may reasonably request. At least seven (7) Business Days prior to the first
anticipated filing date of any Registration Statement, the Company shall notify each Investor of the additional information the Company
requires from such Investor if such Investor elects to have any of the Registrable Securities included in such Registration Statement
(the “Registration Information Notice”). An Investor shall provide such information to the Company no later than five
(5) Business Days following receipt of a Registration Information Notice if such Investor elects to have any of the Registrable Securities
included in such Registration Statement. It is agreed and understood that it shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that
(i) such Investor furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as shall be reasonably required to effect the effectiveness of the registration
of such Registrable Securities, and (ii) such Investor execute such documents in connection with such registration as the Company may
reasonably request, including, without limitation, a waiver of its registration rights hereunder to the extent an Investor elects not
to have any of its Registrable Securities included in a Registration Statement.
(b) Each Investor, by its acceptance
of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation
and filing of a Registration Statement hereunder, unless such Investor has notified the Company in writing of its election to exclude
all of its Registrable Securities from such Registration Statement.
(c) Each Investor agrees that, upon
receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening
of an event pursuant to Section 3(h) hereof, such Investor will immediately discontinue disposition of Registrable Securities pursuant
to any Registration Statement covering such Registrable Securities, until the Investor is advised by the Company that such dispositions
may again be made.
(d) Each Investor covenants and
agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in
connection with sales of Registrable Securities pursuant to any Registration Statement.
6.
Indemnification.
(a) Indemnification by the Company.
The Company will indemnify and hold harmless each Investor and its officers, directors, members, managers, partners, trustees, employees
and agents and other representatives, successors and assigns, and each other Person, if any, who controls such Investor (within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act) and the officers, directors, partners, members, managers, trustees and employees
of each such controlling Person, against any losses, claims, damages or liabilities, joint or several, to which they may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any
Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof; provided, however, that
the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information
furnished by such Investor or any such controlling person in writing specifically for use in such Registration Statement or Prospectus,
(ii) the use by an Investor of an outdated or defective Prospectus after the Company has notified such Investor in writing that such Prospectus
is outdated or defective or (iii) an Investor’s failure to send or give a copy of the Prospectus or supplement (as then amended
or supplemented), if required (and not exempted) to the Persons asserting an untrue statement or omission or alleged untrue statement
or omission at or prior to the written confirmation of the sale of Registrable Securities.
(b) Indemnification by the Investors.
Each Investor agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company,
its directors, officers, employees, stockholders and each person who controls the Company (within the meaning of the 1933 Act) against
any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a material
fact or any omission of a material fact required to be stated in any Registration Statement or Prospectus or preliminary Prospectus or
amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent, that
such untrue statement or omission is contained in any information regarding such Investor and furnished in writing by such Investor to
the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto. In no event shall
the liability of an Investor be greater than the dollar amount of the proceeds received by such Investor upon the sale of the Registrable
Securities included in such Registration Statement giving rise to such indemnification obligation.
(c) Conduct of Indemnification
Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim
with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided, that any person entitled to indemnification hereunder shall have the right
to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such person unless (A) the indemnifying party has agreed to pay such fees or expenses, (B) the indemnifying party shall have
failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (C) in the reasonable judgment
of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party
with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person 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 such
claim on behalf of such person); and provided, further that the failure of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially
adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall
not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys
at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, which shall
not be unreasonably withheld or conditioned, consent to entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect
of such claim or litigation.
(d) Contribution. If for
any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient
to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable
by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative
fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No person guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not
guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of a Holder of Registrable Securities be greater
in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this
Section 6 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
7.
Miscellaneous.
(a) Amendments and Waivers.
This Agreement may be amended only by a writing signed by the Company and the Required Investors. The Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent
to such amendment, action or omission to act, of the Required Investors.
(b) Notices. All notices
and other communications provided for or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase Agreement.
(c) Assignments and Transfers
by Investors. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investors and their respective
successors and permitted assigns. An Investor may transfer or assign, in whole or from time to time in part, to one or more persons its
rights hereunder in connection with the transfer of Registrable Securities by such Investor to such person, provided that (i) the Investor
agrees in writing with the transferee or assignee to assign such rights and a copy of such agreement is furnished to the Company within
a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with
written notice of (A) the name and address of such transferee or assignee and (B) the securities with respect to which such registration
rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities
by the transferee or assignee is restricted under the 1933 Act or applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company
to be bound by all of the provisions contained herein; (v) such transfer shall have been made in accordance with the applicable requirements
of the Purchase Agreement; and (vi) unless the transferee or assignee is an Affiliate of, and after such transfer or assignment continues
to be an Affiliate of, such Investor, the amount of Registrable Securities transferred or assigned to such transferee or assignee represents
at least $5.0 million of Registrable Securities (based on the then-current market price of the Common Stock).
(d) Assignments and Transfers
by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written
consent of the Required Investors, provided, however, that in the event that the Company is a party to a merger, consolidation, share
exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person,
from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the
obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Registrable
Securities” shall be deemed to include the securities received by the Investors in connection with such transaction unless such
securities are otherwise freely tradable by the Investors after giving effect to such transaction.
(e) Benefits of the Agreement.
The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns
of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.
(f) Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one
and the same instrument. Counterparts may be delivered via electronic mail (including pdf or any electronic signature complying with the
U.S. ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have
been duly and validly delivered and be valid and effective for all purposes.
(g) Titles and Subtitles.
The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement.
(h) Severability. Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written
so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the
parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.
(i) Further Assurances. The
parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required
to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.
(j) Entire Agreement. This
Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such subject matter.
(k) Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the
State of New York without regard to the choice of law principles thereof (other than sections 5-1401 and 5-1402 of the General Obligations
Law). Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New
York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with
any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any
such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying
of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum. To the extent that the Company has or hereafter may acquire
any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect to
itself or its property, the Company irrevocably waives, to the fullest extent permitted by law, such immunity in respect of any such suit,
action or proceeding. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT
AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
(l) Interpretation. Wherever
required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include
the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such
agreement, document or instrument as amended, supplemented or modified from time to time. All article, section, paragraph or clause references
not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit, annex, letter and schedule
references not attributed to a particular document shall be references to such exhibits, annexes, letters and schedules to this Agreement.
In addition, the word “or” is not exclusive; the words “including,” “includes,” “included”
and “include” are deemed to be followed by the words “without limitation”; and the terms “herein,”
“hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision.
(m) Independent Nature of Investors’
Obligations and Rights. The obligations of each Investor hereunder are several and not joint with the obligations of any other Investor
hereunder, and no Investor shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing
contained herein or in any other agreement or document delivered at any closing, and no action taken by any Investor pursuant hereto or
thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of group or entity,
or create a presumption that the Investors are in any way acting in concert or as a group or entity with respect to such obligations or
the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Investors are not acting in
concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions. Each Investor
shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall
not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. The use of a single agreement
with respect to the obligations of the Company contained was solely in the control of the Company, not the action or decision of any Investor,
and was done solely for the convenience of the Company and not because it was required or requested to do so by any Investor. It is expressly
understood and agreed that each provision contained in this Agreement is between the Company and an Investor, solely, and not between
the Company and the Investors collectively and not between and among Investors.
[remainder of page intentionally
left blank]
IN WITNESS WHEREOF, the parties
have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.
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CELCUITY INC. |
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By: |
/s/ Brian F. Sullivan |
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Name: |
Brian F. Sullivan |
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Title: |
Chief Executive Officer |
[Company Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the parties
have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.
INVESTORS:
667, L.P.
By: Baker
Bros. Advisors LP, management company and investment adviser to 667, L.P., pursuant to authority granted to it by Baker
Biotech Capital, L.P., general partner to 667, L.P., and not as the general partner.
By: |
/s/
Scott Lessing |
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Scott Lessing |
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President |
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BAKER BROTHERS LIFE SCIENCES, L.P.
By: BAKER BROS. ADVISORS LP, management company
and investment adviser to Baker Brothers Life Sciences, L.P., pursuant to authority granted to it by Baker Brothers Life Sciences
Capital, L.P., general partner to Baker Brothers Life Sciences, L.P., and not as the general partner.
By: |
/s/
Scott Lessing |
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Scott Lessing |
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President |
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[Investor Signature Page to Registration Rights Agreement]
Annex A
Plan of Distribution
Each Selling Stockholder (the
“Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from
time to time, sell any or all of their securities covered hereby on The Nasdaq Capital Market or any other stock exchange, market or trading
facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder
may use any one or more of the following methods when selling securities:
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
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an exchange distribution in accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part; |
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in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security; |
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through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
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a combination of any such methods of sale; or |
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any other method permitted pursuant to applicable law. |
The Selling Stockholders may also
sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the “Securities
Act”), if available, rather than under this prospectus.
Broker-dealers engaged by the
Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts
from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts
to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a
customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in
compliance with FINRA IM 2121.01.
In connection with the sale of
the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling
Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities
to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any
broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act.
The Selling Stockholders and any
broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning
of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly
or indirectly, with any person to distribute the securities.
The Company is required to pay
certain fees and expenses incurred by the Company incident to the registration of the securities; provided, however, that
each Selling Stockholder will pay all underwriting discounts and selling commissions, if any, and any related legal expenses incurred
by it. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act. The Company may be indemnified by the Selling Stockholders against civil liabilities, including
liabilities under the Securities Act, that may arise from any written information furnished to the Company by the Selling Stockholders
specifically for use in this prospectus in accordance with the related Registration Rights Agreement, or the Company may be entitled to
contribution.
We agreed to keep this prospectus
effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance
with the current public information requirement under Rule 144 under the Securities Act or any other rule of similar effect or (ii) the
date on which all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule
of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied
with.
Under applicable rules and regulations
under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making
activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement
of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling
Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them
of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule
172 under the Securities Act).
Annex B
CELCUITY INC.
Selling Stockholder Notice and Questionnaire
The undersigned beneficial owner
of common stock (the “Registrable Securities”) of Celcuity Inc., a Delaware corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”)
a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities
Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the
Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed. A copy of the
Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise
from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial
owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or
not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner
(the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by
it in the Registration Statement.
QUESTIONNAIRE
The undersigned hereby provides
the following information to the Company and represents and warrants that such information is accurate:
1. |
Name. |
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(a) |
Full Legal Name of Selling Stockholder: |
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(b) |
Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held: |
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(c) |
Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire): |
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2. |
Address for Notices to Selling Stockholder: |
Telephone: ______________________________
Fax: ________________________________________
Contact Person:
_____________________________________________________________________
(a) Are you a broker-dealer?
Yes ☐ No ☐
(b) If “yes”
to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
Yes ☐ No ☐
Note: If “no” to Section
3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
(c) Are you an affiliate of a
broker-dealer?
Yes ☐ No ☐
(d) If you are an affiliate of
a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person
to distribute the Registrable Securities?
Yes ☐ No ☐
Note: If “no” to Section
3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
4. |
Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder. |
Except as set forth below in this
Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable
pursuant to the Purchase Agreement.
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(a) |
Type and Amount of other securities beneficially owned by the Selling Stockholder: |
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5. |
Relationships with the Company: |
Except as set forth below, neither
the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities
of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
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State any exceptions here: |
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The undersigned agrees to promptly
notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective; provided, that the undersigned shall not be required to notify the Company
of any changes to the number of securities held or owned by the undersigned or its affiliates.
By signing below, the undersigned
consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information
in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such
information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related
prospectus and any amendments or supplements thereto.
IN WITNESS WHEREOF the undersigned,
by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized
agent.
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Beneficial Owner: |
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Date: ________________________ |
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By: |
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Name: |
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Title: |
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PLEASE EMAIL A PDF COPY OF THE COMPLETED AND EXECUTED
NOTICE AND QUESTIONNAIRE TO:
Brian F. Sullivan, bsullivan@celcuity.com
Vicky Hahne: vhahne@celcuity.com
Exhibit 99.1
Celcuity Inc. Announces
$50 Million Private Placement
Minneapolis, MN, October
18, 2023 – Celcuity Inc. (Nasdaq: CELC), a clinical-stage biotechnology company pursuing development of targeted therapies for
oncology, announced today that it has entered into a securities purchase agreement to sell securities in a private placement that is expected
to result in gross proceeds of approximately $50 million. In the private placement, an institutional investor has agreed to purchase pre-funded
warrants to purchase shares of Celcuity’s common stock at a price of $8.699 per warrant, each with an exercise price of $0.001 per
share (for aggregate consideration equating to $8.70 per share). Subject to certain limitations, each pre-funded warrant will be exercisable
immediately. The closing of the private placement is subject to customary closing conditions and is expected to occur on October 20, 2023.
The Company expects to use the net proceeds to advance clinical development of gedatolisib and for general corporate purposes.
The securities to be sold
in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or
any state or other jurisdiction’s securities laws, and accordingly may not be offered or resold in the United States except pursuant
to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable
state securities laws. The Company has agreed to file a registration statement with the SEC registering the resale of the shares of common
stock issuable upon the exercise of the pre-funded warrants purchased in the private placement.
This press release shall
not constitute an offer to sell or the solicitation of an offer to buy the securities being offered, nor shall there be any sale of the
securities being offered in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration
or qualification under the securities laws of any such state or other jurisdiction. Any offering of the securities under the resale registration
statement will only be made by means of a prospectus.
About Celcuity
Celcuity is a clinical-stage biotechnology
company pursuing development of targeted therapies for oncology. The company’s lead therapeutic candidate is gedatolisib, a potent,
pan-PI3K and mTOR inhibitor. Its mechanism of action and pharmacokinetic properties are highly differentiated from other currently approved
and investigational therapies that target PI3K or mTOR alone or together. A Phase 3 clinical trial, VIKTORIA-1, evaluating gedatolisib
in combination with fulvestrant with or without palbociclib in patients with HR+/HER2- advanced breast cancer is currently enrolling
patients. More detailed information about the VIKTORIA-1 study can be found at ClinicalTrials.gov.
A Phase 1b/2 clinical trial, CELC-G-201, evaluating gedatolisib in combination with darolutamide in patients with metastatic castration
resistant prostate cancer, is planned to begin enrolling patients in the first quarter of 2024. The company’s CELsignia companion
diagnostic platform is uniquely able to analyze live patient tumor cells to identify new groups of cancer patients likely to benefit
from already approved targeted therapies. Celcuity is headquartered in Minneapolis.
Cautionary Note Regarding
Forward-Looking Statements
Any statements in this press
release about the Company’s future expectations, plans and prospects, as well as any other statements regarding matters that are
not historical facts, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to risks and uncertainties and actual results may differ materially from those expressed
or implied by such forward-looking statements. Such statements include, but are not limited to, statements about the expected closing
of the private placement, the anticipated use of proceeds from the private placement, the expected timing of clinical study related activities,
including without limitation, enrollment of patients and reporting of results, and other statements containing the words “believes,”
“anticipates,” “plans,” “expects,” and similar expressions. You should not place undue reliance on
forward-looking statements because they involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible
to predict and, in some cases, beyond the Company’s control. Risks that contribute to the uncertain nature of the forward-looking
statements include, but are not limited to, whether the conditions for the closing of the private placement will be satisfied; the Company’s
limited operating history; the Company’s potential inability to develop and commercialize gedatolisib; challenges the Company may
face in developing and maintaining relationships with pharmaceutical company partners; the complexity and timeline for development of
the Company’s CELsignia tests and gedatolisib; the uncertainties and costs associated with clinical trials; the uncertainty regarding
market acceptance of the Company’s products and services by physicians, patients, third-party payors and others in the medical community,
and with the size of market opportunities available to the Company; the pricing of drug products and molecular and other diagnostic products
and services that compete or may compete with the Company; uncertainty with insurance coverage and reimbursement for the Company’s
products and services; difficulties the Company may face in managing growth, such as hiring and retaining a qualified sales force and
attracting and retaining key personnel; changes in government regulations; and obtaining and maintaining intellectual property protection
for the Company’s technology and time and expense associated with defending third-party claims of intellectual property infringement,
investigations or litigation threatened or initiated against the Company. Forward-looking statements are subject to numerous risks, uncertainties,
and conditions, many of which are beyond the control of Celcuity. These include, but are not limited to, delays, disruptions or adverse
results in our clinical trials and those risks set forth in the Risk Factors section in Celcuity’s Annual Report on Form 10-K for
the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 23, 2023, and our subsequent Quarterly Reports
on Form 10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
Celcuity undertakes no obligation to update these statements for revisions or changes after the date of this press release, except as
required by law.
Contacts:
Celcuity Inc.
Brian Sullivan,
bsullivan@celcuity.com
Vicky Hahne,
vhahne@celcuity.com
763-392-0123
ICR Westwicke
Maria Yonkoski,
maria.yonkoski@westwicke.com
(619) 228-5886
SOURCE: Celcuity Inc.
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