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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): December
20, 2024
CYNGN INC.
(Exact name of registrant as specified in charter)
Delaware |
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001-40932 |
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46-2007094 |
(State or other jurisdiction
of incorporation) |
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(Commission File Number) |
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(IRS Employer
Identification No.) |
1015 O’Brien Dr.
Menlo Park, CA 94025
(Address of principal executive offices) (Zip Code)
(650) 924-5905
(Registrant’s telephone number, including
area code)
Not Applicable
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock |
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CYN |
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The Nasdaq Stock
Market LLC (The Nasdaq Capital Market) |
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
mart 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.
On December 20, 2024,
Cyngn Inc., a Delaware corporation (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”)
with certain investors (the “Purchasers”) for the sale and issuance of (i) 3,076,006 units (the “Units) at a public
offering price per Unit of $1.61 with each Unit consisting of one share of common stock, par value $0.00001 per share, of the Company
(“Common Stock”), one Series A warrant (“Series A Warrant”) to purchase one share of Common Stock at an exercise
price of $2.0125 per share and one Series B warrant to purchase one share of Common Stock at an exercise price of $2.0125 (“Series
B Warrant” and, together with Series A Warrant, the “Warrants”); and (ii) 9,346,354 pre-funded units (the “Pre-Funded
Units”) at a public offering price of $1.6099 per Pre-Funded Unit, with each Pre-Funded Unit consisting of one pre-funded warrant
(the “Pre-Funded Warrants”) exercisable for one share of Common Stock at an exercise price of $0.0001 per share, one Series
A Warrant and one Series B Warrant. The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until all
of the Pre-Funded Warrants are exercised in full.
The Warrants will be
exercisable only upon receipt of such stockholder approval as may be required by the applicable rules and regulations of the Nasdaq Stock
Market to permit the exercise of the Warrants (the “Warrant Stockholder Approval”).The Series A Warrants will be exercisable
commencing upon the date of receipt of the Warrant Stockholder Approval (the “Warrant Stockholder Approval Date”) until five
years after the Warrant Stockholder Approval Date, and the Series B Warrants will be exercisable commencing upon the Warrant Stockholder
Approval Date until two and one-half years after the Warrant Stockholder Approval Date.
The offering closed on
December 23, 2024. The net proceeds to the Company from the Offering were approximately $18.2 million, after deducting placement agent’s
fees and the payment of other estimated offering expenses associated with the offering that are payable by the Company. The Company intends
to use the net proceeds from the offering for working capital and other general corporate purposes, including repayment of the principal
amount of outstanding senior notes.
Aegis Capital Corp. served
as the placement agent in the offering, pursuant to the terms of a Placement Agent Agreement, and received 7% of the gross proceeds of
the offering and reimbursement of the legal fees of its counsel.
The Units and Pre-Funded
Units were offered by the Company pursuant to a registration statement on Form S-1, as amended (File No. 333-283514), which was originally
filed with the Securities and Exchange Commission (“the SEC”) on November 27, 2024, and declared effective by the SEC on December
19, 2024. The final prospectus relating to the offering was filed with the SEC on December 23, 2024.
The foregoing summary
of the terms of the Pre-Funded Warrant, Series A Warrant, Series B Warrant, the Purchase Agreement and the Placement Agent Agreement,
are subject to, and qualified in their entirety by reference to the full text of such agreements, copies of which are filed as Exhibits
4.1, 4.2, 4.3, 10.1 and 10.2 respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
SIGNATURE
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: December 23, 2024
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CYNGN INC. |
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By: |
/s/ Donald Alvarez |
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Donald Alvarez |
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Chief Financial Officer |
2
Exhibit 4.1
PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK
CYNGN INC.
Warrant Shares: |
Initial Exercise Date: December 19, 2024 |
|
Issuance Date: December 20, 2024 |
THIS PRE-FUNDED WARRANT
TO PURCHASE COMMON STOCK (the “Warrant”) certifies that, for value received, or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time until this
Warrant is exercised in full (the “Termination Date”), to subscribe for and purchase from Cyngn Inc., a Delaware
corporation (the “Company”), up to shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one (1) share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2.2.
| 1. | Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms
have the meanings indicated in this Section 1: |
1.1. “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
1.2. “Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the
fees and expenses of which shall be paid by the Company.
1.3. “Board
of Directors” means the board of directors of the Company.
1.4. “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
1.5. “Commission”
means the United States Securities and Exchange Commission.
1.6. “Common
Stock” means the common stock of the Company, $0.00001 par value per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
1.7. “Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
1.8. “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.9. “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
1.10. “Registration
Statement” means the Company’s registration statement on Form S-1 (File No. 333-).
1.11. “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.12. “Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
1.13. “Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
1.14. “Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
1.15. “Transaction
Documents” means these Warrants, such other Warrants as contemplated in the Registration Statement, the Placement Agent
Agreement, the Lock-Up Agreement and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
1.16. “Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address
of 1 State Street, 30th Floor, New York, NY 10004-1561 and an email address of , and any successor transfer agent of the Company.
1.17. “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
1.18. “Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
2.1. Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise substantially in the form attached hereto as Exhibit 2.1 (the “Notice
of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2.4.1 herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate
Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on
a United States bank unless the cashless exercise procedure specified in Section 2.3 below is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised
in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days after the
date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection
to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on
the face hereof.
2.2. Exercise
Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, subject
to adjustment hereunder (such nominal exercise price, the “Exercise Price”), was pre-funded to the Company on
or prior to the Initial Exercise Date and, consequently, no additional consideration (other than such Exercise Price) shall be required
to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund
of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever.
2.3. Cashless
Exercise. This Warrant may also be exercised, in whole or in part, by means of a “cashless exercise” in which the
Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice
of Exercise if such Notice of Exercise is (1) delivered pursuant to Section 2.1 hereof on a day that is not a Trading Day or (2) delivered
pursuant to Section 2.1 hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)
of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the
VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the highest Bid Price of the Common
Stock on the principal Trading Market as reported by Bloomberg L.P. within two (2) hours of the time of the Holder’s delivery of
the Notice of Exercise pursuant to Section 2(a) hereof if such Notice of Exercise is delivered during “regular trading hours,”
or within two (2) hours after the close of “regular trading hours,” on a Trading Day or (iii) the VWAP on the date of the
applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is delivered pursuant
to Section 2.1 hereof after two (2) hours following the close of “regular trading hours” on such Trading Day; |
| (B) = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the
terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act,
the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2.3.
2.4. Mechanics
of Exercise.
2.4.1. Delivery
of Warrant Shares upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via cashless exercise and otherwise by physical delivery of a certificate or by
electronic delivery (at the election of the Holder), for the number of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) one (1) Trading Day after
the delivery to the Company of the Notice of Exercise and (ii) the number of Trading Days comprising the Standard Settlement Period after
the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery
of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment
of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) one (1) Trading
Day and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. Notwithstanding
anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for purposes of Regulation SHO under
the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery of the Warrant Shares. If the Company
fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the
Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share
Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a Transfer Agent
that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing,
with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which
may be delivered at any time after the time of execution of the Placement Agent Agreement, the Company agrees to deliver the Warrant Shares
subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant
Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received by such Warrant Share Delivery Date.
2.4.2. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
2.4.3. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2.4.1
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
2.4.4. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, 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”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored and
return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in which case such exercise shall
be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving
rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a 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.
2.4.5. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
2.4.6. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and
such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit 2.4.6 duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.
The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of
the Warrant Shares.
2.4.7. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
2.5. Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such 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 portion of this Warrant beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2.5, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the
Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained
in this Section 2.5 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 2.5, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares
of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may
be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting
forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one (1)
Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. 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 or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares
of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder
prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 2.5, provided that the Beneficial Ownership Limitation in no event exceeds
9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of this Section 2.5 shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions
of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2.5
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.
3.1. Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares
of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event, and the number of Shares issuable upon exercise
of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3.1 shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
3.2. Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all (or substantially all)
of the record holders of any class of shares 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
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent
that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
3.3. Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to all (or substantially all) 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 or options
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, 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 on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of 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,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the
time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has
exercised this Warrant.
3.4. Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their
shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock or 50%
or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization 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, or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common
equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant,
the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior
to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2.5 on the
exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is
the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a
result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 on the exercise of this Warrant). For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives
upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a
Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any
time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public
announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash
equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this
Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given
the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further,
that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders
of Common Stock will be deemed to have received common stock/shares of the Successor Entity (which Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this
Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable contemplated Fundamental Transaction for pricing purposes and reflecting (A)
a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement
of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1)
100% and (2) the 100 day volatility as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying
price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus
the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period
beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or
the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant
to this Section 3.4 and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated
Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by
wire transfer of immediately available funds (or such other consideration) within the later of (i) five (5) Business Days after the Holder’s
election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3.4
pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant that
is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the
shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this
Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the shares of Common Stock prior to such Fundamental Transaction and the
value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the
term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction,
each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead
to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities,
jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor
Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with
the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company
herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3.4 regardless of (i)
whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental
Transaction occurs prior to the Initial Exercise Date.
3.5. Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
3.6. Notice
to Holder.
3.6.1. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
3.6.2. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders
of the Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such
notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the
Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the
effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
4.1. Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto as Exhibit 2.4.6 duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days after the date on which the Holder delivers an assignment form to
the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder
for the purchase of Warrant Shares without having a new Warrant issued.
4.2. New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 4.1, as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the initial Issuance Date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
4.3. Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof 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.
5.1. No
Rights as Stockholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2.4.1, except as expressly set forth
in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section
2.3 or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein, in no event shall the Company be required to net cash
settle an exercise of this Warrant.
5.2. Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
5.3. Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.4. Authorized
Shares.
5.4.1. Reservation
of Authorized and Unissued Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve
from its authorized and unissued Common Stock a sufficient number of shares of Common Stock to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the
purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable (which means that no further sums are
required to be paid by the holders thereof in connection with the issue thereof) and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
5.4.2. Noncircumvention.
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 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 (i) 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, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) 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.
5.4.3. Authorizations,
Exemptions and Consents. Before taking any action that 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.
5.5. Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by
and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.
Each party 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, 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, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.
Each party 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 party at the address
in effect for notices to it under this Warrant 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 other manner permitted
by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in
such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding the foregoing, nothing
in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities
laws.
5.6. Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
5.7. Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right
to exercise this Warrant terminates on the Termination Date. No provision of this Warrant shall be construed as a waiver by the Holder
of any rights which the Holder may have under the federal securities laws and the rules and regulations of the Commission thereunder.
Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
5.8. Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed
to the Company, at 1015 O’Brien Dr., Menlo Park, CA 94025, Attention: Lior Tal, Chief Executive Officer, email address: ltal@cyngn.com,
or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent
by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing
on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest
of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
5.8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication
is delivered via e-mail at the e-mail address set forth in this Section 5.8 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 second Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any
notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.9. Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for
the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors
of the Company.
5.10. Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
5.11. Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to
the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
5.12. Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
a majority-in-interest of Holders of the Warrants, on the other hand. No modification or amendment or modification of the provisions hereof
may be waived in a manner that is more favorable to other holder(s) of Warrants, as applicable, or to treat any holder(s) of Warrants
in a manner that is in any respect not equal to the treatment of all other holder(s) of Warrants.
5.13. Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
5.14. Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
[CYN Pre-Funded Warrant Signature Page Follows]
[CYN Pre-Funded Warrant Signature Page]
IN WITNESS WHEREOF, the Company
has caused this Registered Pre-Funded Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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CYNGN INC. |
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By: |
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Name: |
Lior Tal |
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Its: |
Chief Executive Officer |
Exhibit 2.1
NOTICE OF EXERCISE
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
| ☐ | in lawful money of the United States. |
| ☐ | if permitted the cancellation of such number of Warrant
Shares as is necessary, in accordance with the formula set forth in subsection 2.3, to exercise this Warrant with respect to the maximum
number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2.3. |
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following
DWAC Account Number:
[SIGNATURE
OF HOLDER]
Name of Investing Entity: |
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Signature of Authorized Signatory of Investing Entity: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Date: |
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Exhibit 2.4.6
ASSIGNMENT FORM
(To assign the foregoing Warrant,
execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares of Common Stock.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name: |
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Address: |
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Phone Number: |
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Email Address: |
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Date: |
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Holder’s Signature: |
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Holder’s Address: |
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Exhibit 4.2
SERIES A WARRANT TO PURCHASE COMMON STOCK
CYNGN INC.
Warrant Shares: |
Issuance Date: December 20, 2024 |
THIS WARRANT TO PURCHASE
COMMON STOCK (the “Warrant”) certifies that, for value received, or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the Initial Exercise Date and on or prior to 5:00 p.m. (New York City time) on the sixty (60) month anniversary of the Initial Exercise
Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Cyngn Inc., a Delaware
corporation (the “Company”), up to shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one (1) share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2.2.
| 1. | Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms
have the meanings indicated in this Section 1: |
1.1. “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
1.2. “Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the
fees and expenses of which shall be paid by the Company.
1.3. “Board
of Directors” means the board of directors of the Company.
1.4. “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
1.5. “Commission”
means the United States Securities and Exchange Commission.
1.6. “Common
Stock” means the common stock of the Company, $0.00001 par value per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
1.7. “Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
1.8. “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.9. “Exempt
Issuance” means securities issued (i) under the Company’s current or future equity incentive plans or issued to employees,
directors or officers as compensation or consideration in the ordinary course of business, including any issuance of options (and the
underlying shares of Common Stock) in exchange for options issued under the Company’s equity incentive plans, (ii) issued pursuant
to agreements, options, restricted share units or convertible securities existing as of the date hereof provided the terms are not modified,
(iii) issued pursuant to acquisitions or strategic transactions (whether by merger, consolidation, purchase of equity, purchase of assets,
reorganization or otherwise) approved by a majority of the disinterested directors of the Company, provided that such securities are issued
as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of
any registration statement in connection therewith during the Standstill Period, and provided that any such issuance shall only be to
a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset
in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment
of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital
or to an entity whose primary business is investing in securities.
1.10. “Floor
Price” means (i) prior to Stockholder Approval, $0.805, a price equal to fifty percent (50%) of the Nasdaq Minimum Price
prior to the pricing date of this offering, as defined in Nasdaq Listing Rule 5635(d)(1)(A) (which price shall be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or similar transaction following the pricing date of this offering),
or (ii) following Stockholder Approval, $0.322, a price equal to twenty percent (20%) of the Nasdaq Minimum Price prior to pricing date
of this offering , as defined in Nasdaq Listing Rule 5635(d)(1)(A) (which price shall be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction following the pricing date).
1.11. “Initial
Exercise Date” means the Stockholder Approval Date.
1.12. “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
1.13. “Registration
Statement” means the Company’s registration statement on Form S-1 (File No. 333-).
1.14. “Reset
Date” means following the close of trading on the eleventh (11th) Trading Day after the Stockholder Approval Date.
1.15. “Reset
Period” means the period commencing on the first (1st) Trading Day following the Stockholder Approval Date and ending following
the close of trading on the tenth (10th) Trading Day thereafter.
1.16. “Reset
Price” means the greater of (i) the lowest single day Weighted Average Price of the Common Stock during the Reset Period
and (ii) the Floor Price (as adjusted for forward and reverse stock splits, recapitalizations, stock dividends and the like after the
pricing date of this offering).
1.17. “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.18. “Stockholder
Approval” means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC
(or any successor entity) from the stockholders of the Company, or board of directors in lieu thereof, with respect to issuance of all
of the Warrants and the Warrant Shares upon the exercise thereof, including without limitation:
1.18.1. to
render inapplicable clause (i) of the definition of the Floor Price in Section 1.9 hereof.
1.18.2. to
give full effect to the adjustment in the exercise price and number of Warrant Shares following a Dilutive Issuance pursuant to Section
3.2.
1.18.3. to
give full effect to the adjustment of the exercise price and number of shares of Common Stock underlying these Warrants pursuant to Section
3.3.
1.18.4. to
consent to any adjustment to the exercise price or number of shares of Common Stock underlying the Warrants in the event of a Share Combination
Event pursuant to Section 3.9.
1.18.5. to
consent to the voluntary adjustment, from time to time, of the exercise price of any and all currently outstanding warrants pursuant to
Section 3.10.
1.19. “Stockholder
Approval Date” means the first Trading Day following the Company’s notice to the Holder of Stockholder Approval.
1.20. “Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
1.21. “Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
1.22. “Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
1.23. “Transaction
Documents” means the Placement Agent Agreement dated December 19, 2024, these Warrants, such other Warrants as contemplated
in the Registration Statement, the Lock-Up Agreement and all exhibits and schedules thereto and hereto and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
1.24. “Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address
of 1 State Street, 30th Floor, New York, NY 10004-1561 and any successor transfer agent of the Company.
1.25. “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
1.26. “Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
2.1. Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise substantially in the form attached hereto as Exhibit 2.1 (the “Notice
of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2.4.1 herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate
Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on
a United States bank unless the cashless exercise procedure specified in Section 2.3 below is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised
in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days after the
date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection
to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on
the face hereof.
2.2. Exercise
Price. The exercise price per Warrant Share shall be $2.0125, subject to adjustment hereunder (the “Exercise Price”).
2.3. Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the resale of the Warrant Shares by the Holder or the resale of the Warrant Shares by the Holder, then this
Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall
be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice
of Exercise if such Notice of Exercise is (1) delivered pursuant to Section 2.1 hereof on a day that is not a Trading Day or (2) delivered
pursuant to Section 2.1 hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)
of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the
VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the highest Bid Price of the Common
Stock on the principal Trading Market as reported by Bloomberg L.P. within two (2) hours of the time of the Holder’s delivery of
the applicable Notice of Exercise pursuant to Section 2.1 hereof if such Notice of Exercise is executed during “regular trading
hours” or within two (2) hours after the close of “regular trading hours” on a Trading Day or (iii) the VWAP on the
date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is delivered
pursuant to Section 2.1 hereof after two (2) hours following the close of “regular trading hours” on such Trading Day; |
| (B) = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the
terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act,
the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2.3.
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2.3.
2.4. Mechanics
of Exercise.
2.4.1. Delivery
of Warrant Shares upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via cashless exercise and otherwise by physical delivery of a certificate or by
electronic delivery (at the election of the Holder), for the number of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) one (1) Trading Day after
the delivery to the Company of the Notice of Exercise and (ii) the number of Trading Days comprising the Standard Settlement Period after
the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery
of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment
of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) one (1) Trading
Day and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. Notwithstanding
anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for purposes of Regulation SHO under
the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery of the Warrant Shares. If the Company
fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the
Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share
Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a Transfer Agent
that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing,
with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which
may be delivered at any time after the Issuance Date, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00
p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes
hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant
Share Delivery Date.
2.4.2. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
2.4.3. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2.4.1
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
2.4.4. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, 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”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored and
return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in which case such exercise shall
be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving
rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a 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.
2.4.5. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
2.4.6. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and
such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit 2.4.6 duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.
The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of
the Warrant Shares.
2.4.7. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
2.5. Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such 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 portion of this Warrant beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2.5, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the
Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained
in this Section 2.5 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 2.5, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares
of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may
be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting
forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one (1)
Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. 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 or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares
of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder
prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 2.5, provided that the Beneficial Ownership Limitation in no event exceeds
9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of this Section 2.5 shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions
of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2.5
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.
3.1. Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares
of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event, and the number of Shares issuable upon exercise
of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3.1 shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
3.2. Subsequent
Equity Sales. If, at any time while this Warrant is outstanding (such period, the “Adjustment Period”),
the Company issues, sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell,
or grants any right to reprice, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other
disposition), or, in accordance with this Section 3.2, is deemed to have issued or sold, any shares of Common Stock or Common Stock Equivalents
for a consideration per share less than a price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed
issuance or sale (such Exercise Price then in effect is referred to as the “Applicable Price”) (the foregoing
a “Dilutive Issuance”), then simultaneously with the consummation (or, if earlier, the announcement) of such
Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the Dilutive Issuance price (the “Base
Share Price”) and the number of Warrant Shares issuable hereunder shall be proportionately increased such that the aggregate
Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged; provided that the
reduced Exercise Price shall not be less than the Floor Price. Notwithstanding the foregoing, if one or more Dilutive Issuances occurred
prior to the Stockholder Approval being obtained and the reduction of the Exercise Price was limited by clause (i) of the definition of
Floor Price, once the Stockholder Approval is obtained, the Exercise Price will automatically be reduced to equal the greater of (x) the
lowest Base Share Price with respect to any Dilutive Issuance that occurred prior to the Shareholder Approval being obtained, and (y)
the price determined by reference to clause (ii) of the definition of Floor Price. If the Company enters into a Variable Rate Transaction,
the Company shall be deemed to have issued shares of Common Stock or Common Stock Equivalents at the lowest possible price, conversion
price or exercise price at which such securities may be issued, converted or exercised. Notwithstanding the foregoing, no adjustments
shall be made, paid or issued under this Section 3.2 in respect of an Exempt Issuance. For the avoidance of doubt, in the event the Exercise
Price has been adjusted pursuant to this Section 3.2 and the Dilutive Issuance that triggered such adjustment does not occur, is not consummated,
is unwound or is cancelled after the facts for any reason whatsoever, in no event shall the Exercise Price be readjusted to the Exercise
Price that would have been in effect if such Dilutive Issuance had not occurred or been consummated. For all purposes of the foregoing,
the following shall be applicable:
3.2.1. Issuance
of Options. If, during the Adjustment Period, the Company in any manner grants or sells any Options and the lowest price per share
for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any convertible
securities (“Convertible Securities”) issuable upon exercise of any such Option (such shares of Common Stock
issuable upon such exercise of any Option or upon conversion, exercise or exchange of any Convertible Securities, the “Convertible
Securities Shares”) is less than the Applicable Price, then such shares of Common Stock shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes
of this Section 3.2.1, the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option” shall be
equal to (A) the sum of (1) the lowest amount of consideration (if any) received or receivable by the Company with respect to any one
Convertible Securities Share upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange
of any Convertible Security issuable upon exercise of such Option and (2) the lowest exercise price set forth in such Option for which
one Convertible Securities Share is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option, minus (B) the sum of all amounts paid or payable to the holder of such Option (or
any other Person), with respect to any one Convertible Securities Share, upon the granting or sale of such Option, upon exercise of such
Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option plus the value of any
other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other Person), with respect
to any one Convertible Securities Share. Except as contemplated below, no further adjustment of the Exercise Price shall be made upon
the actual issuance of such Convertible Securities Share or of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such Convertible Securities Share upon conversion, exercise or exchange of such Convertible Securities.
3.2.2. Issuance
of Convertible Securities. If, during the Adjustment Period, the Company in any manner issues or sells any Convertible Securities
and the lowest price per share for which one Convertible Securities Share is issuable upon the conversion, exercise or exchange thereof
is less than the Applicable Price, then such Convertible Securities Share shall be deemed to be outstanding and to have been issued and
sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this
Section 3.2.2, the “lowest price per share for which one Convertible Securities Share is issuable upon the conversion, exercise
or exchange thereof” shall be equal to (A) the sum of (1) the lowest amount of consideration (if any) received or receivable by
the Company with respect to one Convertible Securities Share upon the issuance or sale of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security and (2) the lowest conversion price set forth in such Convertible Security for which
one Convertible Securities Share is issuable upon conversion, exercise or exchange thereof, minus (B) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share, upon the issuance
or sale of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the
holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share. Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible Securities Share upon conversion,
exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of the Exercise Price has been or is to be made pursuant to other provisions of this Section 3.2,
except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issue or sale.
3.2.3. Change
in Option Price or Rate of Conversion. If, during the Adjustment Period, the purchase or exercise price provided for in any Options,
the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate
at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases
at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to
in Section 3.1), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would
have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes
of this Section 3.2.3, if the terms of any Option or Convertible Security that was outstanding as of the date of issuance of this Warrant
are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and
the Convertible Securities Share deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as
of the date of such increase or decrease. No adjustment pursuant to this Section 3.2 shall be made if such adjustment would result in
an increase of the Exercise Price then in effect.
3.2.4. Calculation
of Consideration Received. If any Option or Convertible Security is issued in connection with the issuance or sale or deemed issuance
or sale of any other securities of the Company (the “Primary Security”, and such Option or Convertible Security,
the “Secondary Securities” and together with the Primary Security, each a “Unit”),
together comprising one integrated transaction, the aggregate consideration per share with respect to such Primary Security shall be deemed
to be the lowest of (x) the purchase price of such Unit, and (y) if such Primary Security is an Option and/or Convertible Security, the
lowest price per share for which one share of Common Stock is at any time issuable upon the exercise or conversion of the Primary Security
in accordance with Section 3.2.1 or 3.2.2 above. If any shares of Common Stock, Options or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of cash received
by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration
consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be
the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt.
If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with
any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair market value
of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options
or Convertible Securities (as the case may be). The fair market value of any consideration other than cash or publicly traded securities
will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the
occurrence of an event requiring valuation (the “Valuation Event”), the fair market value of such consideration
will be determined within five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable
appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
3.2.5. Record
Date. If, during the Adjustment Period, the Company takes a record of stockholders for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
3.3. Exercise
Price and Warrant Shares Reset.
3.3.1. Warrant
Shares Reset Process. On the Reset Date, the Exercise Price shall be adjusted to equal the lower of (i) the Exercise Price then
in effect and (ii) the Reset Price. Upon such reset of the Exercise Price pursuant to this Section 3.3.1, the number of Warrant Shares
issuable upon exercise of this Warrant shall be increased such that the aggregate Exercise Price payable hereunder, after taking into
account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price on the Issuance Date (adjusted for any Warrants
exercised or sold by the Holder prior to such Reset Date) for the Warrant Shares then outstanding, subject to adjustment for any prior
exercises pursuant to Section 3.3.2.
3.3.2. Exercise
Prior to Reset Date. Notwithstanding the foregoing, if a Holder requests to exercise this Warrant, in whole or in part, prior
to the Reset Date on any given date following Stockholder Approval on which (i) the exercised Warrant Shares are registered pursuant to
an effective Registration Statement that is available for the resale of such Warrant Shares, (ii) the Holder can sell the exercised Warrant
Shares pursuant to Rule 144 without restriction or limitation and the Company has not had a Public Information Failure or (iii) twelve
(12) months immediately following the Issuance Date (any such date, an “Exercise Date”), then solely with respect
to such portion of this Warrant being exercised on such applicable Exercise Date, (a) such applicable Reset Date shall be deemed to mean
the Exercise Date, (b) such applicable Reset Period shall be deemed to have commenced on the applicable date set forth in clause (i),
(ii) or (iii) hereof and ended following the close of trading on the Trading Day immediately prior to the Exercise Date and (c) the applicable
Reset Price for such exercised Warrants shall be calculated pursuant to Section 3.3 solely with respect to such portion of this Warrant
being exercised on such applicable date (any such date, an “Exercise Date”), (a) such applicable Reset Period
shall be deemed to have commenced on the Stockholder Approval Date and to have ended on the Trading Day immediately prior to the Exercise
Date, and (b) the applicable Reset Price for such exercised Warrants shall be calculated pursuant to Section 3.3. For the avoidance of
doubt, following the calculation of the Reset Price pursuant to this Section 3.3.2, the Company’s obligations with regard to such
exercised Warrants shall be deemed satisfied and no additional Reset Price shall apply to such exercised Warrants.
3.4. Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all (or substantially all)
of the record holders of any class of shares 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
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent
that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
3.5. Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to all (or substantially all) 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 or options
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, 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 on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of 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,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the
time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has
exercised this Warrant.
3.6. Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their
shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock or 50%
or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization 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, or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common
equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant,
the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior
to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2.5 on the
exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is
the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a
result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 on the exercise of this Warrant). For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives
upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a
Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any
time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public
announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash
equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this
Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given
the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further,
that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders
of Common Stock will be deemed to have received common stock/shares of the Successor Entity (which Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this
Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable contemplated Fundamental Transaction for pricing purposes and reflecting (A)
a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement
of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1)
100% and (2) the 100 day volatility as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying
price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus
the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period
beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or
the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant
to this Section 3.6 and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated
Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by
wire transfer of immediately available funds (or such other consideration) within the later of (i) five (5) Business Days after the Holder’s
election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3.6
pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant that
is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the
shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this
Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the shares of Common Stock prior to such Fundamental Transaction and the
value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the
term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction,
each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead
to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities,
jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor
Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with
the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company
herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3.6 regardless of (i)
whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental
Transaction occurs prior to the Initial Exercise Date.
3.7. Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
3.8. Notice
to Holder.
3.8.1. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
3.8.2. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders
of the Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such
notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the
Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the
effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
3.9. Share
Combination Event Adjustment. In addition to the adjustments set forth in Section 3.1 above, if at any time and from time to time
on or after the Issuance Date there occurs any share split, reverse share split, share dividend, share combination recapitalization or
other similar transaction involving the Common Stock (each, a “Share Combination Event”, and such date thereof,
the “Share Combination Event Date”) and the lowest VWAP during the five (5) consecutive Trading Days immediately
following the Share Combination Event Date (the “Share Combination Adjustment Period”, and such price, the “Event
Market Price”) is less than the Exercise Price then in effect (after giving effect to the adjustment in clause 3.1 above),
then immediately following the close of trading on the primary Trading Market on the last day of the Share Combination Adjustment Period,
the Exercise Price then in effect shall be reduced (but in no event increased) to the Event Market Price and the number of Warrant Shares
issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on the Issuance Date for the Warrant Shares
then outstanding shall remain unchanged following such event; provided, however, if the Share Combination Event is effective after close
of Trading on the primary Trading Market, then the Share Combination Event Date shall be deemed to occur on the next Trading Day, and
the Share Combination Adjustment Period shall be adjusted accordingly; provided, further, that the adjustment to the Exercise Price in
this sentence shall not reduce the Exercise Price below the Floor Price; and provided further that notwithstanding the foregoing, if one
or more Share Combination Events occurred prior to the Stockholder Approval being obtained and the reduction of the Exercise Price was
limited by clause (i) of the definition of Floor Price, then once the Stockholder Approval is obtained, the Exercise Price will automatically
be reduced to equal the greater of (x) the lowest Event Market Price with respect to any Share Combination Event that occurred prior to
the Stockholder Approval being obtained, and (y) the price determined by reference to clause (ii) of the definition of Floor Price. For
the avoidance of doubt, (a) if the adjustment in the immediately preceding sentence would otherwise result in an increase in the Exercise
Price hereunder, no adjustment shall be made, and if this Warrant is exercised, on any given exercise date during the Share Combination
Adjustment Period, solely with respect to such portion of this Warrant exercised on such applicable exercise date, such applicable Share
Combination Adjustment Period shall be deemed to have ended on, and included, the Trading Day immediately prior to such exercise date
and the Event Market Price on such applicable exercise date will be the lowest VWAP of the Common Stock immediately during such the Share
Combination Adjustment Period prior to such exercise date and ending on, and including the Trading Day immediately prior to such exercise
date and (b) all adjustments pursuant to this Section 3.9 shall also be subject to Section 3.1 above, including any Event Market Price.
3.10. Voluntary
Adjustment by Company. Subject to the rules and regulations of the Trading Market and the consent of the Holder, the Company may
at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate
by the Board of Directors.
3.11. Stockholder
Approval. The Company shall hold a special meeting of stockholders (which may also be at the annual meeting of stockholders) at
the earliest practicable date after the date hereof, but in no event later than sixty (60) days after the Closing Date for the purpose
of obtaining Stockholder Approval, if required to effect the purpose thereof, with the recommendation of the Board that such proposal
be approved, and the Company shall solicit proxies from its stockholders in connection therewith in the same manner as all other management
proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. The Company
shall use its reasonable best efforts to obtain such Stockholder Approval, and officers, directors, and shareholders subject to the Lock-Up
Agreement shall cast their proxies in favor of such proposal. If the Company does not obtain Stockholder Approval at the first meeting,
the Company shall call a meeting every sixty (60) days thereafter to seek Stockholder Approval until the earlier of the date Stockholder
Approval is obtained or these Warrants are no longer outstanding.
3.12. Variable
Rate Transactions. The Company, at any time until the three (3) month anniversary of the Initial Exercise Date, shall be prohibited
from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common
Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or
exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market for the shares of Common Stock or (ii)
enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company
may issue securities at a future determined price. The Holder shall be entitled to obtain injunctive relief against the Company to preclude
any such issuance, which remedy shall be in addition to any right to collect damages and any adjustments herein.
4.1. Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto as Exhibit 2.4.6 duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days after the date on which the Holder delivers an assignment form to
the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder
for the purchase of Warrant Shares without having a new Warrant issued.
4.2. New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 4.1, as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the initial Issuance Date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
4.3. Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof 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.
5.1. No
Rights as Stockholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2.4.1, except as expressly set forth
in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section
2.3 or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein, in no event shall the Company be required to net cash
settle an exercise of this Warrant.
5.2. Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
5.3. Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.4. Authorized
Shares.
5.4.1. Reservation
of Authorized and Unissued Shares. The Company covenants that, during the period commencing on the Stockholder Approval Date through
the term of the Warrant, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares of Common Stock to provide for the issuance of the Warrant Shares upon the exercise of any
purchase rights under this Warrant and assuming that the number of Warrant Shares is being determined based on a Reset Price equal to
clause (ii) of the Floor Price. The Company further covenants that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith,
be duly authorized, validly issued, fully paid and nonassessable (which means that no further sums are required to be paid by the holders
thereof in connection with the issue thereof) and free from all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
5.4.2. Noncircumvention.
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 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 (i) 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, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, assuming that the Maximum
Eligibility Number is being determined based on a Reset Price equal to clause (ii) of the Floor Price and (iii) 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.
5.4.3. Authorizations,
Exemptions and Consents. Before taking any action that 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.
5.5. Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by
and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.
Each party 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, 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, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.
Each party 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 party at the address
in effect for notices to it under this Warrant 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 other manner permitted
by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in
such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding the foregoing, nothing
in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities
laws.
5.6. Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
5.7. Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right
to exercise this Warrant terminates on the Termination Date. No provision of this Warrant shall be construed as a waiver by the Holder
of any rights which the Holder may have under the federal securities laws and the rules and regulations of the Commission thereunder.
Without limiting any other provision of this , if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
5.8. Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed
to the Company, at 1015 O’Brien Dr., Menlo Park, CA 94025, Attention: Lior Tal, Chief Executive Officer, email address: ltal@cyngn.com,
or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent
by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing
on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest
of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
5.8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication
is delivered via e-mail at the e-mail address set forth in this Section 5.8 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 second Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any
notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.9. Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for
the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors
of the Company.
5.10. Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
5.11. Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to
the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
5.12. Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
a majority-in-interest of Holders of the Warrants, on the other hand. No modification or amendment or modification of the provisions hereof
may be waived in a manner that is more favorable to other holder(s) of Warrants, as applicable, or to treat any holder(s) of Warrants
in a manner that is in any respect not equal to the treatment of all other holder(s) of Warrants.
5.13. Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
5.14. Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
[CYN Series A Warrant Signature Page Follows]
[CYN Series A Warrant Signature Page]
IN WITNESS WHEREOF, the Company
has caused this Series A Common Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
|
CYNGN INC. |
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|
|
|
By: |
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|
Name: |
Lior Tal |
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Its: |
Chief Executive Officer |
Exhibit 2.1
NOTICE OF EXERCISE
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
| ☐ | in lawful money of the United States. |
| ☐ | if permitted the cancellation of such number of Warrant Shares
as is necessary, in accordance with the formula set forth in subsection 2.3, to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2.3. |
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following
DWAC Account Number:
[SIGNATURE
OF HOLDER]
Name of Investing Entity: |
|
Signature of Authorized Signatory of Investing Entity: |
|
Name of Authorized Signatory: |
|
Title of Authorized Signatory: |
|
Date: |
|
Exhibit 2.4.6
ASSIGNMENT FORM
(To assign the foregoing Warrant,
execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares of Common Stock.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name: |
|
Address: |
|
Phone Number: |
|
Email Address: |
|
Date: |
|
Holder’s Signature: |
|
Holder’s Address: |
|
Exhibit 4.3
SERIES
B WARRANT TO PURCHASE COMMON STOCK
CYNGN
INC.
Warrant
Shares: |
Issuance Date: December 20, 2024 |
THIS
WARRANT TO PURCHASE COMMON STOCK (the “Warrant”) certifies that, for value received, or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the Initial Exercise Date and on or prior to 5:00 p.m. (New York City time) on the thirty (30) month anniversary of the Initial Exercise
Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Cyngn Inc., a Delaware
corporation (the “Company”), up to shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one (1) share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2.2.
1. | Definitions.
In addition to the terms defined elsewhere in this Warrant, the following terms have the
meanings indicated in this Section 1: |
1.1. “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
1.2. “Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day
from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
1.3. “Board
of Directors” means the board of directors of the Company.
1.4. “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
1.5. “Commission”
means the United States Securities and Exchange Commission.
1.6. “Common
Stock” means the common stock of the Company, $0.00001 par value per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
1.7. “Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
1.8. “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.9. “Floor
Price” means (i) prior to Stockholder Approval, $0.805, a price equal to fifty percent (50%) of the Nasdaq Minimum Price
prior to the pricing date of this offering, as defined in Nasdaq Listing Rule 5635(d)(1)(A) (which price shall be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or similar transaction following the pricing date of this offering),
or (ii) following Stockholder Approval, $0.322, a price equal to twenty percent (20%) of the Nasdaq Minimum Price prior to pricing date
of this offering , as defined in Nasdaq Listing Rule 5635(d)(1)(A) (which price shall be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction following the pricing date).
1.10. “Initial
Exercise Date” means the Stockholder Approval Date.
1.11. “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
1.12. “Registration
Statement” means the Company’s registration statement on Form S-1 (File No. 333-).
1.13. “Reset
Date” means following the close of trading on the eleventh (11th) Trading Day after the Stockholder Approval Date.
1.14. “Reset
Period” means the period commencing on the first (1st) Trading Day following the Stockholder Approval Date and ending following
the close of trading on the tenth (10th) Trading Day thereafter.
1.15. “Reset
Price” means the greater of (i) the lowest single day Weighted Average Price of the Common Stock during the Reset Period
and (ii) the Floor Price (as adjusted for forward and reverse stock splits, recapitalizations, stock dividends and the like after the
pricing date of this offering).
1.16. “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.17. “Stockholder
Approval” means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC
(or any successor entity) from the stockholders of the Company, or board of directors in lieu thereof, with respect to issuance of all
of the Warrants and the Warrant Shares upon the exercise thereof, including without limitation:
1.17.1. to
render inapplicable clause (i) of the definition of the Floor Price in Section 1.9 hereof.
1.17.2. to
give full effect to the alternative cashless exercise provision pursuant to Section 2.3.
1.17.3. to
give full effect to the adjustment of the exercise price and number of shares of Common Stock underlying these Warrants pursuant to Section
3.3.
1.17.4. to
consent to any adjustment to the exercise price or number of shares of Common Stock underlying the Warrants in the event of a Share Combination
Event pursuant to Section 3.9.
1.17.5. to
consent to the voluntary adjustment, from time to time, of the exercise price of any and all currently outstanding warrants pursuant
to Section 3.10.
1.18. “Stockholder
Approval Date” means the first Trading Day following the Company’s notice to the Holder of Stockholder Approval.
1.19. “Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
1.20. “Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
1.21. “Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
1.22. “Transaction
Documents” means the Placement Agent Agreement dated December 19, 2024, these Warrants, such other Warrants as contemplated
in the Registration Statement, the Lock-Up Agreement and all exhibits and schedules thereto and hereto and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
1.23. “Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing
address of 1 State Street, 30th Floor, New York, NY 10004-1561 and any successor transfer agent of the Company.
1.24. “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
1.25. “Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
2.1. Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise substantially in the form attached hereto as Exhibit 2.1 (the “Notice
of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2.4.1 herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate
Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn
on a United States bank unless the cashless exercise procedure specified in Section 2.3 below is specified in the applicable Notice of
Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has
been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading
Days after the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in
purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number
of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company
shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection
to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated
on the face hereof.
2.2. Exercise
Price. The exercise price per Warrant Share shall be $2.0125, subject to adjustment hereunder (the “Exercise Price”).
2.3. Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the resale of the Warrant Shares by the Holder or the resale of the Warrant Shares by the Holder, then this
Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall
be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) = | as
applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable
Notice of Exercise if such Notice of Exercise is (1) delivered pursuant to Section 2.1 hereof
on a day that is not a Trading Day or (2) delivered pursuant to Section 2.1 hereof on a Trading
Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)
of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii)
at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding
the date of the applicable Notice of Exercise or (z) the highest Bid Price of the Common
Stock on the principal Trading Market as reported by Bloomberg L.P. within two (2) hours
of the time of the Holder’s delivery of the applicable Notice of Exercise pursuant
to Section 2.1 hereof if such Notice of Exercise is executed during “regular trading
hours” or within two (2) hours after the close of “regular trading hours”
on a Trading Day or (iii) the VWAP on the date of the applicable Notice of Exercise if the
date of such Notice of Exercise is a Trading Day and such Notice of Exercise is delivered
pursuant to Section 2.1 hereof after two (2) hours following the close of “regular
trading hours” on such Trading Day; |
| (B) = | the
Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) = | the
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance
with the terms of this Warrant if such exercise were by means of a cash exercise rather than
a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2.3.
Whether
or not an effective registration statement is available, the Holder may also effect an “alternative cashless exercise” following
the Stockholder Approval Date. In such event, the aggregate number of Warrant Shares issuable in such alternative cashless exercise pursuant
to any given Notice of Exercise electing to effect an alternative cashless exercise shall equal the product of (i) the aggregate number
of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise
were by means of a cash exercise rather than a cashless exercise, multiplied by (ii) 3.0. Notwithstanding anything herein to the contrary,
on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2.3 (including
an alternative cashless exercise pursuant to this paragraph). Notwithstanding anything herein to the contrary, on the Termination Date,
this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2.3.
2.4. Mechanics
of Exercise.
2.4.1. Delivery
of Warrant Shares upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise and otherwise by physical delivery of a
certificate or by electronic delivery (at the election of the Holder), for the number of Warrant Shares to which the Holder is entitled
pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) one
(1) Trading Day after the delivery to the Company of the Notice of Exercise and (ii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”).
Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of
the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares,
provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier
of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice
of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for
purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery
of the Warrant Shares. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise
by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each
$1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery Date) for each
Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company
agrees to maintain a Transfer Agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.
As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of
Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of
the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m.
(New York City time) on the Initial Exercise Date, which may be delivered at any time after the Issuance Date, the Company agrees to
deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise
Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than
in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
2.4.2. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.
2.4.3. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2.4.1
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
2.4.4. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, 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”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored and
return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in which case such exercise shall
be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving
rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to
pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a 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.
2.4.5. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
2.4.6. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and
such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit 2.4.6 duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the
Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic
delivery of the Warrant Shares.
2.4.7. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
2.5. Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such 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 portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2.5, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2.5 applies, the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2.5, in determining the number of outstanding shares of Common Stock, a Holder may rely on the
number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company
or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the
Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.
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 or its Affiliates or Attribution Parties since the date as of which
such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall
be 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 2.5, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held
by the Holder and the provisions of this Section 2.5 shall continue to apply. Any increase in the Beneficial Ownership Limitation will
not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2.5 to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or
to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant.
3.1. Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock
any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of Shares issuable
upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.
Any adjustment made pursuant to this Section 3.1 shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
3.2. Reserved.
3.3. Exercise
Price and Warrant Shares Reset.
3.3.1. Warrant
Shares Reset Process. On the Reset Date, the Exercise Price shall be adjusted to equal the lower of (i) the Exercise Price then
in effect and (ii) the Reset Price. Upon such reset of the Exercise Price pursuant to this Section 3.3.1, the number of Warrant Shares
issuable upon exercise of this Warrant shall be increased such that the aggregate Exercise Price payable hereunder, after taking into
account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price on the Issuance Date (adjusted for any Warrants
exercised or sold by the Holder prior to such Reset Date) for the Warrant Shares then outstanding, subject to adjustment for any prior
exercises pursuant to Section 3.3.2.
3.3.2. Exercise
Prior to Reset Date. Notwithstanding the foregoing, if a Holder requests to exercise this Warrant, in whole or in part, prior
to the Reset Date on any given date following Stockholder Approval on which (i) the exercised Warrant Shares are registered pursuant
to an effective Registration Statement that is available for the resale of such Warrant Shares, (ii) the Holder can sell the exercised
Warrant Shares pursuant to Rule 144 without restriction or limitation and the Company has not had a Public Information Failure or (iii)
twelve (12) months immediately following the Issuance Date (any such date, an “Exercise Date”), then solely
with respect to such portion of this Warrant being exercised on such applicable Exercise Date, (a) such applicable Reset Date shall be
deemed to mean the Exercise Date, (b) such applicable Reset Period shall be deemed to have commenced on the applicable date set forth
in clause (i), (ii) or (iii) hereof and ended following the close of trading on the Trading Day immediately prior to the Exercise Date
and (c) the applicable Reset Price for such exercised Warrants shall be calculated pursuant to Section 3.3 solely with respect to such
portion of this Warrant being exercised on such applicable date (any such date, an “Exercise Date”), (a) such
applicable Reset Period shall be deemed to have commenced on the Stockholder Approval Date and to have ended on the Trading Day immediately
prior to the Exercise Date, and (b) the applicable Reset Price for such exercised Warrants shall be calculated pursuant to Section 3.3.
For the avoidance of doubt, following the calculation of the Reset Price pursuant to this Section 3.3.2, the Company’s obligations
with regard to such exercised Warrants shall be deemed satisfied and no additional Reset Price shall apply to such exercised Warrants.
3.4. Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company grants, issues or
sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all (or substantially
all) of the record holders of any class of shares 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 on exercise hereof, including without limitation, the Beneficial Ownership Limitation) 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
3.5. Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to all (or substantially all) 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 or options
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, 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 on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of 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,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the
time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder
has exercised this Warrant.
3.6.
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or
any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all
or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted
to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization 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,
or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with
another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding shares of Common Stock
or 50% or more of the voting power of the common equity of the Company (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 2.5 on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 on the exercise of this
Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary,
in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option,
exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the
date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder
an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date
of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s
control, including not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company
or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised
portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental
Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock
are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided,
further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such
holders of Common Stock will be deemed to have received common stock/shares of the Successor Entity (which Entity may be the Company
following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value
of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable contemplated Fundamental Transaction for pricing purposes and reflecting (A)
a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement
of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1)
100% and (2) the 100 day volatility as obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying
price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus
the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period
beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or
the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant
to this Section 3.6 and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated
Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by
wire transfer of immediately available funds (or such other consideration) within the later of (i) five (5) Business Days after the Holder’s
election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3.6
pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant that
is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the
shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares
of capital stock (but taking into account the relative value of the shares of Common Stock prior to such Fundamental Transaction and
the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to
the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction,
each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead
to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor
Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity
or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents
with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the
Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3.6 regardless
of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a
Fundamental Transaction occurs prior to the Initial Exercise Date.
3.7. Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
3.8. Notice
to Holder.
3.8.1. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
3.8.2. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company
shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled
to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver
such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding
the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the
effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
3.9. Share
Combination Event Adjustment. In addition to the adjustments set forth in Section 3.1 above, if at any time and from time to
time on or after the Issuance Date there occurs any share split, reverse share split, share dividend, share combination recapitalization
or other similar transaction involving the Common Stock (each, a “Share Combination Event”, and such date thereof,
the “Share Combination Event Date”) and the lowest VWAP during the five (5) consecutive Trading Days immediately
following the Share Combination Event Date (the “Share Combination Adjustment Period”, and such price, the
“Event Market Price”) is less than the Exercise Price then in effect (after giving effect to the adjustment
in clause 3.1 above), then immediately following the close of trading on the primary Trading Market on the last day of the Share Combination
Adjustment Period, the Exercise Price then in effect shall be reduced (but in no event increased) to the Event Market Price and the number
of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on the Issuance Date for
the Warrant Shares then outstanding shall remain unchanged following such event; provided, however, if the Share Combination Event is
effective after close of Trading on the primary Trading Market, then the Share Combination Event Date shall be deemed to occur on the
next Trading Day, and the Share Combination Adjustment Period shall be adjusted accordingly; provided, further, that the adjustment to
the Exercise Price in this sentence shall not reduce the Exercise Price below the Floor Price; and provided further that notwithstanding
the foregoing, if one or more Share Combination Events occurred prior to the Stockholder Approval being obtained and the reduction of
the Exercise Price was limited by clause (i) of the definition of Floor Price, then once the Stockholder Approval is obtained, the Exercise
Price will automatically be reduced to equal the greater of (x) the lowest Event Market Price with respect to any Share Combination Event
that occurred prior to the Stockholder Approval being obtained, and (y) the price determined by reference to clause (ii) of the definition
of Floor Price. For the avoidance of doubt, (a) if the adjustment in the immediately preceding sentence would otherwise result in an
increase in the Exercise Price hereunder, no adjustment shall be made, and if this Warrant is exercised, on any given exercise date during
the Share Combination Adjustment Period, solely with respect to such portion of this Warrant exercised on such applicable exercise date,
such applicable Share Combination Adjustment Period shall be deemed to have ended on, and included, the Trading Day immediately prior
to such exercise date and the Event Market Price on such applicable exercise date will be the lowest VWAP of the Common Stock immediately
during such the Share Combination Adjustment Period prior to such exercise date and ending on, and including the Trading Day immediately
prior to such exercise date and (b) all adjustments pursuant to this Section 3.9 shall also be subject to Section 3.1 above, including
any Event Market Price.
3.10. Voluntary
Adjustment by Company. Subject to the rules and regulations of the Trading Market and the consent of the Holder, the Company
may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors.
3.11. Stockholder
Approval. The Company shall hold a special meeting of stockholders (which may also be at the annual meeting of stockholders)
at the earliest practicable date after the date hereof, but in no event later than sixty (60) days after the Closing Date for the purpose
of obtaining Stockholder Approval, if required to effect the purpose thereof, with the recommendation of the Board that such proposal
be approved, and the Company shall solicit proxies from its stockholders in connection therewith in the same manner as all other management
proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. The Company
shall use its reasonable best efforts to obtain such Stockholder Approval, and officers, directors, and shareholders subject to the Lock-Up
Agreement shall cast their proxies in favor of such proposal. If the Company does not obtain Stockholder Approval at the first meeting,
the Company shall call a meeting every sixty (60) days thereafter to seek Stockholder Approval until the earlier of the date Stockholder
Approval is obtained or these Warrants are no longer outstanding.
3.12. Variable
Rate Transactions. The Company, at any time until the three(3) month anniversary of the Initial Exercise Date, shall be prohibited
from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common
Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price
or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common
Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that
is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market for the shares of Common Stock or (ii)
enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company
may issue securities at a future determined price. The Holder shall be entitled to obtain injunctive relief against the Company to preclude
any such issuance, which remedy shall be in addition to any right to collect damages and any adjustments herein.
4.1. Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of
this Warrant substantially in the form attached hereto as Exhibit 2.4.6 duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of
this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which
case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days after the date on which the Holder delivers
an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
4.2. New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section 4.1, as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial Issuance Date of this
Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
4.3. Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof 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.
5.1. No
Rights as Stockholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2.4.1, except as expressly set forth
in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section
2.3 or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein, in no event shall the Company be required to net
cash settle an exercise of this Warrant.
5.2. Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
5.3. Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
5.4. Authorized
Shares.
5.4.1. Reservation
of Authorized and Unissued Shares. The Company covenants that, during the period commencing on the Stockholder Approval Date
through the term of the Warrant, it will reserve from its authorized and unissued Common Stock a sufficient number of shares of Common
Stock to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant and assuming that
the number of Warrant Shares is being determined based on a Reset Price equal to clause (ii) of the Floor Price. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing
the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
(which means that no further sums are required to be paid by the holders thereof in connection with the issue thereof) and free from
all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
5.4.2. Noncircumvention.
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 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 (i) 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, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, assuming that the Maximum
Eligibility Number is being determined based on a Reset Price equal to clause (ii) of the Floor Price and (iii) 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.
5.4.3. Authorizations,
Exemptions and Consents. Before taking any action that 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.
5.5. Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by
and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.
Each party 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, 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, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding. Each party 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 party at the address in effect for notices to it under this Warrant 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
other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant,
the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding
the foregoing, nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under
the federal securities laws.
5.6. Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
5.7. Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right
to exercise this Warrant terminates on the Termination Date. No provision of this Warrant shall be construed as a waiver by the Holder
of any rights which the Holder may have under the federal securities laws and the rules and regulations of the Commission thereunder.
Without limiting any other provision of this , if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
5.8. Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any
Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service,
addressed to the Company, at 1015 O’Brien Dr., Menlo Park, CA 94025, Attention: Lior Tal, Chief Executive Officer, email address:
ltal@cyngn.com, or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and
all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally,
by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of
such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address
set forth in this Section 5.8 prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission,
if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section 5.8 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 second Trading Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to
be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.9. Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for
the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors
of the Company.
5.10. Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
5.11. Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be
enforceable by the Holder or holder of Warrant Shares.
5.12. Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
a majority-in-interest of Holders of the Warrants, on the other hand. No modification or amendment or modification of the provisions
hereof may be waived in a manner that is more favorable to other holder(s) of Warrants, as applicable, or to treat any holder(s) of Warrants
in a manner that is in any respect not equal to the treatment of all other holder(s) of Warrants.
5.13. Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
5.14. Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
********************
[CYN
Series B Warrant Signature Page Follows]
[CYN
Series B Warrant Signature Page]
IN
WITNESS WHEREOF, the Company has caused this Series B Common Warrant to be executed by its officer thereunto duly authorized as of the
date first above indicated.
|
CYNGN INC. |
|
|
|
|
By: |
|
|
Name: |
Lior Tal |
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Its: |
Chief Executive Officer |
Exhibit
2.1
NOTICE
OF EXERCISE
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
| ☐ | in
lawful money of the United States. |
| ☐ | if
permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2.3,
to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2.3. |
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The
Warrant Shares shall be delivered to the following DWAC Account Number:
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: |
|
Signature
of Authorized Signatory of Investing Entity: |
|
Name
of Authorized Signatory: |
|
Title
of Authorized Signatory: |
|
Date: |
|
Exhibit
2.4.6
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase
shares of Common Stock.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
|
Address: |
|
Phone
Number: |
|
Email
Address: |
|
Date: |
|
Holder’s
Signature: |
|
Holder’s
Address: |
|
Exhibit 10.1
SECURITIES
PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of December 20, 2024, between Cyngn Inc., a Delaware corporation (the “Company”),
and each purchaser identified on the signature pages hereto (including their respective successors and assigns, each a “Purchaser”
and collectively, the “Purchasers”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of 1933,
as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as follows:
| 1. | Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms have the meanings set forth in this Section 1: |
1.1. “Acquiring
Person” shall have the meaning ascribed to such term in Section 4.4.
1.2. “Action”
shall have the meaning ascribed to such term in Section 3.1.10.
1.3. “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
1.4. “Agreement”
shall have the meaning ascribed to such term in the preamble.
1.5. “BHCA”
shall have the meaning ascribed to such term in Section 3.1.42.
1.6. “Board
of Directors” means the board of directors of the Company.
1.7. “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
1.8. “Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
1.9. “Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the
applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and
(ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later
than the second (2nd) Trading Day following the date hereof.
1.10. “Code”
means the Internal Revenue Code of 1986, as amended.
1.11. “Commission”
means the United States Securities and Exchange Commission.
1.12. “Common
Stock” means the common stock of the Company, $0.00001 par value per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
1.13. “Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
1.14. “Common
Warrants” means the warrants to purchase shares of Common Stock delivered to the Purchasers at the Closing in accordance
with Section 2.2.1 hereof, which Common Warrants shall be in the forms of Exhibit 1.14.1 and Exhibit 1.14.2
attached hereto.
1.15. “Company”
shall have the meaning ascribed to such term in the preamble.
1.16. “Company
Counsel” means with respect to U.S. federal securities law and New York law, Sichenzia Ross Ference Carmel LLP, 1185 Avenue
of the Americas, 31st Floor, New York, New York 10036.
1.17. “Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
1.18. “Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time)
and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the
date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight
(New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof,
unless otherwise instructed as to an earlier time by the Placement Agent.
1.19. “DVP”
shall have the meaning ascribed to such term in Section 2.1.
1.20. “Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1.19.
1.21. “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.22. “Exempt
Issuance” means (i) any conventional bank loans that are not convertible into shares of Common Stock or Common Stock
Equivalents and do not involve any issuance of any shares of Common Stock or Common Stock Equivalents or other security of the
Company in connection therewith; (ii) shares of Common Stock or options issued to employees, officers or directors of the Company
pursuant to the Company’s equity incentive plans or pursuant to the compensation agreements previously authorized by the Board
of Directors; (iii) securities issued upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with
stock splits or combinations) or to extend the term of such securities; (iv) securities issued pursuant to acquisitions or strategic
transactions (whether by merger, consolidation, purchase of equity, purchase of assets, reorganization or otherwise) approved by a
majority of the disinterested directors of the Company, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration
statement in connection therewith during the sixty (60) days following the Closing Date, and provided that any such issuance shall
only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an
owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for
the purpose of raising capital or to an entity whose primary business is investing in securities and (v) securities issues pursuant
to this Agreement or the Placement Agent Agreement.
1.23. “FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
1.24. “Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1.42.
1.25. “Final
Prospectus” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the
Commission and delivered by the Company to each Purchaser at the Closing.
1.26. “GAAP”
shall have the meaning ascribed to such term in Section 3.1.8.
1.27. “Indebtedness”
shall have the meaning ascribed to such term in Section 3.1.28.
1.28. “Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1.16.
1.29. “IT
Systems and Data” shall have the meaning ascribed to such term in Section 3.1.45.
1.30. “Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
1.31. “Lock-Up
Agreement” means the Lock-Up Agreement, dated as of the date hereof, by and among the Company and the directors,
executive officers, employees and stockholders holding at least ten percent (10%) of the outstanding shares of Common Stock on a
fully converted basis, in the form of Exhibit 1.31 attached hereto.
1.32. “Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1.2.
1.33. “Material
Permits” shall have the meaning ascribed to such term in Section 3.1.14.
1.34. “Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1.43.
1.35. “OFAC”
shall have the meaning ascribed to such term in Section 3.1.40.
1.36. “Per
Unit Purchase Price” equals $1.61 (less $0.0001 for each Pre-Funded Warrant), subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this
Agreement.
1.37. “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
1.38. “PFIC”
shall have the meaning ascribed to such term in Section 4.15.
1.39. “Placement
Agent” means Aegis Capital Corp.
1.40. “Placement
Agent Agreement” means the placement agent agreement, dated on or about the date hereof, between the Company and the Placement
Agent relating to the purchase and sale of the Securities under this Agreement and the purchase and sale of Securities to other accredited
investors pursuant to the terms of such Placement Agent Agreement.
1.41. “Pre-Funded
Warrants” means the pre-funded Common Stock purchase warrants, in the form of Exhibit 1.41.1 attached hereto
delivered to the Purchasers at the Closing in accordance with Section 2.2.1 hereof, which Pre-Funded Warrants shall be exercisable immediately
and shall expire when exercised in full.
1.42. “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
1.43. “Prospectus”
means the base prospectus filed for the Registration Statement.
1.44. “Final
Prospectus” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the
Commission and delivered by the Company to each Purchaser at the Closing.
1.45. “Public
Information Failure” shall have the meaning ascribed to such term in Section 4.1.2.
1.46. “Purchaser”
shall have the meaning ascribed to such term in the preamble.
1.47. “Purchaser
Party” shall have the meaning ascribed to such term in Section 4.7.
1.48. “Registration
Statement” means the effective registration statement on Form S-1 with Commission (File No. 333-283514), including
all information, documents and exhibits filed with or incorporated by reference into such registration statement, which registers the
sale of the Securities to the Purchasers.
1.49. “Required
Approvals” shall have the meaning ascribed to such term in Section 3.1.5.
1.50. “Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
1.51. “Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
1.52. “SEC
Reports” shall have the meaning ascribed to such term in Section 3.1.8.
1.53. “Securities”
means the Shares, the Warrants and the Warrant Shares purchased pursuant to this Agreement.
1.54. “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.55. “Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement, but excluding the Warrant Shares.
1.56. “Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not
be deemed to include locating and/or borrowing shares of Common Stock).
1.57. “Stockholder
Approval” means such approval as may be required by the applicable rules and regulations of the The Nasdaq Stock Market
LLC (or any successor entity) from the stockholders of the Company, or board of directors in lieu thereof, with respect to issuance of
all of the Common Warrants and the Warrant Shares upon the exercise thereof and/or to give full effect to the terms of the Common Warrants
without regard to clause (i) of the definition of “Floor Price” (as defined in the Common Warrants).
1.58. “Stockholder
Approval Date” means the date on which Stockholder Approval is received and deemed effective.
1.59. “Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Securities purchased hereunder as specified below
such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United
States dollars and in immediately available funds.
1.60. “Subsidiary”
means any subsidiary of the Company as set forth in Schedule 3.1.1 and shall, where applicable, also include any direct or indirect subsidiary
of the Company formed or acquired after the date hereof.
1.61. “Trading
Day” means a day on which the principal Trading Market is open for trading.
1.62. “Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange, the OTCQB, OTCQX, Pink Open Market (or any successors to any of the foregoing).
1.63. “Transaction
Documents” means this Agreement, the Securities, the Placement Agent Agreement, the Lock-Up Agreements and all exhibits
and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
1.64. “Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address
of 1 State Street, 30th Floor, New York, NY 10004-1561 and an email address of saqui@continentalstock.com, and any successor transfer
agent of the Company.
1.65. “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the OTC Pink (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported,
or (d) in all other cases, the fair market value of the Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
1.66. “Warrants”
means, collectively, the Pre-Funded Warrants and the Common Warrants.
1.67. “Warrant
Shares” means the shares of Common Stock underlying the Warrants.
2.1. Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase,
up to an aggregate of approximately $20 million of Shares and Warrants; provided, however, that a Purchaser in its sole discretion, may
elect to purchase Pre-Funded Warrants in lieu of Shares in such manner to result in the same aggregate purchase price being paid by such
Purchaser less $0.0001 per Pre-Funded Warrant. Each Purchaser shall make such Purchaser’s Subscription Amount as set forth on the
signature page hereto executed by such Purchaser available to be delivered to the Company (or its designee) via DVP (as defined below),
and the Company shall deliver to each Purchaser its respective Securities, as determined pursuant to Section 2.2.1, and the Company and
each Purchaser shall deliver the other items set forth in Section 2.2.2 deliverable at the Closing. Upon satisfaction of the covenants
and conditions set forth in Sections 2.3.1 and 2.3.2, the Closing shall occur at the offices of counsel to the Placement Agent or such
other location (or remotely by electronic means) as the parties shall mutually agree. Unless otherwise directed by the Placement Agent,
settlement of the Shares and Warrants shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on
the Closing Date, the Company shall issue the Warrants and Shares registered in the Purchasers’ names and addresses and released
by the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the
Placement Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be made by the
Placement Agent (or its clearing firm) by wire transfer to the Company).Notwithstanding anything herein to the contrary, if at any time
on or after the time of execution of this Agreement by the Company and an applicable Purchaser, through and including the time immediately
prior to the Closing (the “Pre-Settlement Period”), if such Purchaser sells to any Person all, or any portion,
of any Shares or Warrant Shares to be issued hereunder to such Purchaser at the Closing (collectively, the “Pre-Settlement
Shares”), such Purchaser shall, automatically hereunder (without any additional required actions by such Purchaser or the
Company), be deemed to be unconditionally bound to purchase such Pre-Settlement Shares at the Closing; provided, that the Company shall
not be required to deliver any Pre-Settlement Shares to such Purchaser prior to the Company’s receipt of the purchase price for
such Pre-Settlement Shares hereunder, and provided further that the Company hereby acknowledges and agrees that the foregoing shall not
constitute a representation or covenant by such Purchaser as to whether or not such Purchaser will elect to sell any Pre-Settlement Shares
during the Pre-Settlement Period. The decision to sell any Pre-Settlement Shares will be made in the sole discretion of such Purchaser
from time to time, including during the Pre-Settlement Period.
2.2. Deliveries.
2.2.1. The
Company shall deliver or cause to be delivered to each Purchaser or the Placement Agent, as appropriate, the following at the times stated:
2.2.1.1 on
the date hereof:
2.2.1.1.1. this
Agreement duly executed by the Company.
2.2.1.1.2. a
certificate executed by the Chief Financial Officer of the Company in customary form reasonably satisfactory to the Placement Agent and
its counsel.
2.2.1.1.3. the
Lock-Up Agreements.
2.2.1.1.4. the
Placement Agent Agreement.
2.2.1.2 on
or prior to the Closing Date:
2.2.1.2.1. a
legal opinion of Company Counsel, addressed to the Placement Agent and the Purchasers, in form and substance reasonably acceptable to
the Placement Agent and the Purchasers.
2.2.1.2.2. a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, a certificate
(or at the request of the Purchaser, book entry statement) evidencing a number of Shares equal to the portion of such Purchaser’s
Subscription Amount applicable to Share divided by the Per Unit Purchase Price, registered in the name of such Purchaser.
2.2.1.2.3. for
each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, a Pre-Funded Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to Pre-Funded Warrants
divided by the Per Unit Purchase Price, with an exercise price equal to $0.0001, subject to adjustment as provided therein.
2.2.1.2.4. the
Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief
Executive Officer or Chief Financial Officer.
2.2.1.2.5. a
duly executed and delivered Officers’ Certificate, in customary form reasonably satisfactory to the Placement Agent and its counsel.
2.2.1.2.6. a
cold comfort letter from the Company’s auditor, addressed to the Placement Agent in form and substance reasonably satisfactory in
all material respects.
2.2.1.2.7. the
Series A Registered Common Warrants registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal
to 100.0% of the sum of the number of Shares and Pre-Funded Warrants stated on such Purchaser’s signature page hereto.
2.2.1.2.8. the
Series B Registered Common Warrants registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal
to 100.0% of the sum of the number of Shares and Pre-Funded Warrants stated on such Purchaser’s signature page hereto.
2.2.2. Each
Purchaser, and the Placement Agent, as applicable, shall deliver or cause to be delivered to the Company the following at the times stated:
2.2.2.1 on
the date hereof:
2.2.2.1.1. this
Agreement duly executed by such Purchaser.
2.2.2.1.2. the
Placement Agent Agreement executed by the Placement Agent.
2.2.2.2 on
or prior to the Closing Date, such Purchaser’s the Subscription Amount shall be made available for DVP settlement with the Company
or its designee.
2.3. Closing
Conditions.
2.3.1. The
obligations of the Company hereunder in connection with the Closing are subject to each of the following conditions being met:
2.3.1.1 the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date.
2.3.1.2 all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed.
2.3.1.3 the
delivery by each Purchaser of the items set forth in Section 2.2.2 of this Agreement.
2.3.2. The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to each of the following conditions being
met:
2.3.2.1 the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date).
2.3.2.2 all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed.
2.3.2.3 the
delivery by the Company of the items set forth in Section 2.2.1 of this Agreement.
2.3.2.4 there
shall have been no Material Adverse Effect with respect to the Company since the date hereof.
2.3.2.5 from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude
in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the Closing.
| 3. | Representations and Warranties. |
3.1. Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser:
3.1.1. Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1.1. The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights
to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in
the Transaction Documents shall be disregarded.
3.1.2. Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is
in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on
the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any
of (i), (ii) or (iii), a “Material Adverse Effect”; provided, however, that “Material Adverse
Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or
attributable to: (i) the announcement, pendency or completion of the transactions contemplated by the Transaction Documents, or (ii)
any action required or permitted by the Transaction Documents or any action taken (or omitted to be taken) with the written consent
of or at the written request of Purchaser). As to all Company and Subsidiary power, authority and qualification, no Proceeding has
been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.
3.1.3. Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other
than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or
upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute
the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
3.1.4. No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, 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 upon any of
the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or
similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is
bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result
in a Material Adverse Effect.
3.1.5. Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person
in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required
pursuant to Section 4.3 of this Agreement, (ii) the filing with the Commission of the Final Prospectus to the Registration Statement ,
(iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of
the Shares and Warrant Shares for trading thereon in the time and manner required thereby, (v) the Stockholder Approval and such other
filings as are required to be made under applicable state securities laws (the “Required Approvals”).
3.1.6. Issuance
of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable (which means that no further sums
are required to be paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents and applicable law. The Warrant Shares, when
issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable (which means
that no further sums are required to be paid by the holders thereof in connection with the issue thereof), free and clear of all
Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents and applicable law. The
Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this
Agreement and the Warrants. The Company has prepared and filed the Registration Statement in conformity with the requirements of the
Securities Act, which became effective on , including the Prospectus, and such amendments and supplements thereto as may have been
required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has
been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are
threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Final
Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became
effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed
and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or
supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of
the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The
Company was at the time of the filing of the Registration Statement eligible to use Form S-1. The Company is eligible to use Form
S-1 under the Securities Act and it meets the requirements set forth in General Instruction I.B. of Form S-1.
3.1.7. Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1.7, which Schedule 3.1.7 shall also include the
number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. Other than as
stated in Schedule 3.1.7, the Company has not issued any capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares
of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise
of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has
any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents. Except as set forth in Schedule 3.1.7, or pursuant to this Agreement, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common
Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary
is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The
issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities
to any Person (other than the Purchasers). Except as set forth in Schedule 3.1.7, there are no outstanding securities or instruments
of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or
instrument upon an issuance of securities by the Company or any Subsidiary. Except as set forth in Schedule 3.1.7, there are no outstanding
securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There
are no stockholders’ agreements, voting agreements or other similar agreements with respect to the Company’s capital stock
to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
3.1.8. SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to
be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Final
Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the
Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
3.1.9. Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as set forth on Schedule 3.1.9, (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or
disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the
Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this
Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to
occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations,
assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time
this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that
this representation is made.
3.1.10. Litigation.
Except as set forth in Schedule 3.1.10, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or,
to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”). None of the Actions set forth on Schedule 3.1.10, (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or (ii) would, if there were an unfavorable decision, have
or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company, except in the ordinary
course of business that would not have a Material Adverse Effect. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
3.1.11. Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the
Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the
Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that
their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and
foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
3.1.12. Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan
or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court,
arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.
3.1.13. Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii)
have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),
(ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
3.1.14. Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.
3.1.15. Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable
rights to lease or otherwise use, all real property and all personal property that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens that do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property by the Company and the
Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in
accordance with GAAP, and the payment of which is neither delinquent nor subject to penalties. Neither the Company nor any of its
Subsidiaries has received any written notice of any claim of any sort that has been asserted by anyone adverse to the rights of the
Company or its Subsidiaries under any of the leases or subleases or licenses or with respect to the properties mentioned above, or
affecting or questioning the rights of the Company or any Subsidiary to the continued possession or use of the leased or subleased
or licensed premises or the properties mentioned above, other than such claims which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
3.1.16. Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar
rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure
to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of,
and neither the Company nor any Subsidiary has received notice (written or otherwise) that any of, the Intellectual Property Rights has
expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years after the date of this
Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within
the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge
of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of
the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
3.1.17. Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage in amount deemed prudent by the Company. Neither the Company nor any Subsidiary has any
reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
3.1.18. Transactions
with Affiliates and Employees. Except as set forth on Schedule 3.1.18, during the past three fiscal years and the subsequent
interim period through the date of this Agreement, none of the officers or directors of the Company or any Subsidiary and, to the
knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than 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,
providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i)
payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and
(iii) other employee benefits, including stock option agreements under any stock option plan of the Company.
3.1.19. Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as set forth on Schedule
3.1.19, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access
to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed
by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness
of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its
most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in
the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have
materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its
Subsidiaries.
3.1.20. Certain
Fees. Except for the fees and expenses of the Placement Agent, no brokerage or finder’s fees or commissions are or will
be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section
3.1.20 that may be due in connection with the transactions contemplated by the Transaction Documents.
3.1.21. Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.
To the Company’s knowledge, the issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market.
3.1.22. Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not
be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
3.1.23. Registration
Rights. Except as disclosed on Schedule 3.1.23, no Person has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary.
3.1.24. Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
Except as disclosed int the Company’s SEC filings, the Company has not, in the 12 months preceding the date hereof, received notice
from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in
the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently
eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current
in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic
transfer.
3.1.25. Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state
of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations
or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of
the Securities and the Purchasers’ ownership of the Securities.
3.1.26. Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands and
confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. All
of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months
preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.
3.1.27. No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither
the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such
securities under the Securities Act, or (ii) any applicable stockholder approval provisions of any Trading Market on which any of the
securities of the Company are listed or designated.
3.1.28. Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry
on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital
availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it
to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts
on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its
debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year after the Closing Date. Schedule 3.1.28
sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which
the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means
(x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the
ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of
others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
3.1.29. Tax
Status. Except as disclosed in Schedule 3.1.29, the Company and its Subsidiaries each (i) has made or filed all material United
States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all material taxes and other governmental assessments and charges that are material in amount, shown
or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for
the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company
or of any Subsidiary know of no basis for any such claim.
3.1.30. No
General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
3.1.31. Foreign
Corrupt Practices Act. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign
or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.
3.1.32. Accountants.
The Company’s accounting firm is Marcum LLP, with offices at 1 Montgomery St., Suite 1700, San Francisco, CA 94104. To the knowledge
and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall
express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the now current fiscal
year.
3.1.33. No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.
3.1.34. Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is
acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any
advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and
the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further
represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has
been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
3.1.35. Acknowledgment
Regarding Purchaser’s Trading Activity. Notwithstanding anything in this Agreement or elsewhere herein to the contrary (except
for Sections 3.2.7 and 4.13 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked
by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company,
or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term, (ii)
past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of
the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock and (iv)
each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various
times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Warrant
Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of
the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted.
The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
3.1.36. Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) 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, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the
Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the
Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with
the placement of the Securities.
3.1.37. Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Purchasers shall be deemed
a representation and warranty by the Company to the Purchasers as to the matters covered thereby.
3.1.38. D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires most recently completed by each
of the Company’s directors and officers and beneficial owner of 5% or more of the shares of Common Stock or Common Stock Equivalents
is true and correct in all respects and the Company has not become aware of any information which would cause the information disclosed
in such questionnaires become inaccurate and incorrect.
3.1.39. Stock
Option Plans. Each stock option granted by the Company under the Company’s stock option plan, if any, was granted (i) in
accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value
of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under
the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
3.1.40. Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
3.1.41. U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
3.1.42. Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more
of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company
nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.
3.1.43. Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company or any Subsidiary, threatened.
3.1.44. Other
Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person)
that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any
Securities.
3.1.45. Cybersecurity.
(i) (a) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information
technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers,
vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and
Data”) and (b) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition
that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and
the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of
any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy
and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation
or modification, except, in the case of clauses (i) and (ii) herein, as would not, individually or in the aggregate, have a Material Adverse
Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect
its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and
(iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and
practices.
3.2. Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of
the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be
accurate as of such date):
3.2.1. Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good
standing under the law of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction
Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized
by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.
Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the legal, valid and binding obligation of such Purchaser, enforceable against it
in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
3.2.2. Own
Account. Such Purchaser is acquiring the Securities as principal for its own account and has no present intention of distributing
any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities
Act or any applicable state securities law (this representation and warranty shall not limit such Purchaser’s right to sell the
Securities pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser
is acquiring the Securities hereunder in the ordinary course of its business.
3.2.3. Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which
it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7),
(a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a)(1) under the Securities Act. Such Purchaser hereby represents that neither such Purchaser nor any of its Rule 506(d) Related Parties
(as defined below) is a “bad actor” within the meaning of Rule 506(d) promulgated under the Securities Act. For purposes of
this Agreement, “Rule 506(d) Related Party” shall mean a person or entity covered by the “Bad Actor disqualification”
provision of Rule 506(d) of the Securities Act.
3.2.4. Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
3.2.5. General
Solicitation. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.
3.2.6. Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering
of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its
financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Such
Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such
Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired.
Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the
Securities and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such
Purchaser agrees need not be and has not been provided to it (other than with respect to the transactions contemplated by the
Transaction Documents). In connection with the issuance of the Securities to such Purchaser, neither the Placement Agent nor any of
its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.
3.2.7. Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor
has any Person acting on behalf of or pursuant to any understanding with such Purchaser, 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 Purchaser first
received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms
of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions
of such Purchaser’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 or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners,
legal and other advisors, employees, agents and Affiliates, such Purchaser 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
the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect
to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
The Company acknowledges and agrees that the representations
contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations
and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other
document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated
hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty,
or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
| 4. | Other Agreements of the Parties. |
4.1. Furnishing
of Information; Public Information.
4.1.1. Until
no Purchaser owns any Securities and the Common Warrants have terminated, the Company covenants to maintain the effectiveness of the registration
of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to use reasonable best efforts to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
4.1.2. At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities
(assuming cashless exercise for the Warrants) may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1)
and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current
public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer
in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”)
then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal
to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the day of a Public Information Failure
and on every thirtieth (30th) day (prorated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such
Public Information Failure is cured and (b) such time that such public information is no longer required for the Purchasers to transfer
the Shares and Warrant Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.1.2
are referred to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be
paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii)
the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event
the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear
interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available
to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
4.2. Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the 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.
4.3. Securities
Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material
terms of the transactions contemplated hereby, and (b) file, within the time required by the Exchange Act, a Current Report on Form
8-K, including the Transaction Documents as exhibits thereto, with the Commission. From and after the issuance of such press
release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information
delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors,
employees or agents (including, without limitation, the Placement Agent) in connection with the transactions contemplated by the
Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any
and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its
Subsidiaries, or any of their respective officers, directors, agents (including, without limitation, the Placement Agent), employees
or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate and be of no
further force or effect. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company. The Company and each Purchaser shall consult with each other in issuing any
other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any
such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which
consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing
party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing
with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) to
the extent required by federal securities law in connection with the filing of final Transaction Documents with the Commission and
(b) to the extent such disclosure is required by law or Trading Market regulations, in which such cases the Company shall (x) obtain
prior advice of competent counsel that such disclosure is required, (y) provide the Purchasers with prior notice of such disclosure
permitted under this Section 4.3 and (z) reasonably cooperate with such Purchasers regarding such disclosure.
4.4. Stockholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any
Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under
the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.5. Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.3, the Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes
constitutes, material non-public information, unless prior thereto such Purchaser shall have consented in writing to the receipt of such
information and agreed in writing with the Company to keep such information confidential. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company,
any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates delivers any material, non-public
information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall
not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents,
employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees
or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to
applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public
information regarding the Company or any Subsidiaries, the Company shall simultaneously with the delivery of such notice file such notice
with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying
on the foregoing covenant in effecting transactions in securities of the Company.
4.6. Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for general corporate purposes (which
for the avoidance of doubt may include acquisitions, in the Company’s discretion), including working capital. The Company shall
not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the
ordinary course of the Company’s business and prior practices), (b) for the redemption of any shares of Common Stock or Common Stock
Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.
4.7. Indemnification
of Purchasers. Subject to the provisions of this Section 4.7, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such
Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents,
(b) any action instituted against the Purchaser Parties in any capacity (including a Purchaser Party’s status as an investor),
or any of them or their respective Affiliates, by the Company or any stockholder of the Company who is not an Affiliate of such
Purchaser Party, arising out of or relating to any of the transactions contemplated by the Transaction Documents. For the avoidance
of doubt, the indemnification provided herein is intended to, and shall also cover, direct claims brought by the Company against the
Purchaser Parties; provided, however, that such indemnification shall not cover any loss, claim, damage or liability to the extent
it is finally judicially determined to be attributable to such Purchaser Party’s material breach of any of the
representations, warranties or covenants made by such Purchaser Party in any Transaction Document or any conduct by such Purchaser
Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct. If any action shall be
brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party
shall promptly notify the Company in writing, and, except with respect to direct claims brought by the Company, the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel to the applicable
Purchaser Party (which may be internal counsel), a material conflict on any material issue between the position of the Company and
the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement for any settlement by a
Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed. In
addition, if any Purchaser Party takes actions to collect amounts due under any Transaction Documents or to enforce the provisions
of any Transaction Documents, then the Company shall pay the costs incurred by such Purchaser Party for such collection, enforcement
or action, including, but not limited to, attorneys’ fees and disbursements. The indemnification and other payment obligations
required by this Section 4.7 shall be made by periodic payments of the amount thereof during the course of the investigation,
defense, collection, enforcement or action, as and when bills are received or are incurred; provided, however, that if any Purchaser
Party is finally judicially determined not to be entitled to indemnification or payment under this Section 4.7, such Purchaser Party
shall promptly reimburse the Company for any payments that are advanced under this sentence. The indemnity agreements contained
herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any
liabilities the Company may be subject to pursuant to law.
4.8. Listing
of Common Stock.
4.8.1. The
Company hereby agrees to use its best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on
which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares and
Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares and Warrant Shares on such Trading
Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then
include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of
the Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then
take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in
all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The
Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or
another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company
or such other established clearing corporation in connection with such electronic transfer.
4.8.2. In
addition, the Company shall hold a special meeting of stockholders (which may also be at the annual meeting of stockholders) at the earliest
practicable date after the date hereof, but in no event later than sixty (60) days after the date hereof for the purpose of obtaining
Stockholder Approval, with the recommendation of the Company’s Board of Directors that such proposal be approved, and the Company
shall solicit proxies from its stockholders in connection therewith in the same manner as all other management proposals in such proxy
statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. The Company shall use its reasonable
best efforts to obtain such Stockholder Approval. If the Company does not obtain Stockholder Approval at the first meeting, the Company
shall call a meeting every sixty (60) days thereafter to seek Stockholder Approval until the earlier of the date Stockholder Approval
is obtained or the Common Warrants are no longer outstanding. Notwithstanding the foregoing, the Company may, in lieu of holding a special
meeting of stockholders as aforesaid, obtain the written consent of a majority of its stockholders covering the Stockholder Approval so
long as prior to sixty (60) days after the date hereof, such written consents are obtained and in accordance with Exchange Act Rule 14c-2
at least twenty (20) days shall have transpired after the date on which a written information statement containing the information specified
in Schedule 14C detailing such Stockholder Approval shall have been filed with the SEC and delivered to stockholders of the Company.
4.9. Subsequent
Equity Sales.
4.9.1. From
the date hereof until sixty (60) days after the Closing Date, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement
to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or (ii) file any registration
statement or any amendment or supplement thereto, in each case other than solely with respect to securities issued pursuant to any share
or option plan duly adopted for such purpose by the Board of Directors or a committee of non-employee directors established for such purpose
for services rendered to the Company, on Form S-8.
4.9.2. Notwithstanding
the foregoing, this Section 4.9 shall not apply in respect of an Exempt Issuance or securities sold to other investors pursuant to the
Placement Agent Agreement.
4.10. Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same
consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended
for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a
group with respect to the purchase, disposition or voting of Securities or otherwise.
4.11. Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short
Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time
that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in
Section 4.3. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.3, such Purchaser
will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding the foregoing and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.3, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance
with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.3 and (iii) no Purchaser shall have any duty of confidentiality or duty
not to trade in the securities of the Company to the Company, any of its Subsidiaries, or any of their respective officers, directors,
employees, agents or Affiliates after the issuance of the initial press release as described in Section 4.3. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of
such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the covenant 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.
4.12. Capital
Changes. Until the date that is sixty (60) days after the Date, the Company shall not undertake a reverse or forward stock split
or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in interest of the Shares
and Pre-Funded Warrants, based on the initial Subscription Amounts hereunder.
4.13. Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares and Warrant Shares
pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay
or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.
4.14. Lock-Up
Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements (and any lock-up
agreements contemplated in the Lock-Up Agreements) except to extend the term of the lock-up period and shall enforce the provisions of
each Lock-Up Agreement (and any lock-up agreements contemplated in the Lock-Up Agreements) in accordance with its terms. If any party
to a Lock-Up Agreement (and any lock-up agreements contemplated in the Lock-Up Agreements) breaches any provision of a Lock-Up Agreement,
the Company shall promptly use its best efforts to seek specific performance of the terms of such Lock-Up Agreement (and any lock-up agreements
contemplated in the Lock-Up Agreements).
4.15. QEF
Election. If a Purchaser so requests in writing for any taxable year of the Company, the Company, after consulting with its outside
accounting firm, shall within fifteen (15) Business Days notify such Purchaser in writing that either (A) neither the Company nor any
of its Subsidiaries was a “passive foreign investment company” as defined in Section 1297 of the Code (“PFIC”)
for such year, or (B) the Company and/or one or more of its Subsidiaries was a PFIC for such year, in which event the Company shall provide
to such Purchaser, upon the reasonable written request of such Purchaser, the information reasonably necessary to allow such Purchaser
to elect to treat each of the Company and any applicable Subsidiaries (if any), respectively, as a “qualified electing fund”
(within the meaning of Section 1295 of the Code for such year, including a “PFIC Annual Information Statement” as described
in Treasury Regulation Section 1.1295-1(g)(1) (or any successor Treasury Regulation).
4.16. Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue
Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.17. Exercise
Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers
in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers
to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise the
Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions
and time periods set forth in the Transaction Documents.
5.1. Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated
on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination
will affect the right of any party to sue for any breach by any other party (or parties).
5.2. Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered
by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3. Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Final Prospectus,
contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules.
5.4. Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email
at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the time of transmission, if such notice or communication is delivered via email at the email address as
set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any
Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction
Document constitutes, or contains material, non-public information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.5. Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares and
Pre-Funded Warrants based on the initial Subscription Amounts hereunder (or, prior to Closing, the Company and each Purchaser) or,
in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any
amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such
disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any
subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party
to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that
disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights
and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment
effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
5.6. Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other
than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8. No
Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties of the
Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof
be enforced by, any other Person, except as otherwise set forth in Section 4.7 and this Section 5.8.
5.9. Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the law of the State of New York without regard to the principles of
conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of
the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, stockholders, partners, members, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City and County of New York 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 Action or Proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an
inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process
being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement 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 other manner permitted by law. If any party shall commence an Action or Proceeding to enforce
any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.7, the prevailing
party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
5.10. Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11. Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
5.12. Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13. Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any
of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document
and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of an
exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise
notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such Shares and the restoration
of such Purchaser’s right to acquire such Shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement
warrant certificate evidencing such restored right).
5.14. Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu
of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15. Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would
be adequate.
5.16. Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or
a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or
are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
5.17. Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are
several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the
performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers 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 Purchaser 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 Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by
its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience
only, each Purchaser and its respective counsel have chosen to communicate with the Company through the legal counsel to the
Placement Agent. The legal counsel of the Placement Agent does not represent any of the Purchasers and only represents the Placement
Agent. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the
Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that
each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely,
and not between the Company and the Purchasers collectively and not between and among the Purchasers.
5.18. Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
5.19. Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.20. Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.21. WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY
AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES
FOREVER TRIAL BY JURY.
[CYN Securities Purchase Agreement Signature
Pages Follows]
[CYN Securities Purchase Agreement – Company
Signature Page]
IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
CYNGN INC. |
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Address for Notice: |
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By: |
/s/ Lior Tal |
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Email: ltal@cyngn.com |
Name: |
Lior Tal |
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Title: |
Chief Executive Officer |
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[CYN Securities Purchase Agreement – Investor
Signature Page]
IN WITNESS WHEREOF, the undersigned
has caused this Securities Purchase Agreement to be duly executed by its authorized signatory as of the date first indicated above.
Name of Purchaser: |
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Signature of Authorized Signatory of Purchaser: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Email Address of Authorized Signatory: |
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Address for Notice to Purchaser: |
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Address for Delivery of Securities to Purchaser (if not same as address for notice): |
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Subscription Amount: |
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Shares: |
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Pre-funded Warrants: |
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Beneficial Ownership Blocker: |
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Series B Warrants: |
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Beneficial Ownership Blocker: |
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Series A Warrants: |
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Beneficial Ownership Blocker: |
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Employer Identification Number: |
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Exhibit 1.14.1
Form of Registered Pre-Funded Warrant
Exhibit 1.14.1
Form of Series A Registered Common Warrant
Exhibit 1.14.2
Form of Series A Registered Common Warrant
Exhibit 1.31
Form of Lock-Up Agreement
43
Exhibit 10.2
December 19, 2024
PERSONAL AND CONFIDENTIAL
Mr. Lior Tal, Chief Executive Officer
Cyngn Inc.
1015 O’Brien Dr.
Menlo Park, CA 94025
Re: | CYN | Best Efforts Secondary Offering | Agreement |
Dear Mr. Tal:
The purpose of this placement
agent agreement (“Agreement”) is to outline our agreement pursuant to which Aegis Capital Corp. (“Aegis”)
will act as the placement agent on a “best efforts” basis in connection with the proposed Best Efforts Secondary Offering
(the “Placement”) by Cyngn Inc. (collectively, with its subsidiaries and affiliates, the “Company”)
of its shares of Common Stock and warrants to purchase Common Stock (the “Securities”). This Agreement sets
forth certain conditions and assumptions upon which the Placement is premised. The Company expressly acknowledges and agrees that Aegis’s
obligations hereunder are on a reasonable “best efforts” basis only and that the execution of this Agreement does not constitute
a commitment by Aegis to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof
or the success of Aegis with respect to securing any other financing on behalf of the Company. The Company confirms that entry into this
Agreement and completion of the Placement with Aegis will not breach or otherwise violate the Company’s obligations to any other
party or require any payments to such other party. For the sake of clarity, such obligations may include but not be limited to obligations
under an engagement letter, placement agency agreement, underwriting agreement, advisory agreement, right of first refusal, tail fee obligation
or other agreement.
The terms of our agreement
are as follows:
1. | Engagement. The Company hereby engages Aegis, for the period beginning on the date hereof
and ending six (6) months thereafter or upon the completion of the Placement, whichever is sooner (the “Engagement Period”),
to act as the Company’s exclusive investment bank in connection with the proposed Placement. During the Engagement Period or until
the consummation of the Placement, and as long as Aegis is proceeding in good faith with preparations for the Placement, the Company agrees
not to solicit, negotiate with or enter into any agreement with any other source of financing (whether equity, debt or otherwise), any
underwriter, potential underwriter, placement agent, financial advisor, investment banking firm or any other person or entity in connection
with an offering of the Company’s debt or equity securities or any other financing by the Company. Aegis will use its reasonable
“best efforts” to solicit offers to purchase the Securities from the Company on the terms, and subject to the conditions,
set forth in the Prospectus (as defined below). Aegis shall use commercially reasonable efforts to assist the Company in obtaining performance
by each Purchaser (as defined below) whose offer to purchase Securities has been solicited by Aegis, but Aegis shall not, except as otherwise
provided in this Agreement, be obligated to disclose the identity of any potential purchaser or have any liability to the Company in the
event any such purchase is not consummated for any reason. The Company acknowledges that under no circumstances will Aegis be obligated
to underwrite or purchase any Securities for its own account and, in soliciting purchases of the Securities, Aegis shall act solely as
an agent of the Company. The services provided pursuant to this Agreement shall be on an “agency” basis and not on a “principal”
basis. |
1345
Avenue of the Americas ● New York, New York ● 10105
(212)
813-1010 ● Fax (212) 813-1047 ● Member FINRA, SIPC
2. | The Placement. The Placement is expected to consist of a sale of approximately $20.0 million
of the Company’s Securities. Aegis will act as placement agent for the Placement subject to, among other matters referred to herein
and additional customary conditions, completion of Aegis’s due diligence examination of the Company and its affiliates, listing
approval by the Nasdaq Capital Market (“Exchange”) of the Securities to be issued in connection with this Agreement
and a definitive Securities Purchase Agreement (“Securities Purchase Agreement”) with certain institutional
investors named therein. The actual size of the Placement, the precise number of Securities to be offered by the Company and the offering
price will be the subject of continuing negotiations between the Company and the investors thereto. |
3. | Placement Compensation. The placement commission will be 7.0% for the Placement. |
4. | Registration Statement. To the extent the Company decides to proceed with the Placement,
the Company will, as soon as practicable, prepare and file with the Securities and Exchange Commission (the “Commission”)
a Registration Statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933, as amended
(the “Securities Act”) and a prospectus included therein (the “Prospectus”) covering
the Securities to be offered and sold in the Placement. The Registration Statement (including the Prospectus therein), and all amendments
and supplements thereto, will be in form reasonably satisfactory to Aegis and counsel to Aegis. Other than any information provided by
Aegis in writing specifically for inclusion in the Registration Statement or the Prospectus, the Company will be solely responsible for
the contents of its Registration Statement and Prospectus and any and all other written or oral communications provided by or on behalf
of the Company to any actual or prospective investor of the Securities, and the Company represents and warrants that such materials and
such other communications will not, as of the date of the offer or sale of the Securities, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. If at any time prior to the completion of the offer and sale of the Securities
an event occurs that would cause the Registration Statement or Prospectus (as supplemented or amended) to contain an untrue statement
of a material fact or to omit to state a material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, the Company will notify Aegis immediately of such event and Aegis will suspend solicitations
of the prospective purchasers of the Securities until such time as the Company shall prepare a supplement or amendment to the Registration
Statement or Prospectus that corrects such statement or omission. |
5. | Lock-Ups. In connection with the Placement, the Company’s directors, executive officers,
employees and shareholders holding at least ten percent (10%) of the outstanding common stock will enter into customary “lock-up”
agreements in favor of the Placement Agent for a period of sixty (60) days after Stockholder Approval Date (as defined in the Series A
Warrants and Series B Warrants) (the “Lock-Up Period”); provided, however, that any sales by parties to the
lock-ups shall be subject to the lock-up agreements and provided further, that none of such common stock shall be saleable in the public
market until the expiration of the Lock-Up Period. |
6. | Company Standstill. In connection with the Placement, without the prior written consent
of the investors, the Company will not, for a period of sixty (60) days after the Stockholder Approval Date (the “Standstill
Period”), (a) offer, sell, issue, or otherwise transfer or dispose of, directly or indirectly, any equity of the Company
or any securities convertible into or exercisable or exchangeable for equity of the Company; (b) file or caused to be filed any registration
statement with the Commission relating to the offering of any equity of the Company or any securities convertible into or exercisable
or exchangeable for equity of the Company; or (c) enter into any agreement or announce the intention to effect any of the actions described
in subsections (a) or (b) hereof (all of such matters, the “Standstill Restrictions”). So long as none of such
equity securities shall be saleable in the public market until the expiration of the Standstill Period, the following matters shall not
be prohibited by the Standstill Restrictions: (i) the adoption of an equity incentive plan and the grant of awards or equity pursuant
to any equity incentive plan, and the filing of a registration statement on Form S-8; (ii) securities issued pursuant to agreements, options,
restricted share units or convertible securities existing as of the date hereof provided the terms are not modified; and (iii) securities
issued pursuant to acquisitions or strategic transactions (whether by merger, consolidation, purchase of equity, purchase of assets, reorganization
or otherwise) approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement
in connection therewith during the Standstill Period, and provided that any such issuance shall only be to a person or entity (or to the
equityholders of an entity) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall
not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities. In no event should any equity transaction during the Standstill Period result in the sale
of equity at an offering price to the public less than that of the Placement referred herein. |
7. | Expenses. The Company will be responsible for and will pay all expenses relating to the
Placement, including, without limitation, (a) all filing fees and expenses relating to the registration of the Securities with the Commission;
(b) all FINRA Public Offering filing fees; (c) all fees and expenses relating to the listing of the Company’s equity or equity-linked
securities on an Exchange; (d) all fees, expenses and disbursements relating to the registration or qualification of the Securities under
the “blue sky” securities laws of such states and other jurisdictions as Aegis may reasonably designate (including, without
limitation, all filing and registration fees, and the reasonable fees and disbursements of the Company’s “blue sky”
counsel, which will be Aegis’s counsel) unless such filings are not required in connection with the Company’s proposed Exchange
listing; (e) any fees for counsel to lead investors in the Placement; (f) all fees, expenses and disbursements relating to the registration,
qualification or exemption of the Securities under the securities laws of such foreign jurisdictions as Aegis may reasonably designate;
(g) the costs of all mailing and printing of the Placement documents; (h) transfer and/or stamp taxes, if any, payable upon the transfer
of Securities from the Company to Aegis; (i) the fees and expenses of the Company’s accountants; and (j) $100,000 for reasonable
legal fees and disbursements for Aegis’s counsel. |
8. | Right of First Refusal. If, for the period beginning on the Closing of the Placement and
ending twenty-four (24) months after the commencement of sales in the Placement, the Company or any of its subsidiaries (a) decides to
finance or refinance any indebtedness, Aegis (or any affiliate designated by Aegis) shall have the right to act as sole book-runner, sole
manager, sole placement agent or sole agent with respect to such financing or refinancing; or (b) decides to raise funds by means of a
public offering (including an at-the-market facility) or a private placement or any other capital raising financing of equity, equity-linked
or debt securities, Aegis (or any affiliate designated by Aegis) shall have the right to act as sole book-running manager, sole underwriter
or sole placement agent for such financing. If Aegis or one of its affiliates decides to accept any such engagement, the agreement governing
such engagement (each, a “Subsequent Transaction Agreement”) will contain, among other things, provisions for
customary fees for transactions of similar size and nature, but in no event will the fees be less than those outlined herein, and the
provisions of this Agreement, including indemnification, that are appropriate to such a transaction. Notwithstanding the foregoing, the
decision to accept the Company’s engagement under this Section 8 shall be made by Aegis or one of its affiliates, by a written notice
to the Company, within ten (10) days of the receipt of the Company’s notification of its financing needs, including a detailed term
sheet. Aegis’s determination of whether in any case to exercise its right of first refusal will be strictly limited to the terms
on such term sheet, and any waiver of such right of first refusal shall apply only to such specific terms. If Aegis waives its right of
first refusal, any deviation from such terms (including without limitation after the launch of a subsequent transaction) shall void the
waiver and require the Company to seek a new waiver from the right of first refusal on the terms set forth in this Section 8. Notwithstanding
the foregoing, such right of first refusal to be received by Aegis (or any affiliate designated by Aegis) shall comply with FINRA Rule
5110(g)(6)(A). |
9. | Closing; Closing Deliverables. Unless otherwise directed by the Placement Agent, settlement
of the Securities shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date,
the Company shall cause the Depositary to issue the Securities directly to the clearing firm designated by the Placement Agent; upon receipt
of such Securities, the Placement Agent shall promptly electronically deliver such Securities to the applicable Purchaser, and payment
therefor shall be made by the Placement Agent (or its clearing firm) by wire transfer to the Company). The Securities sold under the Securities
Purchase Agreement shall be settled as set forth in the Securities Purchase Agreement and shall be registered in such name or names and
in such authorized denominations as set forth therein. |
9.1. Company
Deliveries.
9.1.1. On
the date hereof, the Company shall deliver each of the following:
9.1.1.1 This
Agreement duly executed by the Company.
9.1.1.2 A
cold comfort letter from the Company’s auditor, addressed to the Placement Agent in form and substance reasonably satisfactory in
all material respects.
9.1.1.3 A
certificate executed by the Chief Financial Officer of the Company in customary form reasonably satisfactory to the Placement Agent and
its counsel.
9.1.1.4 The
Lock-Up Agreements.
9.1.2. On
or prior to the Closing Date, the Company shall deliver each the following:
9.1.2.1 A
legal opinion of Sichenzia Ross Ference Carmel LLP, addressed to the Placement Agent and the Purchasers, in form and substance reasonably
acceptable to the Placement Agent and Purchasers.
9.1.2.2 A
negative assurance letter from Sichenzia Ross Ference Carmel LLP, addressed to the Placement Agent and dated the Closing Date, in a form
reasonably satisfactory to the Placement Agent.
9.1.2.3 A
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, a certificate
(or at the request of the Purchaser, book entry statement) evidencing a number of Shares equal to such Purchaser’s Subscription
Amount divided by the Per Unit Purchase Price, registered in the name of such Purchaser; Shares.
9.1.2.4 For
each Purchaser of Pre-Funded Warrants, a Pre-Funded Warrant registered in the name of such Purchaser to purchase up to a number of shares
of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to Pre-Funded Warrants divided by the Per
Unit Purchase Price, with an exercise price equal to $0.0001, subject to adjustment as provided therein.
9.1.2.5 The
Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief
Executive Officer or Chief Financial Officer.
9.1.2.6 A
duly executed and delivered Officers’ Certificate, in customary form reasonably satisfactory to the Placement Agent and its counsel.
9.1.2.7 A
bring down to the cold comfort letter from the Company’s auditor, addressed to the Placement Agent in form and substance reasonably
satisfactory in all material respects.
9.1.2.8 The
Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).
9.1.2.9 The
Series A Warrants registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100.0% of the
sum of the number of Shares and Pre-Funded Warrants purchased by such Purchaser, each with an exercise price equal to $[●], subject
to adjustment as provided therein.
9.1.2.10 The
Series B Warrants registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100.0% of the
sum of the number of Shares and Pre-Funded Warrants purchased by such Purchaser, each with an exercise price equal to $[●], subject
to adjustment as provided therein.
10. | Representations and Warranties of the Company. The Company hereby makes the following representations
and warranties: |
10.1. Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 10.1. The Company owns, directly or indirectly, all
of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares
of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the
Transaction Documents shall be disregarded.
10.2. Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to
own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in
violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational
or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected
to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”; provided, however,
that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly,
arising out of or attributable to: (i) general economic or political conditions, (ii) conditions generally affecting the industry in which
the Company or any Subsidiary operates, (iii) any changes in financial or securities markets in general, (iv) acts of war (whether or
not declared), armed hostilities or terrorism, or the escalation or worsening thereof, (v) any pandemic, epidemics or human health crises
(including COVID-19), (vi) any changes in applicable laws or accounting rules (including GAAP), (vii) the announcement, pendency or completion
of the transactions contemplated by the Transaction Documents, or (viii) any action required or permitted by the Transaction Documents
or any action taken (or omitted to be taken) with the written consent of or at the written request of Purchaser) and no Proceeding has
been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.
10.3. Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other
than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or
upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute
the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
10.4. No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which
it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, 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 upon any of the properties or assets
of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property
or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not
have or reasonably be expected to result in a Material Adverse Effect.
10.5. Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person
in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required
pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement included in the Registration
Statement (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the
listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, (v) the Stockholders Approval and
such other filings as are required to be made under applicable state securities laws (the “Required Approvals”).
10.6. Issuance
of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable (which means that no further sums are required to
be paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents and applicable law. The Warrant Shares, when issued in accordance with the terms
of the Transaction Documents, will be validly issued, fully paid and nonassessable (which means that no further sums are required to be
paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents and applicable law. The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. The Company has prepared and filed
the Registration Statement in conformity with the requirements of the Securities Act, which became effective on [●], including the
Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement
is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending
or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or,
to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission,
shall file the Final Prospectus with the Commission pursuant to Rule 424(b). At the time the Shelf Registration Statement and any amendments
thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto
conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement
thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading.
10.7. Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 10.7, which Schedule 10.7 shall also include the number
of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. Other than as stated
in Schedule 10.7, the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other
than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common
Stock to employees pursuant to the Company’s employee stock purchase plans. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except
as set forth in Schedule 10.7, or pursuant to this Agreement, there are no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary,
or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional
shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not
obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers).
Except as set forth in Schedule 10.7, there are no outstanding securities or instruments of the Company or any Subsidiary with any provision
that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company
or any Subsidiary. Except as set forth in Schedule 10.7, there are no outstanding securities or instruments of the Company or any Subsidiary
that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any
stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities. There are no stockholders’ agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between
or among any of the Company’s stockholders.
10.8. SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to
be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Final
Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The Company is not currently an issuer subject to Rule 144(i) under the Securities Act. The Company has filed Form 10
information at least one year prior to the date hereof. The financial statements of the Company included in the SEC Reports comply in
all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as
in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
10.9. Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, except as set forth on Schedule 10.9, (i) there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except
for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development
has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective
businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1)
Trading Day prior to the date that this representation is made.
10.10. Litigation.
Except as set forth in Schedule 10.10, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or,
to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”). None of the Actions set forth on Schedule 10.10, (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or (ii) would, if there were an unfavorable decision, have
or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company except in the ordinary
course of business that would not have a Material Adverse Effect. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
10.11. Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the
Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the
Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that
their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and
foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
10.12. Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator or other governmental authority
or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse
Effect.
10.13. Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii)
have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),
(ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
10.14. Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.
10.15. Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights
to lease or otherwise use, all real property and all personal property that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens that do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP, and the payment of which is neither
delinquent nor subject to penalties. Neither the Company nor any of its Subsidiaries has received any written notice of any claim of any
sort that has been asserted by anyone adverse to the rights of the Company or its Subsidiaries under any of the leases or subleases or
licenses or with respect to the properties mentioned above, or affecting or questioning the rights of the Company or any Subsidiary to
the continued possession or use of the leased or subleased or licensed premises or the properties mentioned above, other than such claims
which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
10.16. Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar
rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure
to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of,
and neither the Company nor any Subsidiary has received written notice that any of, the Intellectual Property Rights has expired, terminated
or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years after the date of this Agreement. Neither
the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports,
a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of
any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company,
all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
10.17. Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage in amount deemed prudent by the Company. Neither the Company nor any Subsidiary has any
reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
10.18. Transactions
with Affiliates and Employees. Except as set forth on Schedule 10.18, during the past three fiscal years and the subsequent interim
period through the date of this Agreement, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of
the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary
(other than 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, providing for the borrowing of money from
or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company,
any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder,
member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under
any stock option plan of the Company.
10.19. Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as set forth on Schedule 10.19,
the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed
by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness
of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its
most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in
the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have
materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its
Subsidiaries.
10.20. Certain
Fees. Except for the fees and expenses of the Placement Agent, no brokerage or finder’s fees or commissions are or will
be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section
that may be due in connection with the transactions contemplated by the Transaction Documents.
10.21. Payments
Within Twelve (12) Months. The Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i)
any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing
to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any
direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the date hereof, other than
the payment to the Placement Agent as provided hereunder in connection with the Placement.
10.22. Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not
be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
10.23. Registration
Rights. Except as disclosed on Schedule 10.23, no Person has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary.
10.24. Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is
or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such
Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository
Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.
10.25. Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state
of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations
or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of
the Securities and the Purchasers’ ownership of the Securities.
10.26. Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchasers
will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or
on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions
contemplated hereby, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made and when made, not misleading.
10.27. No
Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause
this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable stockholders approval
provisions of any Trading Market on which any of the securities of the Company are listed or designated.
10.28. Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount
that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as
now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the
business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current
cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts
are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year after the Closing Date. Schedule 10.28 sets forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or
not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the
present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither
the Company nor any Subsidiary is in default with respect to any Indebtedness.
10.29. Tax
Status. Except as disclosed in Schedule 10.29, the Company and its Subsidiaries each (i) has made or filed all material United
States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all material taxes and other governmental assessments and charges that are material in amount, shown
or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for
the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company
or of any Subsidiary know of no basis for any such claim.
10.30. No
General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
10.31. Foreign
Corrupt Practices Act. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign
or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.
10.32. Accountants.
The Company’s accounting firm is Marcum LLP, 1 Montgomery Street, Suite 1700, San Francisco, CA 94104. To the knowledge and belief
of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express
its opinion with respect to the financial statements to be included in the Company’s Annual Report for the now current fiscal year.
10.33. No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.
10.34. Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or
any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby
is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
10.35. Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any
Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities
based on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions
by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the
closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded
securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party,
directly or indirectly, presently may have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed
to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company
further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period
that the Securities are outstanding, including, without limitation, during the periods that the value of the Warrant Shares deliverable
with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’
equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
10.36. Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) 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, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the
Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the
Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with
the placement of the Securities.
10.37. Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Purchasers shall be deemed
a representation and warranty by the Company to the Purchasers as to the matters covered thereby.
10.38. D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires most recently completed by each
of the Company’s directors and officers and beneficial owner of 5% or more of the shares of Common Stock or Common Stock Equivalents
is true and correct in all respects and the Company has not become aware of any information which would cause the information disclosed
in such questionnaires become inaccurate and incorrect.
10.39. Stock
Option Plans. Each stock option granted by the Company under the Company’s stock option plan, if any, was granted (i) in
accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value
of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under
the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
10.40. Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department.
10.41. U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
10.42. Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more
of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company
nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.
10.43. Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
10.44. Other
Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person)
that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any
Securities.
10.45. Notice
of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing Date
of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become
a Disqualification Event relating to any Issuer Covered Person.
10.46. Cybersecurity.
(i) (a) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information
technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers,
vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and
Data”) and (b) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition
that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and
the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of
any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy
and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation
or modification, except, in the case of clauses (i) and (ii) herein, as would not, individually or in the aggregate, have a Material Adverse
Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect
its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and
(iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and
practices
11. | Conditions of the Obligations of the Placement Agent. The obligations of the Placement Agent
hereunder shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in the Registration
Statement (on which the Company authorizes the Placement Agent to rely), in each case as of the date hereof and as of the Closing Date
as though then made, to the timely performance by each of the Company of its covenants and other obligations hereunder on and as of such
dates, and to each of the following additional conditions: |
11.1. Regulatory
Matters.
11.1.1. Effectiveness
of Registration Statement; Rule 424 Information. The Registration Statement is effective on the date of this Agreement, and, on
the Closing Date no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has
been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been
issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated
by the Commission. The Company has complied with each request (if any) from the Commission for additional information. All filings with
the Commission required by Rule 424 under the Securities Act to have been filed by the Closing Date shall have been made within the applicable
time period prescribed for such filing by Rule 424.
11.1.2. FINRA
Clearance. On or before the Closing Date, the Placement Agent shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Placement Agent as described in the Registration Statement.
11.1.3. Listing
of Additional Shares. On or before the Closing Date, the Company shall have filed a notice with the Exchange with respect to the
Company’s additional listing of the securities sold in the Offering.
11.2. Closing
Deliverables. The Company shall have delivered all closing deliverables to the Placement Agent as set forth in Section 9.1 as
of the time required and in form reasonably satisfactory to the Placement Agent.
11.2.1. No
Material Changes. Prior to and on the Closing Date: (i) there shall have been no Material Adverse Effect or development involving
a prospective Material Adverse Effect in the condition or prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Registration Statement, the Disclosure Package and the Prospectus;
(ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any affiliates of
the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision,
ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company,
except as set forth in the Registration Statement and the Prospectus; (iii) no stop order shall have been issued under the Securities
Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement and the
Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in
accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of
the Securities Act and the Securities Act Regulations, and neither the Registration Statement nor the Prospectus nor any amendment or
supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
11.2.2. Additional
Documents. At the Closing Date, Placement Agent’s counsel shall have been furnished with such documents and opinions as
they may require in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Placement Agent and Placement Agent’s counsel.
12. | Prior Agreement. By entering into this Agreement, the parties agree that that certain letter
of engagement, dated November 11, 2024, entered into between the same parties hereof, shall automatically terminate and cease to have
any effect whatsoever and shall be superseded in its entirety by this Agreement. |
1. | Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms have the meanings: |
| 13.1. | “Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule
405 under the Securities Act. |
13.2. “BHCA”
shall have the meaning ascribed to such term in Section 10.42.
13.3. “Board
of Directors” means the board of directors of the Company.
13.4. “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
13.5. “Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading
Day following the date hereof.
13.6. “Commission”
means the United States Securities and Exchange Commission.
13.7. “Common
Stock” means the common stock of the Company, $0.00001 par value per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
13.8. “Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
13.9. “Common
Warrants” means the warrants to purchase shares of Common Stock delivered to the Purchasers at the Closing in accordance
with Section 9.1 hereof, which Common Warrants shall be in the forms of Exhibit 13.9.1 and Exhibit 13.9.2
attached hereto.
13.10. “Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
13.11. “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
13.12. “Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
13.13. “Per
Unit Purchase Price” equals $1.61 (less $0.0001 exercise price for each Pre-Funded Warrant), subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the
date of this Agreement.
13.14. “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
13.15. “Placement
Agent” means Aegis Capital Corp.
13.16. “Pre-Funded
Warrants” means the pre-funded Common Stock purchase warrants, in the form of Exhibit 13.16.1 attached hereto
delivered to the Purchasers at the Closing in accordance with Section 9.1.2.4 hereof, which Pre-Funded Warrants shall be exercisable immediately
and shall expire when exercised in full.
13.17. “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
13.18. “Purchaser”
means each purchaser of Securities in the Placement.
13.19. “Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder in United
States dollars and in immediately available funds.
13.20. “Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports and shall, where applicable, also include any direct or indirect subsidiary
of the Company formed or acquired after the date hereof.
13.21. “Trading
Day” means a day on which the principal Trading Market is open for trading.
13.22. “Trading
Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the
date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange, the OTCQB, OTCQX, Pink Open Market (or any successors to any of the foregoing).
13.23. “Transaction
Documents” means this Agreement, the Securities, the Lock-Up Agreement and all exhibits and schedules thereto and hereto
and any other documents or agreements executed in connection with the transactions contemplated hereunder.
13.24. “Transfer
Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address
of 1 State Street, 30th Floor, New York, NY 10004-1561 and an email address of , and any successor transfer agent of the Company.
13.25. “Warrants”
means, collectively, the Pre-Funded Warrants and the Common Warrants.
13.26. “Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants
13. | Termination. Notwithstanding anything to the contrary contained herein, the Company agrees
that the provisions relating to the payment of fees, reimbursement of expenses, right of first refusal, indemnification and contribution,
equitable remedies, confidentiality, conflicts, independent contractor and waiver of the right to trial by jury will survive any termination
or expiration of this Agreement. Notwithstanding anything to the contrary contained herein, the Company has the right to terminate the
Agreement for cause in compliance with FINRA Rule 5110(g)(5)(B)(i). The exercise of such right of termination for cause eliminates the
Company’s obligations with respect to the provisions relating to right of first refusal. Notwithstanding anything to the contrary
contained in this Agreement, in the event that no Placement is completed for any reason whatsoever during the Engagement Period, the Company
shall be obligated to pay to Aegis its actual and accountable out-of-pocket expenses related to the Placement (including the fees and
disbursements of Placement Agent’s legal counsel) and if applicable, for electronic road show service used in connection with the
Placement. During the engagement hereunder: (i) the Company will not, and will not permit its representatives to, other than in coordination
with Aegis, contact or solicit institutions, corporations or other entities or individuals as potential purchasers of the Securities and
(ii) the Company will not pursue any financing transaction which would be in lieu of the Placement. Furthermore, the Company agrees that
during Aegis’s engagement hereunder, all inquiries from prospective investors will be referred to Aegis. |
14. | Publicity. The Company agrees that it will not issue press releases or engage in any other
publicity, without Aegis’s prior written consent, commencing on the date hereof and continuing until the final Closing of the Placement. |
15. | Information. During the Engagement Period or until the Closing, the Company agrees to cooperate
with Aegis and to furnish, or cause to be furnished, to Aegis, any and all information and data concerning the Company, and the Placement
that Aegis deems appropriate (the “Information”). The Company will provide Aegis reasonable access during normal
business hours from and after the date of execution of this Agreement until the Closing to all of the Company’s assets, properties,
books, contracts, commitments and records and to the Company’s officers, directors, employees, appraisers, independent accountants,
legal counsel and other consultants and advisors. Except as contemplated by the terms hereof or as required by applicable law, Aegis will
keep strictly confidential all non-public Information concerning the Company provided to Aegis. No obligation of confidentiality will
apply to Information that: (a) is in the public domain as of the date hereof or hereafter enters the public domain without a breach by
Aegis, (b) was known or became known by Aegis prior to the Company’s disclosure thereof to Aegis as demonstrated by the existence
of its written records, (c) becomes known to Aegis from a source other than the Company which information is not provided by the breach
of an obligation of confidentiality owed to the Company, (d) is disclosed by the Company to a third party without restrictions on its
disclosure or (e) is independently developed by Aegis as demonstrated by its written records. For the avoidance of doubt, except as otherwise
provided herein, all information which is not publicly available relating to the Company’s proprietary technology is proprietary
and confidential. |
16. | No Third Party Beneficiaries; No Fiduciary Obligations. This Agreement does not create,
and shall not be construed as creating, rights enforceable by any person or entity not a party hereto, except those entitled hereto by
virtue of the indemnification provisions hereof. The Company acknowledges and agrees that: (i) Aegis is not and shall not be construed
as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other
person or entity by virtue of this Agreement or the retention of Aegis hereunder, all of which are hereby expressly waived; and (ii) Aegis
is a full service securities firm engaged in a wide range of businesses and from time to time, in the ordinary course of its business,
Aegis or its affiliates may hold long or short positions and trade or otherwise effect transactions for its own account or the account
of its customers in debt or equity securities or loans of the companies which may be the subject of the transactions contemplated by this
Agreement. During the course of Aegis’s engagement with the Company, Aegis may have in its possession material, non-public information
regarding other companies that could potentially be relevant to the Company or the transactions contemplated herein but which cannot be
shared due to an obligation of confidence to such other companies. |
17. | Indemnification, Advancement & Contribution. |
17.1. Indemnification.
The Company agrees to indemnify and hold harmless Aegis, its affiliates and each person controlling Aegis (within the meaning of Section
15 of the Securities Act), and the directors, officers, agents and employees of Aegis, its affiliates and each such controlling person
(Aegis, and each such entity or person hereafter is referred to as an “Indemnified Person”) from and against
any losses, claims, damages, judgments, assessments, costs and other liabilities (collectively, the “Liabilities”),
and shall reimburse each Indemnified Person for all fees and expenses (including the reasonable fees and expenses of counsel for the Indemnified
Persons) (collectively, the “Expenses”) and agrees to advance payment of such Expenses as they are incurred
by an Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Indemnified Person is a party
thereto, arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in (A) the Registration
Statement, Prospectus or any other offering documents (as from time to time each may be amended and supplemented), (B) any materials or
information provided to investors by, or with the approval of, the Company in connection with the marketing of the Placement, including
any “road show” or investor presentations made to investors by the Company (whether in person or electronically), or (C) any
application or other document or written communication (collectively called “application”) executed by the Company or based
upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities laws thereof
or to file for an exemption from such requirement or filed with the Commission, any state securities commission or agency, any national
securities exchange; or (ii) the omission or alleged omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information provided to the Company by Aegis in writing specifically for use
in the Registration Statement, Prospectus or any other offering documents with respect which or resulting from conduct by Aegis or another
Indemnified Party, as to which Aegis shall indemnify and hold harmless the Company, its officers, directors and controlling parties in
the manner set forth in this Section 17. The Company also agrees to reimburse and advance each Indemnified Person for all Expenses as
they are incurred in connection with such Indemnified Person’s enforcement of his or its rights under this Section 17.
17.2. Procedure.
Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with respect to which indemnity may
reasonably be expected to be sought under this Section 17, such Indemnified Person shall promptly notify the Company in writing; provided
that failure by any Indemnified Person so to notify the Company shall not relieve the Company from any obligation or liability which the
Company may have on account of this Section 17 or otherwise to such Indemnified Person. The Company shall, if requested by Aegis, assume
the defense of any such action (including the employment of counsel designated by Aegis and reasonably satisfactory to the Company). Any
Indemnified Person shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company has failed promptly to assume
the defense and employ separate counsel reasonably acceptable to Aegis for the benefit of Aegis and the other Indemnified Persons or (ii)
such Indemnified Person shall have been advised that in the opinion of counsel that there is an actual or potential conflict of interest
that prevents (or makes it imprudent for) the counsel designated by and engaged by the Company for the purpose of representing the Indemnified
Person, to represent both such Indemnified Person and any other person represented or proposed to be represented by such counsel, in which
event the Company shall pay the reasonable fees and expenses of one counsel, plus local counsel, for all Indemnified Parties, which counsel
shall, if Aegis is a defendant, be designated by Aegis. The Company shall not be liable for any settlement of any action effected without
its written consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent
of Aegis, settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action
in respect of which advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not such Indemnified
Person is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of each Indemnified
Person, acceptable to such Indemnified Party, from all Liabilities arising out of such action for which indemnification or contribution
may be sought hereunder and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on
behalf of any Indemnified Person. The advancement, reimbursement, indemnification and contribution obligations of the Company required
hereby shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as every Liability
and Expense is incurred and is due and payable, and in such amounts as fully satisfy each and every Liability and Expense as it is incurred
(and in no event later than 30 days following the date of any invoice therefore).
17.3. Contribution.
In the event that a court of competent jurisdiction makes a finding, final beyond right of review, that indemnity is unavailable to an
Indemnified Person, the Company shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion
as is appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to Aegis and any other Indemnified Person,
on the other hand, of the matters contemplated by this Section 17 or (ii) if the allocation provided by the immediately preceding clause
is not permitted by applicable law, not only such relative benefits but also the relative fault of the Company, on the one hand, and Aegis
and any other Indemnified Person, on the other hand, in connection with the matters as to which such Liabilities or Expenses relate, as
well as any other relevant equitable considerations; provided that in no event shall the Company contribute less than the amount necessary
to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities and Expenses in excess of the amount of commissions
actually received by Aegis in the Placement. The relative fault shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied
by the Company on the one hand or Aegis on the other and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and Aegis agree that it would not be just and equitable if contributions
pursuant to this subsection 17.3 were determined by pro rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection 17.3. For purposes of this paragraph, the relative benefits to the
Company, on the one hand, and to Aegis on the other hand, of the matters contemplated by this Section 17 shall be deemed to be in the
same proportion as: (a) the total value received by the Company in the Placement, whether or not such Placement is consummated, bears
to (b) the commissions paid to Aegis under the Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of fraudulent
misrepresentation.
17.4. Limitation.
The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise)
to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement,
the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services
or transactions, except to the extent that a court of competent jurisdiction has made a finding that Liabilities (and related Expenses)
of the Company have resulted exclusively from such Indemnified Person’s gross negligence or willful misconduct in connection with
any such advice, actions, inactions or services.
18. | Equitable Remedies. Each party to this Agreement acknowledges and agrees that (a) a breach
or threatened breach by the Company of any of its obligations under Section 8 or the exclusivity provisions of Section 1 would give rise
to irreparable harm to Aegis for which monetary damages would not be an adequate remedy and (b) if a breach or a threatened breach by
the Company of any such obligations occurs, Aegis will, in addition to any and all other rights and remedies that may be available to
such party at law, at equity, or otherwise in respect of such breach, be entitled to equitable relief, including a temporary restraining
order, an injunction, specific performance of the terms of Section 8 or the exclusivity provisions of Section 1, as applicable, and any
other relief that may be available from a court of competent jurisdiction, without any requirement to (i) post a bond or other security,
or (ii) prove actual damages or that monetary damages will not afford an adequate remedy. Each party to this Agreement agrees that such
party shall not oppose or otherwise challenge the existence of irreparable harm, the appropriateness of equitable relief or the entry
by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent with the terms of this Section
18. |
19. | Governing Law; Venue. This Agreement will be deemed to have been made and delivered in the
State of New York, USA, and both the binding provisions of this Agreement and the transactions contemplated hereby will be governed as
to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York, without regard
to the conflict of laws principles thereof. Each of Aegis and the Company: (i) agrees that any legal suit, action or proceeding arising
out of or relating to this Agreement and/or the transactions contemplated hereby will be instituted exclusively in the courts located
in the Borough of Manhattan, City of New York, County of New York, State of New York (ii) waives any objection which it may have or hereafter
to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the courts located in the City
of New York, County of New York and State of New York, in any such suit, action or proceeding. Each of Aegis and the Company further agrees
to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in such courts and
agrees that service of process upon the Company mailed by certified mail to the Company’s address will be deemed in every respect
effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon Aegis mailed by certified
mail to Aegis’s address will be deemed in every respect effective service process upon Aegis, in any such suit, action or proceeding.
Notwithstanding any provision of this Agreement to the contrary, the Company agrees that neither Aegis nor its affiliates, and the respective
officers, directors, employees, agents and representatives of Aegis, its affiliates and each other person, if any, controlling Aegis or
any of its affiliates, will have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in
connection with the engagement and transaction described herein except for any such liability for losses, claims, damages or liabilities
incurred by the Company that are finally judicially determined to have resulted from the bad faith or gross negligence of such individuals
or entities. Aegis will act under this Agreement as an independent contractor with duties to the Company. |
20. | Miscellaneous. The Company represents and warrants that it has all required power and authority
to enter into and carry out the terms and provisions of this Agreement and the execution, delivery and performance of this Agreement does
not breach or conflict with any agreement, document or instrument to which it is a party or bound. The binding provisions of this Agreement
are legally binding upon and inure to the benefit of both the Company and Aegis and their respective assigns, successors, and legal representatives.
If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such
provision in any other respect, and the remainder of the Agreement shall remain in full force and effect. This Agreement may be executed
in counterparts (including electronic counterparts), each of which shall be deemed an original but all of which together shall constitute
one and the same instrument. The undersigned hereby consents to receipt of this Agreement in electronic form and understands and agrees
that this Agreement may be signed electronically. Signatures to this Agreement transmitted in electronic form will have the same effect
as physical delivery of a paper document bearing the original signature, and if any signature is delivered electronically evidencing an
intent to sign this Agreement, such electronic mail or other electronic transmission shall create a valid and binding obligation of the
undersigned with the same force and effect as if such signature were an original. Execution and delivery of this Agreement by electronic
mail or other electronic transmission is legal, valid and binding for all purposes. |
If you are in agreement with
the foregoing, please sign and return to us one copy of this Agreement. This Agreement may be executed in counterparts (including facsimile
or .pdf counterparts), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
[Signature Page of CYN Best Efforts Secondary
Offering Agreement Follows]
[Signature Page of CYN Best Efforts Secondary
Offering Agreement]
|
Very truly
yours, |
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|
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Aegis Capital Corp. |
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By: |
/s/ Robert Eide |
|
Name: |
Robert Eide |
|
Title: |
Chief Executive Officer |
AGREED AND ACCEPTED:
The foregoing accurately sets forth our understanding
and agreement with respect to the matters set forth herein.
Cyngn Inc. |
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/s/ Lior Tal |
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Name: |
Lior Tal |
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Title: |
Chief Executive Officer |
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Exhibit 99.1
Cyngn Announces Pricing of $20.0 Million Follow
On Offering Priced At-the-Market
MENLO PARK, Calif., December 20, 2024 /PRNewswire/
-- Cyngn Inc. (the “Company” or “Cyngn”) (Nasdaq: CYN), a developer of AI-powered autonomous driving software
solutions for industrial applications, today announced the pricing of a follow on offering, priced at the market, with gross proceeds
to the Company expected to be approximately $20.0 million, before deducting placement agent fees and other estimated offering expenses
payable by the Company.
The offering consists of 12,422,360 Common Units
(or Pre-Funded Units), each consisting of one (1) share of Common Stock or one (1) Pre-Funded Warrant to purchase one (1) share of Common
Stock, one (1) Series A Common Warrant to purchase one (1) share of Common Stock per warrant, and one (1) Series B Common Warrant to purchase
one (1) share of Common Stock per warrant. The public offering price per Common Unit is $1.61 (or $1.6099 for each Pre-Funded Unit, which
is equal to the public offering price per Common Unit to be sold in the offering minus an exercise price of $0.0001 per Pre-Funded Warrant).
The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until exercised in full. For each Pre-Funded
Unit sold in the offering, the number of Common Units in the offering will be decreased on a one-for-one basis. The initial exercise price
of each Series A Common Warrant is $2.0125 per share of Common Stock. The Series A Common Warrants are exercisable upon stockholder approval
and expire 60 months thereafter. The initial exercise price of each Series B Common Warrant is $2.0125 per share of Common Stock or pursuant
to an alternative cashless exercise option. The Series B Common Warrants are exercisable upon stockholder approval and expire 30 months
thereafter.
Aggregate gross proceeds to the Company are expected
to be approximately $20.0 million. The transaction is expected to close on or about December 23, 2024, subject to the satisfaction of
customary closing conditions. The Company expects to use the net proceeds from the offering, together with its existing cash, for working
capital and other general corporate purposes, including repayment of outstanding senior notes.
Aegis Capital Corp. is acting as Exclusive
Placement Agent for the offering. Sichenzia Ross Ference Carmel LLP is acting as counsel to the Company. Kaufman & Canoles, P.C. is
acting as counsel to Aegis Capital Corp.
A registration statement on Form S-1 (No. 333-283514)
previously filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 27, 2024 was declared effective
by the SEC on December 19, 2024. The offering is being made only by means of a prospectus. A final prospectus describing the terms of
the proposed offering will be filed with the SEC and will be available on the SEC’s website located at www.sec.gov. Electronic
copies of the preliminary prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Aegis Capital
Corp., Attention: Syndicate Department, 1345 Avenue of the Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com,
or by telephone at +1 (212) 813-1010. Before investing in this offering, interested parties should read in their entirety the prospectus,
which provides more information about the Company and such offering.
This press release shall not constitute an offer
to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such
an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or
jurisdiction.
About Cyngn
Cyngn develops and deploys scalable, differentiated
autonomous vehicle technology for industrial organizations. Cyngn’s self-driving solutions allow existing workforces to increase productivity
and efficiency. The Company addresses significant challenges facing industrial organizations today, such as labor shortages, costly safety
incidents, and increased consumer demand for eCommerce.
Cyngn’s DriveMod Kit can be installed on new industrial
vehicles at end of line or via retrofit, empowering customers to seamlessly adopt self-driving technology into their operations without
high upfront costs or the need to completely replace existing vehicle investments.
Cyngn’s flagship product, its Enterprise Autonomy
Suite, includes DriveMod (autonomous vehicle system), Cyngn Insight (customer-facing suite of AV fleet management, teleoperation, and
analytics tools), and Cyngn Evolve (internal toolkit that enables Cyngn to leverage data from the field for artificial intelligence, simulation,
and modeling).
Forward-Looking Statements
The foregoing material may contain “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including
without limitation statements regarding the timing of closing, expected use of proceeds of the offering, the completion of the offering,
the satisfaction of customary closing conditions related to the offering, and can be identified by the use of words such as “may,”
“will,” “expect,” “project,” “estimate,” “anticipate,” “plan,”
“believe,” “potential,” “should,” “continue” or the negative versions of those words or
other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements
are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks
and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize, or the
underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected,
intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable,
the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security
laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to
actual results.
Investor Contact:
Donald Alvarez, CFO
investors@cyngn.com
Media Contact:
Luke Renner, Head of Marketing
media@cyngn.com
Exhibit 99.2
Cyngn Announces Closing of $20.0 Million Follow
On Offering Priced At-the-Market
MENLO PARK, Calif., December 23, 2024 /PRNewswire/
-- Cyngn Inc. (the “Company” or “Cyngn”) (Nasdaq: CYN), a developer of AI-powered autonomous driving software
solutions for industrial applications, today announced the closing of a follow on offering, priced at the market, with gross proceeds
to the Company of approximately $20.0 million, before deducting placement agent fees and other estimated offering expenses payable by
the Company.
The offering consists of 12,422,360 Common Units
(or Pre-Funded Units), each consisting of one (1) share of Common Stock or one (1) Pre-Funded Warrant to purchase one (1) share of Common
Stock, one (1) Series A Common Warrant to purchase one (1) share of Common Stock per warrant, and one (1) Series B Common Warrant to purchase
one (1) share of Common Stock per warrant. The public offering price per Common Unit is $1.61 (or $1.6099 for each Pre-Funded Unit, which
is equal to the public offering price per Common Unit to be sold in the offering minus an exercise price of $0.0001 per Pre-Funded Warrant).
The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until exercised in full. For each Pre-Funded
Unit sold in the offering, the number of Common Units in the offering will be decreased on a one-for-one basis. The initial exercise price
of each Series A Common Warrant is $2.0125 per share of Common Stock. The Series A Common Warrants are exercisable upon stockholder approval
and expire 60 months thereafter. The initial exercise price of each Series B Common Warrant is $2.0125 per share of Common Stock or pursuant
to an alternative cashless exercise option. The Series B Common Warrants are exercisable upon stockholder approval and expire 30 months
thereafter.
The transaction closed on December 23, 2024. The
Company will use the net proceeds from the offering, together with its existing cash, for general corporate purposes and working capital.
Aegis Capital Corp. acted as Exclusive Placement
Agent for the offering. Sichenzia Ross Ference Carmel LLP acted as counsel to the Company. Kaufman & Canoles, P.C. acted as counsel
to Aegis Capital Corp.
A registration statement on Form S-1 (No. 333-283514)
previously filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 27, 2024 was declared effective
by the SEC on December 19, 2024. The offering was made only by means of a prospectus. A final prospectus describing the terms of the proposed
offering has been filed with the SEC and is available on the SEC’s website located at www.sec.gov. Electronic copies of the
final prospectus may be obtained, when available, by contacting Aegis Capital Corp., Attention: Syndicate Department, 1345 Avenue of the
Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com, or by telephone at +1 (212) 813-1010. Before investing in
this offering, interested parties should read in their entirety the prospectus, which provides more information about the Company and
such offering.
This press release shall not constitute an offer
to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such
an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or
jurisdiction.
About Cyngn
Cyngn develops and deploys scalable, differentiated
autonomous vehicle technology for industrial organizations. Cyngn’s self-driving solutions allow existing workforces to increase productivity
and efficiency. The Company addresses significant challenges facing industrial organizations today, such as labor shortages, costly safety
incidents, and increased consumer demand for eCommerce.
Cyngn’s DriveMod Kit can be installed on new industrial
vehicles at end of line or via retrofit, empowering customers to seamlessly adopt self-driving technology into their operations without
high upfront costs or the need to completely replace existing vehicle investments.
Cyngn’s flagship product, its Enterprise Autonomy
Suite, includes DriveMod (autonomous vehicle system), Cyngn Insight (customer-facing suite of AV fleet management, teleoperation, and
analytics tools), and Cyngn Evolve (internal toolkit that enables Cyngn to leverage data from the field for artificial intelligence, simulation,
and modeling).
Forward-Looking Statements
The foregoing material may contain “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including
without limitation statements regarding the Company’s product development and business prospects, and can be identified by the use
of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,”
“plan,” “believe,” “potential,” “should,” “continue” or the negative versions
of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking
statements are based on information currently available to the Company and its current plans or expectations and are subject to a number
of risks and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize,
or the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected,
intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable,
the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security
laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to
actual results.
Investor Contact:
Don Alvarez, CFO
investors@cyngn.com
Media Contact:
Luke Renner, Head of Marketing
media@cyngn.com
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