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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 29, 2023
MICROBOT
MEDICAL INC.
(Exact
name of registrant as specified in its charter)
Delaware |
|
000-19871 |
|
94-3078125 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
288
Grove Street, Suite 388
Braintree, MA 02184
(Address
of Principal Executive Offices) (Zip Code)
Registrant’s
telephone number, including area code: (781) 875-3605
(Former
Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, $0.01 par value |
|
MBOT |
|
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 (17 CFR §230.405)
or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging
Growth Company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
On
December 29, 2023, Microbot Medical Inc., a Delaware corporation (the “Company”), entered into a preferred investment option
exercise inducement offer letter (the “Inducement Letter”) with certain holders (the “Holders”) of existing (i)
preferred investment options to purchase 1,022,495 shares of the Company’s common stock at an exercise price of $2.20 per share,
issued on October 25, 2022, as amended on May 24, 2023, (ii) preferred investment options to purchase 350,878 shares of the Company’s
common stock at an exercise price of $2.075 per share, issued on June 6, 2023, and (iii) preferred investment options to purchase 312,309
shares of the Company’s common stock at an exercise price of $3.19 per share issued on June 26, 2023 (together, the “Existing
Investment Options”), pursuant to which the Holders agreed to exercise for cash their Existing Investment Options to purchase an
aggregate of 1,685,682 shares of the Company’s common stock, at a reduced exercised price of $1.62 per share, in consideration
for the Company’s agreement to issue new preferred investment options (the “Inducement Investment Options”) having
terms as described below, to purchase up to 1,685,682 shares of the Company’s common stock (the “Inducement Investment Option
Shares”). The Company expects to receive aggregate gross proceeds of approximately $2.73 million from the exercise of the Existing
Investment Options by the Holders and the sale of the Inducement Investment Options, before deducting placement agent fees and other
offering expenses payable by the Company.
The
Company engaged H.C. Wainwright & Co., LLC (“Wainwright”) to act as its exclusive placement agent in connection with
the transactions summarized above pursuant to an engagement letter, dated October 24, 2023 (the “Engagement Letter”) and
will pay Wainwright a cash fee equal to 7.0% of the gross proceeds received from the exercise of the Existing Investment Options as well
as a management fee equal to 1.0% of the gross proceeds from the exercise of the Existing Investment Options. The Company also agreed
to pay Wainwright up to $60,000 for non-accountable expenses, and $15,950 for clearing fees. The Company also agreed to issue to Wainwright
or its designees preferred investment options (the “Placement Agent Investment Options,” and such shares of common stock
issuable thereunder, the “Placement Agent Investment Option Shares”) to purchase up to 84,284 shares of common stock which
will have the same terms as the Inducement Investment Options except for an exercise price equal to $2.025 per share. Further,
pursuant to the Engagement Letter, Wainwright has a right of first refusal to act as sole book-running manager, sole underwriter or sole
placement agent with respect to any public offering or private placement of equity, equity-linked or debt securities using an underwriter
or placement agent occurring during the twelve-month period following the Closing Date (as defined below).
The
Company expects to use the net proceeds of these transactions for general corporate and working capital purposes. The closing of the
transactions contemplated pursuant to the Inducement Letter is expected to occur on or about January 3, 2024 (the “Closing Date”),
subject to satisfaction of customary closing conditions.
The
resale of the shares of the Company’s common stock issuable upon exercise of the Existing Investment Options are registered pursuant
to an existing registration statement on Form S-1 (File No. 333-273207), as amended on July 14, 2023, and declared effective by the SEC
on July 17, 2023.
The
Company also agreed to file a registration statement on Form S-3 (or other appropriate form, including on Form S-1, if the Company is
not then S-3 eligible) covering the resale of the Investment Option Shares issuable upon the exercise of the Inducement Investment Options
(the “Resale Registration Statement”), within 30 days of the date of the Inducement Letter, and to use commercially reasonable
efforts to have such Resale Registration Statement declared effective by the SEC within 90 days following the date of the Inducement
Letter. In the Inducement Letter, the Company agreed not to issue any shares of common stock or common stock equivalents or to file any
other registration statement with the SEC (in each case, subject to certain exceptions) until 10 trading days after the Closing Date.
The Company also agreed not to effect or agree to effect any variable rate transaction (as defined in the Inducement Letter) until six
(6) months after the Closing Date (subject to certain exceptions).
Inducement
Investment Option Terms
The
following summary of certain terms and provisions of the Inducement Investment Options is not complete and is subject to, and qualified
in its entirety by, the provisions of the Inducement Investment Options, the form of which is filed as Exhibit 4.1 to this Current Report
on Form 8-K and is incorporated herein by reference. The following description of the Inducement Investment Options is qualified in its
entirety by reference to such exhibit.
Duration
and Exercise Price
Each
Inducement Investment Option will have an exercise price equal to $1.50 per share. The Inducement Investment Options will be immediately
exercisable from the date of issuance until five and one-half (5.5) years following the date of issuance. The exercise price and number
of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits,
subsequent rights offerings, pro rate distributions, reorganizations, a Fundamental Transaction (as defined in the Inducement Investment
Options) or similar events affecting our common stock and the exercise price.
Exercisability
The
Inducement Investment Options will be exercisable, at the option of each holder, in whole or in part, by delivering to the Company a
duly executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise
(except in the case of a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion
of such holder’s Inducement Investment Options to the extent that the holder would own more than 4.99% (or, 9.99% at the election
of the holder prior to issuance) of the outstanding common stock immediately after exercise, except that upon at least 61 days’
prior notice from the holder to the Company, the holder may increase the amount of ownership of outstanding stock after exercising the
holder’s Inducement Investment Options up to 9.99% of the number of shares of the Company’s common stock outstanding immediately
after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Inducement Investment
Options.
Cashless
Exercise
If,
at the time a holder exercises its Inducement Investment Options, a registration statement registering the resale of the Inducement Investment
Option Shares by the holder under the Securities Act (as defined herein) is not then effective or available, then in lieu of making the
cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect
instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a
formula set forth in the Inducement Investment Options.
Trading
Market
There
is no established trading market for the Inducement Investment Options, and the Company does not expect an active trading market to develop.
The Company does not intend to apply to list the Inducement Investment Options on any securities exchange or other trading market. Without
a trading market, the liquidity of the Inducement Investment Options will be extremely limited.
Rights
as a Stockholder
Except
as otherwise provided in the Inducement Investment Options or by virtue of the holder’s ownership of shares of the Company’s
common stock, such holder of Inducement Investment Options does not have the rights or privileges of a holder of the Company’s
common stock, including any voting rights, until such holder exercises such holder’s Inducement Investment Options. The Inducement
Investment Options will provide that the holders of the Inducement Investment Options have the right to participate in distributions
or dividends paid on the Company’s shares of common stock.
Fundamental
Transactions
If
at any time the Inducement Investment Options are outstanding, the Company, either directly or indirectly, in one or more related transactions
effects a Fundamental Transaction (as defined in the Inducement Investment Options), a holder of Inducement Investment Options will be
entitled to receive, upon exercise of the Inducement Investment Options, the kind and amount of securities, cash or other property that
such holder would have received had they exercised the Inducement Investment Options immediately prior to the Fundamental Transaction.
As an alternative, and at the Holder’s option in the event of a Fundamental Transaction, 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), the Company shall purchase the unexercised portion of the Inducement Investment Option from the holder by paying
to the holder an amount of cash equal to the Black Scholes Value (as defined in the Inducement Investment Option) of the remaining unexercised
portion of the Inducement Investment Option on the date of the consummation of such Fundamental Transaction.
Waivers
and Amendments
The
Inducement Investment Options may be modified or amended, or the provisions of the Inducement Investment Options waived with the Company’s
and the holder’s written consent.
The
forms of Inducement Letter, Inducement Investment Option and Placement Agent Investment Option are attached as Exhibits 10.1, 4.1, and
4.2, respectively. The description of the terms of each of the Inducement Letter, the Inducement Investment Option and the Placement
Agent Investment Option is not intended to be complete and is qualified in its entirety by reference to such exhibits. The Inducement
Letter contains customary representations, warranties and covenants by the Company which were made only for the purposes of such agreements
and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon
by the contracting parties.
Item
3.02 Unregistered Sales of Equity Securities.
The
Company issued the Inducement Investment Options and the Placement Agent Investment Options pursuant to the exemption from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”), available under Section 4(a)(2). Neither the
issuance of the Inducement Investment Options, the Placement Agent Investment Options nor the Inducement Investment Option Shares or
the Placement Agent Investment Option Shares have been registered under the Securities Act and such securities may not be offered or
sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities
laws. The description of each of the Inducement Investment Options and the Placement Agent Investment Options under Item 1.01 of this
Form 8-K is incorporated by reference herein.
Neither
this Current Report on Form 8-K nor any exhibit attached hereto is an offer to sell or the solicitation of an offer to buy securities
of the Company.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
|
MICROBOT
MEDICAL INC. |
|
|
|
/s/
Harel Gadot |
|
Harel
Gadot |
|
Chairman,
President and Chief Executive Officer |
|
|
Date:
January 2, 2024 |
|
Exhibit
4.1
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
SERIES
E PREFERRED INVESTMENT OPTION
Microbot
Medical Inc.
Preferred
Investment Option Shares: ______ |
Issue
Date: January 3, 2024 |
|
Initial
Exercise Date: January 3, 2024 |
THIS
SERIES E PREFERRED INVESTMENT OPTION (the “Preferred Investment Option”) 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 date set forth above (the “Initial Exercise Date”) and on or prior
to 5:00 p.m. (New York City time) on July 3, 2029 (the “Termination Date”) but not thereafter, to subscribe for and
purchase from Microbot Medical Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment
hereunder, the “Preferred Investment Option Shares”) of Common Stock. The purchase price of one share of Common Stock
under this Preferred Investment Option shall be equal to the Exercise Price, as defined in Section 2(b).
Section
1. Definitions. In addition to the terms defined elsewhere in this Preferred Investment Option, the following terms have the
meanings indicated in this Section 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.
“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 (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 the 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 Preferred Investment Options then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.
“Board
of Directors” means the board of directors of the Company.
“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.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“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.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Letter
Agreement” means that certain letter agreement between the initial Holder hereof and the Company, dated as of December 29,
2023, pursuant to which such initial Holder agreed to exercise one or more preferred investment options and the Company agreed to issue
to the initial Holder this Preferred Investment Option.
“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.
“Preferred
Investment Oprion” means this Preferred Investment Option and other Preferred Investment Options issued by the Company pursuant
to the Letter Agreement.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“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.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“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, or the New York
Stock Exchange (or any successors to any of the foregoing).
“Transfer
Agent” means Computershare Trust Company, with offices located at Meidinger Tower, 462 South 4th Street, Louisville, KY 40202,
and any successor transfer agent of the Company.
“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 (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 the 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 Preferred Investment Options then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.
Section
2. Exercise.
a)
Exercise of Preferred Investment Option. Exercise of the purchase rights represented by this Preferred Investment Option 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 in the form annexed hereto
(the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver
the aggregate Exercise Price for the Preferred Investment Option 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(c) 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 Preferred Investment Option to the Company until the Holder has purchased all of the
Preferred Investment Option Shares available hereunder and the Preferred Investment Option has been exercised in full, in which case,
the Holder shall surrender this Preferred Investment Option to the Company for cancellation as soon as reasonably practicable of the
date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Preferred Investment Option resulting
in purchases of a portion of the total number of Preferred Investment Option Shares available hereunder shall have the effect of lowering
the outstanding number of Preferred Investment Option Shares purchasable hereunder in an amount equal to the applicable number of Preferred
Investment Option Shares purchased. The Holder and the Company shall maintain records showing the number of Preferred Investment Option
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business
Day of receipt of such notice. The Holder and any assignee, by acceptance of this Preferred Investment Option, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Preferred Investment Option Shares hereunder,
the number of Preferred Investment Option Shares available for purchase hereunder at any given time may be less than the amount stated
on the face hereof.
b)
Exercise Price. The exercise price per share of Common Stock under this Preferred Investment Option shall be $1.50, subject
to adjustment hereunder (the “Exercise Price”).
c)
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 Preferred Investment Option Shares by the Holder, then this Preferred Investment
Option 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 Preferred Investment Option 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) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 2(a) 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 Bid Price of
the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of
the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading
hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of
“regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof 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 both executed and delivered
pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
|
(B)
= |
the
Exercise Price of this Preferred Investment Option, as adjusted hereunder; and |
|
|
|
|
(X)
= |
the
number of Preferred Investment Option Shares that would be issuable upon exercise of this Preferred Investment Option in accordance
with the terms of this Preferred Investment Option if such exercise were by means of a cash exercise rather than a cashless exercise. |
If
Preferred Investment Option 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 holding period of the Preferred Investment Option Shares being issued may be tacked on to
the holding period of this Preferred Investment Option. The Company agrees not to take any position contrary to this Section 2(c).
d)
Mechanics of Exercise.
|
i. |
Delivery
of Preferred Investment Option Shares Upon Exercise. The Company shall cause the Preferred Investment Option 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 Preferred Investment Option Shares to or resale of the Preferred Investment Option Shares by the Holder or (B) the Preferred
Investment Option Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144
(assuming cashless exercise of the Preferred Investment Options), and otherwise by physical delivery of a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Preferred Investment Option 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 earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading
Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise (such date, the “Preferred Investment Option 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 Preferred Investment Option Shares with respect to which this Preferred Investment Option has been exercised,
irrespective of the date of delivery of the Preferred Investment Option 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) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any
reason to deliver to the Holder the Preferred Investment Option Shares subject to a Notice of Exercise by the Preferred Investment
Option 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 Preferred Investment Option 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 Trading Day after the Preferred Investment
Option Share Delivery Date) for each Trading Day after such Preferred Investment Option Share Delivery Date until such Preferred
Investment Option 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 Preferred Investment Option 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 Purchase Agreement, the Company
agrees to deliver the Preferred Investment Option 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 Preferred Investment Option 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 Preferred
Investment Option Share Delivery Date. |
ii.
Delivery of New Preferred Investment Options Upon Exercise. If this Preferred Investment Option shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of this Preferred Investment Option certificate, at the time of delivery
of the Preferred Investment Option Shares, deliver to the Holder a new Preferred Investment Option evidencing the rights of the Holder
to purchase the unpurchased Preferred Investment Option Shares called for by this Preferred Investment Option, which new Preferred Investment
Option shall in all other respects be identical with this Preferred Investment Option.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Preferred Investment Option
Shares pursuant to Section 2(d)(i) by the Preferred Investment Option Share Delivery Date, then the Holder will have the right to rescind
such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Preferred Investment Option 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 Preferred Investment Option
Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Preferred Investment Option
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 Preferred Investment Option 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 Preferred
Investment Option 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 Preferred Investment Option and equivalent number of Preferred Investment Option Shares for which such exercise was
not honored (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 Preferred Investment Option as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Preferred Investment Option. 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.
vi.
Charges, Taxes and Expenses. Issuance of Preferred Investment Option 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 Preferred Investment Option Shares, all of which
taxes and expenses shall be paid by the Company, and such Preferred Investment Option 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 Preferred Investment
Option Shares are to be issued in a name other than the name of the Holder, this Preferred Investment Option when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto 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 Preferred Investment Option Shares.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Preferred Investment Option, pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Preferred Investment Option, and a Holder
shall not have the right to exercise any portion of this Preferred Investment Option, 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 Preferred Investment
Option 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, nonexercised portion of this Preferred Investment Option beneficially owned by the Holder
or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted 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(e), 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(e) applies, the determination of whether this Preferred Investment Option is exercisable (in relation to other securities
owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Preferred Investment Option 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 Preferred Investment Option is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Preferred Investment Option 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(e), 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 Preferred Investment Option, 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%] [9.99%] of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Preferred Investment Option.
The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e),
provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of this Preferred Investment Option held by the Holder and
the provisions of this Section 2(e) 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(e) 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 Preferred Investment Option.
Section
3. Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Preferred Investment Option is outstanding: (i) pays a stock
dividend or otherwise makes a distribution or distributions on shares of its 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 Preferred Investment Option), (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 the 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 Preferred Investment Option shall be proportionately
adjusted such that the aggregate Exercise Price of this Preferred Investment Option shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) 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.
b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) 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 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 Preferred Investment Option (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).
c)
Pro Rata Distributions. During such time as this Preferred Investment Option is outstanding, if the Company shall declare or make
any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return
of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property 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 Preferred Investment Option, 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 Preferred Investment Option (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).
d)
Fundamental Transaction. If, at any time while this Preferred Investment Option 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 greater
than 50% of the outstanding Common Stock or greater than 50% 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 greater than 50% of the outstanding
shares of Common Stock or greater than 50% of the voting power of the common equity of the Company (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Preferred Investment Option, the Holder shall have the right to receive, for each Preferred
Investment Option 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(e) on the exercise of this Preferred Investment Option), 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 Preferred Investment Option is exercisable immediately prior to such
Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Preferred Investment Option). 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 Preferred Investment Option 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 Preferred Investment Option 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 Preferred Investment Option 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, 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 Preferred Investment Option, 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 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 Preferred Investment Option based on the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg determined as of the day of consummation of the applicable 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 Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the volatility for the remaining exercised period 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 Fundamental Transaction,
(C) the underlying price per share used in such calculation shall be the share price on the day of completion of the transaction (D)
a remaining option time equal to the time between the date of the public announcement of the applicable 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 Business Days of 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 Preferred
Investment Option and the Letter Agreement in accordance with the provisions of this Section 3(d) 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 Preferred Investment Option a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Preferred Investment Option
which 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 Preferred Investment Option (without regard to any limitations
on the exercise of this Preferred Investment Option) 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
pursuant 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 Preferred Investment Option 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 Preferred Investment Option
(so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Preferred Investment
Option and the Letter Agreement 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 Preferred Investment Option and the Letter Agreement 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.
e)
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.
f)
Notice to Holder.
i.
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 Preferred Investment Option Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
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 Preferred Investment Option 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 the 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. The Holder agrees to maintain any information
disclosed pursuant to this Section 3(f)(ii) in confidence until such information is publicly available, and shall comply with
applicable law with respect to trading in the Company’s securities following receipt any such information.
Section
4. Transfer of Preferred Investment Option.
a)
Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof
and to the provisions of Section 4.1 of the Purchase Agreement, this Preferred Investment Option and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Preferred Investment Option
at the principal office of the Company or its designated agent, together with a written assignment of this Preferred Investment Option
substantially in the form attached hereto 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 Preferred Investment Option or Preferred Investment Options 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 Preferred Investment
Option evidencing the portion of this Preferred Investment Option not so assigned, and this Preferred Investment Option shall promptly
be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Preferred
Investment Option to the Company unless the Holder has assigned this Preferred Investment Option in full, in which case, the Holder shall
surrender this Preferred Investment Option to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment
form to the Company assigning this Preferred Investment Option in full. The Preferred Investment Option, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of Preferred Investment Option Shares without having a new Preferred Investment
Option issued.
b)
New Preferred Investment Options. This Preferred Investment Option may be divided or combined with other Preferred Investment
Options upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations
in which new Preferred Investment Options are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with
Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Preferred
Investment Option or Preferred Investment Options in exchange for the Preferred Investment Option or Preferred Investment Options to
be divided or combined in accordance with such notice. All Preferred Investment Options issued on transfers or exchanges shall be dated
the Issue Date of this Preferred Investment Option and shall be identical with this Preferred Investment Option except as to the number
of Preferred Investment Option Shares issuable pursuant thereto.
c)
Preferred Investment Option Register. The Company shall register this Preferred Investment Option, upon records to be maintained
by the Company for that purpose (the “Preferred Investment Option Register”), in the name of the record Holder hereof
from time to time. The Company may deem and treat the registered Holder of this Preferred Investment Option 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.
d)
Transfer Restrictions. If, at the time of the surrender of this Preferred Investment Option in connection with any transfer of
this Preferred Investment Option, the transfer of this Preferred Investment Option shall not be either (i) registered pursuant to an
effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for
resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may
require, as a condition of allowing such transfer, that the Holder or transferee of this Preferred Investment Option, as the case may
be, provides to the Company an opinion of counsel in form and substance reasonably satisfactory to the Company to the effect that the
transfer of this Preferred Investment Option does not require registration under the Securities Act.
e)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Preferred
Investment Option and, upon any exercise hereof, will acquire the Preferred Investment Option Shares issuable upon such exercise, for
its own account and not with a view to or for distributing or reselling such Preferred Investment Option Shares or any part thereof in
violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities
Act.
Section
5. Miscellaneous.
a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Preferred Investment Option 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(d)(i),
except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Preferred Investment Option Shares on
a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv)
herein, in no event shall the Company be required to net cash settle an exercise of this Preferred Investment Option.
b)
Loss, Theft, Destruction or Mutilation of Preferred Investment Option. The Company covenants that upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Preferred Investment Option or any stock
certificate relating to the Preferred Investment Option Shares, and in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Preferred Investment Option, shall not include the posting of any bond), and upon surrender
and cancellation of such Preferred Investment Option or stock certificate, if mutilated, the Company will make and deliver a new Preferred
Investment Option or stock certificate of like tenor and dated as of such cancellation, in lieu of such Preferred Investment Option or
stock certificate.
c)
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.
d)
Authorized Shares.
The
Company covenants that, during the period the Preferred Investment Option is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Preferred Investment Option Shares upon the exercise of
any purchase rights under this Preferred Investment Option. The Company further covenants that its issuance of this Preferred Investment
Option shall constitute full authority to its officers who are charged with the duty of issuing the necessary Preferred Investment Option
Shares upon the exercise of the purchase rights under this Preferred Investment Option. The Company will take all such reasonable action
as may be necessary to assure that such Preferred Investment Option 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 Preferred Investment Option Shares which may be issued upon the exercise of the purchase rights represented by this Preferred
Investment Option will, upon exercise of the purchase rights represented by this Preferred Investment Option and payment for such Preferred
Investment Option Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable 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).
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 Preferred
Investment Option, 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 Preferred Investment Option against impairment.
Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Preferred Investment Option
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 Preferred Investment
Option Shares upon the exercise of this Preferred Investment Option 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 Preferred Investment Option.
Before
taking any action which would result in an adjustment in the number of Preferred Investment Option Shares for which this Preferred Investment
Option 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.
e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Preferred Investment
Option 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 Preferred Investment Option (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 Preferred Investment Option
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 Preferred Investment Option, 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.
a)
Restrictions. The Holder acknowledges that the Preferred Investment Option Shares acquired upon the exercise of this Preferred
Investment Option, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by
state and federal securities laws.
b)
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. Without limiting any other provision
of this Preferred Investment Option or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision
of this Preferred Investment Option, 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.
c)
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 288 Grove Street, Suite 388, Braintree, MA 02184, Attention: ___________, email address:
___________, 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 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 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.
d)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Preferred
Investment Option to purchase Preferred Investment Option 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.
e)
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 Preferred Investment Option. 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 Preferred Investment Option
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.
f)
Successors and Assigns. Subject to applicable securities laws, this Preferred Investment Option 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 Preferred Investment Option are intended to be for the benefit of any Holder
from time to time of this Preferred Investment Option and shall be enforceable by the Holder or holder of Preferred Investment Option
Shares.
g)
Amendment. This Preferred Investment Option may be modified or amended or the provisions hereof waived with the written consent
of the Company and the Holder.
h)
Severability. Wherever possible, each provision of this Preferred Investment Option shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Preferred Investment Option 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 Preferred Investment Option.
i)
Headings. The headings used in this Preferred Investment Option are for the convenience of reference only and shall not, for any
purpose, be deemed a part of this Preferred Investment Option.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Preferred Investment Option to be executed by its officer thereunto duly authorized as of
the date first above indicated.
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Microbot
Medical Inc. |
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By: |
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NOTICE
OF EXERCISE
To: |
Microbot
Medical Inc. |
(1)
The undersigned hereby elects to purchase ________ Preferred Investment Option Shares of the Company pursuant to the terms of the attached
Preferred Investment Option (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; or
[ ] if permitted the cancellation of such number of Preferred Investment Option Shares as is necessary, in accordance with the formula
set forth in subsection 2(c), to exercise this Preferred Investment Option with respect to the maximum number of Preferred Investment
Option Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3)
Please issue said Preferred Investment Option Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The
Preferred Investment Option Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
(4)
Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity: _________________________________________________
Name
of Authorized Signatory: ___________________________________________________________________
Title
of Authorized Signatory: ____________________________________________________________________
Date:
________________________________________________________________________________________
EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Preferred Investment Option, execute this form and supply required information. Do not use this form to exercise
the Preferred Investment Option to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Preferred Investment Option 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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Dated:
_______________ __, ______ |
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Signature:___________________________ |
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Exhibit
4.2
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
PLACEMENT AGENT PREFERRED INVESTMENT OPTION
Microbot
Medical Inc.
Preferred
Investment Option Shares: ______ |
Issue
Date: January 3, 2024 |
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Initial
Exercise Date: January 3, 2024 |
THIS
SERIES E PREFERRED INVESTMENT OPTION (the “Preferred Investment Option”) 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 date set forth above (the “Initial Exercise Date”) and on or prior
to 5:00 p.m. (New York City time) on July 3, 2029 (the “Termination Date”) but not thereafter, to subscribe for and
purchase from Microbot Medical Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment
hereunder, the “Preferred Investment Option Shares”) of Common Stock. The purchase price of one share of Common Stock
under this Preferred Investment Option shall be equal to the Exercise Price, as defined in Section 2(b).This Preferred Investment Option is issued pursuant to that certain engagement letter, dated as of October 24, 2023,
by and between the Company and H.C. Wainwright & Co., LLC (the “Engagement Letter”).
Section
1. Definitions. In addition to the terms defined elsewhere in this Preferred Investment Option, the following terms have the
meanings indicated in this Section 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.
“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 (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 the 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 Preferred Investment Options then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.
“Board
of Directors” means the board of directors of the Company.
“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.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“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.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“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.
“Preferred
Investment Oprion” means this Preferred Investment Option and other Preferred Investment Options issued by the Company pursuant
to the Engagement Letter.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“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.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“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, or the New York
Stock Exchange (or any successors to any of the foregoing).
“Transfer
Agent” means Computershare Trust Company, with offices located at Meidinger Tower, 462 South 4th Street, Louisville, KY 40202,
and any successor transfer agent of the Company.
“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 (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 the 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 Preferred Investment Options then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.
Section
2. Exercise.
a)
Exercise of Preferred Investment Option. Exercise of the purchase rights represented by this Preferred Investment Option 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 in the form annexed hereto
(the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver
the aggregate Exercise Price for the Preferred Investment Option 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(c) 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 Preferred Investment Option to the Company until the Holder has purchased all of the
Preferred Investment Option Shares available hereunder and the Preferred Investment Option has been exercised in full, in which case,
the Holder shall surrender this Preferred Investment Option to the Company for cancellation as soon as reasonably practicable of the
date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Preferred Investment Option resulting
in purchases of a portion of the total number of Preferred Investment Option Shares available hereunder shall have the effect of lowering
the outstanding number of Preferred Investment Option Shares purchasable hereunder in an amount equal to the applicable number of Preferred
Investment Option Shares purchased. The Holder and the Company shall maintain records showing the number of Preferred Investment Option
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business
Day of receipt of such notice. The Holder and any assignee, by acceptance of this Preferred Investment Option, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Preferred Investment Option Shares hereunder,
the number of Preferred Investment Option Shares available for purchase hereunder at any given time may be less than the amount stated
on the face hereof.
b)
Exercise Price. The exercise price per share of Common Stock under this Preferred Investment Option shall be $2.025, subject
to adjustment hereunder (the “Exercise Price”).
c)
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 Preferred Investment Option Shares by the Holder, then this Preferred Investment
Option 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 Preferred Investment Option Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:
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(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) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 2(a) 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 Bid Price of
the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of
the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading
hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of
“regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof 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 both executed and delivered
pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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(B)
= |
the
Exercise Price of this Preferred Investment Option, as adjusted hereunder; and |
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(X)
= |
the
number of Preferred Investment Option Shares that would be issuable upon exercise of this Preferred Investment Option in accordance
with the terms of this Preferred Investment Option if such exercise were by means of a cash exercise rather than a cashless exercise. |
If
Preferred Investment Option 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 holding period of the Preferred Investment Option Shares being issued may be tacked on to
the holding period of this Preferred Investment Option. The Company agrees not to take any position contrary to this Section 2(c).
d)
Mechanics of Exercise.
|
i. |
Delivery
of Preferred Investment Option Shares Upon Exercise. The Company shall cause the Preferred Investment Option 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 Preferred Investment Option Shares to or resale of the Preferred Investment Option Shares by the Holder or (B) the Preferred
Investment Option Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144
(assuming cashless exercise of the Preferred Investment Options), and otherwise by physical delivery of a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Preferred Investment Option 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 earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading
Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise (such date, the “Preferred Investment Option 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 Preferred Investment Option Shares with respect to which this Preferred Investment Option has been exercised,
irrespective of the date of delivery of the Preferred Investment Option 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) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any
reason to deliver to the Holder the Preferred Investment Option Shares subject to a Notice of Exercise by the Preferred Investment
Option 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 Preferred Investment Option 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 Trading Day after the Preferred Investment
Option Share Delivery Date) for each Trading Day after such Preferred Investment Option Share Delivery Date until such Preferred
Investment Option 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 Preferred Investment Option 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 Purchase Agreement, the Company
agrees to deliver the Preferred Investment Option 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 Preferred Investment Option 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 Preferred
Investment Option Share Delivery Date. |
ii.
Delivery of New Preferred Investment Options Upon Exercise. If this Preferred Investment Option shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of this Preferred Investment Option certificate, at the time of delivery
of the Preferred Investment Option Shares, deliver to the Holder a new Preferred Investment Option evidencing the rights of the Holder
to purchase the unpurchased Preferred Investment Option Shares called for by this Preferred Investment Option, which new Preferred Investment
Option shall in all other respects be identical with this Preferred Investment Option.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Preferred Investment Option
Shares pursuant to Section 2(d)(i) by the Preferred Investment Option Share Delivery Date, then the Holder will have the right to rescind
such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Preferred Investment Option 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 Preferred Investment Option
Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Preferred Investment Option
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 Preferred Investment Option 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 Preferred
Investment Option 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 Preferred Investment Option and equivalent number of Preferred Investment Option Shares for which such exercise was
not honored (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 Preferred Investment Option as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Preferred Investment Option. 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.
vi.
Charges, Taxes and Expenses. Issuance of Preferred Investment Option 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 Preferred Investment Option Shares, all of which
taxes and expenses shall be paid by the Company, and such Preferred Investment Option 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 Preferred Investment
Option Shares are to be issued in a name other than the name of the Holder, this Preferred Investment Option when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto 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 Preferred Investment Option Shares.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Preferred Investment Option, pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Preferred Investment Option, and a Holder
shall not have the right to exercise any portion of this Preferred Investment Option, 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 Preferred Investment
Option 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, nonexercised portion of this Preferred Investment Option beneficially owned by the Holder
or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted 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(e), 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(e) applies, the determination of whether this Preferred Investment Option is exercisable (in relation to other securities
owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Preferred Investment Option 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 Preferred Investment Option is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Preferred Investment Option 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(e), 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 Preferred Investment Option, 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% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Preferred Investment Option.
The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e),
provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of this Preferred Investment Option held by the Holder and
the provisions of this Section 2(e) 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(e) 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 Preferred Investment Option.
Section
3. Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Preferred Investment Option is outstanding: (i) pays a stock
dividend or otherwise makes a distribution or distributions on shares of its 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 Preferred Investment Option), (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 the 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 Preferred Investment Option shall be proportionately
adjusted such that the aggregate Exercise Price of this Preferred Investment Option shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) 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.
b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) 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 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 Preferred Investment Option (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).
c)
Pro Rata Distributions. During such time as this Preferred Investment Option is outstanding, if the Company shall declare or make
any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return
of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property 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 Preferred Investment Option, 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 Preferred Investment Option (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).
d)
Fundamental Transaction. If, at any time while this Preferred Investment Option 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 greater
than 50% of the outstanding Common Stock or greater than 50% 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 greater than 50% of the outstanding
shares of Common Stock or greater than 50% of the voting power of the common equity of the Company (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Preferred Investment Option, the Holder shall have the right to receive, for each Preferred
Investment Option 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(e) on the exercise of this Preferred Investment Option), 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 Preferred Investment Option is exercisable immediately prior to such
Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Preferred Investment Option). 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 Preferred Investment Option 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 Preferred Investment Option 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 Preferred Investment Option 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, 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 Preferred Investment Option, 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 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 Preferred Investment Option based on the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg determined as of the day of consummation of the applicable 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 Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the volatility for the remaining exercised period 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 Fundamental Transaction,
(C) the underlying price per share used in such calculation shall be the share price on the day of completion of the transaction (D)
a remaining option time equal to the time between the date of the public announcement of the applicable 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 Business Days of 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 Preferred
Investment Option in accordance with the provisions of this Section 3(d) 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 Preferred Investment Option a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to this Preferred Investment Option which 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 Preferred Investment Option (without regard to any limitations on the exercise of this Preferred
Investment Option) 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 pursuant 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 Preferred Investment Option 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 Preferred Investment Option (so that from and after the
occurrence or consummation of such Fundamental Transaction, each and every provision of this Preferred Investment Option 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
Preferred Investment Option 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.
e)
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.
f)
Notice to Holder.
i.
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 Preferred Investment Option Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
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 Preferred Investment Option 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 the 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. The Holder agrees to maintain any information
disclosed pursuant to this Section 3(f)(ii) in confidence until such information is publicly available, and shall comply with
applicable law with respect to trading in the Company’s securities following receipt any such information.
Section
4. Transfer of Preferred Investment Option.
a)
Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof
and to the provisions of Section 4.1 of the Purchase Agreement, this Preferred Investment Option and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Preferred Investment Option
at the principal office of the Company or its designated agent, together with a written assignment of this Preferred Investment Option
substantially in the form attached hereto 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 Preferred Investment Option or Preferred Investment Options 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 Preferred Investment
Option evidencing the portion of this Preferred Investment Option not so assigned, and this Preferred Investment Option shall promptly
be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Preferred
Investment Option to the Company unless the Holder has assigned this Preferred Investment Option in full, in which case, the Holder shall
surrender this Preferred Investment Option to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment
form to the Company assigning this Preferred Investment Option in full. The Preferred Investment Option, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of Preferred Investment Option Shares without having a new Preferred Investment
Option issued.
b)
New Preferred Investment Options. This Preferred Investment Option may be divided or combined with other Preferred Investment
Options upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations
in which new Preferred Investment Options are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with
Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Preferred
Investment Option or Preferred Investment Options in exchange for the Preferred Investment Option or Preferred Investment Options to
be divided or combined in accordance with such notice. All Preferred Investment Options issued on transfers or exchanges shall be dated
the Issue Date of this Preferred Investment Option and shall be identical with this Preferred Investment Option except as to the number
of Preferred Investment Option Shares issuable pursuant thereto.
c)
Preferred Investment Option Register. The Company shall register this Preferred Investment Option, upon records to be maintained
by the Company for that purpose (the “Preferred Investment Option Register”), in the name of the record Holder hereof
from time to time. The Company may deem and treat the registered Holder of this Preferred Investment Option 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.
d)
Transfer Restrictions. If, at the time of the surrender of this Preferred Investment Option in connection with any transfer of
this Preferred Investment Option, the transfer of this Preferred Investment Option shall not be either (i) registered pursuant to an
effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for
resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may
require, as a condition of allowing such transfer, that the Holder or transferee of this Preferred Investment Option, as the case may
be, provides to the Company an opinion of counsel in form and substance reasonably satisfactory to the Company to the effect that the
transfer of this Preferred Investment Option does not require registration under the Securities Act.
e)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Preferred
Investment Option and, upon any exercise hereof, will acquire the Preferred Investment Option Shares issuable upon such exercise, for
its own account and not with a view to or for distributing or reselling such Preferred Investment Option Shares or any part thereof in
violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities
Act.
Section
5. Miscellaneous.
a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Preferred Investment Option 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(d)(i),
except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Preferred Investment Option Shares on
a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv)
herein, in no event shall the Company be required to net cash settle an exercise of this Preferred Investment Option.
b)
Loss, Theft, Destruction or Mutilation of Preferred Investment Option. The Company covenants that upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Preferred Investment Option or any stock
certificate relating to the Preferred Investment Option Shares, and in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Preferred Investment Option, shall not include the posting of any bond), and upon surrender
and cancellation of such Preferred Investment Option or stock certificate, if mutilated, the Company will make and deliver a new Preferred
Investment Option or stock certificate of like tenor and dated as of such cancellation, in lieu of such Preferred Investment Option or
stock certificate.
c)
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.
d)
Authorized Shares.
The
Company covenants that, during the period the Preferred Investment Option is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Preferred Investment Option Shares upon the exercise of
any purchase rights under this Preferred Investment Option. The Company further covenants that its issuance of this Preferred Investment
Option shall constitute full authority to its officers who are charged with the duty of issuing the necessary Preferred Investment Option
Shares upon the exercise of the purchase rights under this Preferred Investment Option. The Company will take all such reasonable action
as may be necessary to assure that such Preferred Investment Option 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 Preferred Investment Option Shares which may be issued upon the exercise of the purchase rights represented by this Preferred
Investment Option will, upon exercise of the purchase rights represented by this Preferred Investment Option and payment for such Preferred
Investment Option Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable 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).
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 Preferred
Investment Option, 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 Preferred Investment Option against impairment.
Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Preferred Investment Option
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 Preferred Investment
Option Shares upon the exercise of this Preferred Investment Option 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 Preferred Investment Option.
Before
taking any action which would result in an adjustment in the number of Preferred Investment Option Shares for which this Preferred Investment
Option 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.
e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Preferred Investment
Option 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 Preferred Investment Option (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 Preferred Investment Option
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 Preferred Investment Option, 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.
a)
Restrictions. The Holder acknowledges that the Preferred Investment Option Shares acquired upon the exercise of this Preferred
Investment Option, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by
state and federal securities laws.
b)
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. Without limiting any other provision
of this Preferred Investment Option or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision
of this Preferred Investment Option, 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.
c)
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 288 Grove Street, Suite 388, Braintree, MA 02184, Attention: ___________, email address:
___________, 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 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 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.
d)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Preferred
Investment Option to purchase Preferred Investment Option 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.
e)
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 Preferred Investment Option. 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 Preferred Investment Option
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.
f)
Successors and Assigns. Subject to applicable securities laws, this Preferred Investment Option 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 Preferred Investment Option are intended to be for the benefit of any Holder
from time to time of this Preferred Investment Option and shall be enforceable by the Holder or holder of Preferred Investment Option
Shares.
g)
Amendment. This Preferred Investment Option may be modified or amended or the provisions hereof waived with the written consent
of the Company and the Holder.
h)
Severability. Wherever possible, each provision of this Preferred Investment Option shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Preferred Investment Option 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 Preferred Investment Option.
i)
Headings. The headings used in this Preferred Investment Option are for the convenience of reference only and shall not, for any
purpose, be deemed a part of this Preferred Investment Option.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Preferred Investment Option to be executed by its officer thereunto duly authorized as of
the date first above indicated.
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Microbot
Medical Inc. |
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By: |
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Title: |
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NOTICE
OF EXERCISE
To: |
Microbot
Medical Inc. |
(1)
The undersigned hereby elects to purchase ________ Preferred Investment Option Shares of the Company pursuant to the terms of the attached
Preferred Investment Option (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; or
[ ] if permitted the cancellation of such number of Preferred Investment Option Shares as is necessary, in accordance with the formula
set forth in subsection 2(c), to exercise this Preferred Investment Option with respect to the maximum number of Preferred Investment
Option Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3)
Please issue said Preferred Investment Option Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The
Preferred Investment Option Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
(4)
Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity: _________________________________________________
Name
of Authorized Signatory: ___________________________________________________________________
Title
of Authorized Signatory: ____________________________________________________________________
Date:
________________________________________________________________________________________
EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Preferred Investment Option, execute this form and supply required information. Do not use this form to exercise
the Preferred Investment Option to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Preferred Investment Option and all rights evidenced thereby are hereby assigned to
Name: |
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Print) |
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Address: |
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Print) |
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Phone
Number: |
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Email
Address: |
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Dated:
_______________ __, ______ |
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Holder’s
Signature:___________________________ |
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Holder’s
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Exhibit
10.1
MICROBOT
MEDICAL INC.
December
29, 2023
Holder
of Preferred Investment Options Issued in October 2022 and June 2023
Re:
Inducement Offer to Exercise Preferred Investment Options Issued in October 2022 and June 2023
Dear
Holder:
Microbot
Medical Inc. (the “Company”) is pleased to offer to you (“Holder”, “you” or
similar terminology) the opportunity to receive (a) new preferred investment options to purchase shares of the Company’s common
stock, par value $0.01 per share (the “Common Stock”), and (b) a reduction in the Exercise Price (as defined in the
respective Existing Preferred Investment Options) of the preferred investment options to purchase an aggregate of [___] shares of Common
Stock held by you in consideration for exercising for cash all of the Company’s [(i) Series A preferred investment options to purchase
an aggregate of [___] shares of Common Stock, issued to you on October 25, 2022, as amended on May 24, 2023 (at an amended exercise price
of $2.20 per share), [(ii) Series C preferred investment options to purchase an aggregate of [___] shares of Common Stock, issued to
you on June 6, 2023 (at an original exercise price of $2.075 per share) and [(iii) Series D preferred investment options to purchase
an aggregate of [___] shares of Common Stock, issued to you on June 26, 2023 (at an original exercise price of $3.19 per share) (clauses
(i) through (iii) collectively, the “Existing Preferred Investment Options”)], as set forth on the signature page
hereto. The issuance and/or resale of the shares of Common Stock underlying the Existing Preferred Investment Options (the “Existing
Preferred Investment Option Shares”) have been registered pursuant to the registration statement on Form S-1 (File No. 333-273207)
(the “Registration Statement”). The Registration Statement is currently effective and, upon exercise of the Existing
Preferred Investment Options pursuant to this letter agreement, will be effective for the issuance and resale of the Existing Preferred
Investment Option Shares, as applicable. Capitalized terms not otherwise defined herein shall have the meanings set forth in the New
Preferred Investment Options (as defined herein).
The
Company desires to reduce the Exercise Price (as defined in the respective Existing Preferred Investment Options) of the Existing Preferred
Investment Options to $1.62 per share (the “Reduced Exercise Price”). In consideration for cash exercising in full
all of the Existing Preferred Investment Options held by Holder as set forth on the Holder’s signature page hereto (the “Warrant
Exercise”) at the Reduced Exercise Price on or before the Execution Time (as defined below), the Company hereby offers to sell
and issue you:
(a)
new series E preferred investment options (the “New Series E Preferred Investment Options”) pursuant to an unregistered
transaction in compliance with Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”), to purchase
up to [____] shares of Common Stock (the “New Preferred Investment Option Shares”), which New Series E Preferred Investment
Options shall have an exercise price per share equal to $1.50, subject to adjustment as provided in the New Preferred Investment Options,
will be exercisable at any time on or after the date of issuance and have a term of exercise of five and one-half (5.5) years from the
date of issuance, which New Preferred Investment Options shall be substantially in the form as set forth in Exhibit A-1 hereto;
and
(b)
the New Preferred Investment Option certificate(s) will be delivered at Closing (as defined below), and such New Preferred Investment
Options, together with any underlying shares of Common Stock issued upon exercise of the New Preferred Investment Options, will, unless
and until their sales are registered under the Securities Act, contain customary restrictive legends and other language typical for a
restricted warrant and restricted shares. Notwithstanding anything herein to the contrary, in the event that any Warrant Exercise would
otherwise cause the Holder to exceed the beneficial ownership limitations (“Beneficial Ownership Limitation”) set
forth in Section 2(e) of the Existing Preferred Investment Options (or, if applicable and at the Holder’s election, 9.99%), the
Company shall only issue such number of Existing Preferred Investment Option Shares to the Holder that would not cause the Holder to
exceed the maximum number of Existing Preferred Investment Option Shares permitted thereunder, as directed by the Holder, with the balance
to be held in abeyance until notice from the Holder that the balance (or portion thereof) may be issued in compliance with such limitations,
which abeyance shall be evidenced through the Existing Preferred Investment Options which shall be deemed prepaid thereafter (including
the cash payment in full of the exercise price), and exercised pursuant to a Notice of Exercise in the Existing Preferred Investment
Options (provided no additional exercise price shall be due and payable). The parties hereby agree that the Beneficial Ownership Limitation
for purposes of the Existing Preferred Investment Options is as set forth on the Holder’s signature page hereto. For the avoidance
of doubt, the determination of which portion of the Existing Preferred Investment Option 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 an Existing
Preferred Investment Option is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties (as such terms are defined in the Existing Preferred Investment Options) and of which portion of an Existing Preferred Investment
Option 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 and shall have no liability for exercises of an Existing Preferred Investment Option that
are in non-compliance with the Beneficial Ownership Limitation.
Expressly
subject to the paragraph immediately following this paragraph below, Holder may accept this offer by signing this letter agreement below,
with such acceptance constituting Holder’s exercise in full of the Existing Preferred Investment Options for an aggregate exercise
price set forth on the Holder’s signature page hereto (the “Warrant Exercise Price”) on or before 12:30 a.m.,
Eastern Time, on December 29, 2023 (the “Execution Time”).
Additionally,
the Company agrees to the representations, warranties and covenants set forth on Annex A attached hereto. Holder represents and
warrants that, as of the date hereof it is, and on each date on which it exercises any New Preferred Investment Options it will be, an
“accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act, and agrees that the New
Preferred Investment Options will contain restrictive legends when issued, and neither the New Preferred Investment Options nor the shares
of Common Stock issuable upon exercise of the New Preferred Investment Options will be registered under the Securities Act, except as
provided in Annex A attached hereto. Also, Holder represents and warrants that it is acquiring the New Preferred Investment Options
as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or
regarding the distribution of the New Preferred Investment Options or the New Preferred Investment Option Shares (this representation
is not limiting Holder’s right to sell the New Preferred Investment Option Shares pursuant to an effective registration statement
under the Securities Act or otherwise in compliance with applicable federal and state securities laws).
The
Holder understands that the issuance of the New Preferred Investment Options and the New Preferred Investment Option Shares are not,
and may never be, registered under the Securities Act, or the securities laws of any state and, accordingly, each certificate, if any,
representing such securities shall bear a legend substantially similar to the following:
“THE
OFFER AND SALE OF THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.”
Certificates
evidencing the New Preferred Investment Option Shares shall not contain any legend (including the legend set forth above), (i) while
a registration statement covering the resale of such New Preferred Investment Option Shares is effective under the Securities Act, (ii)
following any sale of such New Preferred Investment Option Shares pursuant to Rule 144 under the Securities Act, (iii) if such New Preferred
Investment Option Shares are eligible for sale under Rule 144 (assuming cashless exercise of the New Preferred Investment Options), without
the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such New Preferred
Investment Option Shares and without volume or manner-of-sale restrictions, (iv) if such New Preferred Investment Option Shares may be
sold under Rule 144 (assuming cashless exercise of the New Preferred Investment Options) and the Company is then in compliance with the
current public information required under Rule 144 as to such New Preferred Investment Option Shares, or (v) if such legend is not required
under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the
Securities and Exchange Commission (the “Commission”) and the earliest of clauses (i) through (v), the “Delegend
Date”)). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Delegend Date
if required by the Company and/or the Transfer Agent to effect the removal of the legend hereunder, or at the request of the Holder,
which opinion shall be in form and substance reasonably acceptable to the Holder. From and after the Delegend Date, such New Preferred
Investment Option Shares shall be issuable free of all legends. The Company agrees that following the Delegend Date or at such time as
such legend is no longer required under this Section, it will, no later than two (2) Trading Days following the delivery by the Holder
to the Company or the Transfer Agent of a certificate representing the New Preferred Investment Option Shares issued with a restrictive
legend, along with such certificate(s) or other documentation reasonably requested by the Company’s counsel and/or the Transfer
Agent (within one (1) Trading Day following the delivery by the Holder to the Company or the Transfer Agent of a certificate representing
the New Preferred Investment Option Shares, which request shall include the form of representation letter requested by this sentence),
including a customary representation letter, in form and substance reasonably acceptable to the Company’s counsel and/or the Transfer
Agent (such second (2nd) Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to the
Holder a certificate representing such shares that is free from all restrictive and other legends or, at the request of the Holder shall
credit the account of the Holder’s prime broker with the Depository Trust Company System as directed by the Holder.
In
addition to the Holder’s other available remedies, the Company shall pay to a Holder, in cash, (i) as partial liquidated damages
and not as a penalty, for each $1,000 of New Preferred Investment Option Shares (based on the VWAP of the Common Stock on the date such
New Preferred Investment Option Shares are submitted to the Transfer Agent) delivered for removal of the restrictive legend, $10 per
Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after
the Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or
cause to be delivered) to the Holder by the Legend Removal Date a certificate representing the New Preferred Investment Option Shares
that is free from all restrictive and other legends and (b) if after the Legend Removal Date the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number
of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common
Stock that the Holder anticipated receiving from the Company without any restrictive legend, then, an amount equal to the excess of the
Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common
Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) over the product of (A) such number of
New Preferred Investment Option Shares that the Company was required to deliver to the Holder by the Legend Removal Date and for which
the Holder was required to purchase shares to timely satisfy delivery requirements, multiplied by (B) the weighted average price at which
the Holder sold that number of shares of Common Stock.
If
this offer is accepted and the transaction documents are executed by the Execution Time, then as promptly as possible following the Execution
Time, but in any event no later than 8:00 a.m., Eastern Time, on the date hereof, the Company shall issue a press release disclosing
the material terms of the transactions contemplated hereby and shall file a Current Report on Form 8-K with the Commission disclosing
all material terms of the transactions contemplated hereunder, including the filing with the Commission of this letter agreement as an
exhibit thereto within the time required by the Exchange Act. From and after the dissemination of such press release, the Company represents
to you that it shall have publicly disclosed all material, non-public information delivered to you by the Company, or any of its respective
officers, directors, employees or agents in connection with the transactions contemplated hereunder. In addition, effective upon the
dissemination 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, employees or Affiliates on the one hand, and you and your Affiliates on the other hand, shall terminate. The Company represents,
warrants and covenants that, upon acceptance of this offer, the Existing Preferred Investment Option Shares shall be issued at Closing
free of any legends or restrictions on resale by Holder.
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, stamp taxes and other taxes and duties levied in connection with the delivery of any Exiting Preferred Investment
Option Shares. This Agreement shall be governed by the laws of the State of New York without regard to the principles of conflict of
law.
No
later than the second (2nd) Trading Day following the date hereof, the closing (“Closing”) shall occur at such location
as the parties shall mutually agree. Unless otherwise directed by H.C. Wainwright & Co., LLC (the “Placement Agent”),
settlement of the Existing Preferred Investment Option Shares shall occur via “Delivery Versus Payment” (“DVP”)
(i.e., on the Closing Date (as defined below), the Company shall issue the Existing Preferred Investment Option Shares registered in
the Holder’s name and address provided to the Company in writing and released by the Transfer Agent directly to the account(s)
at the Placement Agent identified by the Holder; upon receipt of such Existing Preferred Investment Option Shares, the Placement Agent
shall promptly electronically deliver such Existing Preferred Investment Option Shares to the Holder, and payment therefor shall concurrently
be made to the Company by the Placement Agent (or its clearing firm) by wire transfer to the Company). The date of the Closing of the
Warrant Exercise shall be referred to as the “Closing Date”.
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Sincerely
yours, |
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MICROBOT
MEDICAL INC. |
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By: |
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Name: |
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Title: |
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[Holder
Signature Page Follows]
Accepted
and Agreed to:
Name
of Holder: ________________________________________________________
Signature
of Authorized Signatory of Holder: _________________________________
Name
of Authorized Signatory: _______________________________________________
Title
of Authorized Signatory: ________________________________________________
Number
of Existing Preferred Investment Options: __________________
Aggregate
Warrant Exercise Price at the Reduced Exercise Price being exercised contemporaneously with signing this letter agreement: _________________
Existing
Preferred Investment Options Beneficial Ownership Blocker: ☐ 4.99% or ☐ 9.99%
New
Series E Preferred Investment Options: _______________ (100% coverage)
New
Preferred Investment Options Beneficial Ownership Blocker: ☐ 4.99% or ☐ 9.99%
DTC
Instructions:
[Holder
signature page to MBOT Inducement Offer]
Annex
A
Representations,
Warranties and Covenants of the Company. The Company hereby makes the following representations and warranties to the Holder:
a) |
SEC
Reports. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one year 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 “SEC Reports”). As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the Exchange Act 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 identified in Rule 144(i) under the Securities Act. |
b) |
Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this letter agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this letter agreement
by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in
connection herewith. This letter agreement has been duly executed by the Company and, when delivered in accordance with the terms
hereof, will constitute the 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. |
c) |
No
Conflicts. The execution, delivery and performance of this letter agreement by the Company and the consummation by the Company
of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’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 liens, claims,
security interests, other encumbrances or defects upon any of the properties or assets of the Company in connection with, or give
to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of,
any material agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other material
understanding to which such Company is a party or by which any property or asset of the Company is bound or affected; or (iii) 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 is subject (including federal and state securities laws and regulations), or by which
any property or asset of the Company 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 upon the business, prospects, properties, operations, condition
(financial or otherwise) or results of operations of the Company, taken as a whole, or in its ability to perform its obligations
under this letter agreement. |
d) |
Registration
Obligations. As soon as reasonably practicable (and in any event within 30 calendar days of the date of this letter agreement),
the Company shall file a registration statement on Form S-3 (or other appropriate form, including on Form S-1, if the Company is
not then S-3 eligible) providing for the resale of the New Preferred Investment Option Shares by the holders of the New Preferred
Investment Options (the “Resale Registration Statement”). The Company shall use commercially reasonable efforts
to cause the Resale Registration Statement to become effective within ninety (90) calendar days following the date hereof and to
keep the Resale Registration Statement effective at all times until no holder of the New Preferred Investment Options owns any New
Preferred Investment Options or New Preferred Investment Option Shares. |
e) |
Trading
Market. The transactions contemplated under this letter agreement comply with all the rules and regulations of the Nasdaq Capital
Market. |
f) |
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 this letter agreement, other than: (i) the filings required
pursuant to this letter agreement, (ii) application(s) or notice to each applicable Trading Market for the listing of the New Preferred
Investment Option Shares for trading thereon in the time and manner required thereby, (iii) the filing of Form D with the Commission
and (iv) such filings as are required to be made under applicable state securities laws. |
g) |
Listing
of Common Stock. The Company hereby agrees to use commercially reasonable 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 New Preferred Investment Option Shares on such Trading Market and promptly secure the listing of all of
the New Preferred Investment Option 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 New Preferred Investment Option
Shares, and will take such other action as is necessary to cause all of the New Preferred Investment Option 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. |
h) |
Subsequent
Equity Sales. |
(i)
From the date hereof until ten (10) Trading Days after the Closing Date, neither the Company nor any Subsidiary shall (A) issue, enter
into any agreement to issue or announce the issuance or proposed issuance of any Common Stock or Common Stock Equivalents or (B) file
any registration statement or any amendment or supplement to any existing registration statement (other than (x) the Resale Registration
Statement referred to herein or (y) a registration statement on Form S-8 in connection with any employee benefit plan). Notwithstanding
the foregoing, this Section (h)(i) shall not apply in respect of an Exempt Issuance. “Exempt Issuance” means the issuance
of (a) shares of Common Stock or options to employees, officers, directors or consultants of the Company pursuant to any stock or option
plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members
of a committee of non-employee directors established for such purpose for services rendered to the Company, provided that such shares
of Common Stock or options issued to consultants of the Company 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 prohibition period in this Section (h)(i), (b) preferred investment options to the Placement Agent in connection with the transactions
pursuant to this letter agreement (the “Placement Agent Preferred Investment Options”) and any shares of Common Stock
upon exercise of the Placement Agent Preferred Investment Options and the shares of Common Stock issuable 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 letter agreement, provided that such securities have not been amended since
the date of this letter 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, and (c)
securities issued pursuant to acquisitions or strategic transactions 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 prohibition period in this Section
(h)(i), 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. “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, for purposes of this Section
(h)(i).
(ii)
From the date hereof until six (6) months following the Closing Date, the Company shall be prohibited from effecting or entering into
an agreement to effect any issuance by the Company nor any Subsidiary 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 Common Stock or (ii) enters into, or effects a transaction
under, any agreement, including, but not limited to, an equity line of credit or an “at-the-market offering”, whereby the
Company may issue securities at a future determined price, regardless of whether shares pursuant to such agreement have actually been
issued and regardless of whether such agreement is subsequently canceled; provided, however, that, following the expiration
of the restrictive period set forth in Section (h)(i) above, the entry into and/or issuance of shares of Common Stock in an “at
the market” offering with the Placement Agent as sales agent shall not be deemed a Variable Rate Transaction. 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.
i) |
Form
D; Blue Sky Filings. If required, the Company agrees to timely file a Form D with respect to the New Preferred Investment Options
and New Preferred Investment Option Shares as required under Regulation D and to provide a copy thereof, promptly upon request of
any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption
for, or to qualify the New Preferred Investment Options and New Preferred Investment Option Shares for, sale to the Holder at Closing
under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such
actions promptly upon request of any Holder. |
Exhibit
99.1
Microbot
Medical Announces Exercise of Outstanding Preferred Investment Options for $2.73 Million in Gross Proceeds Priced At-the-Market Under
Nasdaq Rules
BRAINTREE,
Mass., Dec. 29, 2023 — Microbot Medical Inc. (Nasdaq: MBOT), developer of the innovative LIBERTY® Endovascular Robotic
Surgical System, today announced the entry into a definitive agreement for the immediate exercise of certain outstanding preferred investment
options to purchase up to an aggregate of 1,685,682 shares of common stock, having exercise prices ranging from $2.075 to $3.19 per share,
issued by Microbot in October 2022 and June 2023, at a reduced exercise price of $1.62 per share. The shares of common stock issuable
upon exercise of the preferred investment options are registered pursuant to an effective resale registration statement on Form S-1 (File
No. 333-273207). The closing of the offering is expected to occur on or about January 3, 2024, subject to satisfaction of customary closing
conditions.
H.C.
Wainwright & Co. is acting as the exclusive placement agent for the offering.
In
consideration for the immediate exercise of the preferred investment options for cash, Microbot will issue new unregistered series E
preferred investment options to purchase up to 1,685,682 shares of common stock. The new series E preferred investment options will have
an exercise price of $1.50 per share, will be exercisable immediately upon issuance and have a term equal to five and one-half years
from the date of issuance.
The
gross proceeds to the Company from the exercise of the preferred investment options are expected to be approximately $2.73 million, prior
to deducting placement agent fees and offering expenses. The Company intends to use the net proceeds from the offering for the continued
development, commercialization and regulatory activities for the Company’s LIBERTY® Robotic System, expansion and
development of additional applications derived from the Company’s existing IP portfolio, and for working capital and other general
corporate purposes.
The
new series E preferred investment options described above were offered in a private placement pursuant to an applicable exemption from
the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”), and, along with the shares of common
stock issuable upon exercise, have not been registered under the 1933 Act, and may not be offered or sold in the United States absent
registration with the Securities and Exchange Commission (“SEC”) or an applicable exemption from such registration requirements.
Microbot has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issuable upon exercise
of the new series E preferred investment options.
This
press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, nor shall there
be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of any such state or other jurisdiction.
About
Microbot Medical
Microbot
Medical Inc. (NASDAQ: MBOT) is a pre-clinical medical device company that specializes in transformational micro-robotic technologies,
with the goals of improving clinical outcomes for patients and increasing accessibility through the natural and artificial lumens within
the human body.
The
LIBERTY® Endovascular Robotic Surgical System aims to improve the way surgical robotics are being used in endovascular
procedures today, by eliminating the need for large, cumbersome, and expensive capital equipment. The Company believes the LIBERTY®
Endovascular Robotic Surgical System’s remote operation has the potential to be the first system to democratize endovascular
interventional procedures.
Further
information about Microbot Medical is available at http://www.microbotmedical.com.
Safe
Harbor
Statements
to future financial and/or operating results, future growth in research, technology, clinical development, and potential opportunities
for Microbot Medical Inc. and its subsidiaries, along with other statements about the future expectations, beliefs, goals, plans, or
prospects expressed by management, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995 and the Federal securities laws. Any statements that are not historical fact (including, but not limited to statements that
contain words such as “will,” “believes,” “plans,” “anticipates,” “expects”
and “estimates”) should also be considered to be forward-looking statements. Forward-looking statements involve risks and
uncertainties, including, without limitation, the timing and completion of the offering; the satisfaction of customary closing conditions
related to the offering and the intended use of proceeds therefrom, as well as market and other conditions, risks inherent in the development
and/or commercialization of potential products, including LIBERTY, the outcome of its studies to evaluate LIBERTY, whether the Company’s
core business focus program and cost reduction plan are sufficient to enable the Company to continue to focus on its LIBERTY technology
while it stabilizes its financial condition and seeks additional working capital, any failure or inability to recruit physicians and
clinicians to serve as primary investigators to conduct regulatory studies which could adversely affect or delay such studies, uncertainty
in the results of pre-clinical and clinical trials or regulatory pathways and regulatory approvals, disruptions resulting from new and
ongoing hostilities between Israel and the Palestinians, such as employees of Microbot and its vendors and business partners being called
to active military duty, any lingering uncertainty resulting from the COVID-19 pandemic, need and ability to obtain future capital, and
maintenance of intellectual property rights. Additional information on risks facing Microbot Medical can be found under the heading “Risk
Factors” in Microbot Medical’s periodic reports filed with the Securities and Exchange Commission (SEC), which are available
on the SEC’s web site at www.sec.gov. Microbot Medical disclaims any intent or obligation to update these forward-looking
statements, except as required by law.
Investor
Contact:
Michal
Efraty
+972-(0)52-3044404
IR@microbotmedical.com
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