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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 earliest event
reported: May 28, 2024
Presto Automation Inc.
(Exact name of registrant as specified in its
charter)
Delaware |
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001-39830 |
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84-2968594 |
(State or other jurisdiction
of incorporation) |
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(Commission File Number) |
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(IRS Employer
Identification No.) |
985 Industrial Road
San Carlos, CA |
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94070 |
(Address of principal executive offices) |
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(Zip Code) |
(650) 817-9012 |
(Registrant’s telephone number, including area code) |
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N/A |
(Former name or former address if changed since last report) |
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading
Symbol(s) |
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Name of each exchange on which
registered |
Common Stock, par value $0.0001 per share |
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PRST |
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The Nasdaq Stock Market LLC |
Warrants, each whole warrant exercisable for one share of common stock |
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PRSTW |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities
Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company x
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
May 28, 2024, Presto Automation Inc. (“Presto” or the “Company”) entered into a Common Stock Purchase Agreement
(the “CSPA”) with Triton Funds, LP, a Delaware limited partnership (“Triton”). Pursuant to the CSPA, the Company
has the right, but not the obligation, to sell to Triton up to $5,000,000 of shares of the Company’s common stock, par value $0.0001
per share (the “Common Stock”), from time to time during the commitment period commencing on May 28, 2024 and terminating
on the earlier of (i) December 31, 2024 or (ii) the date on which Triton shall have purchased shares of the Company’s
Common Stock pursuant to the CSPA equal to the investment amount of $5,000,000 (the “Commitment Period”).
Each
sale the Company requests under the CSPA (a “Purchase Notice”) may be for a number of shares of the Company’s
Common Stock that does not exceed 9.9% of our outstanding shares as of the date of the CSPA which
amount is 9,988,465 shares as of the date hereof (the “Commitment Shares”). Triton has committed to purchase the Commitment
Shares at the lowest of (i) the official closing
price of the Company’s Common Stock on the Nasdaq
Stock Market on the trading day immediately preceding
our submission of a Purchase Notice to Triton, (ii) the average official closing price of the Company’s common stock on the
Nasdaq Stock Market for
the five consecutive trading days ending on the business day immediately preceding the Company’s submission of a Purchase Notice
to Triton, and (iii) 75% of the lowest traded price of the Common Stock five days prior to the closing date.
The price in (i) and (ii) is referred to as the “Minimum Price” and the price in (i), (ii) and (iii) are
referred to as the Purchase Price.
Subject
to completing the purchase of 18.9% of the Company’s outstanding shares, Triton has committed to purchase a number of additional
shares such that the total proceeds to be received by the Company on or before June 7, 2024 pursuant to the CSPA
will exceed $3,000,000 (such shares, the “Backstop Shares”).
The Backstop Shares will be purchased at (x) the
Purchase Price, if relief provided by Nasdaq Rule 5635(f) (the “Financial Viability Relief”) has been sought and
granted to us and such relief permits the receipt of proceeds from the sale of common stock on or before June 7, 2024, or (y) the
Minimum Price, if the Financial Viability Relief has not been sought or granted or cannot generate such proceeds on or before June 7,
2024. Triton’s obligation with respect to purchasing the Backstop Shares is conditioned on (i) the Company having timely delivered
a first Purchase Notice for 9.9% of our outstanding shares within one business day of the execution of the CSPA,
and (ii) the Company having timely delivered a second Purchase Notice for 9.9% of our outstanding shares to Triton within one business
day after the closing related to such first Purchase Notice.
The Company has filed with
the Securities and Exchange Commission a prospectus supplement to the Company’s prospectus, dated May 28, 2024, filed as part
of the Company’s effective shelf registration statement on Form S-3, File No. 333-275112, registering the shares of Common
Stock that are to be offered and sold to Triton pursuant to the CSPA.
The foregoing is a summary
description of certain terms of the CSPA. For a full description of all terms, please refer to the copy of the CSPA that is filed herewith
as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
This
Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any shares of common stock,
nor shall there be any sale of shares of common stock in any state or jurisdiction in which such an offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
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 hereunto duly authorized.
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PRESTO AUTOMATION INC. |
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Date: May 28, 2024 |
By: |
/s/ Susan Shinoff |
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Name: |
Susan Shinoff |
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Title: |
General Counsel and Corporate Secretary |
Exhibit 10.1
COMMON STOCK PURCHASE AGREEMENT
The PURCHASE AGREEMENT (the “Agreement”),
dated as of May 28, 2024, by and between PRESTO AUTOMATION INC., a Delaware corporation (the “Company”), and TRITON FUNDS
LP, a Delaware limited partnership (the “Investor”).
RECITALS
WHEREAS, subject to the terms
and conditions set forth in this Agreement, the Company wishes to sell to the Investor, and the Investor wishes to buy from the Company,
up to $5,000,000 of the Company’s registered Common Stock, $0.01 par value per share (the “Common Stock”). The shares
of Common Stock to be acquired hereunder are referred to herein as the “Securities.”
NOW THEREFORE, in consideration
of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the Investor hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 DEFINED TERMS.
As used in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
“Affiliate”
shall mean, with respect to a Party, any individual, a corporation or any other legal entity, directly or indirectly, controlling, controlled
by or under common control with such Party. For purpose of this definition, the term “control,” as used with respect
to any corporation or other entity, means (a) direct or indirect ownership of fifty percent (50%) or more of the securities or other
ownership interests representing the equity voting stock or general partnership or membership interest of such corporation or other entity
or (b) the power to direct or cause the direction of the management or policies of such corporation or other entity, whether through
the ownership of voting securities, by contract or otherwise.
“Administrative Fee”
shall have the meaning of a $25,000 fee immediately due payable by the Company to the Investor on the date of the first Closing under
this Agreement.
“Agreement”
shall have the meaning specified in the preamble hereof.
“Backstop Shares”
has the meaning set forth in Section 2.1(b).
“Bankruptcy Law”
means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.
“Beneficial Ownership
Limitation” shall have the meaning specified in Section 7.2(g).
“Business Day”
shall mean a day on which the Principal Market shall be open for business.
“Clearing Costs”
shall mean all of the Investor’s broker and Transfer Agent costs with respect to the deposit of the Purchase Notice Shares, the
Backstop Shares and the True-Up Shares.
“Closing” shall
mean any one of the closings of a purchase and sale of shares of Common Stock pursuant to Section 2.2.
“Closing Date”
shall mean the date a Closing occurs.
“Commitment Period”
shall mean the period commencing on the date hereof and ending on the earlier of (i) December 31, 2024, or (ii) the date
on which the Investor shall have purchased Purchase Notice Shares or Backstop Shares pursuant to this Agreement for an aggregate purchase
price of the Investment Amount.
“Common Stock”
shall mean the Company’s common stock, $0.01 par value per share.
“Common Stock Equivalents”
means any securities of the Company entitling 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.
“Company” shall
have the meaning specified in the preamble to this Agreement.
“Custodian”
means any receiver, trustee, assignee, liquidator, or similar official under any Bankruptcy Law.
“Current Report”
has the meaning set forth in Section 6.2.
“Damages” shall
mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys’ fees and disbursements
and costs and expenses of expert witnesses and investigation).
“DTC” shall
mean The Depository Trust Company, or any successor performing substantially the same function for the Company.
“DTC/FAST Program”
shall mean the DTC’s Fast Automated Securities Transfer Program.
“DWAC” shall
mean Deposit Withdrawal at Custodian as defined by the DTC.
“DWAC Eligible”
shall mean that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s operational arrangements, including,
without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the DTC’s
underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Securities are otherwise
eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Securities,
as applicable, via DWAC.
“DWAC Shares”
means shares of Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction
on resale and (iii) timely credited by the Company to the Investor’s or its designee’s specified DWAC account with DTC
under the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the same function.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Cap”
shall have the meaning set forth in Section 2.3.
“Execution Date”
shall mean the date of the last signature of this Agreement.
“Financial Viability
Exception” shall have the meaning set forth in Section 2.1(b).
“First Purchase Notice”
shall have the meaning set forth in Section 2.1(b).
“Investment Amount”
shall mean $5,000,000.
“Investor”
shall have the meaning specified in the preamble to this Agreement.
“Lien” means
a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right, or other restriction.
“Material Adverse Effect”
shall mean any effect on the business, operations, properties, or financial condition of the Company that is material and adverse to the
Company and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the
Company to enter into and perform its obligations under any Transaction Document.
“Minimum
Price” shall mean the lower of (i) the official closing price of the Common Stock on the Principal Market (as reflected
on Nasdaq.com) on the trading day immediately preceding the date of a Purchase Notice Date and (ii) the average official
closing price of the Common Stock on the Principal Market (as reflected on Nasdaq.com) for the five (5) consecutive trading
days ending on the Business Day immediately preceding the a Purchase Notice Date (in each case, subject to adjustment for any reorganization,
recapitalization, non-cash dividend, stock splits, or other similar transaction that occurs on or after the date of this Agreement).
“Party” shall
mean a party to this Agreement.
“Person” shall
mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
“Principal Market”
shall mean any of the national exchanges (i.e., NYSE, AMEX, Nasdaq), or principal quotation systems (i.e., OTCQX, OTCQB, OTC Pink, the
OTC Bulletin Board), or other principal exchange or recognized quotation system which is at the time the principal trading platform or
market for the Common Stock.
“Purchase Notice Amount”
shall mean the Purchase Notice Shares referenced in the Purchase Notice multiplied by the Purchase Price in accordance with Section 2.1.
“Purchase Notice”
shall mean a written notice from Company, substantially in the form of Exhibit A hereto, to the Investor setting forth the
Purchase Notice Shares which the Company requires the Investor to purchase pursuant to the terms of this Agreement.
“Purchase Notice Date”
shall have the meaning specified in Section 2.2(a).
“Purchase Notice Shares”
shall mean all shares of Common Stock that the Company shall be entitled to issue as set forth in all Purchase Notices in accordance with
the terms and conditions of this Agreement.
“Purchase Price”
shall mean the lessor of either a) Minimum Price or b) 75% of the lowest traded price of the Common Stock five (5) days prior to
the Closing Date.
“Registration Statement”
shall have the meaning specified in Section 6.3.
“Regulation D”
shall mean Regulation D promulgated under the Securities Act.
“Rule 144”
shall mean Rule 144 under the Securities Act or any similar provision then in force under the Securities Act.
“SEC” shall
mean the United States Securities and Exchange Commission.
“SEC Documents”
shall have the meaning specified in Section 4.5.
“Securities”
mean the Purchase Notice Shares and any Backstop Shares or True-Up Shares to be issued to the Investor pursuant to the terms of this Agreement.
“Securities Act”
shall mean the Securities Act of 1933, as amended.
“Shareholder Approval”
shall mean, without derogating from Section 2.1(b), the approval of the holders of a majority of the Company’s outstanding
voting Common Stock that are present or represented by proxy at a meeting, to effectuate the transactions contemplated by this Agreement,
the issuance of all of the Purchase Notice Shares and any Backstop Shares in excess the Exchange Cap, subject to appropriate adjustment
for any stock dividend, stock split, stock combination, rights offerings, reclassification or similar transaction that proportionately
decreases or increases the Common Stock). The Company agrees to file the PRE 14A by May 31, 2024, the DEF 14A by June 11, 2024,
and a special meeting of stockholders scheduled for no later than June 18, 2024.
“Subsidiary”
means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting stock
or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated under the
Securities Act.
“Transaction Documents”
shall mean this Agreement and all exhibits hereto and thereto.
“Transfer Agent”
shall mean the current transfer agent of the Company, and any successor transfer agent of the Company.
All such determinations shall
be appropriately adjusted for any share dividend, share split, share combination, recapitalization, or other similar transaction during
such period.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
Section 2.1 PURCHASE NOTICES.
(a) PURCHASE NOTICES.
Subject to the conditions set forth herein, at any time during the Commitment Period, the Company shall have the right, but not the obligation,
to direct the Investor, by its delivery to the Investor of a Purchase Notice from time to time, to purchase, and the Investor shall have
the obligation to purchase from the Company, the number of Purchase Notice Shares set forth on the Purchase Notice at the Purchase Price,
provided that the amount of Purchase Notice Shares shall not exceed the Beneficial Ownership Limitation set forth in Section 7.2(g).
The Company may not deliver a subsequent Purchase Notice until the Closing of an active Purchase Notice, except if waived by the Investor
in writing.
(b) BACKSTOP COMMITMENT.
The Investor agrees to purchase for (1) the Purchase Price (if the relief provided by Nasdaq Rule 5635(f) (the “Financial
Viability Relief”) has been granted to the Company and can be used on or before June 7, 2024) or if the purchase can be
made using the Purchase Price without violating Nasdaq Rule 5635 or (2) the Minimum Price (if the Financial Viability Relief
has not been granted or cannot be used on or before June 7, 2024) that number of shares of Common Stock (the “Backstop Shares”)
as would result in the total proceeds received by the Company on or before June 7, 2024 pursuant to this Agreement exceeding $3.0
million. The Investor’s obligation to do this is conditioned on (i) the Company having timely delivered a first Purchase Notice
(the “First Purchase Notice”) for 9.9% of the Company’s outstanding shares within one Business Day of the execution
of this Agreement and having otherwise complied with its obligations here under with respect to the delivery of Common Stock pursuant
to the First Purchase Notice, and (ii) the Company having timely delivered a second Purchase Notice (the “Second Purchase
Notice”) for 9.9% of the Company’s outstanding shares to the Investor within one Business Day after the Closing related
to such first Purchase Notice; provided, however, that the Company shall be relieved of this obligation if the Investor has not complied
with its obligations hereunder to consummate the purchase of shares pursuant to the First Purchase Note and the Second Purchase Notice.
For the avoidance of doubt, any Purchase Notice other than the First Purchase Notice and the Second Purchase Notice shall be governed
by Section 2.1(a).
(c) TRUE-UP. Subject
to Shareholder Approval, the Investor shall be entitled to additional shares of Common Stock (“True-Up Shares”), if
the Backstop Shares were purchased for the Minimum Price and before the Closing Date the Purchase Price for the Backstop Shares that would
have applied at Closing is lower than the Minimum Price payable to the Investor. The True Up Shares shall be issued on the third (3rd)
Business Day following Shareholder Approval and shall themselves be priced based on the Minimum Price as of that date.
Section 2.2 MECHANICS.
(a) PURCHASE NOTICE.
In accordance with Section 2.1 and 2.2(b) below, and subject to the satisfaction of the conditions set forth in Section 7.2,
the Company shall deliver the Purchase Notice Shares, as DWAC Shares to the Investor, alongside the delivery of each Purchase Notice by
email. A Purchase Notice shall be deemed delivered on (i) the Business Day that the Purchase Notice has been received by email by
the Investor if both conditions are met on or prior to 8:00 a.m. New York time or (ii) the next Business Day if the conditions
are met after 8:00 a.m. New York time on a Business Day or at any time on a day which is not a Business Day (the “Purchase
Notice Date”).
(b) DELIVERY OF PURCHASE
NOTICE SHARES. No later than 8:00 a.m. New York time on the Business Day of the Purchase Notice Date, the Company shall deliver
the Purchase Notice Shares as DWAC Shares to the Investor.
(c) CLOSING. The Closing
of a Purchase Notice shall occur no later than four (4) Business Days after a Purchase Notice Date. For each Purchase Notice, upon
the terms and subject to the conditions set forth herein, the Investor will pay the Purchase Notice Amount via wire transfer of immediately
available funds on the Closing Date. All payments made under this Agreement shall be made in lawful money of the United States of America
or wire transfer of immediately available funds to such account as the Company may from time to time designate by written notice in accordance
with the provisions of this Agreement. Whenever any amount expressed to be due by the terms of this Agreement is due on any day that is
not a Business Day, the same shall instead be due on the next succeeding day that is a Business Day.
(d) PRINCIPAL MARKET REGULATION.
Until the Company has obtained the Shareholder Approval, the Company shall have no right to issue and the Investor shall have no obligation
to purchase any Purchase Notice Shares if the issuance of aggregate Purchase Notice Shares would exceed 23,354,972 shares of Common Stock
(the “Exchange Cap”), subject to appropriate adjustment for any stock dividend, stock split, stock combination, rights
offerings, reclassification or similar transaction that proportionately decreases or increases the Common Stock), provided further that,
the Exchange Cap will not apply (i) solely to the extent that (and only for so long as) the Purchase Price shall equal or exceed
the Minimum Price (it being hereby acknowledged and agreed that the Exchange Cap shall be applicable for all purposes of this Agreement
and the transactions contemplated hereby at all other times during the term of this Agreement, unless the Shareholder Approval referred
to above is obtained or (ii) in connection with the Backstop Purchase.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF INVESTOR
The Investor represents and warrants
the following to the Company:
Section 3.1 INTENT.
The Investor is entering into this Agreement for its own account and the Investor has no present arrangement (whether or not legally binding)
at any time to sell the Securities to or through any Person in violation of the Securities Act or any applicable state securities laws;
provided, however, that the Investor reserves the right to dispose of the Securities at any time in accordance with federal
and state securities laws applicable to such disposition.
Section 3.2 NO LEGAL ADVICE
FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to review this Agreement and the transactions contemplated
by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors
and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice
with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.
Section 3.3 ACCREDITED
INVESTOR. The Investor is an accredited investor as defined in Rule 501(a)(3) of Regulation D, and the Investor has such
experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in Securities. The
Investor acknowledges that an investment in the Securities is speculative and involves a high degree of risk.
Section 3.4 AUTHORITY.
The Investor has the requisite power and authority to enter into and perform its obligations under the Transaction Documents and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of the Transaction Documents and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no further consent or authorization
of the Investor is required. The Transaction Documents to which it is a party has been duly executed by the Investor, and when delivered
by the Investor in accordance with the terms hereof, will constitute the valid and binding obligation of the Investor enforceable against
it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the
enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
Section 3.5 NOT AN AFFILIATE.
The Investor is not an officer, director or “affiliate” (as that term is defined in Rule 405 of the Securities Act) of
the Company.
Section 3.6 ORGANIZATION
AND STANDING. The Investor is an entity duly formed, validly existing, and in good standing under the laws of the State of Delaware
with full right and limited partnership or similar power and authority to enter into and to consummate the transactions contemplated by
the Transaction Documents.
Section 3.7 ABSENCE OF
CONFLICTS. The execution and delivery of the Transaction Documents and the consummation of the transactions contemplated hereby and
thereby and compliance with the requirements hereof and thereof, will not (a) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Investor, (b) violate any provision of any indenture, instrument or agreement to which
the Investor is a party or is subject, or by which the Investor or any of its assets is bound, or conflict with or constitute a material
default thereunder, (c) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument
or agreement, or constitute a breach of any fiduciary duty owed by the Investor to any third party, or (d) require the approval of
any third-party (that has not been obtained) pursuant to any material contract, instrument, agreement, relationship or legal obligation
to which the Investor is subject or to which any of its assets, operations or management may be subject.
Section 3.8 DISCLOSURE;
ACCESS TO INFORMATION. The Investor had an opportunity to review copies of the SEC Documents filed on behalf of the Company and has
had access to all publicly available information with respect to the Company.
Section 3.9 MANNER OF
SALE. At no time was the Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement
or any other form of general solicitation or advertising.
Section 3.10 NO DISQUALIFICATION
EVENTS. None of the Investor, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the
Investor participating in the offering contemplated hereby, any beneficial owner of 20% or more of the Investor’s outstanding voting
equity securities, calculated on the basis of voting power (each, an “Investor Covered Person”) is subject to any of the “Bad
Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification
Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Investor
has exercised reasonable care to determine whether any Investor Covered Person is subject to a Disqualification Event.
Section 3.11 RELIANCE
ON EXEMPTIONS. The Investor understands that the Securities are being offered and sold to it in reliance on specific exemptions from
the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracy
of, and the Investor’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Investor
set forth herein in order to determine the availability of such exemptions and the eligibility of the Investor to acquire the Securities.
The Investor understands that (i) the Securities may not be offered for sale, sold, assigned or transferred unless (A) registered
pursuant to the Securities Act or (B) an exemption exists permitting such Securities to be sold, assigned or transferred without
such registration; and (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the
seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act)
may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder.
Section 3.12 STATUTORY
UNDERWRITER STATUS. The Investor acknowledges that it will be disclosed as an “underwriter” in each Registration Statement
and in any Prospectus contained therein to the extent required by applicable law and to the extent the Prospectus is related to the resale
of the Securities.
Section 3.13 RESALES OF
SECURITIES. The Investor represents, warrants and covenants that it will resell such Securities only (i) pursuant to the Registration
Statement in which the resale of such Securities is registered under the Securities Act, in a manner described under the caption “Plan
of Distribution” in such Registration Statement in substantially the form annexed hereto, and in a manner in compliance with all
applicable U.S. federal and state securities laws, rules and regulations, including, without limitation, any applicable prospectus
delivery requirements of the Securities Act, or (ii) in compliance with some other exemption under the Securities Act.
Section 3.14 EFFECTIVE
REGISTRATION STATEMENT. The Investor is solely relying on the Registration Statement, the Prospectus, and the SEC Documents, in determining
whether to acquire the Purchase Notice Shares, any Backstop Shares and any True-Up Shares.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as set forth in the SEC
Documents, the Company represents and warrants the following to the Investor, as of the Execution Date:
Section 4.1 ORGANIZATION
OF THE COMPANY. The Company is an entity duly incorporated or otherwise organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its
certificate of incorporation, bylaws or other organizational or charter documents. The Company is duly qualified to conduct business and
is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by it
makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have
or reasonably be expected to result in a Material Adverse Effect and no proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. Other than as listed on Exhibit 21.1
of the Company’s most recent annual report on Form 10-K, the Company has no Subsidiaries.
Section 4.2 AUTHORITY.
The Company has the requisite corporate power and authority to enter into and perform its obligations under the Transaction Documents.
The execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its
Board of Directors or shareholders is required. The Transaction Documents have been duly executed and delivered by the Company and constitutes
a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.
Section 4.3
CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of 180,000,000 shares of Common Stock,
par value of $0.01 per share, of which 116,774,861 shares are issued and outstanding, and 1,500,000
shares of preferred stock, par value of $0.01 per share, of which zero shares are issued and outstanding. Except as set forth in the SEC
Documents, the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than
pursuant to the exercise of employee stock options or the vesting of RSUs under the Company’s equity incentive plans, the issuance
of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or
exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No
Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as set forth in the SEC Documents and this Agreement, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock,
or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common
Stock or Common Stock Equivalents. Except as set forth in the SEC Documents, the issuance and sale of the Securities will not obligate
the Company to issue shares of Common Stock or other securities to any Person (other than the Investor) and will not result in a right
of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. Except as
set forth in the SEC Documents, there are no shareholder agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s
shareholders.
Section 4.4 LISTING AND
MAINTENANCE REQUIREMENTS. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.
Other than as disclosed in the SEC Documents (as defined below), the Company has not, in the twelve (12) months preceding the date hereof,
received notice from the Principal Market on which the Common Stock is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of such Principal Market.
Section 4.5 SEC DOCUMENTS;
DISCLOSURE. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company
under the Securities Act and the Exchange Act, including pursuant to Section 13(a) thereof, for the one (1) 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, including without limitation all registration statements
under the Securities Act, whether required to be filed or otherwise), being collectively referred to herein as the “SEC Documents”)
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Documents prior to the expiration
of any such extension (other than the Company’s Forms 10-Q for the periods ended December 31, 2023 and March 31, 2024
which were each filed after the expiration of such extensions). As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules and regulations
applicable to such SEC Documents, and none of the SEC Documents 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 light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form and
substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or
other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated
in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the
Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments). Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided
the Investor or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information.
The Company understands and confirms that the Investor will rely on the foregoing representation in effecting transactions in securities
of the Company.
Section 4.6 VALID ISSUANCES.
The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly
and validly issued, fully paid, and non-assessable, free and clear of all Liens imposed by the Company other than restrictions on transfer
provided for in the Transaction Documents.
Section 4.7 NO CONFLICTS.
The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of the Securities, do not and will not: (a) result in
a violation of the Company’s certificate or articles of incorporation, by-laws or other organizational or charter documents, (b) conflict
with, or constitute a material default (or an event that with notice or lapse of time or both would become a material default) under,
result in the creation of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture, instrument or any “lock-up” or similar provision of any
underwriting or similar agreement to which the Company is a party, or (c) result in a violation of any federal, state or local law,
rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or
by which any property or asset of the Company is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect) nor is the Company otherwise
in violation of, conflict with or in default under any of the foregoing. The business of the Company is not being conducted in violation
of any law, ordinance or regulation of any governmental entity, except for possible violations that either singly or in the aggregate
do not and will not have a Material Adverse Effect. The Company is not required under federal, state or local law, rule or regulation
to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for
it to execute, deliver or perform any of its obligations under the Transaction Documents (other than any SEC, FINRA, Nasdaq, or state
securities filings that may be required to be made by the Company in connection with any Closing or any registration statement that may
be filed pursuant hereto); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying
upon the accuracy of the relevant representations and agreements of Investor herein.
Section 4.8 NO MATERIAL
ADVERSE EFFECT. No event has occurred that would have a Material Adverse Effect on the Company that has not been disclosed in subsequent
SEC Documents.
Section 4.9 LITIGATION
AND OTHER PROCEEDINGS. Except as disclosed in the SEC Documents, there are no material actions, suits, investigations, SEC inquiries,
FINRA inquiries, Nasdaq inquiries, or similar proceedings (however any governmental agency may name them) pending or, to the actual knowledge
of the Company, threatened against or affecting the Company or its properties, nor has the Company received any written or oral notice
of any such action, suit, proceeding, SEC inquiry, FINRA inquiry, Nasdaq inquiry or investigation, which would have a Material Adverse
Effect. No judgment, order, writ, injunction or decree or award against the Company has been issued by or, to the actual knowledge of
the Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect. There has not been,
and to the actual knowledge of the Company, there is no pending investigation by the SEC involving the Company or any current officer
or director of the Company.
Section 4.10 ACKNOWLEDGMENT
REGARDING INVESTOR’S PURCHASE OF SECURITIES. Based solely on the Investor’s representation and warranties, the Company
acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement
and the transactions contemplated hereby and thereby and that the Investor is not (i) an officer or director of the Company, or (ii) an
“affiliate” (as defined in Rule 144) of the Company. The Company further acknowledges that the Investor is not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated
hereby and thereby, and any advice given by the Investor or any of its representatives or agents in connection with the Agreement and
the transactions contemplated hereby and thereby is merely incidental to the Investor’s purchase of the Purchase Notice Shares and
any Backstop Shares or True-Up Shares. The Company further represents to the Investor that the Company’s decision to enter into
this Agreement has been based solely on the independent evaluation by the Company and its representatives.
Section 4.11 NO GENERAL
SOLICITATION. Neither the Company, nor any Person acting on its behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities act) in connection with the offer or sale of the Securities.
Section 4.13 PLACEMENT
AGENT; OTHER COVERED PERSONS. The Company has not engaged any Person to act as a placement agent, underwriter, broker, dealer, or
finder in connection with the sale of the Securities hereunder. The Company is not aware of any Person that has been or will be paid (directly
or indirectly) remuneration for solicitation of the Investor in connection with the sale of any Securities.
ARTICLE V
COVENANTS OF INVESTOR
Section 5.1 SHORT SALES
AND CONFIDENTIALITY. Neither the Investor, nor any Affiliate of the Investor acting on its behalf or pursuant to any understanding
with it, will execute any short sales during the period from the Execution Date to the end of the Commitment Period. For the purposes
hereof, and in accordance with Regulation SHO, the sale after delivery of the Purchase Notice of such number of shares of Common Stock
reasonably expected to be purchased under the Purchase Notice shall not be deemed a short sale. The Investor shall, until such time as
the transactions contemplated by the Transaction Documents are publicly disclosed by the Company in accordance with the terms of the Transaction
Documents, maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction
Documents.
Section 5.2 COMPLIANCE
WITH LAW; TRADING IN SECURITIES. The Investor’s trading activities with respect to shares of Common Stock will be in compliance
with all applicable state and federal securities laws and regulations and the rules and regulations of the Principal Market.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 LISTING OF
COMMON STOCK. The Company shall use its commercially reasonable efforts to continue the listing or quotation and trading of the Common
Stock on the Principal Market (including, without limitation, maintaining sufficient net tangible assets, if required) and will comply
in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Principal Market.
Section 6.2 FILING OF
CURRENT REPORT. The Company agrees that it shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the SEC within the time required by the Exchange Act, relating to the execution of the transactions contemplated by, and
describing the material terms and conditions of, the Transaction Documents (the “Current Report”). The Company shall
use its reasonable best efforts to permit the Investor to review and comment upon the final pre-filing draft version of the Current Report
at least two (2) Business Days prior to its filing with the SEC, and the Company shall give reasonable consideration to all such
comments. The Investor shall use its reasonable best efforts to comment upon the final pre-filing draft version of the Current Report
within one (1) Business Day from the date the Investor receives it from the Company.
Section 6.3 FILING OF
REGISTRATION STATEMENT. The Company has prepared and filed a Registration Statement on Form S-3 with the SEC in accordance with
the provisions of the Securities Act, which was declared effective by order of the SEC on October 31, 2023 (File No. 333-275112)
(the “Base Registration Statement”). The Base Registration Statement is effective under the Securities Act and the
Company has not received any written notice that the SEC has issued or intends to issue a stop order or other similar order with respect
to the Base Registration Statement or the prospectus contained therein (the “Prospectus”), or that the SEC otherwise
has (i) suspended or withdrawn the effectiveness of the Base Registration Statement or (ii) issued any order preventing or suspending
the use of the Prospectus or any prospectus supplement thereto, in either case, either temporarily or permanently or intends or has threatened
in writing to do so. The “Plan of Distribution” section of the Prospectus permits the issuance of the Securities hereunder.
The SEC has not notified the Company of any objection to the use of the form of the Base Registration Statement pursuant to Rule 401(g)(1) of
the Securities Act. The Company was at the time of the filing of the Base Registration Statement eligible to use Form S-3. As of
the Execution Date, the Company is currently eligible to use the Base Registration Statement and, until the filing of the Company’s
next annual report on Form 10-K, is not subject to the limitations set forth in General Instruction I.B.6 of Form S-3. All
corporate action required to be taken for the authorization, issuance, and sale of the Securities has been duly and validly taken. The
Securities conform in all material respects to all statements with respect thereto contained in the Base Registration Statement, the Prospectus
and the Prospectus Supplement (as defined below).
The Company shall file with the
SEC, within two (2) Business Days (i) from the Execution Date, a prospectus supplement covering the offering and sale of the
Securities (the “Prospectus Supplement”) and (ii) from the Closing Date, a prospectus supplement covering the sale of
Common Stock pursuant to each Purchase Notice. The Prospectus Supplement shall relate to the transactions contemplated by, and describing
the material terms and conditions of, this Agreement, containing required information previously omitted from the Prospectus at the time
of effectiveness of the Base Registration Statement in reliance on Rule 430B under the Securities Act, and disclosing all information
relating to the transactions contemplated hereby required to be disclosed in the Base Registration Statement and the Prospectus as of
the date of the Prospectus Supplement, including, without limitation, information required to be disclosed in the section captioned “Plan
of Distribution” in the Prospectus. The Company shall permit the Investor to review and comment upon the Prospectus Supplement within
a reasonable time prior to their filing with the SEC and the Company shall give reasonable consideration to all such comments. The Investor
shall furnish to the Company such information regarding itself, the Company’s securities beneficially owned by the Investor, and
the intended method of distribution thereof, including any arrangement between the Investor and any other person or relating to the sale
or distribution of the Company’s securities, as shall be reasonably requested by the Company in connection with the preparation
and filing of the Current Report and the Prospectus Supplement, and shall otherwise cooperate with the Company as reasonably requested
by the Company in connection with the preparation and filing of the Current Report and the Prospectus Supplement with the SEC. At the
time of the filing of the Prospectus Supplement, the Company shall have no knowledge of any untrue statement (or alleged untrue statement)
of a material fact in the Prospectus (as supplemented by the Prospectus Supplement) or omission (or alleged omission) of a material fact
required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not
misleading, and there shall be no such untrue statement of material fact or omission in any effective registration statement filed or
any post-effective amendment or prospectus which is a part of the foregoing. The Company shall promptly give the Investor notice of any
event (including the passage of time) which makes the Prospectus not to be in compliance with Section 5(b) or 10 of the Securities
Act and shall use its best efforts thereafter to file with the SEC any post-effective amendment to the Base Registration Statement, amended
Prospectus or Prospectus Supplement in order to comply with Section 5(b) or 10 of the Securities Act.
Section 6.4 SHAREHOLDER
APPROVAL. The Company will include a proposal in its next proxy statements seeking approval from its shareholders (the “Shareholder
Approval”) to approve the terms of this Agreement and the issuance of the Securities hereunder no later than May 31, 2024.
ARTICLE VII
CONDITIONS TO DELIVERY OF PURCHASE
NOTICE AND CONDITIONS TO CLOSING
Section 7.1 CONDITIONS
PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE AND SELL SECURITIES. The obligation of the Company to issue and sell the Securities
to the Investor is subject to the satisfaction of each of the conditions set forth below:
(a) ACCURACY OF INVESTOR’S
REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Investor shall be true and correct in all material respects
as of the Execution Date and as of the date of each Closing as though made at each such time.
(b) PERFORMANCE BY INVESTOR.
Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Investor at or prior to each Closing.
Section 7.2 CONDITIONS
PRECEDENT TO THE OBLIGATION OF INVESTOR TO PURCHASE THE PURCHASE NOTICE SHARES AND BACKSTOP SHARES. The obligation of the Investor
hereunder to purchase the Purchase Notice Shares and any Backstop Shares is subject to the satisfaction of each of the following conditions:
(a) EFFECTIVE REGISTRATION
STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall remain effective for the offering and sale of
the Purchase Notice Shares and any Backstop Shares and (i) the Company shall not have received notice that the SEC has issued or
intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness
of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so and (ii) no other suspension
of the use of, or withdrawal of the effectiveness of, such Registration Statement or the Prospectus shall exist. The Investor shall not
have received any notice from the Company that the Registration Statement, Prospectus and/or any prospectus supplement or amendment thereto
fails to meet the requirements of Section 5(b) or Section 10 of the Securities Act.
(b) ACCURACY OF THE COMPANY’S
REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and correct in all material respects
as of the date of this Agreement and as of the date of each Closing (except for representations and warranties specifically made as of
a particular date).
(c) PERFORMANCE BY THE
COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Company.
(d) NO INJUNCTION.
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or adopted by
any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects any of the transactions
contemplated by the Transaction Documents, and no proceeding shall have been commenced that may have the effect of prohibiting or materially
adversely affecting any of the transactions contemplated by the Transaction Documents.
(e) ADVERSE CHANGES.
Since the date of filing of the Company’s most recent SEC Documents, the Company shall have disclosed any event that had or is reasonably
likely to have a Material Adverse Effect.
(f) NO SUSPENSION OF TRADING
IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the SEC or the Principal Market,
or otherwise halted for any reason, and the Common Stock shall have been approved for listing or quotation on and shall not have been
delisted from or no longer quoted on the Principal Market. In the event of a suspension, delisting, or halting for any reason, of the
trading of the Common Stock, as contemplated by this Section 7.2(f), the Investor shall have the right to return to the Company
any amount of Purchase Notice Shares associated with such Purchase Notice, and the Investment Amount with respect to such Purchase Notice
shall be refunded accordingly.
(g) BENEFICIAL OWNERSHIP
LIMITATION. The number of Purchase Notice Shares and/or Backstop Shares then to be purchased by the Investor shall not exceed the
number of such shares that, when aggregated with all other shares of Common Stock then owned by the Investor beneficially or deemed beneficially
owned by the Investor, would result in the Investor owning more than the Beneficial Ownership Limitation (as defined below), as determined
in accordance with Section 13 of the Exchange Act. For purposes of this Section 7.2(g), if the amount of Common Stock
outstanding is greater or lesser on a Closing Date than on the date upon which the Purchase Notice associated with such Closing Date is
given, the amount of Common Stock outstanding on such issuance of a Purchase Notice shall govern for purposes of determining whether the
Investor, when aggregating all purchases of Common Stock made pursuant to this Agreement, would own more than the Beneficial Ownership
Limitation following a purchase on any such Closing Date. The “Beneficial Ownership Limitation” shall be 9.99% of the
number of shares of the Common Stock outstanding immediately prior to the issuance of shares of Common Stock issuable pursuant to a Purchase
Notice. To the extent that the Beneficial Ownership Limitation would be exceeded in connection with a Closing, the number of shares of
Common Stock issuable to the Investor shall be reduced so it does not exceed the Beneficial Ownership Limitation, unless waived by the
Investor.
(h) PRINCIPAL MARKET REGULATION.
The issuance of the Purchase Notice Shares shall not exceed the Exchange Cap if applicable, subject to appropriate adjustment for any
stock dividend, stock split, stock combination, rights offerings, reclassification or similar transaction that proportionately decreases
or increases the Common Stock) unless Shareholder Approval is obtained, provided further that, the Exchange Cap will not apply solely
to the extent that (and only for so long as) the Purchase Price shall equal or exceed the Minimum Price (it being hereby acknowledged
and agreed that the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated hereby at all
other times during the term of this Agreement, unless the Shareholder Approval referred to above is obtained or the issuance is pursuant
to Section 2.1(b)).
(i) NO KNOWLEDGE. The
Company shall have no knowledge of any event more likely than not to have the effect of causing the effectiveness of the Registration
Statement to be suspended or the Prospectus or any prospectus supplement thereto failing to meet the requirement of Sections 5(b) or
10 of the Securities Act (which event is more likely than not to occur within the fifteen (15) Business Days following the Business Day
on which such Purchase Notice is deemed delivered).
(k) DWAC ELIGIBLE.
The Common Stock must be DWAC Eligible and not subject to a “DTC chill”.
(l) SEC DOCUMENTS.
All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with
the SEC pursuant to the reporting requirements of the Exchange Act shall have been filed with the SEC.
ARTICLE VIII
LEGENDS
Section 8.1 NO RESTRICTIVE
STOCK LEGEND. No restrictive stock legend shall be placed on the share certificates representing the Securities.
Section 8.2 INVESTOR’S
COMPLIANCE. Nothing in this Article VIII shall affect in any way the Investor’s obligations hereunder to comply with all
applicable securities laws upon the sale of the Common Stock.
ARTICLE IX
INDEMNIFICATION
Section 9.1 INDEMNIFICATION.
Each party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with its officers,
directors, employees, and authorized agents (an “Indemnified Party”) from and against any claim or suit by third parties
for Damages resulting from or arising out of (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of the Indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or Prospectus, or
the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus
or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with
the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the
light of the circumstances under which the statements therein were made, not misleading, or (iv) any violation by the Indemnifying
Party of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange
Act or any state securities law, as such Damages are incurred by the Indemnified Party except to the extent that such Damages result primarily
from the Indemnified Party’s failure to perform any covenant or agreement contained in this Agreement or the Indemnified Party’s
negligent, recklessness or willful misconduct; provided, however, that the foregoing indemnity agreement shall not apply to any Damages
of the Investor to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made by the Company in reliance upon and in conformity with information furnished to the Company by the Investor
for use in the Registration Statement, any post-effective amendment thereof, Prospectus, or any preliminary prospectus or final prospectus
(as amended or supplemented).
Section 9.2 PROCEDURES.
Promptly after receipt by an Indemnified Party of notice of the commencement of any claim or suit for which indemnification may be available
pursuant here to, such Indemnified Party shall, if a claim in respect thereof is to be made against any Indemnifying Party hereunder,
deliver to the Indemnifying Party a written notice of the commencement thereof; but the failure to so notify the Indemnifying Party will
not relieve it of liability under this Article IX except to the extent the Indemnifying Party is prejudiced by such failure. The
Indemnifying Party shall have the right to participate in, and, to the extent the Indemnifying Party so desires to assume control of the
defense thereof with counsel mutually reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnified Party
shall have the right to retain its own counsel with the actual and reasonable third party fees and expenses of not more than one counsel
for the Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnifying
Party, the representation by such counsel of the Indemnified Party and the Indemnifying Party would be inappropriate due to actual or
potential differing interests between the Indemnified Party and any other party represented by such counsel in such proceeding. The Indemnified
Party shall cooperate fully with the Indemnifying Party in connection with any negotiation or defense of any such action or claim by the
Indemnifying Party and shall furnish to the Indemnifying Party all information reasonably available to Indemnified Party which relates
to such action or claim. The Indemnifying Party shall keep the Indemnified Party reasonably apprised as to the status of the defense or
any settlement negotiations with respect thereto. No Indemnifying Party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, consent
to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to the Indemnified Party of a release from all liability in respect to such claim or litigation. Following
indemnification as provided for hereunder, the Indemnifying Party shall be subrogated to all rights of the Indemnified Party with respect
to all third parties, firms or corporations relating to the matter for which indemnification has been made. The indemnification required
by this Section 9.2 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as
and when bills are received and payment therefor is due.
ARTICLE X
MISCELLANEOUS
Section 10.1 FORCE MAJEURE.
NO PARTY shall be liable for any failure to fulfill its obligations hereunder due to causes beyond its reasonable control, including but
not limited to acts of God, epidemic or pandemic, natural disaster, labor disturbances, terrorist attack, riots or wars, and any action
taken, or restrictions or limitations imposed, by government or public authorities.
Section 10.2 GOVERNING
LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the State of California without regard to
the principles of conflicts of law.
Section 10.3 ASSIGNMENT.
The Transaction Documents shall be binding upon and inure to the benefit of the Company and the Investor and their respective successors.
Neither any of the Transaction Documents nor any rights of the Investor or the Company hereunder may be assigned by either Party to any
other Person.
Section 10.4 NO THIRD-PARTY
BENEFICIARIES. This Agreement is intended for the benefit of the Company and the Investor and their respective successors, and is
not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as contemplated by Article XI.
Section 10.5 TERMINATION.
The Company may terminate this Agreement at any time by written notice to the Investor. This Agreement shall automatically terminate on
the end of the Commitment Period.
Section 10.6 ENTIRE AGREEMENT.
The Transaction Documents, together with the exhibits thereto, contain the entire understanding of the Company and the Investor with respect
to the matters covered herein and therein and supersede all prior agreements and understandings, oral or written, with respect to such
matters.
Section 10.7 FEES AND
EXPENSES. Except as expressly set forth in the Transaction Documents or any other writing to the contrary, except for the Administrative
Fee, 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 incidental to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The
Company shall pay the Clearing Costs associated with each Closing, and any Transfer Agent fees (including any fees required for same-day
processing of any instruction letter delivered by the Company), stamp taxes, and other taxes and duties levied on the Company in connection
with the delivery of any Securities to the Investor.
Section 10.8 COUNTERPARTS
AND EXECUTION. The Transaction Documents may be executed in multiple counterparts, each of which may be executed by less than all
of the Parties and shall be deemed to be an original instrument which shall be enforceable against the Parties actually executing such
counterparts and all of which together shall constitute one and the same instrument. The Transaction Documents may be delivered to the
other Party hereto by email of a copy of the Transaction Documents bearing the signature of the Party so delivering the Transaction Documents.
The Parties agree that this Agreement shall be considered signed when the signature of a Party is delivered by PDF, DocuSign or other
generally accepted electronic signature. Such PDF, DocuSign, or other generally accepted electronic signature shall be treated in all
respects as having the same effect as an original signature. The signatories to this Agreement each represent and warrant that they are
duly authorized by the Parties with the power and authority to bind the Parties to the terms and conditions thereof.
Section 10.9 SEVERABILITY.
In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective
if it materially changes the economic benefit of this Agreement to any Party.
Section 10.10 FURTHER
ASSURANCES. Each Party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents, as the other Party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 10.11 NOT TO BE
CONSTRUED AGAINST DRAFTER. The Parties acknowledge that they have had an adequate opportunity to review each and every provision contained
in this Agreement and to submit the same to legal counsel for review and comment. The Parties agree with each and every provision contained
in this Agreement and agree that the rule of construction that a contract be construed against the drafter, if any, shall not be
applied in the interpretation and construction of this Agreement.
Section 10.12 TITLE AND
SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.
Section 10.13 AMENDMENTS;
WAIVERS. No provision of this Agreement may be amended other than by a written instrument signed by both Parties hereto and no provision
of this Agreement may be waived other than in a written instrument signed by the Party against whom enforcement of such waiver is sought.
No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
Section 10.14 PUBLICITY.
The Company and the Investor shall consult with each other in issuing any press releases or otherwise making public statements with respect
to the transactions contemplated hereby and no Party shall issue any such press release or otherwise make any such public statement, other
than as required by law or for legal compliance, without the prior written consent of the other Party, which consent shall not be unreasonably
withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing
Party shall provide the other Party with prior notice of such public statement. The Investor acknowledges that the Transaction Documents
may be deemed to be “material contracts,” as that term is defined by Item 601(b)(10) of Regulation S-K, and that
the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the Securities
Act or the Exchange Act. The Investor further agrees that the status of such documents and materials as material contracts shall be determined
solely by the Company, in consultation with its counsel.
Section 10.15 DISPUTE
RESOLUTION.
(a) ARBITRATION. Subject
to Section 10.15(a), any dispute, controversy or claim arising out of or relating to this Agreement or any Transaction Document
(including whether any such dispute is arbitrable), shall be determined by arbitration administered by the American Arbitration Association
(“AAA”) pursuant to the AAA Commercial Arbitration Rules in effect at the time of the filing of the relevant arbitration
demand. The parties will cooperate with the AAA through its case management staff in choosing a single arbitrator from the AAA’s
list of neutral arbitrators and in otherwise proceeding with the arbitration. Any award resulting from an arbitration initiated pursuant
to this Agreement shall be enforceable in courts of applicable jurisdiction. The Parties consent to the jurisdiction of the Chancery Court
of the State of California and the United States District Court for the District of Delaware for all purposes in connection with any such
arbitration. The Parties further waive any right to any jury trial in any action, and as to all claims hereunder. Any arbitration pursuant
to this section shall be governed by the Federal Arbitration Act. Except as may be required by law, neither a party nor the arbitrator
may disclose the content or results of any arbitration proceeding conducted pursuant to this Agreement without the prior written consent
of both Parties. Each party will be responsible for 50% of any administrative costs imposed by the AAA and the arbitrator’s fees.
Each party may choose, at its own expense, to retain a court reporter for the arbitration hearing. If both parties decide to use a court
reporter for the arbitration hearing, the parties shall jointly retain a court reporter and split evenly the court reporter’s fees.
The prevailing party in any arbitration conducted pursuant to this Agreement shall be entitled to recover from the other party its reasonable
attorneys’ fees and costs.
(b) The Company and the Investor
agree that all dispute resolution proceedings in accordance with this Section 10.15 may be conducted in a virtual setting.
Section 10.16 NOTICES.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (a) personally served, (b) delivered by reputable air courier service with charges
prepaid for next Business Day delivery, or (c) transmitted by hand delivery, or email as a PDF (with read receipt or a written confirmation
of delivery or receipt), addressed as set forth below or to such other address as such Party shall have specified most recently by written
notice given in accordance herewith. Any notice or other communication required or permitted to be given hereunder shall be deemed effective
upon hand delivery or delivery by email at the address designated below (if delivered on a Business Day during normal business hours where
such notice is to be received), or the first Business Day following such delivery (if delivered other than on a Business Day during normal
business hours where such notice is to be received).
The addresses for such communications shall be:
If to the Company:
Presto Automation Inc.
ATTN: Legal Department
365 Industrial Road, Suite 205
San Carlos, CA 94070
Email:
accounting@presto.com
with a copy which shall not constitute
notice to:
Paul Hastings LLP
200 Park Avenue
New York, NY 10166
Attn: Colin Diamond and Alex
Cota
Email: colindiamond@paulhastings.com
and willburns@paulhastings.com
If to the Investor:
TRITON FUNDS
Attn: SpecOps
260 Newport Center Drive
Newport Beach, CA 92660
team@tritonfunds.com
619.736.0912
with a copy which shall not constitute
notice to:
Marc Indeglia
Address: 10250 Constellation Boulevard, 19th Floor, Los Angeles, CA
90067
Telephone: 310-282-6245
E-mail: mindeglia@glaserweil.com
Either Party hereto may from time to time change its address or email
for notices under this clause by giving prior written notice of such changed address to the other party hereto.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized as of the Execution Date.
PRESTO AUTOMATION INC. |
|
|
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By: |
/s/
Susan Shinoff |
|
Name: Susan Shinoff |
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Title: General Counsel & Corporate Secretary |
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TRITON FUNDS LP |
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|
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By: |
/s/ Tyler Hoffman |
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Name: Tyler Hoffman |
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Title: Authorized Signatory |
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EXHIBIT A
FORM OF PURCHASE NOTICE
TO: TRITON FUNDS LP
We refer to the Purchase Agreement, dated as of May 28,
2024 (the “Agreement”), entered into by and between PRESTO AUTOMATION, INC., and you. Capitalized terms defined
in the Agreement shall, unless otherwise defined herein, have the same meaning when used herein.
We hereby:
1) Give you notice that we require you to purchase
__________ Purchase Notice Shares.
3) Certify that, as of the date hereof, the conditions
set forth in Section 7 of the Agreement are satisfied.
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