Item 1.01 Entry into
a Material Definitive Agreement.
Securities Purchase Agreement
On
May 13, 2021, ShiftPixy, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”)
with a large institutional investor (the “Purchaser”) pursuant to which the Company agreed to sell to the Purchaser an aggregate
of (i) 2,320,000 shares (the “Shares”) of
its common stock, par value $0.0001 per share (the “Common Stock”), together
with warrants (the “Common Warrants”) to purchase up to 2,320,000 shares of Common
Stock, and (ii) 2,628,453 pre-funded warrants (the “Pre-funded Warrants”
and, together with the Common Warrants, the “Warrants”) with each Pre-funded Warrant
exercisable for one share of Common Stock, together with Common Warrants to purchase up to 2,628,453 shares of Common Stock (collectively,
the “Offering”). Each share of Common Stock and accompanying Common Warrant are being
sold together at a combined offering price of $2.425, and each Pre-funded Warrant and accompanying Common Warrant are being sold together
at a combined offering price of $2.4249. The Pre-funded Warrants will be immediately exercisable, at a nominal exercise price of $0.0001,
and may be exercised at any time until all of the Pre-funded Warrants are exercised in full. The Common Warrants will have an exercise
price of $2.425 per share, will be exercisable upon issuance and will expire five years from the date of an effective registration statement
covering the shares underlying the Common Warrants. The gross proceeds to the Company from the Offering are expected to be approximately
$12.0 million. The Offering closed on May 17, 2021.
The Purchase Agreement contains customary representations,
warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, termination provisions,
and other obligations and rights of the parties. The representations, warranties and covenants contained in the Purchase Agreement were
made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may
be subject to limitations agreed upon by the contracting parties. The Purchase Agreement requires the Company to file a registration statement
with the U.S. Securities and Exchange Commission (the “Commission”) to register the resale by the Purchaser of the Shares
and the shares issuable upon exercise of the Warrants (the “Warrant Shares”) as soon as practicable, and in any event, no
more than fifteen (15) days after the date of closing.
The Offering is exempt from registration
pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities
Act of 1933, as amended (the “Securities Act”) and Regulation D under the Securities Act. The Shares, the Warrants, and
the Warrant Shares being sold and issued in connection with the Purchase Agreement are not registered under the Securities Act or
any state securities laws and may not be offered or sold in the United States absent registration with the Commission or an
applicable exemption from the registration requirements. The Purchaser is an “accredited investor” as such term is
defined in Rule 501(a) under the Securities Act. The Warrants are not and will not be listed for trading on any national securities
exchange.
Placement Agent Agreement
A.G.P./Alliance
Global Partners (the “Placement Agent”) acted as the exclusive placement agent in connection with the Offering pursuant
to the terms of a placement agent agreement, dated May 13, 2021, between the Company and the Placement Agent (the “Placement Agent
Agreement”). Pursuant to the Placement Agent Agreement, the Company agreed to pay the Placement Agent a fee equal to 7.0% of the
aggregate gross proceeds from the Offering. In addition to the cash fee, the Company agreed to issue to the Placement Agent warrants to
purchase an aggregate of up to five percent (5%) of the aggregate number of Shares and shares of Common Stock issuable upon exercise of
the Pre-funded Warrants sold in the Offering (the “Placement Agent Warrants”). The Placement Agent Warrants shall be exercisable
for a period commencing six months from issuance and expiring four years from the effective of a registration statement for the resale
of the underlying shares, and shall have an initial exercise price of $2.6675 per share.
The
foregoing descriptions of the Purchase Agreement, the Placement Agent Agreement, the Common Warrant and the Pre-funded Warrant are not
complete and are qualified in their entireties by reference to the full text of the forms of Purchase Agreement, Placement Agent Agreement,
Common Warrant and Pre-funded Warrant, copies of which are attached to this this Current Report on Form 8-K as Exhibits
10.1, 10.2, 4.1 and 4.2, respectively.