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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): September 24, 2024 (September
24, 2024)
Aclarion,
Inc.
(Exact name of registrant as specified in its charter)
| Delaware |
001-41358 |
47-3324725 |
| (State or other jurisdiction |
(Commission |
(IRS Employer |
| of incorporation) |
File Number) |
Identification No.) |
| 8181 Arista Place, Suite 100 |
|
| Broomfield, Colorado |
80021 |
| (Address of Principal Executive Offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (833) 275-2266
Not
Applicable
(Former name or former address, if changed since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| |
Trading |
|
| Title of each class |
Symbol(s) |
Name of each exchange on which registered |
| Common Stock |
ACON |
Nasdaq Stock Market |
| Common
Stock Warrants |
ACONW |
Nasdaq Stock Market |
Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company,
indicate by check 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 September 24, 2024,
Aclarion, Inc. (the “Company”) entered into an At-the-Market Issuance Sales Agreement (the “Sales Agreement”)
with Ascendiant Capital Markets, LLC, as sales agent (the “Agent”), to sell shares of its common stock, par value $0.00001
per share (the “Common Stock”), having an aggregate offering price of up to $10 million (the “Shares”)
from time to time, through an “at the market offering” (the “ATM Offering”) as defined in Rule 415 under
the Securities Act of 1933, as amended (the “Securities Act”). The aggregate market value of shares of its Common Stock
eligible for sale under the Sales Agreement will be subject to the limitations of General Instruction I.B.6 of Form S-3, to the extent
required under such instruction. On September 24, 2024, the Company filed a prospectus supplement with the Securities and Exchange Commission
(“SEC”) relating to the offer and sale of up to $1,075,000 of shares of its Common Stock in the ATM Offering, which
is based on the limitations of General Instruction I.B.6 of Form S-3.
The offer and sale
of the Shares will be made pursuant to the Company’s effective “shelf” registration statement on Form S-3, as
amended (Registration Statement No. 333-281999), initially filed with the SEC on September 9, 2024, and declared effective by the
SEC on September 23, 2024.
This Current Report on
Form 8-K shall not constitute an offer to sell or the solicitation of any offer to buy the Shares, nor shall there be any offer, solicitation
or sale of the Shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of such state.
Subject to the terms
and conditions of the Sales Agreement, the Agent will use its commercially reasonable efforts to sell the Shares, based upon the Company’s
instructions, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and
rules of the Nasdaq Stock Market. The Company will set the parameters for sales of the Shares, including the number of Shares to be sold,
the time period during which sales are requested to be made, any limitation on the number of Shares that may be sold in one trading day,
and any minimum price below which sales may not be made. Under the Sales Agreement, the Agent may sell the Shares by any method permitted
by law deemed to be an “at the market offering,” as defined in Rule 415 of the Securities Act. The Company or the Agent may,
upon written notice to the other party in accordance with the terms of the Sales Agreement, suspend offers and sales of the Shares.
The Company will pay
the Agent a commission of up to 3.0% of the gross proceeds from the sales of Shares sold through the Agent under the Sales Agreement and
has provided the Agent with customary indemnification and contribution rights. The Company will also reimburse the Agent for certain expenses
incurred in connection with the Sales Agreement.
The Company is not obligated
to make any sales of Shares under the Sales Agreement. The Company and the Agent each have the right, in its sole discretion, to terminate
the Sales Agreement pursuant to the terms and subject to the conditions set forth in the Sales Agreement.
The foregoing description
of the Sales Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Sales Agreement
which is attached hereto as Exhibit 1.1.
A copy of the opinion
of Carroll Legal LLC relating to the validity of the shares of common stock that may be sold pursuant to the Sales Agreement is filed
herewith as Exhibit 5.1.
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.
| |
ACLARION, INC. |
| |
|
|
| September 24, 2024 |
By: | /s/ John Lorbiecki |
| |
Name: |
John Lorbiecki |
| |
Title: |
Chief Financial Officer |
Exhibit 1.1
Aclarion, Inc.
Common Stock
(par value $0.00001 per share)
At-The-Market Issuance Sales Agreement
September 24, 2024
Ascendiant Capital Markets, LLC
110 Front Street, Suite 300
Jupiter, FL 33477
Ladies and Gentlemen:
Aclarion,
Inc., a Delaware corporation (the “Company”), confirms its agreement (this “Agreement”) with Ascendiant
Capital Markets, LLC (the “Agent”), as follows:
1. Issuance
and Sale of Shares. The Company agrees to issue and sell through or to the Agent, shares (the “Placement Shares”)
of the Company’s common stock, par value $0.00001 per share (the “Common Stock”), from time to time during the
term of this Agreement and on the terms set forth in this Agreement; provided however, that in no event will the Company issue
or sell through or to the Agent such dollar amount of Placement Shares that would exceed $10,000,000 in the aggregate, subject to
General Instruction I.B.6 of Form S-3 (the “Maximum Amount”). Notwithstanding anything to the contrary contained herein,
the parties hereto agree that compliance with the limitations set forth in this Section 1 on the amount of Placement Shares issued and
sold under this Agreement will be the sole responsibility of the Company and that the Agent will have no obligation in connection with
such compliance provided the Agent follows the trading instructions provided by the Company pursuant to any Placement Notice in all material
respects. The issuance and sale of Placement Shares through or to the Agent will be effected pursuant to the Registration Statement (as
defined below) filed by the Company and declared effective by the U.S. Securities and Exchange Commission (the “SEC”),
although nothing in this Agreement will be construed as requiring the Company to use the Registration Statement to issue Common Stock.
Certain capitalized terms used in this Agreement have the meanings ascribed to them in Section 25.
The Company
has filed with the SEC, in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”),
and the rules and regulations thereunder (the “Securities Act Regulations”), a registration statement on Form S-3
(File No. 281999), including a base prospectus, relating to certain securities, including the Placement Shares, to be issued from time
to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the
provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations
thereunder. The Company has prepared or will prepare a prospectus supplement specifically relating to the Placement Shares (the “Prospectus
Supplement”) to the base prospectus included as part of the registration statement. The Company will furnish to the Agent,
for use by it, copies of the prospectus included as part of the registration statement, as supplemented by the Prospectus Supplement.
Except when the context otherwise requires, such registration statement, including all documents filed as part thereof or incorporated
by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the SEC pursuant
to Rule 424(b) under the Securities Act Regulations or deemed to be a part of the registration statement pursuant to Rule 430B
of the Securities Act Regulations, is herein called the “Registration Statement.” The base prospectus, including all
documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus Supplement,
in the form in which the prospectus and/or Prospectus Supplement have most recently been filed by the Company with the SEC pursuant to
Rule 424(b) under the Securities Act Regulations is herein called the “Prospectus.” Any reference herein to the
Registration Statement, the Prospectus, or any amendment or supplement thereto will be deemed to refer to and include the documents incorporated
by reference therein, and any reference herein to the terms “amend,” “amendment,” or “supplement”
respecting the Registration Statement or the Prospectus will be deemed to refer to and include the filing of any document with the SEC
deemed to be incorporated by reference therein, including in each such case filings made after the execution hereof (any such documents,
collectively, the “Incorporated Documents”).
For purposes
of this Agreement, all references to the Registration Statement, the Prospectus, or any amendment or supplement thereto will be deemed
to include the most recent copy filed with the SEC pursuant to its Electronic Data Gathering Analysis and Retrieval System, or if applicable,
the Interactive Data Electronic Application system when used by the SEC (collectively, “EDGAR”).
2. Placements.
Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”), it will notify
the Agent by email notice (or other method mutually agreed to in writing by the parties) of the number of Placement Shares, the period
during which sales are requested to be made, any limitation on the number of Placement Shares that may be sold in any one day, and any
minimum price below which sales may not be made (a “Placement Notice”), the form of which is attached hereto as Schedule
1. The Placement Notice will originate from any of the individuals from the Company set forth on Schedule 3 (with a copy to
each of the other individuals from the Company listed on the schedule) and will be addressed to each of the individuals from the Agent
that are set forth on Schedule 3, as Schedule 3 may be amended from time to time. The Placement Notice will be effective
unless and until: (a) the Agent declines to accept the terms contained therein for any reason, in its sole discretion, which must
be evidenced by a written notice to the Company, addressed to the individuals set forth on Schedule 3 within two (2) Business
Days after receipt of such Placement Notice; (b) the entire amount of the Placement Shares thereunder have been sold; (c) the
Company suspends or terminates the Placement Notice; or (d) the Agreement has been terminated under the provisions of Section 13.
The amount of any discount, commission, or other compensation to be paid by the Company to the Agent in connection with the sale of the
Placement Shares will be calculated in accordance with the terms set forth in Schedule 2. Neither the Company nor the Agent will
have any obligation whatsoever respecting a Placement or any Placement Shares unless and until the Company delivers a Placement Notice
to the Agent and the Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms
specified therein and herein. In the event of a conflict between the terms of Sections 2, 3, and 4 of this Agreement and the terms of
a Placement Notice, the terms of the Placement Notice will control.
3. Sale
of Placement Shares by the Agent. Subject to the terms and conditions of this Agreement, each Agent, at any time it is an Agent,
for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and
sales practices and applicable state and federal laws, rules, and regulations and the rules of the Nasdaq Stock Market (the “Exchange”),
to sell the Placement Shares in accordance with the terms of such Placement Notice. The Agent will provide written confirmation to the
Company no later than the opening of the Trading Day (as defined below) immediately following the Trading Day on which it has sold Placement
Shares hereunder, setting forth the number of Placement Shares sold on such day, the compensation payable by the Company to the Agent
pursuant to Section 2 for such sales, and the Net Proceeds (as defined below) payable to the Company, with an itemization
of the deductions made by the Agent (as set forth in Section 5(b)) from the gross proceeds that it receives from such sales.
Subject to the terms of the Placement Notice, Placement Shares may be sold hereunder by any method permitted by law deemed to be an “at
the market” offering as defined in Rule 415(a)(1)(x) and Rule 415(a)(4) of the Securities Act Regulations, including sales
made directly on the Exchange or on any other existing trading market for the Common Stock, to or through a market maker or directly
to the Placement Agent as principal in negotiated transactions. Subject to the terms of a Placement Notice, the Agent may also sell Placement
Shares by any other method permitted by law, including in privately negotiated transactions, with the Company’s consent. “Trading
Day” means any day on which Common Stock is purchased and sold on the Exchange.
4. Suspension
of Sales. The Company or the Agent may, upon notice to the other party in writing (including by email correspondence to each of the
individuals of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the
individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable email correspondence
to each of the individuals of the other party set forth on Schedule 3), suspend any sale of Placement Shares; provided, however,
that such suspension will not affect or impair any party’s obligations respecting any Placement Shares sold hereunder prior to
the receipt of such notice. Notwithstanding anything herein to the contrary, the obligations under Section 7(l), 7(m), and 7(n)
with respect to delivery of certificates, opinions and comfort letters to the Agent shall not apply while a suspension of sales under
this Section 4 is in effect. Each of the parties agrees that no such notice under this Section 4 will be effective against
any other party unless it is made to one of the individuals named on Schedule 3 hereto, as such schedule may be amended from time
to time.
5. Sale
and Delivery to the Agent; Settlement.
(a) Sale
of Placement Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions
herein set forth, upon delivery of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined,
suspended, or otherwise terminated in accordance with the terms of this Agreement, each Agent, at any time it is an Agent, for the period
specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices
and applicable state and federal laws, rules and regulations and the rules of the Exchange to sell such Placement Shares up to the amount
specified, and otherwise in accordance with the terms of such Placement Notice. The Company acknowledges and agrees that: (i) there
can be no assurance that any Agent will be successful in selling Placement Shares; (ii) no Agent will incur any liability or obligation
to the Company or any other Person (as defined herein) for a failure to sell Placement Shares for any reason other than a failure by
such Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations
to sell such Placement Shares as required under this Agreement; and (iii) no Agent will be under any obligation to purchase Placement
Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by such Agent and the Company.
(b) Settlement
of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares
will occur on the second Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which
such sales are made (each, a “Settlement Date”). The Agent shall notify the Company of each sale of Placement Shares
no later than opening day following the Trading Day that the Agent sold Placement Shares. The amount of proceeds to be delivered to the
Company on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the
aggregate sales price received by the Agent, after deduction for the Agent’s commission, discount, or other compensation for
such sales payable by the Company pursuant to Section 2 hereof.
(c) Delivery
of Placement Shares. Before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer
an agreed-upon amount of the Placement Shares being sold by crediting the Agent’s account or its designee’s account (provided
the Agent shall have given the Company written notice of such designee a reasonable period of time prior to the Settlement Date)
at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually
agreed upon by the parties hereto, which in all cases will be freely tradable, transferable, registered shares in good deliverable form.
On each Settlement Date, the Agent will deliver the related Net Proceeds in same-day funds to an account designated by the Company on,
or prior to, the Settlement Date. The Agent is not obligated to sell any of the Placement Shares unless they are first deposited in the
Agent’s account or its designee’s account. The Company agrees that if the Company or its transfer agent defaults in its obligation
to deliver Placement Shares before a Settlement Date through no fault of the Agent that, in addition to and in no way limiting the rights
and obligations set forth in Section 11(a) hereto, it will hold the Agent harmless against any loss, claim, damage, or expense
(including reasonable and documented legal fees and expenses) arising out of or in connection with such default by the Company or its
transfer agent (if applicable).
(d) Limitations
on Offering Size. Under no circumstances will the Company cause or request the offer or sale of any Placement Shares if, after
giving effect to the sale of such Placement Shares, the aggregate gross sales proceeds of Placement Shares sold pursuant to this Agreement
would exceed the lesser of: (i) together with all sales of Placement Shares under this Agreement, the Maximum Amount; or (ii) the
amount authorized from time to time to be issued and sold under this Agreement by the Company’s board of directors, a duly authorized
committee thereof, or a duly authorized executive committee, and notified to the Agent in writing. Under no circumstances will the Company
cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower than the minimum price authorized
from time to time by the Company’s board of directors, a duly authorized committee thereof, or a duly authorized executive committee,
and notified to the Agent in writing.
6. Representations
and Warranties of the Company. The Company represents and warrants to, and agrees with, the Agent that as of the date of this Agreement
and as of each Applicable Time, unless such representation, warranty or agreement specifies a different date or time:
(a) Registration
Statement and Prospectus. The Company and, assuming no act or omission on the part of the Agent that would make such statement untrue,
the transactions contemplated by this Agreement meet the requirements for and comply with the conditions for the use of Form S-3 under
the Securities Act. The Registration Statement has been filed with the SEC and has been declared effective under the Securities Act.
The Prospectus Supplement will name the Agent as the agent in the section entitled “Plan of Distribution.” The Company has
not received, and has no notice of, any order of the SEC preventing or suspending the use of the Registration Statement or threatening
or instituting proceedings for that purpose. The Registration Statement and the offer and sale of Placement Shares as contemplated hereby
meet the requirements of Rule 415 under the Securities Act and comply in all material respects with said Rule. Any statutes, regulations,
contracts, or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement have been so described or filed. Copies of the Registration Statement, the Prospectus, and any such amendments
or supplements and all documents incorporated by reference therein that were filed with the SEC on or prior to the date of this Agreement
have been delivered, or are available through EDGAR, to the Agent and its counsel. The Company has not distributed and, prior to the
later to occur of each Settlement Date and completion of the distribution of the Placement Shares, will not distribute any offering material
in connection with the offering or sale of the Placement Shares other than the Registration Statement and the Prospectus and any Issuer
Free Writing Prospectus (as defined below) to which the Agent has consented, which consent shall not be unreasonably withheld or delayed.
The Common Stock is currently listed on the Exchange under the trading symbol “ACON.” Except as disclosed in the Registration
Statement, including the Incorporated Documents, the Company has not, in the six months preceding the date hereof, received notice from
the Exchange to the effect that the Company is not in compliance with the Exchange’s listing requirements. Except as disclosed
in the Registration Statement, including the Incorporated Documents, or the Prospectus, the Company has no reason to believe that it
will be unable to comply with the Exchange listing requirements.
(b) No
Misstatement or Omission. The Registration Statement, when it became effective, and the Prospectus, and any amendment or supplement
thereto, on the date of such Prospectus or amendment or supplement, conformed and will conform in all material respects with the requirements
of the Securities Act. At each Settlement Date, the Registration Statement and the Prospectus, as of such date, will conform in all material
respects with the requirements of the Securities Act. The Registration Statement, when it became effective, did not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein
not misleading. The Prospectus and any amendment and supplement thereto, on the date thereof and at each Applicable Time, did not and
will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The documents incorporated by reference in the Prospectus or any
Prospectus Supplement did not, and any further documents incorporated by reference therein will not, when filed with the SEC, contain
an untrue statement of a material fact or omit to state a material fact required to be stated in such document or necessary to make the
statements in such document, in light of the circumstances under which they were made, not misleading. The foregoing will not apply to
statements in, or omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company
by the Agent specifically for use in the preparation thereof.
(c) Conformity
with Securities Act and Exchange Act. The Incorporated Documents, when such documents were or are filed with the SEC under the Securities
Act or the Exchange Act, or became or become effective under the Securities Act, as the case may be, conformed or will conform in all
material respects with the requirements of the Securities Act and the Exchange Act, as applicable.
(d) Financial
Information. The consolidated financial statements of the Company included or incorporated by reference in the Registration Statement,
the Prospectus, and the Issuer Free Writing Prospectuses, if any, together with the related notes and schedules, complied as to form
in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto
as in effect as of the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except: (i) as may be otherwise indicated in such financial statements
or the notes thereto; or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the consolidated financial position of the Company and the Subsidiaries
(as defined below) as of the dates indicated and the consolidated results of operations and cash flows of the Company for the periods
specified (subject, in the case of unaudited statements, to normal year-end audit adjustments that will not be material, either individually
or in the aggregate); the other financial and statistical data respecting the Company and the Subsidiaries contained or incorporated
by reference in the Registration Statement, the Prospectus, and the Issuer Free Writing Prospectuses, if any, are accurately and fairly
presented and prepared in all material respects on a basis consistent with the financial statements and books and records of the Company;
there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Registration
Statement or the Prospectus that are not included or incorporated by reference as required; the Company and the Subsidiaries do not have
any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration
Statement (including the exhibits thereto) and the Prospectus that are required to be described in the Registration Statement or the
Prospectus (including exhibits thereto and Incorporated Documents); and all disclosures contained or incorporated by reference in the
Registration Statement, the Prospectus, and the Issuer Free Writing Prospectuses, if any, regarding “non-GAAP financial measures”
(as such term is defined by the rules and regulations of the SEC) comply in all material respects with Regulation G of the Exchange Act
and Item 10 of Regulation S-K under the Securities Act, to the extent applicable.
(e) Conformity
with EDGAR Filing. The Prospectus delivered to the Agent for use in connection with the sale of the Placement Shares pursuant to
this Agreement will be identical to the versions of the Prospectus created to be transmitted to the SEC for filing via EDGAR, except
to the extent permitted by Regulation S-T.
(f) Organization.
The Company and each of its Subsidiaries are duly organized, validly existing as a corporation, limited partnership, limited liability
company, or other legal entity, and in good standing under the laws of their respective jurisdictions of organization, except where the
failure to be in good standing would not, individually or in the aggregate, have a Material Adverse Effect (as defined below) or reasonably
be expected to have a Material Adverse Effect. The Company and each of its Subsidiaries are duly qualified as a foreign corporation for
transaction of business and in good standing under the laws of each other jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such qualification, and have all corporate power and authority necessary
to own or hold their respective properties and to conduct their respective businesses as described in the Registration Statement and
the Prospectus, except where the failure to be so qualified or in good standing or have such power or authority would not, individually
or in the aggregate, have a material adverse effect or reasonably be expected to have a material adverse effect on the assets, business,
operations, earnings, properties, condition (financial or otherwise), prospects, stockholders’ equity, or results of operations
of the Company and the Subsidiaries taken as a whole, or prevent or materially interfere with consummation of the transactions contemplated
hereby (a “Material Adverse Effect”).
(g) Subsidiaries.
The significant subsidiaries of the Company, as determined pursuant to Rule 1-02(w) of Regulation S-X, are set forth on Schedule 4
(collectively, the “Subsidiaries”). Except as set forth in the Registration Statement and in the Prospectus, the
Company owns, directly or indirectly, all of the equity interests of the Subsidiaries free and clear of any material lien, charge, security
interest, encumbrance, right of first refusal, or other restriction, and all the equity interests of the Subsidiaries are validly issued
and are fully paid, nonassessable, and free of preemptive and similar rights.
(h) No
Violation or Default. Neither the Company nor any of its Subsidiaries is: (i) in violation of its charter or bylaws or similar
organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant, or condition contained in any indenture, mortgage, deed of
trust, loan agreement, or other agreement or instrument to which the Company or any of its Subsidiaries is a party, by which the Company
or any of its Subsidiaries is bound, or to which any of the property or assets of the Company or any of its Subsidiaries are subject;
or (iii) in violation of any law or statute or any judgment, order, rule, or regulation of any court, arbitrator, or governmental
or regulatory authority, except, in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as described in the Prospectus, the
Prospectus Supplement, or the Incorporated Documents, to the Company’s knowledge, no other party under any material contract or
other agreement to which it or any of its Subsidiaries is a party is in default in any respect thereunder where such default would reasonably
be expected to have a Material Adverse Effect.
(i) No
Material Adverse Change. Subsequent to the respective dates as of which information is given in the Registration Statement and the
Prospectus (including any Incorporated Documents), there has not been: (i) any Material Adverse Effect, or any development involving
a prospective Material Adverse Effect, in or affecting the business, properties, management, condition (financial or otherwise), results
of operations, or prospects of the Company and the Subsidiaries taken as a whole; (ii) any transaction that is material to the Company
and the Subsidiaries taken as a whole; (iii) any obligation or liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or any Subsidiary, that is material to the Company and the Subsidiaries taken as a whole; (iv) any
material change in the capital stock (other than as a result of the sale of Placement Shares or other than as described in a proxy statement
filed on Schedule 14A or a Registration Statement on Form S-4 and otherwise publicly announced) or outstanding long-term indebtedness
of the Company or any of its Subsidiaries; or (v) any dividend or distribution of any kind declared, paid, or made on the capital
stock of the Company or any Subsidiary, other than in each case above, in the ordinary course of business or as otherwise disclosed in
the Registration Statement or Prospectus (including any document deemed incorporated by reference therein).
(j) Capitalization.
The issued and outstanding shares of capital stock of the Company have been validly issued, and are fully paid, and nonassessable. The
Company has an authorized, issued, and outstanding capitalization as set forth in the Registration Statement or the Prospectus as of
the dates referred to therein (other than the grant of shares of Common Stock, options or restricted stock under the Company’s
existing equity incentive plans, or changes in the number of outstanding Common Stock of the Company due to the issuance of shares upon
the exercise or conversion of securities exercisable for, or convertible into, Common Stock outstanding on the date hereof or as a result
of the issuance of Placement Shares), and such authorized capital stock conforms to the description thereof set forth in the Registration
Statement and the Prospectus. The description of the Common Stock in the Registration Statement and the Prospectus is complete and accurate
in all material respects. Except as disclosed in or contemplated by the Registration Statement, the Prospectus, and the Incorporated
Documents, as of the date referred to therein, the Company did not have reserved or available for issuance any shares of Common Stock
in respect of options, any rights or warrants to subscribe for, any securities or obligations convertible into or exchangeable for, or
any contracts or commitments to issue or sell, any shares of capital stock or other securities.
(k) Authorization;
Enforceability. The Company has full legal right, power, and authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed, and delivered by the Company and is a legal, valid, and binding
agreement of the Company enforceable in accordance with its terms, except to the extent that: (i) enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors’ rights generally and by general equitable
principles; and (ii) the indemnification and contribution provisions of Section 11 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof.
(l) Authorization
of Placement Shares. The Placement Shares, when issued and delivered pursuant to the terms approved by the board of directors of
the Company or a duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein,
will be duly and validly authorized and issued and fully paid and nonassessable, free and clear of any pledge, lien, encumbrance, security
interest, or other claim (other than any pledge, lien, encumbrance, security interest, or other claim arising from an act or omission
of any Agent or a purchaser), including any statutory or contractual preemptive rights, resale rights, rights of first refusal, or other
similar rights, and will be registered pursuant to Section 12 of the Exchange Act. The Placement Shares, when issued, will conform in
all material respects to the description thereof set forth in or incorporated into the Prospectus.
(m) No
Consents Required. No consent, approval, authorization, order, registration, or qualification of or with any court or arbitrator
or any governmental or regulatory authority having jurisdiction over the Company is required for the execution, delivery, and performance
by the Company of this Agreement, and the issuance and sale by the Company of the Placement Shares as contemplated hereby, except for
such consents, approvals, authorizations, orders, and registrations or qualifications as may be required under applicable state securities
laws or by the bylaws and rules of the Financial Industry Regulatory Authority (“FINRA”) or the Exchange in connection
with the sale of the Placement Shares by the Agent.
(n) No
Preferential Rights. Except as set forth in the Registration Statement or the Prospectus: (i) no person, as such term is defined
in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a “Person”), has the right, contractual
or otherwise, to cause the Company to issue or sell to such Person any Common Stock or shares of any other capital stock or other securities
of the Company (other than upon the exercise of options or warrants to purchase Common Stock or upon the exercise of options that may
be granted from time to time under the Company’s stock option plans); (ii) no Person has any preemptive rights, rights of
first refusal, or any other rights (whether pursuant to a “poison pill” provision or otherwise) to purchase any Common Stock
or shares of any other capital stock or other securities of the Company from the Company that have not been duly waived respecting the
offering contemplated hereby; (iii) no Person has the right to act as an underwriter or as a financial advisor to the Company in
connection with the offer and sale of the Placement Shares; and (iv) no Person has the right, contractual or otherwise, to require
the Company to register under the Securities Act any Common Stock or shares of any other capital stock or other securities of the Company,
or to include any such shares or other securities in the Registration Statement or the offering contemplated thereby, whether as a result
of the filing or effectiveness of the Registration Statement or the sale of the Placement Shares as contemplated thereby or otherwise,
except for such rights as have been waived on or prior to the date hereof.
(o) Independent
Public Accountant. Haynie & Company (the “Accountants”), whose reports on the consolidated financial statements
of the Company are filed with the SEC as part of the Company’s most recent Annual Report on Form 10-K and incorporated by reference
into the Registration Statement, is and, during the periods covered by its report, was an independent registered public accounting firm
within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To the Company’s knowledge,
the Accountants are not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) respecting the Company.
(p) Enforceability
of Agreements. To the Company’s knowledge, all agreements between the Company and third parties expressly referenced in the
Prospectus, other than such agreements that have expired by their terms or whose termination is disclosed in documents filed by the Company
on EDGAR, are legal, valid, and binding obligations of the Company enforceable in accordance with their respective terms, except to the
extent that: (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors’ rights generally and by general equitable principles; and (ii) the indemnification provisions of certain agreements
may be limited be federal or state securities laws or public policy considerations in respect thereof, except for any unenforceability
that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
(q) No
Litigation. Except as set forth in the Registration Statement or the Prospectus: (i) there are no legal, governmental, or regulatory
actions, suits, or proceedings pending or, to the Company’s knowledge, any legal, governmental, or regulatory investigations to
which the Company, a Subsidiary, or any of their respective directors, officers, or controlling Persons is a party or to which any property
of the Company or any of its Subsidiaries is the subject that, individually or in the aggregate, if determined adversely to the Company
or any of its Subsidiaries, would reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability
of the Company to perform its obligations under this Agreement; (ii) to the Company’s knowledge, no actions, suits, or proceedings
are threatened or contemplated by any governmental or regulatory authority or threatened by others against the Company, a Subsidiary,
or any of their respective directors, officers, or controlling Persons that, individually or in the aggregate, if determined adversely
to the Company or any of its Subsidiaries, would reasonably be expected to have a Material Adverse Effect; (iii) there are no current
or pending legal, governmental, or regulatory, actions, suits, proceedings or, to the Company’s knowledge, investigations that
are required under the Securities Act to be described in the Prospectus that are not described in the Prospectus; and (iv) there
are no contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement
that are not so filed.
(r) Licenses
and Permits. Except as set forth in the Registration Statement or the Prospectus, the Company and each of its Subsidiaries possess
or have obtained all licenses, certificates, consents, orders, approvals, permits, and other authorizations issued by, and have made
all declarations and filings with, the appropriate federal, state, local, or foreign governmental or regulatory authorities that are
necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the
Registration Statement and the Prospectus (the “Permits”), except where the failure to possess, obtain, or make the
same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the
Registration Statement or the Prospectus, neither the Company nor its Subsidiaries have received written notice of any proceeding relating
to revocation or modification of any such Permit or have any reason to believe that such Permit will not be renewed in the ordinary course,
except when the failure to obtain any such renewal would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(s) S-3
Eligibility. (i) At the time of filing the Registration Statement; and (ii) if applicable, at the time of the most recent
amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective
amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act, or form of prospectus), the Company met the
then-applicable requirements for use of Form S-3 under the Securities Act, including compliance with General Instruction I.B.6 of Form
S-3, for the sale of up to the Maximum Amount of Placement Shares.
(t) No
Material Defaults. Except as set forth in the Registration Statement and Prospectus, neither the Company nor any of the Subsidiaries
has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults,
individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Except as set forth in the Registration
Statement and Prospectus, the Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing
of its last Annual Report on Form 10-K, indicating that it: (i) has failed to pay any dividend or sinking fund installment on preferred
stock; or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases,
which defaults, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
(u) Certain
Market Activities. Neither the Company or any of the Subsidiaries, nor, to the Company’s knowledge, any of their respective
directors, officers, or controlling Persons has taken, directly or indirectly, any action designed, or that has constituted or might
reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Placement Shares.
(v) Broker-Dealer
Relationships. Neither the Company nor any of the Subsidiaries or any related entities: (i) are required to register as a “broker”
or “dealer” in accordance with the provisions of the Exchange Act; or (ii) directly or indirectly through one or more
intermediaries, control or are a “person associated with a member” or “associated person of a member” (within
the meaning set forth in the FINRA rules).
(w) No
Reliance. The Company has not relied upon the Agent or legal counsel for the Agent for any legal, tax, or accounting advice in connection
with the offering and sale of the Placement Shares.
(x) Taxes.
The Company and each of its Subsidiaries have filed all federal, state, local, and foreign tax returns that have been required to be
filed and paid all taxes shown thereon through the date hereof, to the extent that such taxes have become due and are not being contested
in good faith, except when the failure to do so would not reasonably be expected to have a Material Adverse Effect. Except as otherwise
disclosed in or contemplated by the Registration Statement or the Prospectus, no tax deficiency has been determined adversely to the
Company or any of its Subsidiaries that has had, or would reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The Company has no knowledge of any federal, state, or other governmental tax deficiency, penalty, or assessment that
has been or might be asserted or threatened against it that could reasonably be expected to have a Material Adverse Effect.
(y) Title
to Real and Personal Property. The Company and each of its Subsidiaries have good title to all of their real and personal property
owned by them that are material to the business of the Company and such Subsidiary, in each case, free and clear of all liens, encumbrances,
and defects, except as described in the Registration Statement and Prospectus or that do not materially affect the value of the properties
of the Company and its Subsidiaries, considered as one enterprise, and do not interfere in any material respect with the use made and
proposed to be made of such properties by the Company and its Subsidiaries, considered as one enterprise; and all of the leases, subleases,
and other rights under which the Company or any of its Subsidiaries holds or uses properties described in the Registration Statement
and Prospectus are in full force and effect, with such exceptions as would not reasonably be expected to have a Material Adverse Effect,
and neither the Company nor any of its Subsidiaries has received any written notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or its Subsidiaries under any of the leases, subleases, and other rights mentioned above,
or affecting or questioning the rights of the Company or any Subsidiary thereof to the continued possession or use of the leased or subleased
premises or the premises granted by leases, subleases, and other rights. The Company and each of its Subsidiaries have the consents,
easements, rights-of-way, or licenses from any Person as are necessary to enable them to conduct their business in the manner described
in the Registration Statement and the Prospectus, subject to such qualifications as may be set forth in the Registration Statement and
the Prospectus, and except for the consents, easements, rights-of-way, or licenses the lack of which would not have, individually or
in the aggregate, a Material Adverse Effect.
(z) Intellectual
Property. Except as set forth in the Registration Statement or the Prospectus, to the Company’s knowledge, the Company and
its Subsidiaries own or possess adequate enforceable rights to use all patents, patent applications, trademarks (both registered and
unregistered), service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, and know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems, or procedures) (collectively,
the “Intellectual Property”), necessary for the conduct of their respective businesses as conducted as of the date
hereof, except to the extent that the failure to own or possess adequate rights to use such Intellectual Property would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect; except as disclosed in writing to the Agent, the Company
and any of its Subsidiaries have not received any written notice of any claim of infringement or conflict that asserted Intellectual
Property rights of others, which infringement or conflict, if the subject of an unfavorable decision, would result in a Material Adverse
Effect; there are no pending, or to the Company’s knowledge, threatened judicial proceedings or interference proceedings against
the Company or its Subsidiaries challenging the Company’s or its Subsidiaries’ rights in or to or the validity of the scope
of any of the Company’s or its Subsidiaries’ material patents, patent applications, or proprietary information; to the Company’s
knowledge, no other entity or individual has any right or claim in any of the Company’s or its Subsidiaries’ owned, material
patents, patent applications, or any patent to be issued therefrom by virtue of any contract, license, or other agreement entered into
between such entity or individual and the Company or a Subsidiary or by any non-contractual obligation of the Company or a Subsidiary,
other than by written licenses granted by the Company or a Subsidiary; the Company and its Subsidiaries have not received any written
notice of any claim challenging the rights of the Company or a Subsidiary in or to any Intellectual Property owned, licensed, or optioned
by the Company or such Subsidiary that, if the subject of an unfavorable decision, would result in a Material Adverse Effect.
(aa) Environmental
Laws. Except as set forth in the Registration Statement or the Prospectus, the Company and its Subsidiaries: (i) are in compliance
with any and all applicable federal, state, local, and foreign laws, rules, regulations, decisions, and orders relating to the protection
of human health and safety, the environment, hazardous or toxic substances or wastes, pollutants, or contaminants (collectively, “Environmental
Laws”); (ii) have received and are in compliance with all permits, licenses, or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses as described in the Registration Statement and the Prospectus; (iii) have
not received written notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous
or toxic substances or wastes, pollutants, or contaminants, except, in the case of any of clauses (i), (ii), or (iii) above, for any
such failure to comply or failure to receive required permits, licenses, other approvals or liability as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; and (iv) there are no costs or liabilities arising under
Environmental Laws respecting the operation of the Company’s and each of its Subsidiaries’ properties (including any capital
or operating expenditures required for clean-up or closure of the properties, compliance with Environmental Laws, any permit, license,
or approval or any related legal constraints or operating activities, and any potential liabilities of third parties assumed under contract
by the Company or any of its Subsidiaries) that would reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(bb) Disclosure
Controls. Except as set forth in the Registration Statement or the Prospectus, the Company and each of its Subsidiaries maintains
a system of internal accounting controls designed to provide reasonable assurance that: (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken respecting any differences. The
Company is not aware of any material weaknesses in its internal control over financial reporting (other than as set forth in the Prospectus).
Since the date of the latest audited financial statements of the Company included in the Prospectus, there has been no change in the
Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial reporting (other than as set forth in the Prospectus). Except as set forth in the
Registration Statement or the Prospectus, the Company has established disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls and procedures to provide reasonable assurance that material
information relating to the Company and each of its Subsidiaries is made known to the certifying officers by others within those entities,
particularly during the period in which the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case
may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and
procedures as of a date within 90 days prior to the filing date of the Form 10-K for the fiscal year most recently ended (such date,
the “Evaluation Date”). The Company presented in its Form 10-K for the fiscal year most recently ended the conclusions
of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation
Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined
in Item 307(b) of Regulation S-K under the Securities Act).
(cc) Sarbanes-Oxley.
There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s directors
or officers, in their capacities as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley Act
and the rules and regulations promulgated thereunder. Each of the principal executive officer and the principal financial officer of
the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company as
applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act respecting all reports, schedules,
forms, statements, and other documents required to be filed by it or furnished by it to the SEC. For purposes of the preceding sentence,
“principal executive officer” and “principal financial officer” will have the meanings given to such terms in
the Sarbanes-Oxley Act.
(dd) Finder’s
Fees. Neither the Company nor any of the Subsidiaries has incurred any liability for any finder’s fees, brokerage commissions,
or similar payments in connection with the transactions herein contemplated, except as may otherwise exist respecting the Agent pursuant
to this Agreement.
(ee) Labor
Disputes. No labor disturbance by or dispute with employees of the Company or any of its Subsidiaries exists or, to the knowledge
of the Company, is threatened that would reasonably be expected to result in a Material Adverse Effect.
(ff) Investment
Company Act. Neither the Company nor any of the Subsidiaries is or, after giving effect to the offering and sale of the Placement
Shares, will be an “investment company” or an entity “controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(gg) Operations.
The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes
of all jurisdictions to which the Company or its Subsidiaries are subject, the rules and regulations thereunder, and any related or similar
rules, regulations, or guidelines, issued, administered, or enforced by any governmental agency having jurisdiction over the Company
(collectively, the “Money Laundering Laws”), except as would not reasonably be expected to result in a Material Adverse
Effect; and no action, suit, or proceeding by or before any court or governmental agency, authority, or body or any arbitrator involving
the Company or any of its Subsidiaries respecting the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(hh) Off-Balance
Sheet Arrangements. There are no transactions, arrangements, and other relationships between and/or among the Company, and/or, to
the knowledge of the Company, any of its affiliates and any unconsolidated entity, including any structural finance, special purpose,
or limited purpose entity (each, an “Off Balance Sheet Transaction”) that could reasonably be expected to affect materially
the Company’s liquidity or the availability of or requirements for its capital resources, including those Off Balance Sheet Transactions
described in the SEC’s Statement about Management’s Discussion and Analysis of Financial Conditions and Results of Operations
(Release Nos. 33-8056; 34-45321; FR-61), required to be described in the Prospectus that have not been described as required.
(jj) Underwriter
Agreements. The Company is not a party to any agreement with an agent or underwriter for any other “at-the-market” or
continuous equity transaction.
(jj) ERISA.
To the knowledge of the Company: (i) each material employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered, or contributed to by the Company
or any of its Subsidiaries (other than a Multiemployer Plan, within the meaning of Section 3(37) of ERISA) for employees or former employees
of the Company and any of its Subsidiaries has been maintained in material compliance with its terms and the requirements of any applicable
statutes, orders, rules, and regulations, including ERISA and the Internal Revenue Code of 1986, as amended (the “Code”);
(ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred respecting
any such plan (excluding transactions effected pursuant to a statutory or administrative exemption); and (iii) for each such plan
that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency”
as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each such
plan (excluding for these purposes accrued but unpaid contributions) equals or exceeds the present value of all benefits accrued under
such plan determined using reasonable actuarial assumptions, other than, in the case of (i), (ii), and (iii) above, as would not reasonably
be expected to have a Material Adverse Effect.
(kk) Margin
Rules. Neither the issuance, sale, and delivery of the Placement Shares nor the application of the proceeds thereof by the Company
as described in the Registration Statement and the Prospectus will violate Regulation T, U, or X of the Board of Governors of the Federal
Reserve System or any other regulation of such Board of Governors.
(ll) Insurance.
The Company and each of its Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company and
each of its Subsidiaries reasonably believe are adequate for the conduct of their properties and as is customary for companies of similar
size engaged in similar businesses in similar industries.
(mm) No
Improper Practices. (i) Neither the Company nor, to the Company’s knowledge, the Subsidiaries or any of their respective
executive officers has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed
fully to disclose any contribution in violation of law) or made any contribution or other payment to any official of, or candidate for,
any federal, state, municipal, or foreign office or other Person charged with similar public or quasi-public duty in violation of any
law or of the character required to be disclosed in the Prospectus; (ii) no relationship, direct or indirect, exists between or
among the Company or, to the Company’s knowledge, any Subsidiary or any affiliate of any of them, on the one hand, and the directors,
officers and stockholders of the Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that is required by
the Securities Act to be described in the Registration Statement and the Prospectus that is not so described; (iii) no relationship,
direct or indirect, exists between or among the Company or any Subsidiary or any affiliate of them, on the one hand, and the directors,
officers, stockholders, or directors of the Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that is
required by the rules of FINRA to be described in the Registration Statement and the Prospectus that is not so described; (iv) except
as described in the Prospectus, there are no material outstanding loans or advances or material guarantees of indebtedness by the Company
or, to the Company’s knowledge, any Subsidiary to or for the benefit of any of their respective officers or directors or any of
the members of the families of any of them; and (v) the Company has not offered, or caused any placement agent to offer, Common
Stock to any Person with the intent to influence unlawfully: (1) a customer or supplier of the Company or any Subsidiary to alter
the customer’s or supplier’s level or type of business with the Company or any Subsidiary; or (2) a trade journalist
or publication to write or publish favorable information about the Company or any Subsidiary or any of their respective products or services;
and (vi) neither the Company nor any Subsidiary nor, to the Company’s knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or received or retained any funds in violation of any law,
rule, or regulation (including the Foreign Corrupt Practices Act of 1977), which payment, receipt, or retention of funds is of a character
required to be disclosed in the Registration Statement or the Prospectus.
(nn) Status
under the Securities Act. The Company was not and is not an ineligible issuer as defined in Rule 405 under the Securities Act at
the times specified in Rules 164 and 433 under the Securities Act in connection with the offering of the Placement Shares.
(oo) No
Misstatement or Omission in an Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and as of
each Applicable Time, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, including any incorporated document deemed to be a part thereof that has not
been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to the Company by the Agent specifically for its therein.
(pp) No
Conflicts. None of the execution of this Agreement; the issuance, offering, or sale of the Placement Shares; the consummation of
any of the transactions contemplated herein; or the compliance by the Company with the terms and provisions hereof will conflict with
or result in a breach of any of the terms and provisions of; constitute or will constitute a default under; or has resulted in or will
result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company pursuant to the terms
of any contract or other agreement to which the Company may be bound or to which any of the property or assets of the Company is subject,
except: (i) such conflicts, breaches, or defaults as may have been waived; and (ii) such conflicts, breaches, and defaults
that would not reasonably be expected to have a Material Adverse Effect; nor will such action result in any material violation of the
provisions of the organizational or governing documents of the Company or in any material violation of the provisions of any statute
or any order, rule, or regulation applicable to the Company or of any court or of any federal, state, or other regulatory authority or
other government body having jurisdiction over the Company, except where such violation would not reasonably be expected to have a Material
Adverse Effect.
(qq) Regulatory
Compliance.
(i) Neither
the Company nor any of its Subsidiaries (each, an “Entity”) nor, to the Company’s knowledge, any director, officer,
employee, agent, affiliate, or representative of the Entity, is a government, individual, or entity that is owned or controlled by any
director, officer, employee, agent, affiliate, or representative of the Entity that is:
(1) the
subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United
Nations Security Council, the European Union, His Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”);
or
(2) located,
organized, or resident in a country or territory that is the subject of Sanctions (including Burma/Myanmar, Cuba, Iran, North Korea,
Sudan and Syria).
(ii) The
Company, on behalf of each Entity, represents and covenants that it will not, directly or indirectly, knowingly use, lend, contribute,
or otherwise make available the proceeds of the offering governed by this Agreement to any subsidiary, joint venture partner, or other
director, officer, employee, agent, affiliate, or representative of the Entity:
(1) to fund
or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation,
is the subject of Sanctions; or
(2) in any
other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether
as underwriter, advisor, investor, or otherwise).
(iii) Except
as detailed in the Prospectus, for the past five years, the Entity has not knowingly engaged in, is not now knowingly engaged in, and
will not engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or
transaction is or was the subject of Sanctions.
(rr) Stock
Transfer Taxes. On each Settlement Date, all stock transfer or other taxes (other than income taxes) that are required to be paid
in connection with the sale and transfer of the Placement Shares to be sold hereunder will be, or will have been, fully paid or provided
for by the Company and all laws imposing such taxes will be or will have been fully complied with in all material respects.
Any certificate
signed by an officer of the Company and delivered to the Agent or to counsel for the Agent pursuant to or in connection with this Agreement
will be deemed to be a representation and warranty by the Company, as applicable, to the Agent as to the matters set forth therein.
7. Covenants
of the Company. The Company covenants and agrees with the Agent that:
(a) Registration
Statement Amendments. After the date of this Agreement and during any period in which a Prospectus relating to any Placement Shares
is required to be delivered by the Agent under the Securities Act (including in circumstances when such requirement may be satisfied
pursuant to Rule 172 under the Securities Act): (i) the Company will notify the Agent promptly of the time when any subsequent amendment
to the Registration Statement, other than documents incorporated by reference, has been filed with the SEC and/or has become effective
or any subsequent supplement to the Prospectus has been filed and of any request by the SEC for any amendment or supplement to the Registration
Statement or Prospectus or for additional information; (ii) the Company will prepare and file with the SEC, promptly upon the Agent’s
reasonable request, any amendments or supplements to the Registration Statement or Prospectus that, in the Agent’s reasonable opinion,
may be necessary or advisable in connection with the distribution of the Placement Shares by the Agent (provided, however, that
the failure of the Agent to make such request will not relieve the Company of any obligation or liability hereunder, or affect the Agent’s
right to rely on the representations and warranties made by the Company in this Agreement and provided, further, that the only remedy
the Agent will have respecting the failure to make such filing will be to cease making sales under this Agreement until such amendment
or supplement is filed); (iii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus
relating to the sale of Placement Shares or a security convertible into the Placement Shares unless a copy thereof has been submitted
to the Agent within a reasonable period of time before the filing and the Agent has not reasonably objected thereto within two (2) Business
Days (provided, however, that (A) the failure of the Agent to make such objection will not relieve the Company of any obligation
or liability hereunder, or affect the Agent’s right to rely on the representations and warranties made by the Company in this Agreement
and provided, further, that the only remedy the Agent will have respecting the failure by the Company to provide the Agent with such
copy will be to cease making sales under this Agreement and (B) the Company will have no obligation to provide the Agent any advance
copy of such filing or provide to the Agent an opportunity to object to such filing if (i) the filing does not name the Agent and does
not relate to the transactions pursuant hereto or (ii) relates to the termination of this Agreement or the Prospectus Supplement) and
the Company will furnish to the Agent at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated
by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR; and (iv) the Company
will cause each amendment or supplement to the Prospectus to be filed with the SEC as required pursuant to the applicable paragraph of
Rule 424(b) of the Securities Act or, in the case of any document to be incorporated therein by reference, to be filed with the SEC as
required pursuant to the Exchange Act, within the period prescribed (the determination to file or not file any amendment or supplement
with the SEC under this Section 7(a), based on the Company’s reasonable opinion or reasonable objections, will be made exclusively
by the Company).
(b) Notice
of SEC Stop Orders. The Company will advise the Agent, promptly after it receives notice or obtains knowledge thereof, of the issuance
or threatened issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement, of the suspension of
the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding
for any such purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such a stop order should be issued. The Company will advise the Agent promptly after it receives any request by the
SEC for any amendments to the Registration Statement or any amendment or supplements to the Prospectus or any Issuer Free Writing Prospectus
or for additional information related to the offering of the Placement Shares or for additional information related to the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus in connection with the offering of the Placement Shares.
(c) Delivery
of Prospectus; Subsequent Changes. During any period in which a Prospectus relating to the Placement Shares is required to be delivered
by the Agent under the Securities Act respecting the offer and sale of the Placement Shares (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Securities Act) (the “Prospectus Delivery Period”), the Company will
comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective
due dates all reports and any definitive proxy or information statements required to be filed by the Company with the SEC pursuant to
Sections 13(a), 13(c), 14, 15(d), or any other provision of or under the Exchange Act. If the Company has omitted any information from
the Registration Statement pursuant to Rule 430A under the Securities Act, it will use its commercially reasonable efforts to comply
with the provisions of and make all requisite filings with the SEC pursuant to said Rule 430A and to notify the Agent promptly of all
such filings. If during the Prospectus Delivery Period any event occurs as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the
light of the circumstances then existing, not misleading, or if during the Prospectus Delivery Period it is necessary to amend or supplement
the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify the Agent to suspend the
offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus
(at the expense of the Company) so as to correct such statement or omission or effect such compliance; provided, however, that the Company
may delay any amendment or supplement, if in the sole discretion of the Company, it is in the Company’s best interest to do so.
(d) Listing
of Placement Shares. During the Prospectus Delivery Period, the Company will use its commercially reasonable efforts to cause the
Placement Shares to be listed on the Exchange.
(e) Delivery
of Registration Statement and Prospectus. The Company will furnish to the Agent and its counsel (at the expense of the Company) copies
of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements
to the Registration Statement or Prospectus that are filed with the SEC during the Prospectus Delivery Period (including all documents
filed with the SEC during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable
and in such quantities as the Agent may from time to time reasonably request and, at the Agent’s request, will also furnish copies
of the Prospectus to each exchange or market on which sales of the Placement Shares may be made; provided, however, that the Company
will not be required to furnish any document (other than the Prospectus) to the Agent to the extent such document is available on EDGAR.
(f) Earnings
Statement. The Company will make generally available to its security holders as soon as practicable, but in any event not later than
15 months after the end of the Company’s current fiscal quarter, an earnings statement covering a 12-month period that satisfies
the provisions of Section 11(a) and Rule 158 of the Securities Act. The Company’s compliance with the reporting requirements of
the Exchange Act shall be deemed to satisfy this Section 7(f).
(g) Use
of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”
(h) Notice
of Other Sales. Without the prior written notice to the Agent, the Company will not, directly or indirectly, offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant
to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common
Stock during the period beginning on the second Trading Day immediately prior to the date on which any Placement Notice is delivered
to the Agent hereunder and ending on the fifth Trading Day immediately following the final Settlement Date respecting Placement Shares
sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement
Shares covered by a Placement Notice, the date of such suspension or termination); and will not directly or indirectly in any other “at-the-market”
offering sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered
pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire,
Common Stock prior to the termination of this Agreement; provided, however, that such restrictions will not be required
in connection with the Company’s issuance or sale of: (1) Common Stock, options to purchase Common Stock or Common Stock issuable
upon the exercise of options or restricted stock units granted pursuant to any employee or director stock option or benefits plan, stock
ownership plan or dividend reinvestment plan (but not Common Stock subject to a waiver to exceed plan limits in its dividend reinvestment
plan) of the Company whether now in effect or hereafter implemented; (2) Common Stock issuable upon conversion of securities or
in respect of dividends accruing thereon or the exercise of warrants, options or other rights in effect or outstanding, and disclosed
in filings by the Company available on EDGAR or otherwise in writing to the Agent; and (3) Common Stock, or securities convertible
into or exercisable for Common Stock, as consideration for mergers, acquisitions, other business combinations, licensing agreements or
strategic alliances, or offered and sold in a privately negotiated transaction to vendors, customers, or strategic partners and otherwise
conducted in a manner so as not to be integrated with the offering of Common Stock hereby.
(i) Change
of Circumstances. The Company will, at any time that a Placement Notice has been issued, advise the Agent promptly after it will
have received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any
opinion, certificate, letter or other document required to be provided to the Agent pursuant to this Agreement.
(j) Due
Diligence Cooperation. The Company will cooperate with any reasonable due diligence review conducted by the Agent or its representatives
in connection with the transactions contemplated hereby, including providing information and making available documents and senior corporate
officers, during regular business hours and at the Company’s principal offices or such other location mutually agreed to by the
parties, as the Agent may reasonably request.
(k) Disclosure
of Shares Sold. The Company will disclose information regarding the sale of the Placement Shares in compliance with the requirements
of the Exchange Act.
(l) Representation
Dates; Certificate. On the date of this Agreement and each time the Company:
(i) files
the Prospectus relating to the Placement Shares or amends or supplements (other than a prospectus supplement relating solely to an offering
of securities other than the Placement Shares) the Registration Statement or the Prospectus relating to the Placement Shares by means
of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into the Registration
Statement or the Prospectus relating to the Placement Shares;
(ii) files
an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A that contains restated financial statements);
(iii) files
a quarterly report on Form 10-Q under the Exchange Act; or
(iv) files
a current report on Form 8-K containing amended audited financial information (other than information “furnished” pursuant
to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification of
certain properties as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the Exchange
Act (each date of filing of one or more of the documents referred to in clauses (i) through (iv) will be a “Representation Date”);
the Company
will furnish the Agent (but in the case of clause (iv) above only if the Agent reasonably determines that the information contained in
such Form 8-K is material) with a certificate, in the form attached hereto as Exhibit A. The requirement to provide a certificate
under this Section 7(l) will be waived for any Representation Date occurring at a time at which no Placement Notice is pending, which
waiver will continue until the earlier to occur of the date the Company delivers a Placement Notice hereunder (which for such calendar
quarter will be considered a Representation Date) and the next occurring Representation Date. Notwithstanding the foregoing, if the Company
subsequently decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and did not provide
the Agent with a certificate under this Section 7(l), then before the Company delivers the Placement Notice or the Agent sells any Placement
Shares, the Company will provide the Agent with a certificate, in the form attached hereto as Exhibit A, dated the date of the
Placement Notice.
(m) Legal
Opinion. On the date of this Agreement and within five Trading Days of each Representation Date for which the Company is obligated
to deliver a certificate in the form attached hereto as Exhibit A for which no waiver is applicable, the Company will cause to
be furnished to the Agent written opinions of Carroll Legal LLC (“Company Counsel”), or other counsel reasonably satisfactory
to the Agent, in form and substance reasonably satisfactory to the Agent and its counsel; provided, however, the Company
will be required to furnish to the Agent no more than one opinion hereunder per calendar quarter; provided, further, that in lieu
of such opinions for subsequent periodic filings under the Exchange Act, Company Counsel may furnish the Agent with a letter (a “Reliance
Letter”) to the effect that the Agent may rely on a prior opinion delivered under this Section 7(m) to the same extent
as if it were dated the date of such letter (except that statements in such prior opinion will be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented as of the date of the Reliance Letter).
(n) Comfort
Letters. On the date of this Agreement and within five Trading Days of each Representation Date, other than pursuant to Section
7(l)(iii), for which the Company is obligated to deliver a certificate in the form attached hereto as Exhibit A for which
no waiver is applicable, the Company will cause its Accountants to furnish the Agent letters (the “Comfort Letters”),
dated the date the Comfort Letters are delivered, which will meet the requirements set forth in this Section 7(n). The Comfort
Letter from each of the Accountants will be in a form and substance reasonably satisfactory to the Agent: (i) confirming that they
are an independent public accounting firm within the meaning of the Securities Act and the PCAOB; (ii) stating, as of such date,
the conclusions and findings of such firm respecting the financial information and other matters ordinarily covered by accountants’
“comfort letters” to underwriters in connection with registered public offerings (the first such letter, the “Initial
Comfort Letter”); and (iii) updating the Initial Comfort Letter with any information that would have been included in
the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus,
as amended and supplemented to the date of such letter.
(o) Market
Activities. The Company will not, directly or indirectly: (i) take any action designed to cause or result in, or that constitutes
or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of Common Stock; or (ii) sell, bid for, or purchase Common Stock in violation of Regulation M, or pay anyone
any compensation for soliciting purchases of the Placement Shares other than the Agent.
(p) Investment
Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor any of its Subsidiaries
will be or become, at any time prior to the termination of this Agreement, required to register as an “investment company,”
as such term is defined in the Investment Company Act.
(q) No
Offer to Sell. Other than an Issuer Free Writing Prospectus approved in advance by the Company and the Agent in its capacity as agent
hereunder, neither the Agent nor the Company (including its agents and representatives, other than the Agent in its capacity as such)
will make, use, prepare, authorize, approve, or refer to any written communication (as defined in Rule 405 under the Securities Act),
required to be filed with the SEC, that constitutes an offer to sell or solicitation of an offer to buy Placement Shares hereunder.
(r) Sarbanes-Oxley
Act. The Company and the Subsidiaries shall comply with the applicable provisions of the Sarbanes-Oxley Act in all material respects.
8. Representations
and Covenants of the Agent. The Agent represents and warrants that it is duly registered as a broker-dealer under FINRA, the Exchange
Act, and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such states
in which such Agent is exempt from registration or such registration is not otherwise required. The Agent will continue, for the term
of this Agreement, to be duly registered as a broker-dealer under FINRA, the Exchange Act, and the applicable statutes and regulations
of each state in which the Placement Shares will be offered and sold, except such states in which such Agent is exempt from registration
or such registration is not otherwise required, during the term of this Agreement. The Agent will comply with all applicable law and
regulations in connection with the Placement Shares, including Regulation M.
9. Payment
of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including: (i) the
preparation, filing, including any fees required by the SEC, and printing of the Registration Statement (including financial statements
and exhibits) as originally filed and of each amendment and supplement thereto and each Free Writing Prospectus, in such number as the
Agent will reasonably deem necessary; (ii) the printing and delivery to the Agent of this Agreement and such other documents as may reasonably
be required in connection with the offering, purchase, sale, issuance, or delivery of the Placement Shares; (iii) the preparation,
issuance, and delivery of the certificates, if any, for the Placement Shares to the Agent, including any stock or other transfer taxes
and any capital duties, stamp duties, or other duties or taxes payable upon the sale, issuance, or delivery of the Placement Shares to
the Agent; (iv) the fees and disbursements of the counsel, accountants, and other advisors to the Company; (v) the fees and
expenses of the transfer agent and registrar for the Common Stock; (vi) the filing fees incident to any review by FINRA of the terms
of the sale of the Placement Shares; (vii) the fees and expenses incurred in connection with the listing of the Placement Shares
on the Exchange; (viii) route and exchange fees and usual and customary transaction, ticket, and similar charges; and (ix) $30,000 in
due diligence fees and expenses of the Agent, including Agent’s legal counsel initially and, thereafter, the reasonable fees and
expenses of the Agent’s legal counsel in connection with quarterly and annual bring-downs required hereunder up to a maximum amount
of $2,500 for each such bring-down.
10. Conditions
to the Agent’s Obligations. The obligations of the Agent hereunder respecting a Placement will be subject to the continuing
accuracy and completeness of the representations and warranties made by the Company herein in all material respects (except for representations
and warranties qualified by materiality which are required to be accurate and complete in all respects), to the due performance by the
Company of its obligations hereunder in all material respects, to the completion by such Agent of a due diligence review satisfactory
to it in its reasonable judgment, and to the continuing satisfaction (or waiver by such Agent in its sole discretion) of the following
additional conditions:
(a) Registration
Statement Effective. The Company shall at all times maintain in effect the Registration Statement, which will be available for the
sale of all Placement Shares contemplated to be issued by any Placement Notice.
(b) No
Material Notices. None of the following events will have occurred and be continuing: (i) receipt by the Company of any request
for additional information from the SEC or any other federal or state governmental authority during the period of effectiveness of the
Registration Statement the response to which would require any post-effective amendments or supplements to the Registration Statement
or the Prospectus which have not, as of the time of such Placement, been so made; (ii) the issuance by the SEC or any other federal
or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose; (iii) receipt by the Company of any notification respecting the suspension of the qualification or
exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; or (iv) the occurrence of any event that requires the making of any changes in the Registration Statement, the
Prospectus or documents so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading
and, that in the case of the Prospectus, it will not contain any materially untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(c) No
Misstatement or Material Omission. Such Agent will not have advised the Company that the Registration Statement or Prospectus, or
any amendment or supplement thereto, contains an untrue statement of fact that in the Agent’s reasonable opinion is material, or
omits to state a fact that in the Agent’s opinion is material and is required to be stated therein or is necessary to make the
statements therein not misleading, which changes shall not, as of the time of the Placement, have been so made.
(d) Material
Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the SEC, there will not
have been any material adverse change, on a consolidated basis, in the authorized capital stock of the Company or any Material Adverse
Effect, or any development that could reasonably be expected to cause a Material Adverse Effect.
(e) Legal
Opinion. Such Agent will have received the opinion of Company Counsel required to be delivered pursuant Section 7(m) on or
before the date on which such delivery of such opinion is required pursuant to Section 7(m).
(f) Comfort
Letters. Such Agent will have received the Comfort Letter required to be delivered pursuant Section 7(n) on or before the
date on which such delivery of such letter is required pursuant to Section 7(n).
(g) Representation
Certificate. Such Agent will have received the certificate required to be delivered pursuant to Section 7(l) on or before
the date on which delivery of such certificate is required pursuant to Section 7(l).
(h) No
Suspension. Trading in the Common Stock will not have been suspended on the Exchange and the Common Stock will not have been delisted
from the Exchange.
(i) Other
Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(l), the Company will
have furnished to such Agent such appropriate further information, certificates, and documents as such Agent may reasonably request and
that are usually and customarily furnished by an issuer of securities in connection with a securities offering. All such opinions, certificates,
letters, and other documents will be in compliance with the provisions hereof. The Company will furnish such Agent with such conformed
copies of such opinions, certificates, letters, and other documents as such Agent will reasonably request.
(j) Securities
Act Filings Made. All filings with the SEC required by Rule 424 under the Securities Act to have been filed prior to the issuance
of any Placement Notice hereunder will have been made within the applicable period prescribed for such filing by Rule 424.
(k) Approval
for Listing. To the extent required by continued listing rules of the Exchange, the Placement Shares will either have been approved
for listing on the Exchange, subject only to notice of issuance, or the Company will have filed an application for listing of the Placement
Shares on the Exchange at, or prior to, the issuance of any Placement Notice.
(l) No
Termination Event. No event will have occurred that would permit such Agent to terminate this Agreement pursuant to Section 13(a).
11. Indemnification
and Contribution.
(a) Company
Indemnification. The Company agrees to indemnify and hold harmless the Agent, its partners, members, directors, officers, employees,
and agents and each Person, if any, who controls any Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act as follows:
(i) against
any and all loss, liability, claim, damage, and expense whatsoever, as incurred, joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), 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,
or arising out of any untrue statement or alleged untrue statement of a material fact included in any related Issuer Free Writing Prospectus
or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided
that any such settlement is effected with the written consent of the Company, which consent will not unreasonably be delayed or withheld;
and
(iii) against
any and all expense whatsoever, as incurred (including the reasonable fees and disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above;
provided,
however, that this indemnity agreement will not apply to any loss, liability, claim, damage, or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or omission made solely in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in the Registration Statement (or any amendment thereto), or in any
related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).
(b) Agent
Indemnification. The Agent agrees, jointly and severally, to indemnify and hold harmless the Company and its directors and each officer
of the Company who signed the Registration Statement, and each Person, if any, that: (i) controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act; or (ii) is controlled by or is under common control with
the Company against any and all loss, liability, claim, damage, and expense described in the indemnity contained in Section 11(c),
as incurred, but only respecting untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendments thereto), the Prospectus (or any amendment or supplement thereto) or any Free Writing Prospectus in reliance
upon and in conformity with information furnished to the Company in writing by the Agent expressly for use therein.
(c) Procedure.
(i) Any
party that proposes to assert the right to be indemnified under this Section 11 will, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section
11, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission
so to notify such indemnifying party will not relieve the indemnifying party from: (1) any liability that it might have to any indemnified
party otherwise than under this Section 11; and (2) any liability that it may have to any indemnified party under the foregoing
provision of this Section 11 unless, and only to the extent that, such omission results in the forfeiture or material impairment
of substantive rights or defenses by the indemnifying party.
(ii) If
any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly
notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the
indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified
party for any legal or other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred
by the indemnified party in connection with the defense.
(iii) The
indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless: (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party; (2) the indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available
to the indemnifying party; (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between
the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party); or (4) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties.
(iv) It
is understood that the indemnifying party or parties will not, in connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction
at any one time for all such indemnified party or parties. All such fees, disbursements, and other charges will be reimbursed by the
indemnifying party promptly after the indemnifying party receives a written invoice relating to fees, disbursements and other charges
in reasonable detail.
(v) An indemnifying
party will not, in any event, be liable for any settlement of any action or claim effected without its written consent. No indemnifying
party will, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, or proceeding relating to the matters contemplated by this Section 11 (whether or
not any indemnified party is a party thereto), unless such settlement, compromise or consent: (i) includes an unconditional release
of each indemnified party from all liability arising out of such litigation, investigation, proceeding, or claim; and (ii) does
not include a statement as to or an admission of fault, culpability, or a failure to act by or on behalf of any indemnified party.
(d) Contribution.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs
of this Section 11 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or
the Agent, the Company and the Agent will contribute to the total losses, claims, liabilities, expenses, and damages (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding
or any claim asserted, but after deducting any contribution received by the Company from Persons other than the Agent, such as Persons
that control the Company within the meaning of the Securities Act, officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to which the Company and the Agent may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Agent, on the other hand. The relative
benefits received by the Company, on the one hand, and the Agent, on the other hand, will be deemed to be in the same proportion as the
total net proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation
received by the Agent (before deducting expenses) from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution will be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Agent, on the other hand, respecting the statements or omission that resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations respecting such offering.
Such relative fault will be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent
of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Agent agree that it would not be just and equitable if contributions pursuant to this Section 11(d) were to
be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage,
or action in respect thereof, referred to above in this Section 11(d) will be deemed to include, for the purpose of this Section
11(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any
such action or claim to the extent consistent with Section 11(c) hereof. Notwithstanding the foregoing provisions of this Section
11(d), the Agent will not be required to contribute any amount in excess of the commissions received by it under this Agreement and
no Person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 11(d), any
Person who controls a party to this Agreement within the meaning of the Securities Act, and any officers, directors, partners, employees
or agents of the Agent, will have the same rights to contribution as that party, and each officer and director of the Company who signed
the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which
a claim for contribution may be made under this Section 11(d), will notify any such party or parties from whom contribution may
be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 11(d) except to the extent that the failure to so notify such other party materially prejudiced
the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant to the
last sentence of Section 11(c) hereof, no party will be liable for contribution respecting any action or claim settled without
its written consent if such consent is required pursuant to Section 11(c) hereof.
12. Representations
and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 11 of this Agreement and
all representations and warranties of the Company herein or in certificates delivered pursuant hereto will survive, as of their respective
dates, regardless of: (a) any investigation made by or on behalf of the Agent, any controlling Persons, or the Company (or any of
their respective officers, directors, or controlling Persons); (b) delivery and acceptance of the Placement Shares and payment therefor;
or (c) any termination of this Agreement.
13. Termination.
(a) The
Agent may terminate this Agreement, by written notice to the Company, as hereinafter specified at any time: (i) if there has been,
since the time of execution of this Agreement or since the date as of which information is given in the Prospectus, any Material Adverse
Effect, or any development has occurred that is reasonably likely to have a Material Adverse Effect or in the reasonable judgment of
the Agent makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares;
(ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective
change in national or international political, financial or economic conditions, in each case the effect of which is such as to make
it, in the judgment of the Agent, impracticable or inadvisable to market the Placement Shares or to enforce contracts for the sale of
the Placement Shares; (iii) if trading in the Common Stock has been suspended or limited by the SEC or the Exchange, or if trading
generally on the Exchange has been suspended or limited, or minimum prices for trading have been fixed on the Exchange; (iv) if
a major disruption of securities settlements or clearance services in the United States will have occurred and be continuing; or (v) if
a banking moratorium has been declared by either U.S. Federal or New York authorities. Any such termination will be without liability
of any party to any other party except that the provisions of Section 9 (Expenses), Section 11 (Indemnification), Section
12 (Survival of Representations), Section 18 (Applicable Law; Waiver of Jury Trial), Section 19 (Consent to Jurisdiction),
and Section 20 (Use of Information) hereof will remain in full force and effect notwithstanding such termination. If the Agent
elects to terminate this Agreement as provided in this Section 13(a), the Agent will provide the required notice as specified
in Section 14 (Notices).
(b)
(i) The Company will have the right, by giving 10 days’ notice as hereinafter specified to terminate this Agreement in its
sole discretion at any time after the date of this Agreement.
(ii)
If any Agent decline any commercially reasonable placement notice pursuant to
Section 2(a) of this Agreement, then the Company will have the right to terminate this Agreement with respect to such Agent by giving
written notice of termination to such Agent. Any such termination will be effective
immediately upon a delivery of a termination notice by the Company to such Agent.
Any termination
pursuant to Section 13(b) will be without liability of any party to any other party except that the provisions of Section 9,
Section 11, Section 12, Section 18, Section 19, and Section 20 hereof will remain in full force and
effect notwithstanding such termination.
(c) The
Agent will have the right, by giving 10 days’ notice as hereinafter specified to terminate this Agreement in its discretion at
any time after the date of this Agreement. Any such termination will be without liability of any party to any other party except that
the provisions of Section 9, Section 11, Section 12, Section 18, Section 19, and Section 20
hereof will remain in full force and effect notwithstanding such termination.
(d) Unless
earlier terminated pursuant to this Section 13, this Agreement will automatically terminate upon the earlier to occur of: (i)
the two-year anniversary of the date hereof; or (ii) the issuance and sale of all of the Placement Shares through the Agent on the
terms and subject to the conditions set forth herein, except that, in either such case, the provisions of Section 9, Section
11, Section 12, Section 18, Section 19, and Section 20 hereof will remain in full force and effect notwithstanding
such termination.
(e) This
Agreement will remain in full force and effect unless terminated pursuant to Sections 13(a), (b), (c), or (d)
above or otherwise by mutual agreement of the parties. Upon termination of this Agreement, the Company will not have any liability
to any Agent for any discount, commission, or other compensation respecting any Placement Shares not otherwise sold by an Agent under
this Agreement.
(f) Any
termination of this Agreement will be effective on the date specified in such notice of termination; provided, however,
that such termination will not be effective until the close of business on the date of receipt of such notice by the Agent or the Company,
as the case may be; provided further, that the Agent shall suspend any ongoing Placement as soon as practicable following receipt of
the notice of termination (and in any event by the close of business on the date of receipt). If such termination will occur prior to
the Settlement Date for any sale of Placement Shares, such Placement Shares will settle in accordance with the provisions of this Agreement.
14. Notices.
(a) All
notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement
will be in writing, unless otherwise specified, and if sent to Ascendiant Capital Markets, LLC, will be delivered to:
Ascendiant
Capital Markets, LLC
Attention:
Managing Partner
110 Front
Street, Suite 300
Jupiter,
FL 33477
with a copy
to:
Clyde Snow
& Sessions, P.C.
Attention:
Brian Lebrecht
201 South
Main Street, Suite 2200
Salt Lake
City, UT 84111
and if to
the Company, will be delivered to:
Aclarion,
Inc.
8181
Arista Place, Suite 100
Broomfield,
CO 80021
Attn: Chief
Financial Officer
with a copy
to:
Carroll
Legal LLC
Attention:
James Carroll
1449
Wynkoop Street, Suite 507
Denver,
CO 80202
Notice to
any other Agent shall be sent to its address set forth in Annex 1 hereto.
(b) Each
such notice or other communication will be deemed given: (i) when delivered personally on or before 4:30 p.m., New York City
time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day; or (ii) on the next Business
Day after timely delivery to a nationally recognized overnight courier. For purposes of this Agreement, “Business Day”
will mean any day on which the Exchange and commercial banks in the City of New York are open for business.
(c) An electronic
communication (“Electronic Notice”) will be deemed written notice for purposes of this Section 14 if sent to
the electronic mail address set forth above or specified by the receiving party under separate cover. Electronic Notice will be deemed
received at the time the party sending Electronic Notice receives confirmation of receipt by the receiving party. Any party receiving
Electronic Notice may request and will be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”),
which will be sent to the requesting party within 10 days of receipt of the written request for Nonelectronic Notice.
(d) Each
party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address
for such purpose.
15. Successors
and Assigns. This Agreement will inure to the benefit of and be binding upon the Company and the Agent and their respective successors
and the affiliates, controlling persons, partners, members, officers, directors, employees, and agents referred to in Section 11
hereof. References to any of the parties contained in this Agreement will be deemed to include the successors and permitted assigns of
such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their
respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except
as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement without the prior written
consent of the other party.
16. Adjustments
for Stock Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement will be adjusted to
take into account any share consolidation, stock split, stock dividend, corporate domestication or similar event effected respecting
the Placement Shares.
17. Entire
Agreement; Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued
pursuant hereto), by and between the Company and the Agent constitutes the entire agreement of the parties respecting the subject matter
hereof and thereof and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties
hereto with regard to the subject matter hereof and thereof. Neither this Agreement nor any term hereof may be amended except pursuant
to a written instrument executed by the Company and the Agent. In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal, or unenforceable as written by a court of competent jurisdiction,
then such provision will be given full force and effect to the fullest possible extent that it is valid, legal, and enforceable, and
the remainder of the terms and provisions herein will be construed as if such invalid, illegal, or unenforceable term or provision was
not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof
will be in accordance with the intent of the parties as reflected in this Agreement.
18. APPLICABLE
LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. THE COMPANY HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
19. CONSENT
TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-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 WITH ANY TRANSACTION CONTEMPLATED
HEREBY, 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 BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE
OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. 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 (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED)
TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE WILL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN WILL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW.
20. Use
of Information. The Agent may not use or disclose any information gained in connection with this Agreement and the transactions contemplated
by this Agreement, including due diligence, for any purpose except in connection with entering into this Agreement and providing services
as distribution agent hereunder.
21. Counterparts.
This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will
constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile transmission.
22. Effect
of Headings. The section and exhibit headings herein are for convenience only and will not affect the construction hereof.
23. Permitted
Free Writing Prospectuses. The Company represents, warrants, and agrees that, unless it obtains the prior consent of the Agent, which
consent shall not be unreasonably withheld, conditioned or delayed, and each Agent represents, warrants and agrees that, unless it obtains
the prior consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed, it has not made and will
not make any offer relating to the Placement Shares that would constitute an Issuer Free Writing Prospectus, or that would otherwise
constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the SEC. Any such free writing
prospectus consented to by the Agent or by the Company, as the case may be, is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents and warrants that it has treated and agrees that it will treat each Permitted Free Writing
Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the
requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the SEC where required,
legending, and recordkeeping. For the purposes of clarity, the parties hereto agree that all free writing prospectuses, if any, listed
in Exhibit B hereto are Permitted Free Writing Prospectuses.
24. Absence
of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) Each
Agent is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each transaction
contemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company
or any of its respective affiliates, stockholders (or other equity holders), creditors or employees or any other party, on the one hand,
and such Agent, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether or not such Agent has advised or is advising the Company on other matters, and such Agent has no obligation to
the Company respecting the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement;
(b) it is
capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated
by this Agreement;
(c) the
Agent has not provided any legal, accounting, regulatory or tax advice respecting the transactions contemplated by this Agreement and
it has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;
(d) it is
aware that the Agent and its affiliates are engaged in a broad range of transactions that may involve interests that differ from those
of the Company and the Agent has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary,
advisory or agency relationship or otherwise; provided that the Agent hereby agrees not to engage in any such transaction that would
cause its interests to be in direct conflict with the best interests of the Company; and
(e) it waives,
to the fullest extent permitted by law, any claims it may have against any Agent for breach of fiduciary duty or alleged breach of fiduciary
duty in connection with the sale of Placement Shares under this Agreement and agrees that no Agent will have any liability (whether direct
or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any Person asserting a fiduciary duty
claim on its behalf or in right of it or the Company, employees or creditors of Company, other than in respect of such Agent’s
obligations under this Agreement and to keep information provided by the Company to the Agent’s and the Agents’ counsel confidential
to the extent not otherwise publicly available.
25. Definitions.
As used in this Agreement, the following terms have the respective meanings set forth below:
(a) “Applicable
Time” means: (i) each Representation Date; and (ii) the time of each sale of any Placement Shares pursuant to this
Agreement.
(b) “Company’s
knowledge,” “knowledge of the Company” and similar expressions mean the actual knowledge of an executive
officer of the Company as of the date to which the expression relates.
(c) “Agent”
means, as of any given time, an Agent that the Company has designated as sales agent to sell Placement Shares pursuant to the terms of
this Agreement, which shall initially be Ascendiant Capital Markets, LLC.
(d) “Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the
Placement Shares.
(e) “Rule
164,” “Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,”
“Rule 424(b),” “Rule 430A,” “Rule 430B,” and “Rule 433”
refer to such rules under the Securities Act Regulations.
(f) All
references in this Agreement to financial statements and schedules and other information that is “contained,” “included,”
or “stated” in the Registration Statement or the Prospectus (and all other references of like import) will be deemed to mean
and include all such financial statements and schedules and other information that is incorporated by reference in the Registration Statement
or the Prospectus, as the case may be.
(g) All
references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing will
be deemed to include the copy filed with the SEC pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus
(other than any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not required to be filed with the SEC) will be
deemed to include the copy thereof filed with the SEC pursuant to EDGAR; and all references in this Agreement to “supplements”
to the Prospectus will include any supplements, “wrappers,” or similar materials prepared in connection with any offering,
sale, or private placement of any Placement Shares by Ascendiant outside of the United States.
[Signature Page Follows]
If the foregoing correctly sets
forth the understanding between the Company and the Agent, please so indicate in the space provided below for that purpose, whereupon
this letter will constitute a binding agreement between the Company and the Agent.
Very truly yours,
| |
ACLARION, INC.
|
| |
|
| |
By: |
/s/ John Lorbiecki |
| |
Name: |
John Lorbiecki |
| |
Title: |
Chief Financial Officer |
ACCEPTED as of the date first-above
written:
| |
ASCENDIANT CAPITAL MARKETS, LLC
|
| |
|
| |
By: |
/s/ Bradley J. Wilhite |
| |
Name: |
Bradley J. Wilhite |
| |
Title: |
Managing Partner |
SCHEDULE 1
_________________________________
FORM OF PLACEMENT NOTICE
_________________________________
| To: | Ascendiant Capital Markets, LLC
Attention: Bradley J. Wilhite |
| Subject: | At-The-Market Issuance--Placement Notice |
Gentlemen:
Pursuant to the terms and
subject to the conditions contained in the At-The-Market Issuance Sales Agreement between Aclarion, Inc., a Delaware corporation (the
“Company”) and the Agent party thereto (“Ascendiant”), dated September 24, 2024, the Company hereby
requests that Ascendiant sell up to $____________ of the Company’s Common Stock, par value $0.00001 per share, at a minimum market
price of $_______ per share, during the period beginning [month, day, time] and ending [month, day, time], not to exceed $______ in a
single Trading Day.
SCHEDULE 2
__________________________
Compensation
__________________________
The Company will pay to the
Agent in cash, upon each sale of Placement Shares pursuant to this Agreement, an amount equal to up to three percent (3.0%) of the gross
proceeds from each sale of Placement Shares.
SCHEDULE 3
__________________________
Notice Parties
__________________________
The Company:
| Name |
Title |
Email |
| John Lorbiecki |
CFO |
jlorbiecki@aclarion.com |
| Brent Ness |
CEO |
bness@aclarion.com |
| Jeff Thramann |
Executive Chairman and Director |
jeff@thramann.com |
Ascendiant:
Bradley J. Wilhite bwilhite@ascendiant.com
SCHEDULE 4
__________________________
Subsidiaries
None.
__________________________
Exhibit A
Form of Representation Date
Certificate
This Officer’s Certificate
(this “Certificate”) is executed and delivered in connection with Section 7(l) of the At-The-Market Issuance Sales
Agreement (the “Agreement”), dated September 24, 2024, and entered into between Aclarion, Inc. (the “Company”)
and the Agent party thereto. All capitalized terms used but not defined herein shall have the meanings given to such terms in the Agreement
The undersigned, a duly appointed
and authorized officer of the Company, having made all necessary inquiries to establish the accuracy of the statements below and having
been authorized by the Company to execute this certificate, hereby certifies, in his capacity as such officer and not in his individual
capacity, as follows:
| 1. | As of the date of this Certificate, neither the Registration Statement nor the Prospectus contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading and no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements therein not untrue or misleading. |
| 2. | Each of the representations and warranties of the Company contained in Section 6 of the Agreement: |
| (a) | to the extent such representations and warranties are subject to qualifications and exceptions contained
therein relating to materiality or Material Adverse Effect, are true and correct on and as of the date hereof with the same force and
effect as if expressly made on and as of the date hereof, except for those representations and warranties that speak solely as of a specific
date, which were true and correct as of such date; and |
| (b) | to the extent such representations and warranties are not subject to any qualifications or exceptions,
are true and correct in all material respects as of the date hereof as if made on and as of the date hereof with the same force and effect
as if expressly made on and as of the date hereof, except for those representations and warranties that speak solely as of a specific
date, which were true and correct as of such date. |
| 3. | Each of the covenants required to be performed by the Company in the Agreement on or prior to the date
of the Agreement, this Representation Date, and each such other date as set forth in the Agreement, has been duly, timely and fully performed
in all material respects and each condition required to be complied with by the Company on or prior to the date of the Agreement, this
Representation Date, and each such other date as set forth in the Agreement has been duly, timely and fully complied with in all material
respects. |
| 4. | Subsequent to the date of the most recent financial statements included in or incorporated by reference
into the Prospectus, there has been no Material Adverse Effect. |
| 5. | No stop order suspending the effectiveness of the Registration Statement or of any part thereof has been
issued, and, to the Company’s knowledge, no proceedings for that purpose have been instituted or are pending or threatened by any
securities or other governmental authority (including, without limitation, the SEC). |
Carroll Legal LLC is entitled
to rely on this Certificate in connection with any opinion such firm is rendering pursuant to the Agreement.
The undersigned has executed
this Officer’s Certificate as of the date first written above.
| |
ACLARION, INC.
|
| |
|
| |
By: |
|
| |
Name: |
|
| |
Title: |
|
Exhibit 5.1
CARROLL LEGAL LLC
1449 Wynkoop Street
Suite 507
Denver, CO 80202
September 24, 2024
Aclarion, Inc.
1680 38th Street, Suite 130
Boulder, Colorado 80301
Re: At-The-Market Offering
pursuant to Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to
Aclarion, Inc., a Delaware corporation (the “Company”), in connection with the sale through Ascendiant Capital Markets, LLC
(the “Agent”), as the sales agent, from time to time by the Company of shares of the common stock of the Company, par value
$0.00001 per share (the “Common Stock”), having an aggregate offering price of up to $1,075,000 (the “Shares”),
to be issued pursuant to a registration statement on Form S-3 initially filed by the Company with the Securities and Exchange
Commission (the “Commission”) on September 9, 2024 (File No. 333-281999) (as amended, the “Registration Statement”),
the base prospectus, dated September 23, 2024, included in the Registration Statement (the “Base Prospectus”) and a prospectus
supplement, dated September 24, 2024, filed with the Commission pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the
“Act”) (the “Prospectus Supplement” and together with the Base Prospectus, the “Prospectus”), and
that certain At-The-Market Issuance Sales Agreement, dated as of September 24, 2024, by and between the Company and the Agent (the “Sales
Agreement”).
This opinion is being furnished
in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as
to any matter pertaining to the contents of the Registration Statement or the Prospectus, other than as expressly stated herein with respect
to the issue of the Shares.
You have requested our opinion
as to the matters set forth below in connection with the Registration Statement and the Sales Agreement. For purposes of rendering the
opinion set forth below, we have examined such documents and reviewed such questions of law as we have considered necessary and appropriate
for the purposes of our opinion including (i) the Registration Statement, including the exhibits filed therewith, (ii) the Base Prospectus,
(iii) the Prospectus Supplement, (iv) the Company’s amended and restated certificate of incorporation, as amended (the “Certificate
of Incorporation”), (v) the Company’s second amended and restated bylaws, as amended, (vi) the Sales Agreement, and (vii)
the corporate resolutions and other actions of the Company that authorize and provide for the filing of the Prospectus Supplement and
the issuance of the Shares pursuant thereto and the Sales Agreement, and we have made such other investigation as we have deemed appropriate.
We have not independently established any of the facts so relied on.
For purposes of this opinion
letter, we have assumed the accuracy and completeness of each document submitted to us, the genuineness of all signatures on original
documents, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted
to us as facsimile, electronic, certified, conformed or photostatic copies thereof, and the due execution and delivery of all documents
where due execution and delivery are prerequisites to the effectiveness thereof. We have further assumed the legal capacity of natural
persons, that persons identified to us as officers of the Company are actually serving in such capacity, that the representations of officers
and employees of the Company are correct as to questions of fact, that the board of directors will have taken all action necessary to
set the issuance price of the Shares to be offered and sold and that each party to the documents we have examined or relied on (other
than the Company) has the power, corporate or other, to enter into and perform all obligations thereunder and also have assumed the due
authorization by all requisite action, corporate or other, the execution and delivery by such parties of such documents, and the validity
and binding effect thereof on such parties. We have not independently verified any of these assumptions.
The opinions expressed in
this opinion letter are limited to the General Corporation Law of the State of Delaware (the “DGCL”) and the applicable statutory
provisions of the Delaware Constitution and the reported judicial decisions interpreting such statute and provisions and, solely in connection
with the opinion given below. We are not opining on, and we assume no responsibility for, the applicability to or effect on any of the
matters covered herein of (a) any other laws; (b) the laws of any other jurisdiction; or (c) the laws of any county, municipality or other
political subdivision or local governmental agency or authority.
Based on the foregoing and
in reliance thereon, and subject to the assumptions, qualifications, limitations and exceptions set forth below, we are of the opinion
that:
| |
1. |
The Shares have been duly authorized by all requisite corporate action on the part of the Company, and when the Shares are issued and paid for as described in the Prospectus in accordance with the terms of the Sales Agreement, the Shares will be validly issued, fully paid and non-assessable. |
In rendering the foregoing
opinion, we have assumed that (i) the Company will comply with all applicable notice requirements regarding uncertificated shares provided
in the DGCL and (ii) upon the issue of any of the Shares, the total number of shares of Common Stock issued and outstanding will not exceed
the total number of shares of Common Stock that the Company is then authorized to issue under its Certificate of Incorporation.
We hereby consent to the filing
of this opinion with the Commission as Exhibit 5.1 to the Company’s Current Report on Form 8-K being filed on the date hereof and
incorporated by reference in the Prospectus. We also hereby consent to the reference to our firm under the heading “Legal Matters”
in the Prospectus and in each case in any amendment or supplement thereto. In giving this consent, we do not thereby admit that we are
within the category of persons whose consent is required under Section 7 and Section 11 of the Act, or the rules and regulations of the
Commission promulgated thereunder, nor do we admit that we are experts with respect to any part of the Prospectus within the meaning of
the term “expert” as used in the Act or the related rules and regulations of the Commission promulgated thereunder.
Yours truly,
CARROLL LEGAL LLC
By: /s/ James H. Carroll
Name: James H. Carroll
Title: Managing Member
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| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
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| X |
- DefinitionCode for the postal or zip code
| Name: |
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| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
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| X |
- DefinitionName of the state or province.
| Name: |
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| Namespace Prefix: |
dei_ |
| Data Type: |
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| Balance Type: |
na |
| Period Type: |
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| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
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| Namespace Prefix: |
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| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
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| Namespace Prefix: |
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| Data Type: |
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| Balance Type: |
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| Period Type: |
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| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
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| Balance Type: |
na |
| Period Type: |
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| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
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| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
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|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
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| Namespace Prefix: |
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| Data Type: |
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| Balance Type: |
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| Period Type: |
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| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
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| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
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| X |
- DefinitionLocal phone number for entity.
| Name: |
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| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
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| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
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| Namespace Prefix: |
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- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
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| Namespace Prefix: |
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| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
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| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
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| Balance Type: |
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| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
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- DefinitionTrading symbol of an instrument as listed on an exchange.
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| Namespace Prefix: |
dei_ |
| Data Type: |
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| Balance Type: |
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| Period Type: |
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| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
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| X |
- Details
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- Details
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| Namespace Prefix: |
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| Data Type: |
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| Balance Type: |
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