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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of
the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): December
16, 2024 (December 12, 2024)
PALISADE
BIO, INC.
(Exact
name of Registrant as Specified in Its Charter)
| Delaware |
|
001-33672 |
|
52-2007292 |
(State
or Other Jurisdiction
of
Incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
7750
El Camino Real
Suite
2A |
|
|
| Carlsbad,
California |
|
92009 |
| (Address
of Principal Executive Offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (858) 704-4900
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
| ☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common
Stock, par value $0.01 per share |
|
PALI |
|
Nasdaq
Capital Market |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check 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 |
Underwriting
Agreement
On
December 12, 2024, Palisade Bio, Inc., a Delaware corporation (the “Company”), entered into an Underwriting Agreement (the
“Underwriting Agreement”) with Ladenburg Thalmann & Co. Inc. (the “Underwriter”), pursuant to which the Company
agreed to issue and sell, in an underwritten public offering by the Company (the “Public Offering”), (a) 158,000 Class A
Units at a public offering price of $1.525 per Class A Unit (the “Class A Units”), with each Class A Unit consisting of (i)
one (1) share of the Company’s common stock, par value $0.01 per share (the “Common Stock”) and (ii) one (1) warrant
to purchase one (1) share of Common Stock (a “Common Warrant”) at an exercise price per share of $1.40 and (b) 3,120,688
Class B Units at a public offering price of $1.5249 per Class B Unit (the “Class B Units”, and collectively with the Class
A Units, the “Units”), with each Class B Unit consisting of (i) one (1) prefunded warrant to purchase one (1) share of Common
Stock (a “Prefunded Warrant”) at an exercise price per share of $0.0001 and (ii) one (1) Common Warrant. In addition,
pursuant to the Underwriting Agreement, the Company granted the Underwriter a 45-day option (the “Overallotment Option”)
to purchase up to 491,803 additional shares of Common Stock and / or Common Warrants.
The Prefunded Warrants and Common
Warrants are exercisable at issuance. The Prefunded Warrants have a perpetual term and the Common Warrants will expire on the five-year
anniversary of the date of issuance. The exercise price and number of shares of Common Stock issuable upon exercise of the Prefunded
Warrants or Common Warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar
events affecting the Common Stock and the exercise price. Subject to limited exceptions, a holder may not exercise any portion of its
Prefunded Warrants or Common Warrants to the extent that the holder would beneficially own more than 4.99% (or, at the election of the
holder prior to the date of issuance, 9.99%) of the Company’s outstanding Common Stock after exercise.
The Public Offering closed on December
13, 2024. The net proceeds to the Company, after deducting the underwriting discounts and commissions and estimated offering expenses
payable by the Company, were approximately $4.10 million. The Company intends to use the net proceeds from the Public Offering to fund
the Phase 1 clinical trial of PALI-2108, pre-clinical studies, research and development, and working capital.
The
Units were offered by the Company pursuant to the registration statement on Form S-1 (File No. 333-282883), as amended, which was initially
filed with the Securities and Exchange Commission (the “Commission”) on October 30, 2024 and declared effective by the Commission
on December 12, 2024, including a prospectus contained therein (the “Registration Statement”). There is no trading
market available for the Prefunded Warrants or Common Warrants on any securities exchange or nationally recognized trading system. The
Company does not intend to list the Prefunded Warrants or Common Warrants on any securities exchange or nationally recognized trading
system.
The
Underwriting Agreement contains representations, warranties and covenants made by the Company that are customary for transactions of
this type. Under the terms of the Underwriting Agreement, the Company has agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended. In addition, pursuant to the terms of the Underwriting Agreement,
the Company and its executive officers and directors have entered into lock-up agreements providing that the Company and each of these
persons may not, without the prior written approval of the Underwriter, subject to limited exceptions, offer, sell, transfer or otherwise
dispose of the Company’s securities for a period of 90 days following the date of the Underwriting Agreement, and a lock-up
period of 180 days from the closing of the Offering with respect to entering or effecting any issuance of the Company’s securities
involving a variable rate transaction, as such term is defined in the Underwriting Agreement.
Warrant
Agency Agreement
On
December 12, 2024, the Company entered into a warrant agency agreement with the Company’s transfer agent, Equiniti Trust Company,
LLC, which will also act as the warrant agent for the Company, setting forth the terms and conditions of the Prefunded Warrants and Common
Warrants sold in the Public Offering (the “Warrant Agency Agreement”).
Warrant
Amendment Agreement
On
December 12, 2024, the Company entered into a warrant amendment agreement (the “Warrant Amendment Agreement”) whereby the
Company, contemporaneously with the closing of the Public Offering, reduced the exercise price of 1,040,217 outstanding common stock
warrants (the “Repriced Warrants”) held by an investor that participated in the Public Offering which expire between July
31, 2027 and May 6, 2031. The Repriced Warrants had their exercise price reduced to $1.40 per share. Other than the reduction
in exercise price, the terms of the Repriced Warrants remain the same and unchanged. The Company additionally agreed to file prospectus
supplements to the applicable registration statements to reflect the reduction in exercise price to the Repriced Warrants within two
(2) business days of the closing of the Public Offering.
The
Repriced Warrants include the following:
| # of Warrants | | |
Issuance Date | |
Expiration Date | |
New Exercise Price | |
| | 3,000 | | |
1/31/2022 | |
7/31/2027 | |
$ | 1.40 | |
| | 114,354 | | |
2/1/2024 | |
2/1/2029 | |
$ | 1.40 | |
| | 922,863 | | |
5/6/2024 | |
5/6/2031 | |
$ | 1.40 | |
The
foregoing summaries of the Underwriting Agreement, the form of Prefunded Warrant, the form of Common Warrant, the Warrant Letter Agreement,
and the Warrant Agency Agreement do not purport to be complete and are subject to, and qualified in their entirety by, such documents
attached as Exhibit 1.01, 4.01, 4.02, 10.01, and 4.03 respectively, to this Current Report on Form 8-K, which are incorporated herein
by reference.
| Item
3.02 |
Unregistered
Sales of Equity Securities |
The
disclosure set forth in Item 1.01 of this Current Report on Form 8-K related to the Warrant Amendment Agreement and Repriced Warrants
is, to the extent required by this Item 3.02, incorporated herein by reference.
As of the close of business on December
13, 2024, the Company has 2,765,980 shares of common stock outstanding following the closing of the Public Offering and exercise of certain
of the Prefunded Warrants issued in the Public Offering.
On
December 12, 2024, the Company issued a press release announcing that it had priced the Public Offering, a copy of which is attached
as Exhibit 99.01 to this Current Report on Form 8-K and is incorporated herein by reference.
On
December 13, 2024, the Company issued a press release announcing the closing of the Public Offering, a copy of which is attached as Exhibit
99.02 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 9.01 |
Financial Statement and Exhibits. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
| Date: |
December
16, 2024 |
Palisade
Bio, Inc. |
| |
|
|
|
| |
|
By: |
/s/
J.D. Finley |
| |
|
|
J.D.
Finley |
| |
|
|
Chief
Executive Officer |
Exhibit
1.01
158,000
SHARES of Common Stock,
3,120,688
PRE-FUNDED Warrants
TO
PURCHASE UP TO 3,120,688 SHARES OF COMMON STOCK
and
3,278,688
COMMON Warrants
TO
PURCHASE UP TO 3,278,688 SHARES OF COMMON STOCK
of
PALISADE
BIO, INC.
UNDERWRITING
AGREEMENT
December
12, 2024
Ladenburg
Thalmann & Co. Inc.
As
the Representative of the
Several
underwriters, if any, named in Schedule I hereto
640
Fifth Avenue, 4th Floor
New
York, New York 10019
Ladies
and Gentlemen:
The
undersigned, Palisade Bio, Inc., Delaware corporation (collectively with its subsidiaries, including, without limitation, all entities
disclosed or described in the Registration Statement as being subsidiaries of Palisade Bio, Inc., the “Company”),
hereby confirms its agreement (this “Agreement”) with the several underwriters, if any (such underwriters, including
the Representative (as defined below), the “Underwriters” and each an “Underwriter”) named in Schedule
I hereto for which Ladenburg Thalmann & Co. Inc. is acting as representative to the several Underwriters (the “Representative”
and if there are no Underwriters other than the Representative, references to multiple Underwriters shall be disregarded and the term
Representative as used herein shall have the same meaning as Underwriter) on the terms and conditions set forth herein.
It
is understood that the several Underwriters are to make a public offering of the Public Securities as soon as the Representative deems
it advisable to do so. The Public Securities are to be initially offered to the public at the public offering price set forth in the
Prospectus. The Representative may from time to time thereafter change the public offering price and other selling terms.
It
is further understood that you will act as the Representative for the Underwriters in the offering and sale of the Closing Securities
and, if any, the Option Securities in accordance with this Agreement.
ARTICLE
I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:
“Action”
shall have the meaning ascribed to such term in Section 3.1(k).
“Affiliate”
means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with such Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
“Closing”
means the closing of the purchase and sale of the Closing Securities pursuant to Section 2.1.
“Closing
Date” means the hour and the date on the Trading Day on which all conditions precedent to (i) the Underwriters’ obligations
to pay the Closing Purchase Price and (ii) the Company’s obligations to deliver the Closing Securities, in each case, have been
satisfied or waived, but in no event later than 10:00 a.m. (New York City time) on the first (1st) Trading Day following the date hereof
(or the second (2nd) Trading Day following the date hereof if this Agreement is signed on a day that is not a Trading Day
or after 4:00 p.m. (New York City time) and before midnight (New York City time) on a Trading Day) or at such earlier time as shall be
agreed upon by the Representative and the Company.
“Closing
Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b), which aggregate purchase price shall be net
of the underwriting discounts and commissions.
“Closing
Securities” shall have the meaning ascribed to such term in Section 2.1(a)(iii).
“Closing
Shares” shall have the meaning ascribed to such term in Section 2.1(a)(i).
“Closing
Warrants” shall have the meaning ascribed to such term in Section 2.1(a)(iii).
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Common
Warrants” means, collectively, the Common Stock purchase warrants delivered to the Underwriters in accordance with Section
2.1(a)(iii) and Section 2.2, which Common Warrants shall be exercisable immediately upon issuance and have a term of exercise equal to
five (5) years, in the form of Exhibit E attached hereto.
“Company
Auditor” means Baker Tilly US, LLP, with offices located at 3570 Carmel Mountain Road,
Suite 400, San Diego, California 92130.
“Company
Counsel” means Silvestre Law Group, P.C., with offices located at 2629 Townsgate Rd., Suite 215, Westlake Village, CA 91362.
“Effective
Date” shall have the meaning ascribed to such term in Section 3.1(f).
“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Execution
Date” shall mean the date on which the parties execute and enter into this Agreement.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, directors or consultants of the
Company pursuant to any stock or option plan duly adopted for such purpose by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to
the Company; provided, however, the shares issued to consultants are issued as “restricted securities” (as defined in Rule
144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during
the prohibition period in Section 4.20(a) herein and shall not exceed 30,286 shares, (b) common stock purchase warrants and the warrant
shares issuable upon exercise thereof issued to the Representative as compensation for services rendered to Company in connection with
the Offering, (c) securities upon the exercise or exchange of or conversion of any Warrants issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided
that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, other than the reduction in the exercise price of 1,040,217 outstanding warrants to $1.40 per warrant share, exchange
price or conversion price of such securities or to extend the term of such securities, and (d) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued
as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of
any registration statement in connection therewith during the prohibition period in Section 4.20(a) herein, and provided that any such
issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating
company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is investing in securities.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“FINRA”
means the Financial Industry Regulatory Authority.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(i).
“Indebtedness”
means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the
ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others,
whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c)
the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up
Agreements” means the lock-up agreements that are delivered on the date hereof by each of the Company’s officers and
directors, in the form of Exhibit A attached hereto.
“Material
Adverse Effect” means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole or (iii) a material adverse effect on the Company’s ability to perform in any material
respect on a timely basis its obligations under any Transaction Document.
“Offering”
shall have the meaning ascribed to such term in Section 2.1(c).
“Option”
shall have the meaning ascribed to such term in Section 2.2.
“Option
Closing Date” shall have the meaning ascribed to such term in Section 2.2(c).
“Option
Closing Purchase Price” shall have the meaning ascribed to such term in Section 2.2(b), which aggregate purchase price shall
be net of the underwriting discounts and commissions.
“Option
Securities” shall have the meaning ascribed to such term in Section 2.2(a).
“Option
Shares” shall have the meaning ascribed to such term in Section 2.2(a).
“Option
Warrants” shall have the meaning ascribed to such term in Section 2.2(a).
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preliminary
Prospectus” means any preliminary prospectus relating to the Public Securities included in the Registration Statement or filed
with the Commission pursuant to Rule 424(b).
“Pre-Funded
Warrants” means, collectively, the pre-funded Common Stock purchase warrants delivered to the Underwriters in accordance with
Section 2.1(a)(ii), which Pre-Funded Warrants shall be exercisable immediately and shall be exercisable until exercised in full, in the
form of Exhibit D attached hereto.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Prospectus”
means the final prospectus filed for the Registration Statement.
“Prospectus
Supplement” means, if any, any supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed
with the Commission.
“Public
Securities” means, collectively, the Closing Securities, the Warrant Shares and, if any, the Option Securities.
“Registration
Statement” means, collectively, the various parts of the registration statement prepared by the Company on Form S-1 (File No.
333-282883) with respect to the Public Securities, each as amended as of the date hereof, including the Preliminary Prospectus, the Prospectus
and any Prospectus Supplement, and all exhibits filed with or incorporated by reference into such registration statement, and includes
any Rule 462(b) Registration Statement.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Rule
462(b) Registration Statement” means any registration statement prepared by the Company registering additional Public Securities,
which was filed with the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated
by the Commission pursuant to the Securities Act.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(i).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
“Shares”
means, collectively, the shares of Common Stock delivered to the Underwriters in accordance with Section 2.1(a)(i) and Section 2.2(a).
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York
Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Warrants, the Warrant Agency Agreement, the Lock-Up Agreements, and any other documents
or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Equiniti Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 1110 Centre
Pointe Curve, Suite 101, Mendota Heights, MN 55120-4101, and any successor transfer agent of the Company.
“Warrant
Agency Agreement” means the warrant agency agreement dated on or about the Closing Date, among the Company and the Transfer
Agent in the form of Exhibit F attached hereto.
“Warrant
Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
“Warrants”
means, collectively, the Pre-Funded Warrants and Common Warrants.
ARTICLE
II.
PURCHASE
AND SALE
2.1 Closing.
(a) Upon
the terms and subject to the conditions set forth herein, the Company agrees to sell (i) in the aggregate 158,000 shares of Common Stock,
(ii) Pre-Funded Warrants exercisable for an aggregate of 3,120,688 shares of Common Stock and (iii) Common Warrants exercisable for an
aggregate of 3,278,688 shares of Common Stock and each Underwriter agrees to purchase, severally and not jointly, at the Closing, the
following securities of the Company:
(i) the
number of shares of Common Stock (the “Closing Shares”) set forth opposite the name of such Underwriter on Schedule
I hereof; and
(ii) Pre-Funded
Warrants to purchase up to the number of shares of Common Stock set forth opposite the name of such Underwriter on Schedule I
hereof (the “Pre-Funded Warrants”) which Pre-Funded Warrants shall have an exercise price of $0.0001, subject to adjustment
as provided therein; and
(iii) Common
Warrants to purchase up to 100% of the sum of the number of Closing Shares and Pre-Funded Warrants, if any, set forth opposite the name
of such Underwriter on Schedule I hereof (the “Closing Warrants” and, collectively with the Closing Shares
and Pre-Funded Warrants, the “Closing Securities”), which Common Warrants shall have an exercise price of $1.40, subject
to adjustment as provided therein.
(b) The
aggregate purchase price for the Closing Securities shall equal the amount set forth opposite the name of such Underwriter on Schedule
I hereto (the “Closing Purchase Price”). The combined purchase price for one Share and one Common Warrant shall
be $1.38775, which shall be allocated as $1.37865 per Share (the “Share Purchase Price”) and $0.0091 per Common Warrant
(the “Warrant Purchase Price”). The combined purchase price for one Pre-Funded Warrant and one Common Warrant shall
be $1.387659, which shall be allocated as $1.378559 per Pre-Funded Warrant and $0.0091 per Common Warrant.
(c)
On the Closing Date, each Underwriter shall deliver or cause to be delivered to the Company, via wire transfer, immediately available
funds equal to such Underwriter’s Closing Purchase Price and the Company shall deliver to, or as directed by, such Underwriter
its respective Closing Securities and the Company shall deliver the other items required pursuant to Section 2.3 deliverable at the Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4, the Closing shall occur at the offices of EGS or
such other location as the Company and Representative shall mutually agree. The Public Securities are to be offered initially to the
public at the offering price set forth on the cover page of the Prospectus (the “Offering”).
(d) The
Company acknowledges and agrees that, with respect to any Notice(s) of Exercise (as defined in the Pre-Funded Warrants) delivered by
a Holder (as defined in the Pre-Funded Warrants) on or prior to 12:00 p.m. (New York City time) on the Trading Day immediately prior
to the Closing Date, which Notice(s) of Exercise may be delivered at any time after the time of execution of this Agreement, the Company
shall deliver the Warrant Shares subject to such notice(s) to the Holder by 4:00 p.m. (New York City time) on the Closing Date and the
Closing Date shall be the Warrant Share Delivery Date (as defined in the Pre-Funded Warrants). The Company acknowledges and agrees that
the Holders are third-party beneficiaries of this covenant of the Company.
2.2 Option
to Purchase Additional Securities.
(a) For
the purposes of covering any over-allotments in connection with the distribution and sale of the Closing Securities, the Representative
is hereby granted an option (the “Option”) to purchase, in the aggregate, up to 491,803 shares of Common Stock (the
“Option Shares”) and/or Common Warrants to purchase up to 491,803 shares of Common Stock (the “Option Warrants”
and, collectively with the Option Shares, the “Option Securities”) which may be purchased in any combination of Option
Shares and/or Option Warrants at the Share Purchase Price and/or Warrant Purchase Price, respectively.
(b) In
connection with an exercise of the Option, (a) the purchase price to be paid for the Option Shares is equal to the product of the Share
Purchase Price multiplied by the number of Option Shares to be purchased and (b) the purchase price to be paid for the Option Warrants
is equal to the product of the Warrant Purchase Price multiplied by the number of Option Warrants to be purchased (the aggregate purchase
price to be paid on an Option Closing Date, the “Option Closing Purchase Price”).
(c) The
Option granted pursuant to this Section 2.2 may be exercised by the Representative as to all (at any time) or any part (from time to
time) of the Option Securities within forty-five (45) days after the Execution Date. An Underwriter will not be under any obligation
to purchase any Option Securities prior to the exercise of the Option by the Representative. The Option granted hereby may be exercised
by the giving of oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or electronic
transmission setting forth the number of Option Shares and/or Option Warrants to be purchased and the date and time for delivery of and
payment for the Option Securities (each, an “Option Closing Date”), which will not be later than one (1) full Business
Day after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of
EGS or at such other place (including remotely by other electronic transmission) as shall be agreed upon by the Company and the Representative.
If such delivery and payment for the Option Securities does not occur on the Closing Date, each Option Closing Date will be as set forth
in the notice. Upon exercise of the Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms
and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Option Shares and/or Option Warrants
specified in such notice. The Representative may cancel the Option at any time prior to the expiration of the Option by written notice
to the Company.
2.3 Deliveries.
The Company shall deliver or cause to be delivered to each Underwriter (if applicable) the following:
(i) At
the Closing Date, the Closing Shares and, as to each Option Closing Date, if any, the applicable Option Shares, which shares shall be
delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;
(ii) At
the Closing Date, the Pre-Funded Warrants via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts
of the several Underwriters;
(iii) At
the Closing Date, the Closing Warrants and, as to each Option Closing Date, if any, the applicable Option Warrants via The Depository
Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;
(iv) At
the Closing Date, and each Option Closing Date, if any, to the Representative only, a warrant to purchase up to a number of shares of
Common Stock equal to 6.0% of the Closing Shares, Pre-Funded Warrants and Option Shares issued on such Closing Date and Option Closing
Date, as applicable, for the account of the Representative (or its designees), which warrant shall have an exercise price of $2.51625,
subject to adjustment therein, and registered in the name of the Representative, otherwise on substantially the same terms as the Common
Warrants;
(v) At
the Closing Date, the Warrant Agency Agreement duly executed by the parties thereto;
(vi) At
the Closing Date, a legal opinion of Company Counsel addressed to the Underwriters, including, without limitation, a negative assurance
letter, substantially in form and substance satisfactory to the Representative and as to each Option Closing Date, if any, a bring-down
opinion, including, without limitation, a negative assurance letter from Company Counsel in form and substance reasonably satisfactory
to the Representative;
(vii) Contemporaneously
herewith, a cold comfort letter, addressed to the Underwriters and in form and substance satisfactory in all respects to the Representative
from the Company Auditor dated, respectively, as of the date of this Agreement and a bring-down letter dated as of the Closing Date and
each Option Closing Date, if any;
(viii) On
the Closing Date and on each Option Closing Date, the duly executed and delivered Officers’ Certificate, substantially in the form
required by Exhibit B attached hereto;
(ix) On
the Closing Date and on each Option Closing Date, the duly executed and delivered Secretary’s Certificate, substantially in the
form required by Exhibit C attached hereto; and
(x) Contemporaneously
herewith, the duly executed and delivered Lock-Up Agreements.
2.4 Closing
Conditions. The respective obligations of each Underwriter hereunder in connection with the Closing and each Option Closing Date
are subject to the following conditions being met:
(i) the
accuracy in all material respects when made and on the date in question (other than representations and warranties of the Company already
qualified by materiality, which shall be true and correct in all respects) of the representations and warranties of the Company contained
herein (unless as of a specific date therein);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the date in question shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.3 of this Agreement;
(iv) the
Registration Statement shall be effective on the date of this Agreement and at each of the Closing Date and each Option Closing Date,
if any, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose
shall have been instituted or shall be pending or to the knowledge of the Company contemplated by the Commission and any request on the
part of the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative;
(v) by
the Execution Date, if required by FINRA, the Underwriters shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Underwriters as described in the Registration Statement;
(vi) the
Closing Shares, the Option Shares and the Warrant Shares have been approved for listing on the Trading Market; and
(vii) prior
to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no material adverse change or development
involving a prospective material adverse change in the condition or prospects or the business activities, financial or otherwise, of
the Company from the latest dates as of which such condition is set forth in the SEC Reports, Registration Statement, Preliminary Prospectus
and Prospectus; (ii) no action suit or proceeding, at law or in equity, shall have been pending or to the knowledge of the Company threatened
against the Company or any Affiliate of the Company before or by any court or federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial
condition or income of the Company, except as set forth in the SEC Reports, Registration Statement and Prospectus; (iii) no stop order
shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or to the Company’s knowledge
threatened by the Commission; and (iv) the Registration Statement, Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the rules
and regulations thereunder and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations
thereunder, and neither the Registration Statement, Preliminary Prospectus nor the Prospectus nor any amendment or supplement thereto
shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not misleading.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Execution Date, as of the Closing
Date and as of each Option Closing Date, if any, as follows:
(a) Subsidiaries.
All of the direct and indirect Subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights
to subscribe for or purchase securities. If the Company has no Subsidiaries, all other references to the Subsidiaries or any of them
in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority
to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary
is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational
or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected
to result in a Material Adverse Effect and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing
or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents to which the Company is a party and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part
of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection
herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which
the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which
it is a party, the issuance and sale of the Public Securities and the consummation by it of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or
articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filing with
the Commission of the Prospectus and (ii) such filings as are required to be made under applicable state securities laws (collectively,
the “Required Approvals”).
(f) Registration
Statement. The Company has filed with the Commission the Registration Statement, including any related Prospectus or Prospectuses,
for the registration of the Public Securities under the Securities Act, which Registration Statement has been prepared by the Company
in all material respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under
the Securities Act. The Registration Statement has been declared effective by the Commission on December 12, 2024 (the “Effective
Date”). The Company has advised the Representative of all further information (financial and other) with respect to the Company
required to be set forth therein in the Registration Statement, Preliminary Prospectus and Prospectus. Any reference in this Agreement
to the Registration Statement, the Prospectus or any Prospectus Supplement shall be deemed to refer to and include the documents incorporated
by reference therein which were filed under the Exchange Act, on or before the date of this Agreement, or the issue date of the Preliminary
Prospectus or the Prospectus, as the case may be; and any reference in this Agreement to the terms “amend,” “amendment”
or “supplement” with respect to the Registration Statement, the Preliminary Prospectus, the Prospectus or any Prospectus
Supplement shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement,
or the issue date of the Preliminary Prospectus, the Prospectus or any Prospectus Supplement, as the case may be, deemed to be incorporated
therein by reference. All references in this Agreement to financial statements and schedules and other information which is “contained,”
“included,” “described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Prospectus or any Prospectus Supplement (and all other references of like import) shall be deemed to mean and include
all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration
Statement, the Prospectus or any Prospectus Supplement, as the case may be. No stop order suspending the effectiveness of the Registration
Statement or the use of the Preliminary Prospectus, the Prospectus or any Prospectus Supplement has been issued, and no proceeding for
any such purpose is pending or has been initiated or, to the Company’s knowledge, is threatened by the Commission. For purposes
of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act. The Company
will not, without the prior consent of the Representative, prepare, use or refer to, any free writing prospectus.
(g) Issuance
of Securities. The Public Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Warrant
Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear
of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of
Common Stock issuable pursuant to this Agreement and the Warrants. The holder of the Public Securities will not be subject to personal
liability by reason of being such holders. The Public Securities are not and will not be subject to the preemptive rights of any holders
of any security of the Company or similar contractual rights granted by the Company. All corporate action required to be taken for the
authorization, issuance and sale of the Public Securities has been duly and validly taken. The Public Securities conform in all material
respects to all statements with respect thereto contained in the Registration Statement.
(h) Capitalization.
The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s
stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans
and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic
report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Public
Securities, or as set forth in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares
of Common Stock or Common Stock Equivalents or the capital stock of any Subsidiary. The issuance and sale of the Public Securities will
not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Underwriters).
Except as set forth in the SEC Reports, there are no outstanding securities or instruments of the Company or any Subsidiary with any
provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities
by the Company or any Subsidiary. Except as set forth in the SEC Reports, there are no outstanding securities or instruments of the Company
or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does
not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the
outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities. The authorized shares of the Company conform in all material respects
to all statements relating thereto contained in the Registration Statement and the Prospectus. The offers and sales of the Company’s
securities were at all relevant times either registered under the Securities Act and the applicable state securities or Blue Sky laws
or, based in part on the representations and warranties of the purchasers, exempt from such registration requirements. No further approval
or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Public Securities.
There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock
to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
(i) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Preliminary Prospectus,
the Prospectus and any Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments. The agreements and documents described in the Registration Statement, the Preliminary Prospectus, the Prospectus,
any Prospectus Supplement and the SEC Reports conform to the descriptions thereof contained therein and there are no agreements or other
documents required by the Securities Act and the rules and regulations thereunder to be described in the Registration Statement, the
Preliminary Prospectus, the Prospectus, any Prospectus Supplement or the SEC Reports or to be filed with the Commission as exhibits to
the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described)
to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement,
the Preliminary Prospectus, the Prospectus, any Prospectus Supplement or the SEC Reports, or (ii) is material to the Company’s
business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable
against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally,
(y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and
(z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses
and to the discretion of the court before which any proceeding therefore may be brought. None of such agreements or instruments has been
assigned by the Company, and neither the Company nor, to the best of the Company’s knowledge, any other party is in default thereunder
and, to the best of the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both,
would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material provisions
of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses,
including, without limitation, those relating to environmental laws and regulations.
(j) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting,
(iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed
or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock option plans and (vi) no current officer or director of
the Company has resigned from any position with the Company. The Company does not have pending before the Commission any request for
confidential treatment of information. Except for the issuance of the Public Securities contemplated by this Agreement, no event, liability,
fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the
Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would
be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that
has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made. Unless otherwise disclosed
in an SEC Report filed prior to the date hereof, the Company has not: (i) issued any securities or incurred any liability or obligation,
direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its
capital stock.
(k) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Public
Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor to the Company’s knowledge, any current director or officer thereof, is or has been
the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach
of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by
the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop
order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.
(l) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary,
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(m) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority
or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (each, a “Material
Permit”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification
of any Material Permit. The disclosures in the Registration Statement concerning the effects of Federal, State, local and all foreign
regulation on the Company’s business as currently contemplated are correct in all material respects.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights
to lease or otherwise use, all real property and all personal property that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP, and the payment of
which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
(p) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to
do so could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither
the Company nor any Subsidiary has received a written or oral notice that any of, the Intellectual Property Rights has expired, terminated
or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither
the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports,
a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights
of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement
by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not
limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in cost.
(r) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from,
providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from, any officer, director or
such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other
employee benefits, including stock option agreements under any stock option plan of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance in all material respects with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as set forth in
the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to
any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have
evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period
covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation
Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the
Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial
reporting of the Company and its Subsidiaries.
(t) Certain
Fees. Except as set forth in the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company,
any Subsidiary or Affiliate of the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the Transaction Documents. To the Company’s knowledge, there
are no other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its stockholders
that may affect the Underwriters’ compensation, as determined by FINRA. Except as previously disclosed to the Representative, the
Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee,
consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who
raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation
or association with any FINRA member, within the twelve months prior to the Execution Date. None of the net proceeds of the Offering
will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.
(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Public Securities will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(v) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any
securities of the Company or any Subsidiary.
(w) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken
no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under
the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except
as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market
on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer
through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees of
the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(x) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state
of incorporation that is or could become applicable as a result of the Underwriters and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents.
(y) Disclosure;
10b-5. The Registration Statement (and any further documents to be filed with the Commission) contains all exhibits and schedules
as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, if any, at the time it
became effective, complied in all material respects with the Securities Act and the Exchange Act and the applicable rules and regulations
under the Securities Act and did not and, as amended or supplemented, if applicable, will not, contain any 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 Preliminary
Prospectus, Prospectus and any Prospectus Supplement, each as of its respective date, comply in all material respects with the Securities
Act and the Exchange Act and the applicable rules and regulations. Each of the Preliminary Prospectus, Prospectus and any Prospectus
Supplement, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading. The SEC Reports, when they were filed with the Commission, conformed in all material respects to the requirements
of the Exchange Act and the applicable rules and regulations, and none of such documents, when they were filed with the Commission, contained
any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to
the SEC Reports incorporated by reference in the Preliminary Prospectus, Prospectus or any Prospectus Supplement), in light of the circumstances
under which they were made not misleading; and any further documents so filed and incorporated by reference in the Preliminary Prospectus,
Prospectus or any Prospectus Supplement, when such documents are filed with the Commission, will conform in all material respects to
the requirements of the Exchange Act and the applicable rules and regulations, as applicable, and will not contain any 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. No post-effective amendment to the Registration Statement reflecting any facts or events arising after
the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required
to be filed with the Commission. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any underwriter
information provided for use in the Registration Statement and Prospectus, which shall be limited to the information in the section titled
“Underwriting” in the Registration Statement with respect to the selling concessions and the information in the subsection
of the Underwriting section with respect to “Stabilization, Short Positions and Penalty Bids.” There are no documents required
to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant
to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to
be described in the Preliminary Prospectus, Prospectus or any Prospectus Supplement, or to be filed as exhibits or schedules to the Registration
Statement, which have not been described or filed as required. The press releases disseminated by the Company during the twelve months
preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
were made and when made, not misleading.
(z) No
Integrated Offering. Neither the Company, nor to the Company’s knowledge, any of its Affiliates, nor any Person acting on its
or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Public Securities to be integrated with prior offerings by the Company for purposes
of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(aa) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Public Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its
business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements
of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii)
the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any
facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date. The SEC Reports sets forth as of the date hereof all outstanding secured
and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. Neither the
Company nor any Subsidiary is in default with respect to any Indebtedness.
(bb) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all
foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis
for any such claim. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration
Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of
such consolidated financial statements. The term “taxes” mean all federal, state, local, foreign, and other net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments,
or charges of any kind whatsoever, together with any interest and any penalties, additions to tax, or additional amounts with respect
thereto. The term “returns” means all returns, declarations, reports, statements, and other documents required to be filed
in respect to taxes.
(cc) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA. The Company
has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all
material respects with the FCPA.
(dd) Accountants.
To the knowledge and belief of the Company, the Company Auditor (i) is an independent registered public accounting firm as required by
the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual
Report for the fiscal year ending December 31, 2024. The Company Auditor has not, during the periods covered by the financial statements
included in the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
(ee) FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled,
tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”),
such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance
with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket
clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product
listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not
have a Material Adverse Effect. There is no pending, completed or, to the Company’s knowledge, threatened, action (including any
lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or
any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication
from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the
uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical
Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising
or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by
the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters
or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges
any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate,
would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all
material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the
FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced
or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed
or proposed to be developed by the Company.
(ff) Stock
Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the
Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or
prospects.
(gg) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department.
(hh) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Representative’s request.
(ii) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of
1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of
a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(jj) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(kk) D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires completed by each of the Company’s
directors and officers immediately prior to the Offering and in the Lock-Up Agreement provided to the Underwriters is true and correct
in all respects and the Company has not become aware of any information which would cause the information disclosed in such questionnaires
become inaccurate and incorrect.
(ll) FINRA
Affiliation. No officer, director or any beneficial owner of 5% or more of the Company’s unregistered securities has any direct
or indirect affiliation or association with any FINRA member (as determined in accordance with the rules and regulations of FINRA) that
is participating in the Offering. The Company will advise the Representative and EGS if it learns that any officer, director or owner
of 5% or more of the Company’s outstanding shares of Common Stock or Common Stock Equivalents is or becomes an affiliate or associated
person of a FINRA member firm.
(mm) Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative or EGS shall
be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
(nn) Board
of Directors. The Board of Directors is comprised of the persons set forth in the SEC Reports. The qualifications of the persons
serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules
promulgated thereunder applicable to the Company and the rules of the Trading Market. At least one member of the Board of Directors qualifies
as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder
and the rules of the Trading Market. In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent”
as defined under the rules of the Trading Market.
(oo) Cybersecurity.
(i) (x) To the Company’s knowledge, there has been no security breach or other compromise of or relating to any of the Company’s
or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its
respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology
(collectively, “IT Systems and Data”) and (y) the Company and the Subsidiaries have not been notified of, and has
no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its
IT Systems and Data; (ii) the Company and the Subsidiaries are presently in material compliance with all applicable laws or statutes
and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies
and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and
Data from unauthorized use, access, misappropriation or modification, except as would not, individually or in the aggregate, have a Material
Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain
and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems
and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology deemed appropriate by the
Board for companies with similar operations and assets.
(pp) Compliance
with Data Privacy Laws. (i) The Company and the Subsidiaries are, and at all times during the last three (3) years were, in compliance
with all applicable state, federal and foreign data privacy and security laws and regulations, including, without limitation, the European
Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, “Privacy Laws”);
(ii) the Company and the Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance
with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling and analysis
of Personal Data (as defined below) (the “Policies”); (iii) the Company provides accurate notice of its applicable
Policies to its customers, employees, third party vendors and representatives as required by the Privacy Laws; and (iv) applicable Policies
provide accurate and sufficient notice of the Company’s then-current privacy practices relating to its subject matter, and do not
contain any material omissions of the Company’s then-current privacy practices, as required by Privacy Laws. “Personal
Data” means (i) a natural person’s name, street address, telephone number, email address, photograph, social security
number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information”
under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR; and (iv) any other piece of
information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any
identifiable data related to an identified person’s health or sexual orientation. (i) None of such disclosures made or contained
in any of the Policies have been inaccurate, misleading, or deceptive in violation of any Privacy Laws and (ii) the execution, delivery
and performance of the Transaction Documents will not result in a breach of any Privacy Laws or Policies. Neither the Company nor the
Subsidiaries (i) to the knowledge of the Company, has received written notice of any actual or potential liability of the Company or
the Subsidiaries under, or actual or potential violation by the Company or the Subsidiaries of, any of the Privacy Laws; (ii) is currently
conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any regulatory request
or demand pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement by or with any court or arbitrator or governmental
or regulatory authority that imposed any obligation or liability under any Privacy Law.
(qq) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as
all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have
received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and
(iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Amendments
to Registration Statement. The Company has delivered, or will as promptly as practicable deliver, to the Underwriters complete conformed
copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed
copies of the Registration Statement (without exhibits), the Preliminary Prospectus, the Prospectus and any Prospectus Supplement, as
amended or supplemented, in such quantities and at such places as an Underwriter reasonably requests. Neither the Company nor any of
its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection
with the offering and sale of the Public Securities other than the Preliminary Prospectus, the Prospectus, any Prospectus Supplement,
the Registration Statement, and copies of the documents incorporated by reference therein. The Company shall not file any such amendment
or supplement to which the Representative shall reasonably object in writing.
4.2 Federal
Securities Laws.
(a) Compliance.
During the time when a Prospectus is required to be delivered under the Securities Act, the Company will use its best efforts to comply
with all requirements imposed upon it by the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules
and regulations thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the
Public Securities in accordance with the provisions hereof and the Prospectus. If at any time when a Prospectus relating to the Public
Securities is required to be delivered under the Securities Act, any event shall have occurred as a result of which, in the opinion of
counsel for the Company or counsel for the Underwriters, the Prospectus, as then amended or supplemented, includes an untrue statement
of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Securities Act, the Company will notify the Underwriters promptly and prepare and file with the Commission, subject to Section
4.1 hereof, an appropriate amendment or supplement in accordance with Section 10 of the Securities Act.
(b) Filing
of Final Prospectus. The Company will file the Prospectus (in form and substance satisfactory to the Representative) with the Commission
pursuant to the requirements of Rule 424.
(c) Exchange
Act Registration. For a period of three years from the Execution Date, the Company will use its reasonable best efforts to maintain
the registration of the Common Stock under the Exchange Act. The Company will not deregister the Common Stock under the Exchange Act
without the prior written consent of the Representative.
(d) Free
Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Public Securities
that would constitute an issuer free writing prospectus, as defined in Rule 433 of the rules and regulations under the Securities Act,
without the prior written consent of the Representative. Any such free writing prospectus consented to by the Representative is herein
referred to as a “Permitted Free Writing Prospectus.” The Company represents that it will treat each Permitted
Free Writing Prospectus as an “issuer free writing prospectus” as defined in rule and regulations under the Securities Act,
and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act, including timely Commission filing
where required, legending and record keeping.
4.3 Delivery
to the Underwriters of Prospectuses. The Company will deliver to the Underwriters, without charge, from time to time during the period
when the Prospectus is required to be delivered under the Securities Act or the Exchange Act such number of copies of each Prospectus
as the Underwriters may reasonably request and, as soon as the Registration Statement or any amendment or supplement thereto becomes
effective, deliver to the Representative two original executed Registration Statements, including exhibits, and all post-effective amendments
thereto and copies of all exhibits filed therewith or incorporated therein by reference and all original executed consents of certified
experts.
4.4 Effectiveness
and Events Requiring Notice to the Underwriters. The Company will use its reasonable best efforts to cause the Registration Statement
to remain effective with a current prospectus until the later of nine (9) months from the Execution Date and the date on which the Warrants
are no longer outstanding, and will notify the Underwriters and holders of the Warrants promptly and confirm the notice in writing: (i)
of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order
or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission
of any proceedings for the suspension of the qualification of the Public Securities for offering or sale in any jurisdiction or of the
initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of
any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional
information from the Commission; and (vi) of the happening of any event during the period described in this Section 4.4 that, in the
judgment of the Company, makes any statement of a material fact made in the Registration Statement or the Prospectus untrue or that requires
the making of any changes in the Registration Statement or the Prospectus in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend
such qualification at any time, the Company will make every reasonable effort to obtain promptly the lifting of such order.
4.5 Review
of Financial Statements. For a period of two (2) years from the Execution Date, the Company, at its expense, shall cause its regularly
engaged independent registered public accountants to review (but not audit) the Company’s financial statements for each of the
first three fiscal quarters prior to the announcement of quarterly financial information.
4.6 Expenses
of the Offering.
(a) General
Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and each Option Closing Date, if any,
to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement,
including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Public Securities to
be sold in the Offering (including the Option Securities) with the Commission; (b) all FINRA Public Offering Filing System fees associated
with the review of the Offering by FINRA; all fees and expenses relating to the listing of such Closing Shares, Option Shares and Warrant
Shares on the Trading Market and such other stock exchanges as the Company and the Representative together determine; (c) all fees, expenses
and disbursements relating to the registration or qualification of such Public Securities under the “blue sky” securities
laws of such states and other foreign jurisdictions as the Representative may reasonably designate (including, without limitation, all
filing and registration fees, and the fees and expenses of Blue Sky counsel, if any); (d) the costs of all mailing and printing of the
underwriting documents (including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement
Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements,
Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative
may reasonably deem necessary; (e) the costs and expenses of the Company’s public relations firm; (f) the costs of preparing, printing
and delivering the Public Securities; (g) fees and expenses of the Transfer Agent for the Public Securities (including, without limitation,
any fees required for same-day processing of any instruction letter delivered by the Company); (h) stock transfer and/or stamp taxes,
if any, payable upon the transfer of securities from the Company to the Underwriters; (i) the fees and expenses of the Company’s
accountants; (j) the fees and expenses of the Company’s legal counsel and other agents and representatives; (k) the Underwriters’
costs of mailing prospectuses to prospective investors. The Underwriters may also deduct from the net proceeds of the Offering payable
to the Company on the Closing Date, or each Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the
Underwriters.
(b) Expenses
of the Representative. The Company further agrees that, in addition to the expenses payable pursuant to Section 4.6(a), on the Closing
Date and Option Closing Date, if applicable, it will reimburse the Representative for its reasonable and documented out-of-pocket expenses
related to the Offering in an amount up to $115,000 in the aggregate.
4.7 Application
of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application
described under the caption “Use of Proceeds” in the Prospectus.
4.8 Delivery
of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth full calendar month following the Execution Date, an earnings statement (which need
not be certified by independent public or independent certified public accountants unless required by the Securities Act or the Rules
and Regulations under the Securities Act, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities
Act) covering a period of at least twelve consecutive months beginning after the Execution Date.
4.9 Stabilization.
Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative)
has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to
cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Public Securities.
4.10 Internal
Controls. The Company will maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as
necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (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 existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
4.11 Accountants.
The Company shall continue to retain a nationally recognized independent certified public accounting firm for a period of at least three
years after the Execution Date. The Underwriters acknowledge that the Company Auditor is acceptable to the Underwriters.
4.12 FINRA.
The Company shall advise the Underwriters (who shall make an appropriate filing with FINRA) if it is aware that any 5% or greater shareholder
of the Company becomes an affiliate or associated person of an Underwriter.
4.13 No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely contractual
and commercial in nature, based on arms-length negotiations and that neither the Underwriters nor their affiliates or any selected dealer
shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in
connection with the Offering and the other transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to
the contrary, the Company acknowledges that the Underwriters may have financial interests in the success of the Offering that are not
limited to the difference between the price to the public and the purchase price paid to the Company by the Underwriters for the shares
and the Underwriters have no obligation to disclose, or account to the Company for, any of such additional financial interests. The Company
hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with
respect to any breach or alleged breach of fiduciary duty.
4.14 Warrant
Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the
issuance of the Warrant Shares or if the Warrant is exercised via cashless exercise at a time when such Warrant Shares would be eligible
for resale under, and in accordance with, Rule 144, the Warrant Shares issued pursuant to any such exercise shall be issued free of all
restrictive legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering
the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale of the Warrant Shares, the Company
shall immediately notify the holders of the Warrants in writing that such registration statement is not then effective and thereafter
shall promptly notify such holders when the registration statement is effective again and available for the sale of the Warrant Shares
(it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any holder thereof to sell,
any of the Warrant Shares in compliance with applicable federal and state securities laws).
4.15 Board
Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as board members
and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder
and with the listing requirements of the Trading Market and (ii) if applicable, at least one member of the Board of Directors qualifies
as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
4.16 Securities
Laws Disclosure; Publicity. At the request of the Representative, by 9:00 a.m. (New York City time) on the date hereof, the Company
shall issue a press release disclosing the material terms of the Offering. The Company and the Representative shall consult with each
other in issuing any other press releases with respect to the Offering, and neither the Company nor any Underwriter shall issue any such
press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release
of such Underwriter, or without the prior consent of such Underwriter, with respect to any press release of the Company, which consent
shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or communication. The Company will not issue press releases
or engage in any other publicity, without the Representative’s prior written consent, for a period ending at 5:00 p.m. (New York
City time) on the first business day following the 45th day following the Closing Date, other than normal and customary releases issued
in the ordinary course of the Company’s business.
4.17 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Underwriter
of the Public Securities is an “Acquiring Person” under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Underwriter of Public Securities could be deemed to trigger the provisions of any such plan or arrangement,
by virtue of receiving Public Securities.
4.18 Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at
all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue
Option Shares pursuant to the Option and Warrant Shares pursuant to any exercise of the Warrants.
4.19 Listing
of Common Stock. The Company hereby agrees to use reasonable best efforts to maintain the listing or quotation of the Common Stock
on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all
of the Closing Shares, Option Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Closing
Shares, Option Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will then include in such application all of the Closing Shares, Option Shares and Warrant
Shares, and will take such other action as is necessary to cause all of the Closing Shares, Option Shares and Warrant Shares to be listed
or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue
the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic
transfer.
4.20 Subsequent
Equity Sales.
(a) From
the date hereof until ninety (90) days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement
to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or file any registration
statement or amendment or supplement thereto, other than the Prospectus.
(b) From
the date hereof until one hundred eighty (180) days after the Closing Date, the Company shall be prohibited from effecting or entering
into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a
combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction
in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or
include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or
other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after
the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects
a transaction under, any agreement, including, but not limited to, an equity line of credit or an “at-the-market offering”,
whereby the Company may issue securities at a future determined price regardless of whether shares pursuant to such agreement have actually
been issued and regardless of whether such agreement is subsequently canceled; provided, however, that, after ninety (90)
days after the Closing Date, the entry into and/or issuance of shares of Common Stock in an “at the market” offering with
the Representative as sales agent shall not be deemed a Variable Rate Transaction. Any Underwriter shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
(c) Notwithstanding
the foregoing, this Section 4.20 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be
an Exempt Issuance.
4.21 Capital
Changes. Until the one (1) year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock split
or reclassification of the Common Stock without the prior written consent of the Representative other than a reverse stock split that
is required, in the good faith determination of the Board of Directors, to maintain the listing of the Common Stock on the Trading Market.
4.22 Research
Independence. The Company acknowledges that each Underwriter’s research analysts and research departments, if any, are required
to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and
that such Underwriter’s research analysts may hold and make statements or investment recommendations and/or publish research reports
with respect to the Company and/or the offering that differ from the views of its investment bankers. The Company hereby waives and releases,
to the fullest extent permitted by law, any claims that the Company may have against such Underwriter with respect to any conflict of
interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be
different from or inconsistent with the views or advice communicated to the Company by such Underwriter’s investment banking divisions.
The Company acknowledges that the Representative is a full service securities firm and as such from time to time, subject to applicable
securities laws, may effect transactions for its own account or the account of its customers and hold long or short position in debt
or equity securities of the Company.
ARTICLE
V.
DEFAULT
BY UNDERWRITERS
If
on the Closing Date or any Option Closing Date, if any, any Underwriter shall fail to purchase and pay for the portion of the Closing
Securities or Option Securities, as the case may be, which such Underwriter has agreed to purchase and pay for on such date (otherwise
than by reason of any default on the part of the Company), the Representative, or if the Representative is the defaulting Underwriter,
the non-defaulting Underwriters, shall use their reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters,
or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Closing Securities
or Option Securities, as the case may be, which the defaulting Underwriter or Underwriters failed to purchase. If during such 36 hours
the Representative shall not have procured such other Underwriters, or any others, to purchase the Closing Securities or Option Securities,
as the case may be, agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the aggregate number of Closing
Securities or Option Securities, as the case may be, with respect to which such default shall occur does not exceed 10% of the Closing
Securities or Option Securities, as the case may be, covered hereby, the other Underwriters shall be obligated, severally, in proportion
to the respective numbers of Closing Securities or Option Securities, as the case may be, which they are obligated to purchase hereunder,
to purchase the Closing Securities or Option Securities, as the case may be, which such defaulting Underwriter or Underwriters failed
to purchase, or (b) if the aggregate number of Closing Securities or Option Securities, as the case may be, with respect to which such
default shall occur exceeds 10% of the Closing Securities or Option Securities, as the case may be, covered hereby, the Company or the
Representative will have the right to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of
the Company except to the extent provided in Article VI hereof. In the event of a default by any Underwriter or Underwriters, as set
forth in this Article V, the applicable Closing Date may be postponed for such period, not exceeding seven days, as the Representative,
or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, may determine in order that the required changes
in the Prospectus or in any other documents or arrangements may be effected. The term “Underwriter” includes any Person substituted
for a defaulting Underwriter. Any action taken under this Section shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
ARTICLE
VI.
INDEMNIFICATION
6.1 Indemnification
of the Underwriters. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Underwriters,
and each dealer selected by each Underwriter that participates in the offer and sale of the Public Securities (each a “Selected
Dealer”) and each of their respective directors, officers and employees and each Person, if any, who controls such Underwriter
or any Selected Dealer (“Controlling Person”) within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and
all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened,
or any claim whatsoever, whether arising out of any action between such Underwriter and the Company or between such Underwriter and any
third party or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute
or at common law or otherwise or under the laws of foreign countries, arising out of or based upon any Proceeding, commenced or threatened
(whether or not such Underwriter is a target of or party to such Proceeding), or arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in (i) the Preliminary Prospectus, the Registration Statement or the Prospectus
(as from time to time each may be amended and supplemented); (ii) any materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the offering of the Public Securities, including any “road show”
or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application or other document
or written communication (in this Article VI, collectively called “application”) executed by the Company or based
upon written information furnished by the Company in any jurisdiction in order to qualify the Public Securities under the securities
laws thereof or filed with the Commission, any state securities commission or agency, Trading Market or any securities exchange; or the
omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon
and in conformity with written information furnished to the Company with respect to the applicable Underwriter by or on behalf of such
Underwriter expressly for use in any Preliminary Prospectus, the Registration Statement or Prospectus, or any amendment or supplement
thereto, or in any application, as the case may be. With respect to any untrue statement or omission or alleged untrue statement or omission
made in the Preliminary Prospectus, the indemnity agreement contained in this Section 6.1 shall not inure to the benefit of an Underwriter
to the extent that any loss, liability, claim, damage or expense of such Underwriter results from the fact that a copy of the Prospectus
was not given or sent to the Person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale
of the Public Securities to such Person as required by the Securities Act and the rules and regulations thereunder, and if the untrue
statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance
by the Company with its obligations under this Agreement. The Company agrees promptly to notify each Underwriter of the commencement
of any litigation or proceedings against the Company or any of its officers, directors or Controlling Persons in connection with the
issue and sale of the Public Securities or in connection with the Registration Statement, Preliminary Prospectus or Prospectus.
6.2 Procedure.
If any action is brought against an Underwriter, a Selected Dealer or a Controlling Person in respect of which indemnity may be sought
against the Company pursuant to Section 6.1, such Underwriter, such Selected Dealer or Controlling Person, as the case may be, shall
promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including
the employment and fees of counsel (subject to the reasonable approval of such Underwriter or such Selected Dealer, as the case may be)
and payment of actual expenses. Such Underwriter, such Selected Dealer or Controlling Person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter, such Selected Dealer
or Controlling Person unless (i) the employment of such counsel at the expense of the Company shall have been authorized in writing by
the Company in connection with the defense of such action, or (ii) the Company shall not have employed counsel to have charge of the
defense of such action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available
to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees
and expenses of not more than one additional firm of attorneys selected by such Underwriter (in addition to local counsel), Selected
Dealer and/or Controlling Person shall be borne by the Company. Notwithstanding anything to the contrary contained herein, if any Underwriter,
Selected Dealer or Controlling Person shall assume the defense of such action as provided above, the Company shall have the right to
approve the terms of any settlement of such action which approval shall not be unreasonably withheld.
6.3 Indemnification
of the Company. Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, its directors, officers
and employees and agents who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to such Underwriter,
as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in the Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment or supplement thereto or in any application, in reliance upon,
and in strict conformity with, written information furnished to the Company with respect to such Underwriter by or on behalf of such
Underwriter expressly for use in such Preliminary Prospectus, the Registration Statement or Prospectus or any amendment or supplement
thereto or in any such application. In case any action shall be brought against the Company or any other Person so indemnified based
on the Preliminary Prospectus, the Registration Statement or Prospectus or any amendment or supplement thereto or any application, and
in respect of which indemnity may be sought against such Underwriter, such Underwriter shall have the rights and duties given to the
Company, and the Company and each other Person so indemnified shall have the rights and duties given to such Underwriter by the provisions
of this Article VI. Notwithstanding the provisions of this Section 6.3, no Underwriter shall be required to indemnify the Company for
any amount in excess of the underwriting discounts and commissions applicable to the Public Securities purchased by such Underwriter.
The Underwriters’ obligations in this Section 6.3 to indemnify the Company are several in proportion to their respective underwriting
obligations and not joint.
6.4 Contribution.
(a) Contribution
Rights. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) any Person entitled
to indemnification under this Article VI makes a claim for indemnification pursuant hereto but it is judicially determined (by the entry
of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right
of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Article VI provides for indemnification
in such case, or (ii) contribution under the Securities Act, the Exchange Act or otherwise may be required on the part of any such Person
in circumstances for which indemnification is provided under this Article VI, then, and in each such case, the Company and each Underwriter,
severally and not jointly, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated
by said indemnity agreement incurred by the Company and such Underwriter, as incurred, in such proportions that such Underwriter is responsible
for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus bears to
the initial offering price appearing thereon and the Company is responsible for the balance; provided, that, no Person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section, each director, officer and employee of such Underwriter
or the Company, as applicable, and each Person, if any, who controls such Underwriter or the Company, as applicable, within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution as such Underwriter or the Company, as applicable. Notwithstanding
the provisions of this Section 6.4, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts
and commissions applicable to the Public Securities purchased by such Underwriter. The Underwriters’ obligations in this Section
6.4 to contribute are several in proportion to their respective underwriting obligations and not joint.
(b) Contribution
Procedure. Within fifteen days after receipt by any party to this Agreement (or its representative) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party
(“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify the
contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder.
In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative
of the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking
contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the
written consent of such contributing party. The contribution provisions contained in this Section 6.4 are intended to supersede, to the
extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available.
ARTICLE
VII.
MISCELLANEOUS
7.1 Termination.
(a) Termination
Right. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic
or international event or act or occurrence has materially disrupted, or in its opinion will in the immediate future materially disrupt,
general securities markets in the United States; or (ii) if trading of the Common Stock on any Trading Market shall have been suspended
or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall
have been required by FINRA or by order of the Commission or any other government authority having jurisdiction, or (iii) if the United
States shall have become involved in a new war or an increase in major hostilities, or (iv) if a banking moratorium has been declared
by a New York State or federal authority, or (v) if a moratorium on foreign exchange trading has been declared which materially adversely
impacts the United States securities markets, or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in the
Representative’s opinion, make it inadvisable to proceed with the delivery of the Public Securities, or (vii) if the Company is
in material breach of any of its representations, warranties or covenants hereunder, or (viii) if the Representative shall have become
aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material
change in general market conditions as in the Representative’s judgment would make it impracticable to proceed with the offering,
sale and/or delivery of the Public Securities or to enforce contracts made by the Underwriters for the sale of the Public Securities.
(b) Expenses.
In the event this Agreement shall be terminated pursuant to Section 7.1(a), within the time specified herein or any extensions thereof
pursuant to the terms herein, the Company shall be obligated to pay to the Representative its actual and accountable out of pocket expenses
related to the transactions contemplated herein then due and payable, including the fees and disbursements of EGS up to $50,000 (provided,
however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement).
(c) Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the provisions of Article VI shall not be in any way effected by such election
or termination or failure to carry out the terms of this Agreement or any part hereof.
7.2 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Preliminary Prospectus, the Prospectus
and any Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have
been merged into such documents, exhibits and schedules. Notwithstanding anything herein to the contrary, the Investment Banking Agreement,
dated April 10, 2024, as amended (the “Engagement Agreement”), by and between the Company and the Representative,
shall continue to be effective and the terms therein, including, without limitation, Section 4(e) and Section 5 with respect to any future
offerings, shall continue to survive and be enforceable by the Representative in accordance with its terms, provided that, in the event
of a conflict between the terms of the Engagement Agreement and this Agreement, the terms of this Agreement shall prevail.
7.3 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via e-mail
attachment at the email address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail attachment at the
e-mail address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York
City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the signature pages attached hereto.
7.4 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and the Representative. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver
of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder
in any manner impair the exercise of any such right.
7.5 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
7.6 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
7.7 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
If either party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the
obligations of the Company under Article VI, the prevailing party in such Action or Proceeding shall be reimbursed by the other party
for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of
such Action or Proceeding.
7.8 Survival.
The representations and warranties contained herein shall survive the Closing and the Option Closing, if any, and the delivery of the
Public Securities.
7.9 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
7.10 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
7.11 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriters
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and
hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law
would be adequate.
7.12 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
7.13 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
7.14 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY RIGHT TO TRIAL BY
JURY.
(Signature
Pages Follow)
If
the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding agreement among the Company and the several Underwriters in
accordance with its terms.
| |
Very
truly yours, |
| |
|
| |
PALISADE
BIO, INC. |
| |
|
|
| |
By: |
|
| |
Name: |
|
| |
Title: |
|
Address
for Notice:
Palisade
Bio, Inc.
7750
El Camino Real, Suite 2A
Carlsbad,
California 92009
Attention:
J.D. Finley, Chief Executive Officer
Copy
to:
Silvestre
Law Group, P.C.
2629
Townsgate Road, #215
Westlake
Village, CA 91361
Attention:
Raul Silvestre
Accepted
on the date first above written.
| Ladenburg
Thalmann & Co. Inc., |
|
| As
the Representative of the several |
|
| Underwriters
listed on Schedule I |
|
| By:
Ladenburg Thalmann & Co. Inc., |
|
| |
|
|
| By: |
|
|
| Name: |
|
|
| Title: |
|
|
Address
for Notice:
Ladenburg
Thalmann & Co. Inc.,
640
Fifth Avenue, 4th Floor
New
York, NY 10019
SCHEDULE
I
Exhibit
4.01
PRE-FUNDED
COMMON STOCK PURCHASE WARRANT
PALISADE
BIO, INC.
| Warrant
Shares: [____] |
Initial
Exercise Date: December 13, 2024 |
THIS
PRE-FUNDED COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [__________] or its assigns
(the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and until this Warrant is exercised
in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from Palisade Bio, Inc., a Delaware
corporation (the “Company”), up to [_____] shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b). This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository
Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence
shall not apply.
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated
in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Registration
Statement” means the Company’s registration statement on Form S-1 (File No. 333-282883).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Transfer
Agent” means Equiniti Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 1110 Centre
Pointe Curve, Suite 101, Mendota Heights, MN 55120-4101, Attn: Corporate Actions, and any successor transfer agent of the Company.
“Underwriting
Agreement” means the underwriting agreement, dated as of December 12, 2024, among the Company and Ladenburg Thalmann &
Co. Inc. as representative of the underwriters named therein, as amended, modified or supplemented from time to time in accordance with
its terms.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
“Warrant
Agency Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company
and the Warrant Agent.
“Warrant
Agent” means the Transfer Agent and any successor warrant agent of the Company.
“Warrants”
means this Warrant and other Pre-Funded Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section
2. Exercise.
a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined
in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the
shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless
the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice
of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise
be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to
the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full,
in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which
the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice
of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the
number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
Notwithstanding
the foregoing in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this
Warrant held in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect
exercises made pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate
instruction form for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation,
as applicable), subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant
Agency Agreement, in which case this sentence shall not apply.
b) Exercise
Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded
to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise
price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant.
The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any
circumstance or for any reason whatsoever. The remaining unpaid exercise price per share of Common Stock under this Warrant shall be
$0.0001, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless
Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable
Notice of Exercise if such Notice of Exercise is (1) delivered pursuant to Section 2(a) hereof
on a day that is not a Trading Day or (2) delivered pursuant to Section 2(a) hereof on a
Trading Day prior to the opening of “regular trading hours” (as defined in Rule
600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day,
(ii) the highest Bid Price of the Common Stock on the principal Trading Market as reported
by Bloomberg L.P. (“Bloomberg”) within two (2) hours of the time of the
Holder’s delivery of the Notice of Exercise if such Notice of Exercise is delivered
during “regular trading hours” or within two (2) hours after the close of “regular
trading hours” on a Trading Day pursuant to Section 2(a) hereof or (iii) the VWAP on
the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a
Trading Day and such Notice of Exercise is delivered within two (2) hours following the close
of “regular trading hours” on such Trading Day; |
| | | |
| | (B)
= | the Exercise Price of this Warrant, as adjusted hereunder; and |
| | | |
| | (X)
= | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2(c).
| i. | Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased
hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account
of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the
Company is then a participant in such system and either (A) there is an effective registration
statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares
by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by
physical delivery of a certificate, registered in the Company’s share register in the
name of the Holder or its designee, for the number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the address specified by the Holder in the Notice
of Exercise by the date that is the earlier of (i) one (1) Trading Day after the delivery
to the Company of the Notice of Exercise and (ii) the number of Trading Days comprising the
Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such
date, the “Warrant Share Delivery Date”). Upon delivery of the Notice
of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective
of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise
Price (other than in the case of a cashless exercise) is received within the earlier of (i)
one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement
Period following delivery of the Notice of Exercise. If the Company fails for any reason
to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant
Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages
and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on
the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading
Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery
Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares
are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer
agent that is a participant in the FAST program so long as this Warrant remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the
standard settlement period, expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of
Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise
Date, which may be delivered at any time after the time of execution of the Underwriting
Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by
4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date
shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of
the aggregate Exercise Price (other than in the case of a cashless exercise) is received
by such Warrant Share Delivery Date. |
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date and the Holder has paid any required Exercise Price
for the portion of this Warrant being exercised on or prior to such Warrant Share Delivery Date (or utilized cashless exercise, if available),
and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder
the amount, if any, by which (x) the Holder’s total purchase price (including customary brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company
was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise
to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to
the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence
of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and
such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit A duly executed by the Holder and the
Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.
The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of
the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed
with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of
a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder,
upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day
after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number
of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as
a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until
such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common Stock, other than as set in Section 3(a), by way of return
of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent
(or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result
in the Holder exceeding the Beneficial Ownership Limitation).
d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in
one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares
for other securities, cash or property and has been accepted by the holders of greater than 50% of the outstanding Common Stock or greater
than 50% of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power
of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately
prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e)
on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if
it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a
result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and
the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in
a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all
of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) pursuant to written agreements
in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental
Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding
number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental
Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account
the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock,
such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to
the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company”
under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of
this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and
the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally
with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall
assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect
as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein.
e) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 5 calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled
to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such
notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section
4. Transfer of Warrant.
a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of
this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay
any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), this Warrant may be divided or combined
with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section
4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers
or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number
of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company and the Warrant Agent
may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
a) No
Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized
Shares.
The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
e) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant,
the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of
this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any
Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service,
addressed to the Company, at 7750 El Camino Real, Suite 2A, Carlsbad, CA 92009, Attention: Attention: CEO, email address: [*], or such
other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally
recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books
of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i)
the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior
to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication
is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any
notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder or the beneficial owner of this Warrant, on the other hand.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
o) Warrant
Agency Agreement. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject
to the Warrant Agency Agreement. To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agency
Agreement, the provisions of this Warrant shall govern and be controlling.
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
| |
PALISADE BIO, INC. |
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|
|
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By: |
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Name: |
|
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Title: |
|
NOTICE
OF EXERCISE
To: PALISADE
BIO, INC.
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
[
] in lawful money of the United States; or
[
] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity: _________________________________________________
Name
of Authorized Signatory: ___________________________________________________________________
Title
of Authorized Signatory: ____________________________________________________________________
Date:
________________________________________________________________________________________
EXHIBIT
A
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
______________________________________ |
| |
(Please
Print) |
| |
|
| Address: |
______________________________________ |
| |
(Please
Print) |
| |
|
| Phone
Number: |
______________________________________ |
| |
|
| Email
Address: |
______________________________________ |
| |
|
| Dated:
_______________ __, ______ |
|
| |
|
| Holder’s
Signature: ________________________ |
|
| |
|
| Holder’s
Address: ________________________ |
|
Exhibit
4.02
COMMON STOCK PURCHASE WARRANT
PALISADE
BIO, INC.
| Warrant
Shares: [____] |
Initial
Exercise Date: December 13, 2024 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [__________] or its assigns
(the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on December 13, 2029 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Palisade Bio, Inc., a Delaware
corporation (the “Company”), up to [_____] shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b). This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository
Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence
shall not apply.
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated
in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
“Board of
Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Registration
Statement” means the Company’s registration statement on Form S-1 (File No. 333-282883).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Transfer
Agent” means Equiniti Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 1110 Centre
Pointe Curve, Suite 101, Mendota Heights, MN 55120-4101, Attn: Corporate Actions, and any successor transfer agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
“Warrant
Agency Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company
and the Warrant Agent.
“Warrant
Agent” means the Transfer Agent and any successor warrant agent of the Company.
“Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section
2. Exercise.
a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined
in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the
shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless
the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice
of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise
be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to
the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full,
in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which
the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice
of Exercise on the Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the
number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
Notwithstanding
the foregoing in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this
Warrant held in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect
exercises made pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate
instruction form for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation,
as applicable), subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant
Agency Agreement, in which case this sentence shall not apply.
b) Exercise
Price. The exercise price per share of Common Stock under this Warrant shall be
$1.40, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus
contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may only be exercised, in
whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a
number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable
Notice of Exercise if such Notice of Exercise is (1) delivered pursuant to Section 2(a) hereof
on a day that is not a Trading Day or (2) delivered pursuant to Section 2(a) hereof on a
Trading Day prior to the opening of “regular trading hours” (as defined in Rule
600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day,
(ii) the highest Bid Price of the Common Stock on the principal Trading Market as reported
by Bloomberg L.P. (“Bloomberg”) within two (2) hours of the time of the
Holder’s delivery of the Notice of Exercise if such Notice of Exercise is delivered
during “regular trading hours” or within two (2) hours after the close of “regular
trading hours” on a Trading Day pursuant to Section 2(a) hereof or (iii) the VWAP on
the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a
Trading Day and such Notice of Exercise is delivered within two (2) hours following the close
of “regular trading hours” on such Trading Day; |
| | | |
| | (B)
= | the Exercise Price of this Warrant, as adjusted hereunder; and |
| | | |
| | (X)
= | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2(c).
| i. | Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the
Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate,
registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is
the earlier of (i) one (1) Trading Day after the delivery to the Company of the Notice of Exercise and (ii) the number of Trading Days
comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant
Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have
become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of
delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise)
is received within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period
following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject
to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not
as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable
Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery
Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a
number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of the Notice of Exercise. |
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date and the Holder has paid any required Exercise Price
for the portion of this Warrant being exercised on or prior to such Warrant Share Delivery Date (or utilized cashless exercise, if available),
and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder
the amount, if any, by which (x) the Holder’s total purchase price (including customary brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company
was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise
to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to
the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence
of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and
such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the
Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.
The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of
the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed
with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of
a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder,
upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day
after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number
of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as
a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until
such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common Stock, other than as set in Section 3(a), by way of return
of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent
(or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result
in the Holder exceeding the Beneficial Ownership Limitation).
d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of
greater than 50% of the outstanding Common Stock or greater than 50% of the voting power of the common equity of the Company, (iv)
the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such
other Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power of
the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation
in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or
of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section
2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the
Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with,
or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the
applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the
Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such
Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control,
including not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any
Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised
portion of this Warrant, that is payable in connection with the Fundamental Transaction, whether that consideration be in the form
of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among
alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders
of Common Stock of the Company are not directly or indirectly offered or paid any consideration in such Fundamental Transaction,
such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which Successor Entity may be the
Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the
value of this Warrant calculated using the Black-Scholes Option Pricing Model obtained from the “OV” function on
Bloomberg determined as of the day immediately following the public announcement of the applicable contemplated Fundamental
Transaction, or, if such contemplated Fundamental Transaction is not publicly announced, the date such Fundamental Transaction has
occurred or is consummated, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to the
100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement
of the applicable contemplated Fundamental Transaction, or, if such contemplated Fundamental Transaction is not publicly announced,
the date such Fundamental Transaction has occurred or is consummated, (iii) the underlying price per share used in such calculation
shall be the greater of (x) the highest VWAP of the Common Stock during the period beginning on the Trading Day prior to the
execution of definitive documentation relating to the applicable Fundamental Transaction and ending on (A) the Trading Day
immediately following the public announcement of such contemplated Fundamental Transaction, if the applicable contemplated
Fundamental Transaction is publicly announced or (B) the Trading Day immediately following the consummation of the applicable
Fundamental Transaction if the applicable contemplated Fundamental Transaction is not publicly announced and (y) the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such
Fundamental Transaction, (iv) a remaining option time equal to the time between the date of the public announcement of the
applicable contemplated Fundamental Transaction or, if such applicable contemplated Fundamental Transaction is not publicly
announced, the date such Fundamental Transaction has occurred or is consummated, (v) a zero cost of borrow, and (vi) a 365 day
annualization factor. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such
other consideration) within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of
the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not
the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this
Warrant in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall,
at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but
taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such
Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the
“Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and
severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and
power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company
prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor
Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(d) regardless
of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental
Transaction occurs prior to the Initial Exercise Date.
e) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled
to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such
notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section
4. Transfer of Warrant.
a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of
this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay
any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), this Warrant may be divided or combined
with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section
4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers
or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number
of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company and Warrant Agent
may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
a) No
Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized
Shares.
The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
e) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant,
the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of
this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any
Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service,
addressed to the Company, at 7750 El Camino Real, Suite 2A, Carlsbad, CA 92009, Attention: CEO, email address: [*].com, or such
other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally
recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books
of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i)
the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior
to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication
is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any
notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder or the beneficial owner of this Warrant, on the other hand.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
o) Warrant
Agency Agreement. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject
to the Warrant Agency Agreement. To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agency
Agreement, the provisions of this Warrant shall govern and be controlling.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
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PALISADE BIO, INC. |
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By: |
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Name: |
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Title: |
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NOTICE
OF EXERCISE
To: PALISADE
BIO, INC.
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
[
] in lawful money of the United States; or
[
] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity: _________________________________________________
Name
of Authorized Signatory: ___________________________________________________________________
Title
of Authorized Signatory: ____________________________________________________________________
Date:
________________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
______________________________________ |
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(Please
Print) |
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| Address: |
______________________________________ |
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(Please
Print) |
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| Phone
Number: |
______________________________________ |
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| Email
Address: |
______________________________________ |
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| Dated:
_______________ __, ______ |
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| Holder’s
Signature: ________________________ |
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| Holder’s
Address: ________________________ |
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Exhibit
4.03
PALISADE
BIO, INC.
and
EQUINITI
TRUST COMPANY, LLC as
Warrant
Agent
Warrant
Agency Agreement
Dated
as of December 12, 2024
WARRANT
AGENCY AGREEMENT
WARRANT
AGENCY AGREEMENT, dated as of December 12, 2024 (“Agreement”), between Palisade Bio, Inc., a Delaware corporation
(the “Company”), and Equiniti Trust Company, LLC (the “Warrant Agent”).
W
I T N E S S E T H
WHEREAS,
pursuant to a registered offering by the Company of 158,000 shares of common stock, par value $0.01 per share (the “Common Stock”),
pre-funded warrants to purchase 3,120,688 shares of Common Stock at an exercise price of $0.0001 (the “Pre-Funded Warrants”)
and common warrants to purchase 3,278,688 shares of Common Stock at an exercise price of $1.40 (the “Common Warrants”, together
with the Pre-Funded Warrants, the “Warrants” and the shares of Common Stock underlying the Warrants, the “Warrant Shares”)
(the “Offering”); and
WHEREAS,
the Company granted an over-allotment option to purchase up to 491,803 additional shares of Common Stock and/or 491,803 Common Warrants
(the “Over-Allotment Option”) to the underwriters in the Offering (for the avoidance of doubt, the defined term “Warrants”
include any Common Warrants issued as part of the Over-Allotment Option);
WHEREAS,
upon the terms and subject to the conditions hereinafter set forth and pursuant to an effective registration statement on Form S-1, as
amended (File No. 333-282883) (the “Registration Statement”), and the terms and conditions of the Warrant Certificate
(as defined below), the Company wishes to issue the Warrants in book entry form entitling the respective holders of the Warrants (the
“Holders,” which term shall include a Holder’s transferees, successors and assigns and “Holder”
shall include, if the Warrants are held in “street name,” a Participant (as defined below) or a designee appointed by such
Participant); and
WHEREAS,
the Common Stock and Warrants to be issued in connection with the Offering shall be immediately separable and will be issued separately,
but will be purchased together in the Offering; and
WHEREAS,
the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with
the issuance, registration, transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as
the Company’s transfer agent, the delivery of the Warrant Shares.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
Section
1. Certain Definitions. For purposes of this Agreement, all capitalized terms not herein defined shall have the meanings hereby
indicated:
(a)
“Affiliate” has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
(b)
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United
States or any day on which the Nasdaq Stock Market is authorized or required by law or other governmental action to close.
(c)
“Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however,
that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.
(d)
“Person” means an individual, corporation, association, partnership, limited liability company, joint venture, trust,
unincorporated organization, government or political subdivision thereof or governmental agency or other entity.
(e)
“Warrant Certificate” means a certificate in substantially the form attached as Exhibit 1-A hereto (as it relates
to the Pre-Funded Warrants) or Exhibit 1-B hereto (as it relates to the Common Warrants), representing such number of Warrant Shares
as is indicated therein, provided that any reference to the delivery of a Warrant Certificate in this Agreement shall include delivery
of a Definitive Certificate or a Global Warrant (each as defined below).
All
other capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificate.
Section
2. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Warrant Agent hereby accepts such appointment.
Section
3. Global Warrants.
(a)
The Warrants shall be registered securities and shall be evidenced by a global warrant (the “Global Warrants”), in
the form of the Warrant Certificate, which shall be deposited with the Warrant Agent and registered in the name of Cede & Co., a
nominee of The Depository Trust Company (the “DTC”), or as otherwise directed by the DTC. Ownership of beneficial
interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i)
the DTC or its nominee for each Global Warrant or (ii) institutions that have accounts with the DTC (such institution, with respect to
a Warrant in its account, a “Participant”).
(b)
If the DTC subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant
Agent regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer
necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the DTC to deliver
to the Warrant Agent for cancellation of each Global Warrant, and the Company shall instruct the Warrant Agent to deliver to each Holder
a Warrant Certificate.
(c)
A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate
Request Notice (as defined below). Upon written notice by a Holder to the Company and the Warrant Agent for the exchange of some or all
of such Holder’s Global Warrants for a separate certificate in the form attached hereto as Exhibit 1-A or Exhibit 1-B (such separate
certificate, a “Definitive Certificate”) evidencing the same number of Warrants, which request shall be in the form
attached hereto as Exhibit 2 (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate
Request Notice by the Holder, the “Warrant Certificate Request Notice Date” and the surrender by the Holder to the Warrant
Agent of a number of Global Warrants for the same number of Warrants evidenced by a Warrant Certificate, a “Warrant Exchange”),
the Company and the Warrant Agent shall promptly effect the Warrant Exchange and the Company shall promptly issue and deliver to the
Holder a Definitive Certificate for such number of Warrants in the name set forth in the Warrant Certificate Request Notice. Such Definitive
Certificate shall be dated the Initial Exercise Date of the Warrants, shall be manually executed by an authorized signatory of the Company,
shall be in the form attached hereto as Exhibit 1-A or Exhibit 1-B and shall be reasonably acceptable in all respects to
such Holder. In connection with a Warrant Exchange, the Company agrees to deliver the Definitive Certificate to the Holder within ten
(10) Business Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the Warrant Certificate Request
Notice (“Warrant Certificate Delivery Date”). If the Company fails for any reason to deliver to the Holder the Definitive
Certificate subject to the Warrant Certificate Request Notice by the Warrant Certificate Delivery Date, the Company shall pay to the
Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Definitive Certificate
(based on the VWAP (as defined in the Warrants) of the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business
Day for each Business Day after such Warrant Certificate Delivery Date until such Definitive Certificate is delivered or, prior to delivery
of such Warrant Certificate, the Holder rescinds such Warrant Exchange. The Company covenants and agrees that, upon the date of delivery
of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder of the Definitive Certificate and, notwithstanding
anything to the contrary set forth herein, the Definitive Certificate shall be deemed for all purposes to contain all of the terms and
conditions of the Warrants evidenced by such Warrant Certificate and the terms of this Agreement, other than Sections 3(c), 3(d) and
9 herein, shall not apply to the Warrants evidenced by the Definitive Certificate. Notwithstanding anything herein to the contrary, the
Company shall act as warrant agent with respect to any Definitive Certificate requested and issued pursuant to this section. Notwithstanding
anything to the contrary contained in this Agreement, in the event of inconsistency between any provision in this Agreement and any provision
in a Definitive Certificate, as it may from time to time be amended, the terms of such Definitive Certificate shall control.
(d)
A Holder of a Definitive Certificate (pursuant to a Warrant Exchange or otherwise) has the right to elect at any time or from time to
time a Global Warrants Exchange (as defined below) pursuant to a Global Warrants Request Notice (as defined below). Upon written notice
by a Holder to the Company for the exchange of some or all of such Holder’s Warrants evidenced by a Definitive Certificate for
a beneficial interest in Global Warrants held in book-entry form through the DTC evidencing the same number of Warrants, which request
shall be in the form attached hereto as Exhibit 3 (a “Global Warrants Request Notice” and the date of delivery
of such Global Warrants Request Notice by the Holder, the “Global Warrants Request Notice Date” and the surrender
upon delivery by the Holder of the Warrants evidenced by Definitive Certificates for the same number of Warrants evidenced by a beneficial
interest in Global Warrants held in book-entry form through the DTC, a “Global Warrants Exchange”), the Company shall
promptly effect the Global Warrants Exchange and shall promptly direct the Warrant Agent to issue and deliver to the Holder Global Warrants
for such number of Warrants in the Global Warrants Request Notice, which beneficial interest in such Global Warrants shall be delivered
by the DTC’s Deposit or Withdrawal at Custodian system to the Holder pursuant to the instructions in the Global Warrants Request
Notice. In connection with a Global Warrants Exchange, the Company shall direct the Warrant Agent to deliver the beneficial interest
in such Global Warrants to the Holder within ten (10) Business Days of the Global Warrants Request Notice pursuant to the delivery instructions
in the Global Warrant Request Notice (“Global Warrants Delivery Date”). If the Company fails for any reason to deliver
to the Holder Global Warrants subject to the Global Warrants Request Notice by the Global Warrants Delivery Date, the Company shall pay
to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Global Warrants
(based on the VWAP (as defined in the Warrants) of the Common Stock on the Global Warrants Request Notice Date), $10 per Business Day
for each Business Day after such Global Warrants Delivery Date until such Global Warrants are delivered or, prior to delivery of such
Global Warrants, the Holder rescinds such Global Warrants Exchange. The Company covenants and agrees that, upon the date of delivery
of the Global Warrants Request Notice, the Holder shall be deemed to be the beneficial holder of such Global Warrants.
Section
4. Form of Warrant Certificates. The Warrant Certificate, together with the form of election to purchase Common Stock (“Notice
of Exercise”) and the form of assignment to be printed on the reverse thereof, shall be substantially in the form of Exhibit
1-A or Exhibit 1-B hereto.
Section
5. Countersignature and Registration. The Global Warrant shall be executed on behalf of the Company by its Chief Executive Officer,
Chief Financial Officer or Vice President, by electronic signature, and have affixed thereto the Company’s seal thereof which shall
be attested by the Secretary or an Assistant Secretary of the Company, by electronic signature. In case any officer of the Company who
shall have signed any of the Global Warrant shall cease to be such officer of the Company before countersignature by the Warrant Agent
and issuance and delivery by the Company, such Global Warrant, nevertheless, may be countersigned by the Warrant Agent, issued and delivered
with the same force and effect as though the person who signed such Global Warrant had not ceased to be such officer of the Company;
and any Global Warrant may be signed on behalf of the Company by any person who, at the actual date of the execution of such Global Warrant,
shall be a proper officer of the Company to sign such Global Warrant, although at the date of the execution of this Agreement any such
person was not such an officer.
The
Warrant Agent will keep or cause to be kept, at one of its offices, or at the office of one of its agents, books for registration and
transfer of the Global Warrants issued hereunder. Such books shall show the names and addresses of the respective Holders of the Global
Warrant, the number of warrants evidenced on the face of each of such Global Warrant and the date of each of such Global Warrant. The
Warrant Agent will create a special account for the issuance of Global Warrants. The Company will keep or cause to be kept at one of
its offices, books for the registration and transfer of any Definitive Certificates issued hereunder and the Warrant Agent shall not
have any obligation to keep books and records with respect to any Definitive Warrants. Such Company books shall show the names and addresses
of the respective Holders of the Definitive Certificates, the number of warrants evidenced on the face of each such Definitive Certificate
and the date of each such Definitive Certificate.
Section
6. Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates.
With respect to the Global Warrant, subject to the provisions of the Warrant Certificate and the last sentence of this first paragraph
of Section 6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions the Company may give
to the Warrant Agent, at any time after the closing date of the Offering, and at or prior to the Close of Business on the Termination
Date (as such term is defined in the Warrant Certificate), any Global Warrant or Global Warrants may be transferred, split up, combined
or exchanged for another Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares of Common Stock
as the Global Warrant or Global Warrants surrendered then entitled such Holder to purchase. Any Holder desiring to transfer, split up,
combine or exchange any Global Warrant shall make such request in writing delivered to the Warrant Agent, and shall surrender the Global
Warrant to be transferred, split up, combined or exchanged at the principal office of the Warrant Agent. Any requested transfer of Warrants,
whether in book-entry form or certificate form, shall be accompanied by reasonable evidence of authority of the party making such request
that may be required by the Warrant Agent. Thereupon the Warrant Agent shall, subject to the last sentence of this first paragraph of
Section 6, countersign and deliver to the Person entitled thereto a Global Warrant or Global Warrants, as the case may be, as so requested.
The Company may require payment from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Global Warrants. The Company shall compensate the Warrant Agent per the fee schedule
mutually agreed upon by the parties hereto and provided separately on the date hereof.
Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate,
which evidence shall include an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining,
and, in case of loss, theft or destruction, of indemnity in customary form and amount (but, with respect to any Definitive Certificates,
shall not include the posting of any bond by the Holder), and satisfaction of any other reasonable requirements established by Section
8-405 of the Uniform Commercial Code as in effect in the State of Delaware, and reimbursement to the Company and the Warrant Agent of
all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate if mutilated,
the Company will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery to the Holder in lieu of
the Warrant Certificate so lost, stolen, destroyed or mutilated.
Section
7. Exercise of Warrants; Exercise Price; Termination Date.
(a)
The Warrants shall be exercisable commencing on the Initial Exercise Date. The Warrants shall cease to be exercisable as set forth in
the Warrant Certificate. Subject to the foregoing and to Section 7(b) below, the Holder of a Warrant may exercise the Warrant in whole
or in part pursuant to Section 2 of the Warrant Certificate. Subject to Section 7(b) below, payment of the Exercise Price (unless exercised
via a cashless exercise) may be made, at the option of the Holder, by wire transfer or by certified or official bank check in United
States dollars, to the Warrant Agent at the principal office of the Warrant Agent or to the office of one of its agents as may be designated
by the Warrant Agent from time to time. In the case of the Holder of a Global Warrant, the Holder shall deliver the executed Notice of
Exercise and the payment of the Exercise Price as described herein. Notwithstanding any other provision in this Agreement, a holder whose
interest in a Global Warrant is a beneficial interest in a Global Warrant held in book-entry form through the DTC (or another established
clearing corporation performing similar functions), shall effect exercises by delivering to the DTC (or such other clearing corporation,
as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by the
DTC (or such other clearing corporation, as applicable). The Company acknowledges that the bank accounts maintained by the Warrant Agent
in connection with the services provided under this Agreement will be in its name and that the Warrant Agent may receive investment earnings
in connection with the investment at Warrant Agent’s risk and for its benefit of funds held in those accounts from time to time.
Neither the Company nor the Holders will receive interest on any deposits or Exercise Price. No ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. The
Company hereby acknowledges and agrees that, with respect to a holder whose interest in a Global Warrant is a beneficial interest in
a Global Warrant held in book-entry form through the DTC (or another established clearing corporation performing similar functions),
upon delivery of irrevocable instructions to such holder’s Participant to exercise such warrants, that solely for purposes of Regulation
SHO that such holder shall be deemed to have exercised such warrants.
(b)
Upon receipt of a Notice of Exercise for a Cashless Exercise, the Company will promptly calculate and transmit to the Warrant Agent the
number of Warrant Shares issuable in connection with such Cashless Exercise and deliver a copy of the Notice of Exercise to the Warrant
Agent, which shall issue such number of Warrant Shares in connection with such Cashless Exercise.
(c)
Upon the exercise of the Warrant Certificate pursuant to the terms of Section 2 of the Warrant Certificate, the Warrant Agent shall cause
the Warrant Shares underlying such Warrant Certificate or Global Warrant to be delivered to or upon the order of the Holder of such Warrant
Certificate or Global Warrant, registered in such name or names as may be designated by such Holder, no later than the Warrant Share
Delivery Date (as such term is defined in the Warrant Certificate). If the Company is then a participant in the DWAC system of the DTC
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) the Warrant is being exercised via Cashless Exercise, then the certificates for Warrant Shares shall be transmitted
by the Warrant Agent to the Holder by crediting the account of the Holder’s broker with the DTC through its DWAC system. For the
avoidance of doubt, if the Company becomes obligated to pay any amounts to any Holders pursuant to Section 2(d)(i) or 2(d)(iv) of the
Warrant Certificate, such obligation shall be solely that of the Company and not that of the Warrant Agent. Notwithstanding anything
else to the contrary in this Agreement, except in the case of a Cashless Exercise, if any Holder fails to duly deliver payment to the
Warrant Agent of an amount equal to the aggregate Exercise Price of the Warrant Shares to be purchased upon exercise of such Holder’s
Warrant as set forth in Section 7(a) hereof by the Warrant Share Delivery Date, the Warrant Agent will not obligated to deliver such
Warrant Shares (via DWAC or otherwise) until following receipt of such payment, and the applicable Warrant Share Delivery Date shall
be deemed extended by one day for each day (or part thereof) until such payment is delivered to the Warrant Agent.
(d)
The Warrant Agent shall deposit all funds received by it in payment of the Exercise Price for all Warrants in the account of the Company
maintained with the Warrant Agent for such purpose (or to such other account as directed by the Company in writing) and shall advise
the Company via email at the end of each day on which notices of exercise are received or funds for the exercise of any Warrant are received
of the amount so deposited to its account.
Section
8. Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for
cancellation or in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificate shall
be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the
Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates
to the Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to
retain such canceled certificates.
Section
9. Certain Representations; Reservation and Availability of Common Stock or Cash.
(a)
This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery
hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance
with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming due authentication thereof
by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration Statement, constitute valid
and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits
hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(b)
As of the date hereof, the authorized capital stock of the Company consists of (i) 280,000,000 shares of Common Stock, of which approximately
1,514,292 shares of Common Stock are issued and outstanding, and 6,891,179 shares of Common
Stock are reserved for issuance upon exercise of the Warrants, and (ii) 7,000,000 shares of preferred stock, 200,000 of which are issued
and outstanding . Except as disclosed in the Registration Statement, there are no other outstanding obligations, warrants, options or
other rights to subscribe for or purchase from the Company any class of capital stock of the Company.
(c)
The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Common Stock
or its authorized and issued Common Stock held in its treasury, free from preemptive rights, the number of shares of Common Stock that
will be sufficient to permit the exercise in full of all outstanding Warrants.
(d)
The Warrant Agent will create a special account for the issuance of Common Stock upon the exercise of Warrants.
(e)
The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock
upon exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may be payable
in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for
shares of Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise
or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Warrants until any such tax or governmental
charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time
of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge
is due.
Section
10. Common Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued (or to whose broker’s
account is credited shares of Common Stock through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed to
have become the holder of record for the Common Stock represented thereby on, and such certificate shall be dated, the date on which
submission of the Notice of Exercise was made, provided that the Warrant Certificate evidencing such Warrant is duly surrendered (but
only if required herein) and payment of the Exercise Price (and any applicable transfer taxes) is received on or prior to the Warrant
Share Delivery Date; provided, however, that if the date of submission of the Notice of Exercise is a date upon which the
Common Stock transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding day on which the Common Stock transfer books of the Company are open.
Section
11. Adjustment of Exercise Price, Number of Common Stock or Number of the Company Warrants. The Exercise Price, the number of
shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section
3 of the Warrant Certificate. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant Certificate,
the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than
Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in Section
3 of the Warrant Certificate and the provisions of Sections 7, 11 and 12 of this Agreement with respect to the Common Stock shall apply
on like terms to any such other shares. All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise
Price pursuant to the Warrant Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares
of Common Stock purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided
herein.
Section
12. Certification of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of
shares of Common Stock issuable upon the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a)
promptly prepare a certificate setting forth the Exercise Price of each Warrant as so adjusted, and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate
and (c) instruct the Warrant Agent to send a brief summary thereof to each Holder of a Warrant Certificate.
Section
13. Fractional Shares of Common Stock.
(a)
The Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any
fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding
of such fraction to the nearest whole Warrant (rounded up).
(b)
The Company shall not issue fractions of shares of Common Stock upon exercise of Warrants or distribute stock certificates which evidence
fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued or distributed,
the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant Certificate.
Section
14. Conditions of the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms
and conditions hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders
from time to time of the Warrant Certificates shall be subject:
| (a) | Compensation
and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation
detailed on the fee schedule mutually agreed upon by the parties hereto and provided separately
on the date hereof for all services rendered by the Warrant Agent and to reimburse the Warrant
Agent for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred
without gross negligence or willful misconduct by the Warrant Agent in connection with the
services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred
without gross negligence or willful misconduct on the part of the Warrant Agent, arising
out of or in connection with its acting as Warrant Agent hereunder, including the reasonable
costs and expenses of defending against any claim of such liability. The Warrant Agent shall
be under no obligation to institute or defend any action, suit, or legal proceeding in connection
herewith or to take any other action likely to involve the Warrant Agent in expense, unless
first indemnified to the Warrant Agent’s satisfaction. The indemnities provided by
this paragraph shall survive the resignation or discharge of the Warrant Agent or the termination
of this Agreement. Anything in this Agreement to the contrary notwithstanding, in no event
shall the Warrant Agent be liable under or in connection with the Agreement for indirect,
special, incidental, punitive or consequential losses or damages of any kind whatsoever,
including but not limited to lost profits, whether or not foreseeable, even if the Warrant
Agent has been advised of the possibility thereof and regardless of the form of action in
which such damages are sought, and the Warrant Agent’s aggregate liability to the Company,
or any of the Company’s representatives or agents, under this Section 14(a) or under
any other term or provision of this Agreement, whether in contract, tort, or otherwise, is
expressly limited to, and shall not exceed in any circumstances, one (1) year’s fees
received by the Warrant Agent as fees and charges under this Agreement, but not including
reimbursable expenses previously reimbursed to the Warrant Agent by the Company hereunder. |
| (b) | Agent
for the Company. In acting under this Agreement and in connection with the Warrant Certificates,
the Warrant Agent is acting solely as agent of the Company and does not assume any obligations
or relationship of agency or trust for or with any of the Holders of Warrant Certificates
or beneficial owners of Warrants. |
| | | |
| (c) | Counsel.
The Warrant Agent may consult with counsel satisfactory to it, which may include counsel
for the Company, and the written advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the advice of such counsel. |
| | | |
| (d) | Documents.
The Warrant Agent shall be protected and shall incur no liability for or in respect of any
action taken or omitted by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper parties. |
| | | |
| (e) | Certain
Transactions. The Warrant Agent, and its officers, directors and employees, may become
the owner of, or acquire any interest in, Warrants, with the same rights that it or they
would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable
law, it or they may engage or be interested in any financial or other transaction with the
Company and may act on, or as depositary, trustee or agent for, any committee or body of
Holders of Warrant Securities or other obligations of the Company as freely as if it were
not the Warrant Agent hereunder. Nothing in this Agreement shall be deemed to prevent the
Warrant Agent from acting as trustee under any indenture to which the Company is a party. |
| | | |
| (f) | No
Liability for Interest. Unless otherwise agreed with the Company, the Warrant Agent shall
have no liability for interest on any monies at any time received by it pursuant to any of
the provisions of this Agreement or of the Warrant Certificates. |
| | | |
| (g) | No
Liability for Invalidity. The Warrant Agent shall have no liability with respect to any
invalidity of this Agreement or the Warrant Certificates (except as to the Warrant Agent’s
countersignature thereon). |
| | | |
| (h) | No
Responsibility for Representations. The Warrant Agent shall not be responsible for any
of the recitals or representations herein or in the Warrant Certificate (except as to the
Warrant Agent’s countersignature thereon), all of which are made solely by the Company. |
| | | |
| (i) | No
Implied Obligations. The Warrant Agent shall be obligated to perform only such duties
as are herein and in the Warrant Certificates specifically set forth and no implied duties
or obligations shall be read into this Agreement or the Warrant Certificates against the
Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder
which may tend to involve it in any expense or liability, the payment of which within a reasonable
time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable
or under any duty or responsibility for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement
or for the application by the Company of the proceeds of the Warrant Certificate. The Warrant
Agent shall have no duty or responsibility in case of any default by the Company in the performance
of its covenants or agreements contained herein or in the Warrant Certificates or in the
case of the receipt of any written demand from a Holder of a Warrant Certificate with respect
to such default, including, without limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any proceedings at law. |
Section
15. Purchase or Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor
Warrant Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which
the Warrant Agent or any successor Warrant Agent shall be party, or any corporation succeeding to the corporate trust business of the
Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Warrant Agent under the provisions of Section 17. In case at the time such successor Warrant Agent shall
succeed to the agency created by this Agreement any of the Warrant Certificates shall have been countersigned but not delivered, any
such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so
countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent
may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant
Agent; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.
In
case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned
but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver such Warrant Certificates so countersigned;
and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant
Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force
provided in the Warrant Certificates and in this Agreement.
Section
16. Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company, by its acceptance hereof, shall be bound:
(a)
The Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.
(b)
Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed
by the Chief Executive Officer, Chief Financial Officer or Vice President of the Company; and such certificate shall be full authentication
to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c)
Subject to the limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence or willful
misconduct, or for a breach by it of this Agreement.
(d)
The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in
the Warrant Certificate (except its countersignature thereof) by the Company or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Company only.
(e)
The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except
its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this
Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change
in the number of shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the manner, method or amount
of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect
to the exercise of Warrants evidenced by the Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall
it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common
Stock to be issued pursuant to this Agreement or any Warrant Certificate or as to whether any shares of Common Stock will, when issued,
be duly authorized, validly issued, fully paid and nonassessable.
(f)
Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the
carrying out or performing by any party of the provisions of this Agreement.
(g)
The Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief
Executive Officer, Chief Financial Officer or Vice President of the Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered
to be taken by it in good faith in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions
without gross negligence or willful misconduct.
(h)
The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants
or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.
(i)
The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment thereof.
Section
17. Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’
notice in writing sent to the Company and to each transfer agent of the Common Stock and to the Holders of the Warrant Certificates.
The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant Agent
or successor Warrant Agent, as the case may be, and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates.
If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor
to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the Holder of a Warrant
Certificate (who shall, with such notice, submit his Warrant Certificate for inspection by the Company), then the Holder of any Warrant
Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent, provided that, for purposes
of this Agreement, the Company shall be deemed to be the Warrant Agent until a new warrant agent is appointed. Any successor Warrant
Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the
United States or of a state thereof, in good standing, which is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a combined
capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the predecessor Warrant
Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and
mail a notice thereof in writing to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this
Section 17, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the
appointment of the successor Warrant Agent, as the case may be.
Section
18. Issuance of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary,
the Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors
to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities
or property purchasable under the several Warrant Certificates made in accordance with the provisions of this Agreement.
Section
19. Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of
any Warrant Certificate to or on the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant
Certificate to or on the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate shall be
deemed given (a) on the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal
Express or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth
Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested),
and (d) the date of transmission, if such notice or communication is delivered via facsimile or email attachment at or prior to 5:30
p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such notice or communication
is delivered via facsimile or email attachment on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any
Business Day, in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like
notice):
| (a) | If
to the Company, to: |
Palisade
Bio, Inc.
7750
El Camino Real, Suite 2A
Carlsbad,
CA 92009
| (b) | If
to the Warrant Agent, to: |
Equiniti
Trust Company, LLC
1110
Centre Pointe Curve, Suite 101
Mendota
Heights, MN 55120-4101
Attention:
Corporate Actions
For
any notice delivered by email to be deemed given or made, such notice must be followed by notice sent by overnight courier service to
be delivered on the next business day following such email, unless the recipient of such email has acknowledged via return email receipt
of such email.
(c)
If to the Holder of any Warrant Certificate to the address of such Holder as shown on the registry books of the Company. Any notice required
to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding
any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder of any Warrant, such notice
shall be sufficiently given if given to the DTC (or its designee) pursuant to the procedures of the DTC or its designee.
Section
20. Supplements and Amendments.
(a)
The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Global
Warrants in order to add to the covenants and agreements of the Company for the benefit of the Holders of the Global Warrants or to surrender
any rights or power reserved to or conferred upon the Company in this Agreement, provided that such addition or surrender shall not adversely
affect the interests of the Holders of the Global Warrants or Warrant Certificates in any material respect.
(b)
In addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority
of the shares of Common Stock issuable under Warrants which are not beneficially owned by Affiliates of the Company, the Company and
the Warrant Agent may modify this Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or modifying in any manner the rights of the Holders of the Global Warrants; provided, however,
that no modification of the terms (including but not limited to the adjustments described in Section 11) upon which the Warrants are
exercisable or the rights of holders of Warrants to receive liquidated damages or other payments in cash from the Company or reducing
the percentage required for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding
Warrant Certificate affected thereby; provided, further, however, that no amendment hereunder shall affect any terms
of any Warrant Certificate issued in a Warrant Exchange. As a condition precedent to the Warrant Agent’s execution of any amendment,
the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed
amendment complies with the terms of this Section 20.
Section
21. Successors. All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of their respective successors and assigns hereunder.
Section
22. Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders
of Warrant Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement. This Agreement shall
be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates. Notwithstanding
anything to the contrary contained herein, to the extent any provision of a Warrant Certificate conflicts with any provision of this
Agreement, the provisions of the Warrant Certificate shall govern and be controlling.
Section
23. Governing Law. This Agreement and each Warrant Certificate and Global Warrant issued hereunder shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof.
Section
24. Counterparts. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same instrument, and may be delivered by electronic delivery of a portable
document format (PDF) file (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions
Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com).
Section
25. Captions. The captions of the sections of this Agreement have been inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
Section
26. Information. The Company agrees to promptly provide to the Holders of the Warrants any information it provides to the holders
of the shares of Common Stock, except to the extent any such information is publicly available on the EDGAR system (or any successor
thereof) of the Securities and Exchange Commission.
[Signature
page to follow]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
| |
PALISADE
BIO, INC. |
| |
|
|
| |
By: |
|
| |
Name: |
J.D.
Finley |
| |
Title: |
CEO |
| |
|
|
| |
EQUINITI TRUST COMPANY, LLC |
| |
|
|
| |
By: |
|
| |
Name: |
|
| |
Title: |
|
Exhibit
1-A
Form
of Pre-Funded Warrant Certificate
Exhibit
1-B
Form
of Common Warrant Certificate
Exhibit
2
Form
of Warrant Certificate Request Notice
WARRANT
CERTIFICATE REQUEST NOTICE
To:
Equiniti Trust Company, LLC, as Warrant Agent for Palisade Bio, Inc. (the “Company”)
The
undersigned Holder of [Pre-Funded] [Common] Warrants (“Warrants”) in the form of Global Warrants issued by the Company
hereby elects to receive a Warrant Certificate evidencing the Warrants held by the Holder as specified below:
| 1. | Name
of Holder of Warrants in form of Global Warrants: _____________________________ |
| | | |
| 2. | Name
of Holder in Warrant Certificate (if different from name of Holder of Warrants in form of
Global Warrants): ________________________________ |
| | | |
| 3. | Number
of Warrants in name of Holder in form of Global Warrants: ___________________ |
| | | |
| 4. | Number
of Warrants for which Warrant Certificate shall be issued: __________________ |
| | | |
| 5. | Number
of Warrants in name of Holder in form of Global Warrants after issuance of Warrant Certificate,
if any: ___________ |
| | | |
| 6. | Warrant
Certificate shall be delivered to the following address: |
______________________________
______________________________
______________________________
______________________________
The
undersigned hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate,
the Holder is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number
of Warrants evidenced by the Warrant Certificate.
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ____________________________________________________
Signature
of Authorized Signatory of Investing Entity: ______________________________
Name
of Authorized Signatory: ________________________________________________
Title
of Authorized Signatory: _________________________________________________
Date:
_______________________________________________________________
Exhibit
3
Form
of Global Warrant Request Notice
GLOBAL
WARRANT REQUEST NOTICE
To:
Equiniti Trust Company, LLC, as Warrant Agent for Palisade Bio, Inc. (the “Company”)
The
undersigned Holder of [Pre-Funded] [Common] Warrants (“Warrants”) in the form of Warrants Certificates issued by the
Company hereby elects to receive a Global Warrant evidencing the Warrants held by the Holder as specified below:
| |
1. |
Name
of Holder of Warrants in form of Warrant Certificates: _____________________________ |
| |
|
|
| |
2. |
Name
of Holder in Global Warrant (if different from name of Holder of Warrants in form of Warrant Certificates): ________________________________ |
| |
|
|
| |
3. |
Number
of Warrants in name of Holder in form of Warrant Certificates: ___________________ |
| |
|
|
| |
4. |
Number
of Warrants for which Global Warrant shall be issued: __________________ |
| |
|
|
| |
5. |
Number
of Warrants in name of Holder in form of Warrant Certificates after issuance of Global Warrant, if any: ___________ |
| |
|
|
| |
6. |
Global
Warrant shall be delivered to the following address: |
______________________________
______________________________
______________________________
______________________________
The
undersigned hereby acknowledges and agrees that, in connection with this Global Warrant Exchange and the issuance of the Global Warrant,
the Holder is deemed to have surrendered the number of Warrants in form of Warrant Certificates in the name of the Holder equal to the
number of Warrants evidenced by the Global Warrant.
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ____________________________________________________
Signature
of Authorized Signatory of Investing Entity: ______________________________
Name
of Authorized Signatory: ________________________________________________
Title
of Authorized Signatory: _________________________________________________
Date:
_______________________________________________________________
Exhibit
10.01
December
12, 2024
Re:
Amendment to Existing Warrants
Dear
Holder:
Reference
is hereby made to the offering on Form S-1 (File No. 333-282883) on or about the date hereof (the “Offering”) by Palisade
Bio, Inc. (the “Company”) of its common stock, par value $0.01 per share (“Common Stock”), and/or
other securities of the Company (collectively, the “Securities”).
This
letter confirms that, in consideration for the undersigned holder’s (“Holder”) participation in the Offering and purchase
of at least $4,000,000 of Securities in the Offering (the “Purchase Commitment”), the Company hereby amends, effective
as of the closing of the Offering, the Common Stock purchase warrants set forth on Schedule A hereto (the “Existing Warrants”)
by reducing the Exercise Price (as defined therein) of the Existing Warrants to $1.40 per share (the “Warrant Amendment”).
The Warrant Amendment shall be effective upon the closing of the Offering and the satisfaction of the other terms and conditions referenced
below.
The
Warrant Amendment is subject to the consummation of the Offering and the Holder’s satisfaction of the Purchase Commitment. In the
event that either (i) the Offering is not consummated, or (ii) the Holder does not satisfy the Purchase Commitment, the Warrant Amendment
shall be null and void and the provisions of the Existing Warrants in effect prior to the date hereof shall remain in full force and
effect.
Except
as expressly set forth herein, the terms and provisions of the Existing Warrants shall remain in full force and effect after the execution
of this letter and shall not in any way be changed, modified or superseded except by the terms set forth herein.
From
and after the effectiveness of the Warrant Amendment, the Company agrees to promptly deliver to the Holder, upon request, the amended
Existing Warrants that reflect the Warrant Amendment in exchange for the surrender for cancellation of the Holder’s Existing Warrants.
For any registered Existing Warrants or if the Common Stock underlying the Existing Warrants are registered for resale on a registration
statement, the Company shall file a prospectus supplement to the applicable registration statement in connection with the amendments
hereunder within two (2) business days of the closing of the Offering.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties hereto have caused this agreement to be duly executed by their respective authorized signatories as of the
date first indicated above.
| PALISADE
Bio, Inc. |
|
| |
|
|
| By:
|
|
|
| Name:
|
|
|
| Title:
|
|
|
Name
of Holder: ________________________________________________________
Signature
of Authorized Signatory of Holder: __________________________________
Name
of Authorized Signatory: ____________________________________________________
[SIGNATURE
PAGE TO WARRANT AMENDMENT AGREEMENT]
SCHEDULE
A
EXISTING
WARRANTS
Exhibit 99.01
CONFIDENTIAL
DRAFT NOT FOR IMMEDIATE RELEASE
Palisade
Bio Announces Pricing of $5 Million Underwritten Public Offering Priced At-Market Under Nasdaq Rules
Carlsbad, CA
– December 12, 2024 – Palisade Bio, Inc, (Nasdaq: PALI) (“Palisade,” “Palisade Bio” or the
“Company”), a clinical-stage biopharmaceutical company focused on developing novel therapeutics for autoimmune, inflammatory,
and fibrotic diseases, today announced the pricing of an underwritten public offering for gross proceeds of approximately $5 million
prior to deducting underwriting commissions and offering expenses. The offering is comprised of (i) 158,000 Class A Units with each unit
consisting of (a) one share of common stock and (b) one common warrant to purchase one share of common stock (the “Common Warrants”),
and (ii) 3,120,688 Class B Units with each unit consisting of (a) one prefunded common stock purchase warrant to purchase one share of
common stock (“Prefunded Warrants”) and (b) one Common Warrant. The price per Class A Unit is $1.525 and the price per Class
B Unit is $1.5249 (collectively, the “Offering”).
The
Common Warrants will have an exercise price of $1.40 per share, will be exercisable at issuance, and have a term expiring five years
from issuance.
Ladenburg
Thalmann & Co. Inc. is acting as sole bookrunning manager in connection with this Offering.
The
closing of the Offering is expected to take place on or about December 13, 2024, subject to the satisfaction or waiver of customary closing
conditions.
In
addition, the Company has granted the underwriter a 45-day option to purchase up to 491,803 additional shares of common stock and/or
Common Warrants, solely to cover over-allotments, if any, at the public offering price less the underwriting discounts and commissions.
In
connection with the Offering, the Company has elected to reprice approximately one million previously issued warrants to $1.40 per share.
The
gross proceeds from the Offering to the Company, before deducting underwriting discounts and commissions and other Offering expenses
and excluding any proceeds that may be received upon the exercise of the Common Warrants and the exercise of the underwriter’s
option to purchase additional shares of common stock and/or Common Warrants, are expected to be approximately $5 million. The Company
currently intends to use the net proceeds of the Offering primarily to fund our Phase 1 clinical trial of PALI-2108, pre-clinical studies,
research and development, and working capital.
The
securities were offered pursuant to a registration statement on Form S-1 (File No. 333-282883), which was declared effective by the United
States Securities and Exchange Commission (“SEC”) on December 12, 2024. The securities may be offered only by means of a
prospectus which forms part of the effective registration statement. A preliminary prospectus describing the terms of the Offering has
been filed with the SEC and is available on the SEC’s website located at http://www.sec.gov. A final prospectus relating to this
Offering will be filed by the Company with the SEC. Electronic copies of the final prospectus relating to the Offering, when available,
may also be obtained by contacting Ladenburg Thalmann & Co. Inc., Prospectus Department, 640 Fifth Avenue, 4th Floor, New York, New
York 10019 or by email at prospectus@ladenburg.com.
This
press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sales of these securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of such jurisdiction.
About
Palisade Bio
Palisade
Bio is a clinical-stage biopharmaceutical company focused on developing and advancing novel therapeutics for patients living with autoimmune,
inflammatory, and fibrotic diseases. The Company believes that by using a targeted approach with its novel therapeutics it will transform
the treatment landscape. For more information, please go to www.palisadebio.com.
Forward
Looking Statements
This
communication contains “forward-looking” statements for purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding statements regarding
the closing of the underwritten Offering, and the over-allotment option. These forward-looking statements are based on the Company’s
current expectations. Forward-looking statements involve risks and uncertainties. The Company’s actual results and the timing of
events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties,
which include, without limitation, the timing and completion of the Offering and the intended use of net proceeds from the Offering,
the extent of our cash runway; our ability to successfully develop our licensed technologies; the timing and outcome of our current and
anticipated applications and studies related to our product candidates; estimates about the size and growth potential of the markets
for our product candidates, and our ability to serve those markets, including any potential revenue generated; future regulatory, judicial,
and legislative changes or developments in the United States (U.S.) and foreign countries and the impact of these changes; our ability
to maintain the Nasdaq listing of our securities; our ability to build a commercial infrastructure in the U.S. and other markets; our
ability to compete effectively in a competitive industry; our ability to identify and qualify manufacturers to provide API and manufacture
drug product; our ability to enter into commercial supply agreements; the success of competing technologies that are or may become available;
our ability to attract and retain key scientific or management personnel; the accuracy of our estimates regarding expenses, future revenues,
capital requirements and needs for additional financing; our ability to obtain funding for our operations; our ability to attract collaborators
and strategic partnerships; and the impact of any global event on our business, and operations, and supply. Any statements contained
in this communication that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking
statements are based upon the Company’s current expectations. Forward-looking statements involve risks and uncertainties. The Company’s
actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result
of these risks and uncertainties, which include, without limitation, the Company’s ability to advance its nonclinical and clinical
programs, the uncertain and time-consuming regulatory approval process; and the Company’s ability to secure additional financing
to fund future operations and development of its product candidates. Additional risks and uncertainties can be found in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”)
on March 26, 2024, and the Quarterly Reports on Form 10-Q or other SEC filings that are filed thereafter, including the Registration
Statement on Form S-1. These forward-looking statements speak only as of the date hereof, and the Company expressly disclaims any obligation
or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change
in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements
are based.
Investor
Relations Contact
JTC
Team, LLC
Jenene
Thomas
908-824-0775
PALI@jtcir.com
Exhibit
99.02
CONFIDENTIAL
DRAFT NOT FOR IMMEDIATE RELEASE
Palisade
Bio Announces Closing of $5 Million Underwritten Public Offering Priced At-Market Under Nasdaq Rules
Carlsbad, CA
– December 13, 2024 – Palisade Bio, Inc, (Nasdaq: PALI) (“Palisade,” “Palisade Bio” or the
“Company”), a clinical-stage biopharmaceutical company focused on developing novel therapeutics for autoimmune, inflammatory,
and fibrotic diseases, today announced the closing of its previously announced underwritten public offering for gross proceeds of approximately
$5 million prior to deducting underwriting commissions and offering expenses. The offering is comprised of (i) 158,000 Class A Units
with each unit consisting of (a) one share of common stock and (b) one common warrant to purchase one share of common stock (the “Common
Warrants”), and (ii) 3,120,688 Class B Units with each unit consisting of (a) one prefunded common stock purchase warrant to purchase
one share of common stock (“Prefunded Warrants”) and (b) one Common Warrant. The price per Class A Unit is $1.525 and the
price per Class B Unit is $1.5249 (collectively, the “Offering”).
The
Common Warrants have an exercise price of $1.40 per share, are exercisable at issuance, and have a term expiring five years from issuance.
Ladenburg
Thalmann & Co. Inc. acted as sole bookrunning manager in connection with this Offering.
In
addition, the Company has granted the underwriter a 45-day option to purchase up to 491,803 additional shares of common stock and/or
Common Warrants, solely to cover over-allotments, if any, at the public offering price less the underwriting discounts and commissions.
In
connection with the Offering, the Company has elected to reprice approximately one million previously issued warrants to $1.40 per share.
The
gross proceeds from the Offering to the Company, before deducting underwriting discounts and commissions and other Offering expenses
and excluding any proceeds that may be received upon the exercise of the Common Warrants and the exercise of the underwriter’s
option to purchase additional shares of common stock and/or Common Warrants, were approximately $5 million. The Company currently intends
to use the net proceeds of the Offering primarily to fund our Phase 1 clinical trial of PALI-2108, pre-clinical studies, research and
development, and working capital.
The
securities were offered pursuant to a registration statement on Form S-1 (File No. 333-282883), which was declared effective by the United
States Securities and Exchange Commission (“SEC”) on December 12, 2024. The securities may be offered only by means of a
prospectus which forms part of the effective registration statement. A preliminary prospectus describing the terms of the Offering has
been filed with the SEC and is available on the SEC’s website located at http://www.sec.gov. A final prospectus relating to this
Offering was filed by the Company with the SEC. Electronic copies of the final prospectus relating to the Offering, when available, may
also be obtained by contacting Ladenburg Thalmann & Co. Inc., Prospectus Department, 640 Fifth Avenue, 4th Floor, New York, New York
10019 or by email at prospectus@ladenburg.com.
This
press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sales of these securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of such jurisdiction.
About
Palisade Bio
Palisade
Bio is a clinical-stage biopharmaceutical company focused on developing and advancing novel therapeutics for patients living with autoimmune,
inflammatory, and fibrotic diseases. The Company believes that by using a targeted approach with its novel therapeutics it will transform
the treatment landscape. For more information, please go to www.palisadebio.com.
Forward
Looking Statements
This
communication contains “forward-looking” statements for purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding the over-allotment option.
These forward-looking statements are based on the Company’s current expectations. Forward-looking statements involve risks and
uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking
statements as a result of these risks and uncertainties, which include, without limitation, the intended use of net proceeds from the
Offering, the extent of our cash runway; our ability to successfully develop our licensed technologies; the timing and outcome of our
current and anticipated applications and studies related to our product candidates; estimates about the size and growth potential of
the markets for our product candidates, and our ability to serve those markets, including any potential revenue generated; future regulatory,
judicial, and legislative changes or developments in the United States (U.S.) and foreign countries and the impact of these changes;
our ability to maintain the Nasdaq listing of our securities; our ability to build a commercial infrastructure in the U.S. and other
markets; our ability to compete effectively in a competitive industry; our ability to identify and qualify manufacturers to provide API
and manufacture drug product; our ability to enter into commercial supply agreements; the success of competing technologies that are
or may become available; our ability to attract and retain key scientific or management personnel; the accuracy of our estimates regarding
expenses, future revenues, capital requirements and needs for additional financing; our ability to obtain funding for our operations;
our ability to attract collaborators and strategic partnerships; and the impact of any global event on our business, and operations,
and supply. Any statements contained in this communication that are not statements of historical fact may be deemed to be forward-looking
statements. These forward-looking statements are based upon the Company’s current expectations. Forward-looking statements involve
risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in
such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, the Company’s
ability to advance its nonclinical and clinical programs, the uncertain and time-consuming regulatory approval process; and the Company’s
ability to secure additional financing to fund future operations and development of its product candidates. Additional risks and uncertainties
can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities
and Exchange Commission (“SEC”) on March 26, 2024, and the Quarterly Reports on Form 10-Q or other SEC filings that are filed
thereafter, including the Registration Statement on Form S-1. These forward-looking statements speak only as of the date hereof, and
the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or
circumstances on which any such statements are based.
Investor
Relations Contact
JTC
Team, LLC
Jenene
Thomas
908-824-0775
PALI@jtcir.com
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|
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|
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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
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-Publisher SEC
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-Publisher SEC
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-Publisher SEC
-Name Exchange Act
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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 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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| 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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| Namespace Prefix: |
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