Table of Contents
As filed with the Securities and Exchange Commission
on October 13, 2023.
Registration No. 333-274582
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________________
Pre-Effective Amendment No. 1
to the
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
_____________________________
SONOMA PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware |
(State or other jurisdiction of incorporation or
organization)
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2834 |
(Primary Standard Industrial Classification Code Number) |
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68-0423298 |
(I.R.S. Employer Identification Number) |
|
5445 Conestoga Court, Suite 150
Boulder, CO 80301
(800) 759-9305 |
(Address, including zip code, and telephone number,
including area code, of registrant’s principal
executive offices) |
|
Amy Trombly
Chief Executive Officer
5445 Conestoga Court, Suite 150
Boulder, CO 80301
(800) 759-9305 |
(Name, address, including zip code, and telephone number,
including area code, of agent for service) |
|
___________________________ |
with copies to:
Andrew J. Merken, Esq.
Burns & Levinson LLP
125 High Street
Boston, MA 02110
Phone: (617) 345-3740
Fax: (617) 345-3299 |
|
Leslie Marlow, Esq.
Patrick J. Egan, Esq.
Hank Gracin, Esq.
Blank Rome LLP
1271 Avenue of the Americas
New York, NY 10020
Phone: (212) 885-5000
Fax: (212) 885-5001 |
Approximate date of commencement of proposed sale
to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on
this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the
following box: ☒
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment
filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of
the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ |
Accelerated filer ☐ |
Non-accelerated filer ☒ |
Smaller reporting company ☒ |
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 7(a)(2)(B) of the Securities Act. ☐
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete
and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission
is declared effective. This prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED OCTOBER
13, 2023.
Up to 6,666,666 Shares of Common Stock
SONOMA PHARMACEUTICALS, INC.
We are offering on a best efforts basis up
to 6,666,666 shares of our common stock, $0.0001 par value per share (the “Common Stock”), based on an assumed public offering
price of $0.75 per share, which is equal to the closing price of our shares of Common Stock on the Nasdaq Capital Market on October
9, 2023. See “Description of Securities” in this prospectus for more information. We refer to the securities
offered by this prospectus as the “Securities.”
Our common stock is traded on the Nasdaq Capital
Market under the symbol “SNOA.” On October 9, 2023, the last reported sale price for our common stock was $0.75 per share.
The offering will terminate on November 15,
2023, unless completed sooner or unless we decide to terminate the offering (which we may do at any time in our discretion) prior to
that date. We expect that this offering will end two (2) trading days after we first enter into a securities purchase agreement and we
will deliver all securities issued in connection with this offering delivery versus payment/receipt versus payment upon our receipt of
investor funds. Accordingly, neither we nor the placement agent have made any arrangements to place investor funds in an escrow account
or trust account since the placement agent will not receive investor funds in connection with the sale of the securities offered hereunder.
We have engaged Maxim Group LLC as our exclusive
placement agent (the “placement agent”) to use its reasonable best efforts to solicit offers to purchase the Securities in
this offering. The placement agent has no obligation to purchase any of the Securities from us or to arrange for the purchase or sale
of any specific number or dollar amount of the Securities. Because there is no minimum offering amount required as a condition to closing
in this offering the actual public offering amount, placement agent’s fee, and proceeds to us, if any, are not presently determinable
and may be substantially less than the total maximum offering amounts set forth above and throughout this prospectus. We have agreed to
pay the placement agent the placement agent fees set forth in the table below. See “Plan of Distribution” in this prospectus
for more information.
The final public offering price of the securities
sold in this offering will be determined between us, the placement agent, and the investors in the offering and may be at a discount to
the current market price of our common stock. Therefore, the recent market price used throughout this prospectus will not be indicative
of the actual public offering price.
We are a “smaller reporting company” under applicable
federal securities laws and are subject to reduced public company reporting requirements. Investing in our securities involves a high
degree of risk. See the section entitled “Risk Factors” beginning on page 5.
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Per Share |
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Total |
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Public offering price |
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$ |
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$ |
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Placement agent fees(1) |
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$ |
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$ |
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Proceeds, before expenses, to us |
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$ |
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$ |
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(1) | | Represents a cash fee equal to 8.0% of the aggregate purchase price paid by investors in this
offering. Does not include certain out-of-pocket expenses of the placement agent that are reimbursable by us. See “Plan
of Distribution” beginning on page 9 of this prospectus for a description of the compensation to be received by the
placement agent. |
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
We anticipate that the delivery of the shares
of our Common Stock against payment therefor will be made on or before ,
2023.
Maxim Group LLC
Subject to completion, the date of this prospectus
is October 13, 2023.
TABLE OF CONTENTS
You should rely only on the information incorporated
by reference or provided in this prospectus, any prospectus supplement and the registration statement. We have not, and the placement
agent has not, authorized anyone else to provide you with different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making an offer to sell these securities in any state where the offer or sale is not
permitted. You should assume that the information in this prospectus and any prospectus supplement, or incorporated by reference, is accurate
only as of the dates of those documents. Our business, financial condition, results of operations and prospects may have changed since
those dates.
ABOUT THIS PROSPECTUS
We incorporate by reference
important information into this prospectus. You may obtain the information incorporated by reference without charge by following the instructions
under “Where You Can Find More Information.” You should carefully read this prospectus before deciding to invest in our securities.
We have not, and the placement
agent has not, authorized anyone to provide any information or to make any representations other than those contained in this prospectus
or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and
can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell
only the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. The information contained
in this prospectus or in any applicable free writing prospectus is current only as of its date, regardless of its time of delivery or
any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date. To
the extent there is a conflict between the information contained in this prospectus, on the one hand, and the information contained in
any document filed with the Securities and Exchange Commission (the “SEC”) before the date of this prospectus and incorporated
by reference herein, on the other hand, you should rely on the information in this prospectus. If any statement in a document incorporated
by reference is inconsistent with a statement in another document incorporated by reference having a later date, the statement in the
document having the later date modifies or supersedes the earlier statement.
Unless otherwise indicated,
all information contained or incorporated by reference in this prospectus concerning our industry in general or any portion thereof, including
information regarding our general expectations and market opportunity, is based on management’s estimates using internal data, data
from industry related publications, consumer research and marketing studies or other externally obtained data.
For investors outside the
United States: We have not, and the placement agent has not, done anything that would permit this offering or possession or distribution
of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the
United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the
offering of the securities and the distribution of this prospectus outside the United States.
We further note that the representations,
warranties and covenants made by us in any agreement that is filed as an exhibit to the registration statement of which this prospectus
is a part and in any document that is incorporated by reference herein were made solely for the benefit of the parties to such agreement,
including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
This prospectus and the
information incorporated by reference into this prospectus contain references to our trademarks and to trademarks belonging to other entities.
Solely for convenience, trademarks and trade names referred to in this prospectus and the information incorporated by reference into this
prospectus, including logos, artwork, and other visual displays, may appear without the ® or TM symbols, but such references are not
intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the
applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names or
trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other company.
The Sonoma Pharmaceuticals
logo and other trademarks or service marks of Sonoma Pharmaceuticals, Inc. appearing in this prospectus are the property of Sonoma Pharmaceuticals,
Inc. All other brand names or trademarks appearing in this prospectus are the property of their respective owners. Solely for convenience,
the trademarks and trade names in this prospectus may be referred to without the ® or TM symbols, but such references should not be
construed as any indicator that their respective owners will not assert their rights thereto. We do not intend our use or display of other
companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other company.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
When used in this prospectus, the words “expect,”
“believe,” “anticipate,” “estimate,” “may,” “could,” “intend,”
and similar expressions are intended to identify forward-looking statements. These statements are subject to known and unknown risks and
uncertainties that could cause actual results to differ materially from those projected or otherwise implied by the forward-looking statements.
These forward-looking statements speak only as of the date of this prospectus. Given these risks and uncertainties, you should not place
undue reliance on these forward-looking statements.
These forward-looking statements may include,
but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of
operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion
and use of our device, and all statements (other than statements of historical facts) that address activities, events or developments
that we intend, expect, project, believe or anticipate will or may occur in the future.
Forward-looking statements are not guarantees
of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments
made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments
and other factors they believe to be appropriate.
Important factors that could cause actual results,
developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other
things:
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our expectations regarding future revenues and profitability; |
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our expectations regarding future growth; |
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our expectations concerning future product research, development, clinical trial and commercialization activities and related costs; |
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our expectations regarding product development timelines; |
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our ability to successfully commercialize and market our product candidates in development, if approved; |
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matters relating to the manufacture of our commercial products; |
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our strategies and opportunities; |
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the potential market size, opportunity and growth potential for our product candidates, if approved; |
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anticipated trends in our markets; |
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anticipated dates for commencement or completion of clinical trials; |
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our expectations concerning regulatory matters concerning our product candidates, including the timing of anticipated regulatory filings; |
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our liquidity needs and need for future funding and working capital; |
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our need to raise additional capital and our ability to obtain sufficient funding to support our planned activities; |
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our expectations regarding future expense, profit, cash flow, or balance sheet items or any other guidance regarding future periods; |
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the accuracy of our estimates regarding expenses, capital requirements and needs for additional financing; |
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our ability to continue as a going concern; |
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the impact of the health emergencies or global geopolitical events on our business; |
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the success, safety and efficacy of our drug products; |
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accounting principles; |
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the potential outcome of any litigation or legal proceedings; |
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the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology; |
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the volatility of the price of our common stock; |
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our financial performance; and |
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other factors described from time to time in documents that we file with the SEC. |
Such statements are not historical facts, but
are based on our current expectations and projections about future events. They are subject to risks and uncertainties, known and unknown,
that could cause actual results and developments to differ materially from those expressed or implied in such statements.
These statements are only current predictions
and are subject to known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results,
levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We
discuss many of these risks in this prospectus in greater detail under the heading “Risk Factors” and elsewhere in this prospectus.
You should not rely upon forward-looking statements as predictions of future events.
Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new
information, future events or otherwise, after the date of this prospectus.
We will continue to file annual, quarterly and
current reports, proxy statements and other information with the SEC. Forward-looking statements speak only as of the dates specified
in such filings. Except as expressly required under federal securities laws and the rules and regulations of the SEC, we do not undertake
any obligation to update any forward-looking statements to reflect events or circumstances arising after any such date, whether as a result
of new information or future events or otherwise. You should not place undue reliance on the forward-looking statements included in this
prospectus or that may be made elsewhere from time to time by us, or on our behalf. All forward-looking statements attributable to us
are expressly qualified by these cautionary statements.
PROSPECTUS SUMMARY
This summary highlights information contained
elsewhere in this prospectus or incorporated by reference. This summary does not contain all of the information you should consider before
buying shares of our Securities. You should read the entire prospectus carefully, especially the risks of investing in our Securities
that we describe under “Risk Factors” and our consolidated financial statements appearing in our annual
and periodic reports incorporated in this prospectus by reference, before deciding to invest in our securities. Unless the context requires
otherwise, references to “Sonoma,” “the Company,” “the Registrant,” “we,” “our”
and “us” refer to Sonoma Pharmaceuticals, Inc.
Company Overview
Sonoma Pharmaceuticals is a global scientific
healthcare company that pioneered the use of hypochlorous acid (HOCl) in the specialty pharmaceutical
sector with over 20 years of experience developing and manufacturing HOCl products. We develop safe and effective solutions that provide
fast relief and are free from side effects and other limitations. Our primary focus is developing innovative solutions for dermatological
conditions, wound care, eye care, oral care, podiatry, animal health care and non-toxic disinfectants. We believe our products, which
are sold throughout the United States and internationally, have improved patient outcomes for millions of patients by treating and reducing
certain skin diseases including acne, atopic dermatitis, scarring, infections, itch, pain and harmful inflammatory responses, without
a single report of serious adverse effect.
We have 21 U.S. FDA clearances as 510(k) medical
devices, CE marks for over 39 products, and extensive worldwide regulatory clearances. We have a pharmaceutical-grade manufacturing facility
in Guadalajara, Mexico, and a robust and diverse international partner network selling into over 55 countries. Our core strategy is to
work with partners both in the United States and around the world to market and distribute our products, and in some cases we also market
and sell our own direct-to-consumer and office dispense products.
Our key business channels and products include:
Dermatology
In the United States, we sell over-the-counter
dermatology products including:
| · | Regenacyn® Advanced Scar Gel, which is clinically
proven to improve the overall appearance of scars while reducing pain, itch, redness, and inflammation |
| · | Reliefacyn® Advanced Itch-Burn-Rash-Pain
Relief Hydrogel, for the alleviation of red bumps, rashes, shallow skin fissures, peeling, and symptoms of eczema/atopic dermatitis |
| · | Rejuvacyn® Advanced Skin Repair Cooling Mist,
for management of minor skin irritations following cosmetic procedures as well as daily skin health and hydration |
We also sell a line of prescription strength office
dispense products exclusively for skin care professionals, including:
| · | Regenacyn® Plus Scar Gel |
| · | Reliefacyn® Plus Advanced
Itch-Burn-Rash-Pain Relief Hydrogel |
| · | Rejuvacyn® Plus Skin Repair
Cooling Mist |
We sell a pediatric dermatology and wound care
product for over-the-counter use, PediacynTM All Natural Skin Care & First Aid For Children. Our consumer products are
available through Amazon.com, our website and third-party distributors.
We partner with EMC Pharma, LLC to sell our prescription
dermatology products in the United States. We sell dermatology products in Europe and Asia through a distributor network.
First Aid and Wound Care
In the United States, we sell our Microcyn®
technology wound care products directly to hospitals, physicians, nurses, and other healthcare practitioners and indirectly through non-exclusive
distribution arrangements. In Europe and the Middle East, we sell our wound care products through a diverse network of distributors.
Microcyn® OTC Wound and Skin Cleanser, our direct to consumer over-the-counter wound care product in the United States, is available
without a prescription through Amazon.com, our online store and third-party distributors.
In June 2023, we announced a new application
of our HOCl technology for intraoperative pulse lavage irrigation treatment, which can replace commonly used IV bags in a variety of surgical
procedures. It is expected to be ready for commercial use in Europe in September 2023, and we anticipate commercial launch in the U.S.
in 2024.
Eye Care
In the United States, we sell Ocucyn® Eyelid
& Eyelash Cleanser directly to consumers on Amazon.com, through our online store, and through third party distributors. Our prescription
product Acuicyn™ is an antimicrobial prescription solution for the treatment of blepharitis and the daily hygiene of eyelids and
lashes and helps manage red, itchy, crusty and inflamed eyes, and is sold by our partner EMC Pharma through its distribution network.
In international markets we rely on distribution
partners to sell our eye products, which are sold under private labels in Italy, Germany, Spain, Portugal, France, the United Kingdom,
and parts of Asia.
Oral, Dental and Nasal Care
We sell oral, dental, and nasal products around
the world, including:
| · | Endocyn®, a biocompatible root canal irrigant
sold through U.S.-based distributors |
| · | Microdacyn60® Oral Care, which treats mouth
and throat infections and thrush |
| · | Sinudox Hypotonic Nasal Hygiene, which clears
and cleans a blocked nose, stuffy nose and sinuses by ancillary ingredients that may have a local antimicrobial effect and is sold through
Amazon in Europe. In other parts of the world, we partner with distributors to sell Sinudox. |
Podiatry
PodiacynTM Advanced Everyday Foot Care
is sold direct to consumers for over-the-counter use in the United States and intended for management of foot odors, infections, and irritations,
as well as daily foot health and hygiene. Podiacyn is available through Amazon.com, our online store and third-party distributors.
Animal Health Care
In the U.S. and Canada, we partner with Manna
Pro Products, LLC to distribute non-prescription MicrocynAH® products to national pet-store retail chains, farm animal specialty stores.
MicrocynAH is intended for the safe and rapid treatment of a variety of animal afflictions including cuts, burns, lacerations, rashes,
hot spots, rain rot, post-surgical sites, pink eye symptoms and wounds to the outer ear of any animal. For the Asian and European markets,
we partner with Petagon, Limited to sell MicrocynAH.
We also sell a line of animal health products
exclusively for veterinarians, MicrocynVS®, intended for the management of wound, skin, ear and eye afflictions in all animal species.
Surface Disinfectants
Nanocyn® Disinfectant & Sanitizer is a
medical-grade surface disinfectant solution used in hospitals worldwide to protect doctors and patients. We sell Nanocyn through our partner
MicroSafe, in Europe, the Middle East and Australia. In April of 2022, MicroSafe secured the EPA approval for Nanocyn® Disinfectant
& Sanitizer to be sold in the United States as a surface disinfectant. Nanocyn is included on the EPA’s lists for use against
COVID-19, Ebola virus, Mpox, SARS-CoV-2, MRSA, Salmonella, Norovirus, Poliovirus, and as a fungicide.
Corporate Information
We were initially incorporated as Micromed Laboratories,
Inc. in 1999 under the laws of the State of California. We changed our name to Oculus Innovative Sciences, Inc. in 2001. In December 2006
we reincorporated under the laws of the State of Delaware, and in December 2016 we changed our name to Sonoma Pharmaceuticals, Inc. Our
principal executive offices are located at 5445 Conestoga Court, Suite 150, Boulder, Colorado 80301. We have two active wholly owned subsidiaries:
Oculus Technologies of Mexico, S.A. de C.V., and Sonoma Pharmaceuticals Netherlands, B.V. Our fiscal year end is March 31. Our corporate
telephone number is (800) 759-9305.
Risk Factors
Investing in our securities involves a high degree
of risk. This prospectus contains a discussion of risks applicable to an investment in the securities offered. Prior to making a decision
about investing in our securities, you should carefully consider the specific factors discussed in the section entitles “Risk Factors” together with all of the other information contained in this prospectus or appearing or incorporated by reference in
this prospectus.
Summary of the Offering
Issuer |
Sonoma Pharmaceuticals, Inc., a Delaware corporation |
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Securities offered |
Common stock, par value $0.0001 per share |
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Common stock offered by us |
Up
to 6,666,666 shares of Common Stock |
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Common stock outstanding prior to this offering |
5,177,889 shares |
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Common stock to be outstanding after this offering |
11,844,555 shares |
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Use of proceeds |
We intend to use the net
proceeds from this offering for working capital and general corporate purposes. See “Use
of Proceeds” on page 9 of this
prospectus. |
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Risk factors |
Investment in our Common
Stock involves a high degree of risk. See “Risk Factors” on page 5 of this prospectus,
as well as the other information included in or incorporated by reference in this prospectus, for factors to consider before deciding
to purchase our securities. |
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Reasonable best efforts |
We have agreed to offer
and sell the Securities offered hereby to the purchasers through the placement agent. The placement agent is not required to buy or
sell any specific number or dollar amount of the securities offered hereby, but it will use its reasonable best efforts to solicit
offers to purchase the securities offered by this prospectus. See “Plan of Distribution” on page
9 of this prospectus. |
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Nasdaq Capital Market stock symbol |
SNOA |
RISK FACTORS
Investing in the Securities involves a high
degree of risk. Before investing in the Securities, you should carefully consider the risks described below, together with all of the
other information contained in this prospectus or appearing or incorporated by reference in this prospectus. Some of these factors relate
principally to our business and the industry in which we operate. Other factors relate principally to your investment in the Securities.
The risks and uncertainties described therein and below are not the only risks we face, but those that we consider to be material. Additional
risks and uncertainties not presently known to us or that we currently deem immaterial may also materially and adversely affect our business
and operations. If any of the matters included in the following risks were to occur, our business, financial condition, results of operations,
cash flows or prospects could be materially and adversely affected. In such case, you may lose all or part of your investment. Please
also read carefully the section below entitled “Cautionary Note Regarding Forward-Looking Statements.”
Risks Related to Our Common Stock
The market price of the Common Stock may
be volatile, and the value of your investment could decline significantly.
The trading price for the Common Stock has been,
and we expect it to continue to be, volatile. The price at which the Common Stock trades depends upon a number of factors, including our
historical and anticipated operating results, our financial situation, announcements of new products by us or our competitors, our ability
or inability to raise the additional capital we may need and the terms on which we raise it, and general market and economic conditions.
Some of these factors are beyond our control. Broad market fluctuations may lower the market price of the Common Stock and affect the
volume of trading in our stock, regardless of our financial condition, results of operations, business or prospects. It is impossible
to assure you that the market price of our shares of Common Stock will not fall in the future.
Our operating results may fluctuate, which
could cause our stock price to decrease.
Fluctuations in our operating results may lead
to fluctuations, including declines, in our share price. Our operating results and our share price may fluctuate from period to period
due to a variety of factors, including:
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demand by physicians, other medical staff and patients for our HOCl-based products; |
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reimbursement decisions by third-party payors and announcements of those decisions; |
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clinical trial results published by others in our industry and publication of results in peer-reviewed journals or the presentation at medical conferences; |
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the inclusion or exclusion of our HOCl-based products in large clinical trials conducted by others; |
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actual and anticipated fluctuations in our quarterly financial and operating results; |
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developments or disputes concerning our intellectual property or other proprietary rights; |
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issues in manufacturing our product candidates or products; |
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new or less expensive products and services or new technology introduced or offered by our competitors or by us; |
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the development and commercialization of product enhancements; |
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changes in the regulatory environment; |
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delays in establishing new strategic relationships; |
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costs associated with collaborations and new product candidates; |
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introduction of technological innovations or new commercial products by us or our competitors; |
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litigation or public concern about the safety of our product candidates or products; |
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changes in recommendations of securities analysts or lack of analyst coverage; |
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failure to meet analyst expectations regarding our operating results; |
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additions or departures of key personnel; and |
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general market conditions. |
Variations in the timing of our future revenues
and expenses could also cause significant fluctuations in our operating results from period to period and may result in unanticipated
earning shortfalls or losses. In addition, The Nasdaq Capital Market, in general, and the market for life sciences companies, in particular,
have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to the operating performance
of those companies.
Anti-takeover provisions in our certificate
of incorporation and bylaws and under Delaware law may make it more difficult for stockholders to change our management and may also make
a takeover difficult.
Our corporate documents and Delaware law contain
provisions that limit the ability of stockholders to change our management and may also enable our management to resist a takeover. These
provisions include:
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the ability of our Board of Directors to issue and designate, without stockholder approval, the rights of up to 714,286 shares of convertible preferred stock, which rights could be senior to those of common stock; |
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limitations on persons authorized to call a special meeting of stockholders; and |
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advance notice procedures required for stockholders to make nominations of candidates for election as directors or to bring matters before meetings of stockholders. |
We are subject to Section 203 of the Delaware
General Corporation Law, which, subject to certain exceptions, prohibits “business combinations” between a publicly held Delaware
corporation and an “interested stockholder,” which is generally defined as a stockholder who became a beneficial owner of
15% or more of a Delaware corporation’s voting stock for a three-year period following the date that such stockholder became an
interested stockholder.
These provisions might discourage, delay or prevent
a change of control in our management. These provisions could also discourage proxy contests and make it more difficult for you and other
stockholders to elect directors and cause us to take other corporate actions. In addition, the existence of these provisions, together
with Delaware law, might hinder or delay an attempted takeover other than through negotiations with our Board of Directors.
Our stockholders may experience substantial
dilution in the value of their investment if we issue additional shares of our capital stock or other securities convertible into common
stock.
Our Restated Certificate of Incorporation, as
amended, allows us to issue up to 24,000,000 shares of our common stock and to issue and designate, without stockholder approval, the
rights of up to 714,286 shares of preferred stock. In the event we issue additional shares of our capital stock, dilution to our stockholders
could result. In addition, if we issue and designate a class of convertible preferred stock, these securities may provide for rights,
preferences or privileges senior to those of holders of our common stock. Additionally, if we issue preferred stock, it may convert into
common stock at a ratio of 1:1 or greater because our Restated Certificate of Incorporation, as amended, allows us to designate a conversion
ratio without limitations.
Shares issuable upon the conversion of warrants
or preferred stock or the exercise of outstanding options may substantially increase the number of shares available for sale in the public
market and depress the price of our common stock.
As of June 30, 2023, we had outstanding warrants
exercisable for an aggregate of 103,000 shares of our common stock at a weighted average exercise price of approximately $9.32 per share.
We also had units convertible into 46,000 shares of common stock at an exercise price of $11.25 per unit. In addition, as of June 30,
2023, options to purchase an aggregate of 547,000 shares of our common stock were outstanding at a weighted average exercise price of
$11.92 per share and a weighted average contractual term of 1.93 years. In addition, 628,547 shares of our common stock were available
on June 30, 2023 for future option grants under our 2016 Equity Incentive Plan and our 2021 Equity Incentive Plan. To the extent any of
these warrants or options are exercised and any additional options are granted and exercised, there will be further dilution to stockholders
and investors. Until the options and warrants expire, these holders will have an opportunity to profit from any increase in the market
price of our common stock without assuming the risks of ownership. Holders of options and warrants may convert or exercise these securities
at a time when we could obtain additional capital on terms more favorable than those provided by the options or warrants. The exercise
of the options and warrants will dilute the voting interest of the owners of presently outstanding shares by adding a substantial number
of additional shares of our common stock.
We have filed several registration statements
with the SEC, so that substantially all of the shares of our common stock which are issuable upon the exercise of outstanding warrants
and options may be sold in the public market. The sale of our common stock issued or issuable upon the exercise of the warrants and options
described above, or the perception that such sales could occur, may adversely affect the market price of our common stock.
Our failure to maintain compliance with
Nasdaq’s continued listing requirements could result in the delisting of our common stock.
On September 22, 2023, we received a letter
from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are not in compliance with Nasdaq Listing Rule 5550(a)(2),
which requires companies listed on The Nasdaq Stock Market to maintain a minimum bid price of $1 per share for continued listing. Nasdaq’s
letter has no immediate impact on the listing of our common stock, which will continue to be listed and traded on Nasdaq, subject to
our compliance with the other continued listing requirements. Nasdaq has granted us a period of 180 calendar days, or until March 20,
2024, to regain compliance with the rule. We may regain compliance at any time during this compliance period if the minimum bid price
for our common stock is at least $1 for a minimum of ten consecutive business days.
Until Nasdaq has reached a final determination
that we have regained compliance with all of the applicable continued listing requirements, there can be no assurances regarding the
continued listing of our common stock or warrants on Nasdaq. The delisting of our common stock and warrants from Nasdaq would have a
material adverse effect on our access to capital markets, and any limitation on market liquidity or reduction in the price of its common
stock as a result of that delisting would adversely affect our ability to raise capital on terms acceptable to the Company, if at all.
Risks Related to this Offering
We will have broad discretion in how we
use the proceeds, and we may use the proceeds in ways in which you and other stockholders may disagree.
We intend to use the net proceeds from this offering
for general corporate purposes, new product launches and working capital. Our management will have broad discretion in the application
of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the
value of our common stock. The failure by management to apply these funds effectively could result in financial losses that could have
a material adverse effect on our business or cause the price of our common stock to decline.
This is a best efforts offering, no minimum amount of Securities
is required to be sold, and we may not raise the amount of capital we believe is required for our business plans.
The placement agent has agreed to use its reasonable
best efforts to solicit offers to purchase the Securities being offered in this offering. The placement agent has no obligation to buy
any of the Securities from us or to arrange for the purchase or sale of any specific number or dollar amount of the Securities. There
is no required minimum number of Securities or amount of proceeds that must be sold as a condition to completion of this offering. Because
there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, placement agent
fees and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth above. We may
sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors
in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to fund for our operations
as described in the “Use of Proceeds” section herein. Thus, we may not raise the amount of capital we believe is required
for our operations and may need to raise additional funds, which may not be available or available on terms acceptable to us.
Purchasers in this offering may suffer immediate
and substantial dilution in the net tangible book value per share of our common stock.
Because the price per share of Common Stock in
this offering may be substantially higher than the net tangible book value per share of Common Stock as of June 30, 2023, investors in
this offering may suffer immediate and substantial dilution in the net tangible book value per share of Common Stock. The shares in this
offering will be sold at market prices which may fluctuate substantially. After giving effect to the sale of 6,666,666 shares
of Common Stock at a price of $0.75 per share, and after deducting the placement agent fees and estimated offering expenses payable
by us, you would not experience any immediate dilution. However, if a new investor purchases shares to be sold in this offering at a
per share price above the adjusted net tangible book value per share of our common stock, you could suffer immediate and substantial
dilution. See the section entitled “Dilution” below for a more detailed illustration of the dilution
you would incur if you participate in this offering. In In addition, upon the exercise of any of our outstanding options or warrants,
investors will incur further dilution.
USE OF PROCEEDS
We estimate that the net proceeds to us from
the sale of shares of Common Stock in this offering, after deducting placement agent fees and estimated offering expenses payable by
us, will be approximately $4.45 million, based on a public offering price of $0.75 per share, the closing sale price of our Common
Stock on the Nasdaq Capital Market on October 9, 2023. However, because this is a best efforts offering and there is no minimum
offering amount required as a condition to the closing of this offering, the actual offering amount, the placement agent’s fees
and net proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth on the cover page
of this prospectus.
We intend to use the net proceeds from the sale
of the Securities offered by this prospectus for general corporate purposes. General corporate purposes may include additions to working
capital, research and development, financing of capital expenditures, and future acquisitions and strategic investment opportunities.
PLAN OF DISTRIBUTION
Maxim Group LLC is acting as our exclusive placement
agent to solicit offers to purchase the securities offered by this prospectus. We and the placement agent intend to enter into a placement
agency agreement with respect to the shares of Common Stock being offered hereby. The placement agent is not purchasing or selling any
securities, nor is it required to arrange for the purchase and sale of any specific number or dollar amount of securities, other than
to use its “reasonable best efforts” to arrange for the sale of the securities by us. Therefore, we may not sell the entire
amount of Securities being offered. There is no minimum amount of proceeds that is a condition to closing of this offering. We will enter
into one or more securities purchase agreements directly with the investors, at each investor’s option, who purchase our securities
in this offering. Investors who do not enter into a securities purchase agreement shall rely solely on this prospectus in connection with
the purchase of our securities in this offering. The placement agent may engage one or more subagents or selected dealers in connection
with this offering.
The placement agency agreement will provide that
the placement agent’s obligations are subject to conditions contained in the placement agency agreement and the securities purchase
agreement, as applicable.
We will deliver the shares of Common Stock being
issued to the investors upon receipt of investor funds for the purchase of the shares of Common Stock offered pursuant to this prospectus.
We anticipate that the initial delivery of the shares of Common Stock being offered pursuant to this prospectus on or about ________,
2023.
Placement Agent Fees, Commissions and Expenses
Upon the closing of this offering, we will pay
the placement agent a cash transaction fee equal to 8.0% of the aggregate gross cash proceeds to us from the sale of the Securities in
the offering. Pursuant to the placement agency agreement, we will agree to reimburse the placement agent for its expenses in connection
with the offering payable by us, in an aggregate amount not to exceed $75,000.
The following table shows the public offering
price, placement agent fees and proceeds, before expenses, to us.
| |
| Per
Share of Common Stock | | |
| Total | |
Public offering price | |
$ | | | |
$ | | |
Placement agent fees (8.0%) | |
$ | | | |
$ | | |
Proceeds, before expenses, to us | |
$ | | | |
$ | | |
We estimate that the total expenses of the offering,
including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the placement agent commission,
will be approximately $_____, all of which are payable by us.
Indemnification
We have agreed to indemnify the placement agent
against certain liabilities, including liabilities under the Securities Act, and liabilities arising from breaches of representations
and warranties contained in the placement agent agreement and to contribute to payments that the placement agent may be required to make
for these liabilities.
Regulation M
The placement agent may be deemed to be an underwriter
within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit realized on the resale
of the securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities
Act. As an underwriter, the placement agent would be required to comply with the requirements of the Securities Act and the Exchange Act,
including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of
purchases and sales of our securities by the placement agent acting as principal. Under these rules and regulations, the placement agent
(i) may not engage in any stabilization activity in connection with our securities and (ii) may not bid for or purchase any of our securities
or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed
its participation in the distribution.
Determination of Offering Price
The actual public offering price of the shares
of Common Stock we are offering will be determined by negotiations between us, the placement agent and the investors in the offering;
among the factors considered in determining such public offering price are our historical performance and capital structure, prevailing
market conditions, and overall assessment of our business.
Electronic Distribution
A prospectus in electronic format may be made
available on a website maintained by the placement agent. In connection with the offering, the placement agent or selected dealers may
distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe®
PDF will be used in connection with this offering.
Other than the prospectus in electronic format,
the information on the placement agent’s website and any information contained in any other website maintained by the placement
agent is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or
endorsed by us or the placement agent in its capacity as placement agent and should not be relied upon by investors.
Lock-Up Agreements and Trading Restrictions
We have agreed, subject to certain exceptions,
not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our common
stock or other securities convertible into or exercisable or exchangeable for our common stock for a period of six (6) months after this
offering is completed without the prior written consent of the placement agent.
The placement agent may in its sole discretion
and at any time without notice release some or all of the shares subject to lock-up agreements prior to the expiration of the lock-up
period.
Lock-Up Agreements
Our directors and officers have entered into lock-up
agreements. Under these agreements, these individuals agreed, subject to specified exceptions, not to sell or transfer any shares of common
stock or securities convertible into, or exchangeable or exercisable for, common stock during a period ending six (6) months after
the completion of this offering, without first obtaining the written consent of the placement agent. Specifically, these individuals agreed,
in part, subject to certain exceptions, not to:
|
· |
offer for sale, sell, pledge, or otherwise transfer or dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the transfer or disposition by any person at any time in the future of) any shares of common stock or securities convertible into or exercisable or exchangeable for common stock; |
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· |
enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of shares of common stock; or |
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· |
make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any of our securities. |
Listing
Our Common Stock is listed on the Nasdaq Stock
Market under the symbol “SNOA”.
Other Relationships
The placement agent and its affiliates have engaged
in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our
affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. In the course of
its businesses, the placement agent and its affiliates may actively trade our securities or loans for its own account or for the accounts
of customers, and, accordingly, the placement agent and its affiliates may at any time hold long or short positions in such securities
or loans.
Except for services provided in connection with
this offering, and except as set forth in this section, the placement agent has not provided any investment banking or other financial
services during the 180-day period preceding the date of this prospectus and we do not expect to retain the placement agent to perform
any investment banking or other financial services for at least 90 days after the date of this prospectus.
Right of First Refusal
For a period of five (5) months from the Closing
of this Offering, we granted the placement agent the right of first refusal to act as sole managing underwriter and sole book runner,
sole placement agent, or sole sales agent, for any and all future public or private equity, equity-linked or debt (excluding commercial
bank debt and loans against tax credits) offerings for which we retain the service of an underwriter, agent, advisor, finder or other
person or entity in connection with such offering during such five (5) month period.
Other Compensation
We have agreed to the same compensation arrangement
as set forth above, for equity, equity-linked, or debt financing or other capital-raising activity (“Tail Financing”) to
the extent that such financing or capital is provided to us by investors whom the placement agent had contacted, or introduced to us,
during the term of the engagement agreement with the placement agent, if such Tail Financing is consummated at any time within the twelve
(12) month period following the closing of this offering or expiration or termination such placement agency agreement with the placement
agent (other than termination for Cause, as defined in the placement agency agreement).
Selling Restrictions
Notice to Investors in Canada
The securities may be sold in Canada only to purchasers
purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus
Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with
an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or
territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement (including any amendment
thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the
time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any
applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or
consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument
33-105 Underwriting Conflicts (“NI 33-105”), the placement agent is not required to comply with the disclosure requirements
of NI 33-105 regarding underwriters conflicts of interest in connection with this offering.
Notice to Investors in the United Kingdom
In relation to each Member State of the European
Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any
securities which are the subject of the offering contemplated by this prospectus may not be made in that Relevant Member State except
that an offer to the public in that Relevant Member State of any such securities may be made at any time under the following exemptions
under the Prospectus Directive, if they have been implemented in that Relevant Member State:
|
(a) |
to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; |
|
(b) |
to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; |
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(c) |
by the underwriter to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or |
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(d) |
in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of these securities shall result in a requirement for the publication by the issuer or the underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive. |
For the purposes of this provision, the expression
an “offer to the public” in relation to any of the securities in any Relevant Member State means the communication in any
form and by any means of sufficient information on the terms of the offer and any such securities to be offered so as to enable an investor
to decide to purchase any such securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive
in that Member State and the expression” Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing
measure in each Relevant Member State.
The placement agent has represented, warranted
and agreed that:
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(a) |
it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection with the issue or sale of any of the securities in circumstances in which section 21(1) of the FSMA does not apply to the issuer; and |
|
(b) |
it has complied with and will comply with all
applicable provisions of the FSMA with respect to anything done by it in relation to the securities in, from or otherwise involving the
United Kingdom.
|
Notice to Investors in the European Economic
Area
In particular, this document does not constitute
an approved prospectus in accordance with European Commission’s Regulation on Prospectuses no. 809/2004 and no such prospectus is
to be prepared and approved in connection with this offering. Accordingly, in relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (being the Directive of the European Parliament and of the Council 2003/71/EC and including
any relevant implementing measure in each Relevant Member State) (each, a Relevant Member State), with effect from and including the date
on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) an offer of securities
to the public may not be made in that Relevant Member State prior to the publication of a prospectus in relation to such securities which
has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member
State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that
it may, with effect from and including the Relevant Implementation Date, make an offer of securities to the public in that Relevant Member
State at any time:
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to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; |
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to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in the last annual or consolidated accounts; or |
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in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive. |
For the purposes of this provision, the expression
an “offer of securities to the public” in relation to any of the securities in any Relevant Member State means the communication
in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor
to decide to purchase or subscribe for the securities, as the same may be varied in that Member State by any measure implementing the
Prospectus Directive in that Member State. For these purposes the shares offered hereby are “securities.”
Notice to Investors in Israel
This document does not constitute a prospectus
under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel Securities
Authority. In the State of Israel, this document is being distributed only to, and is directed only at, and any offer of the shares
is directed only at, investors listed in the first addendum (as it may be amended from time to time, the “Addendum”) to the
Israeli Securities Law, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio
managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess
of NIS 50 million and “qualified individuals”, each as defined in the Addendum, collectively referred to as qualified
investors (in each case purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who
are investors listed in the Addendum). Qualified investors will be required to submit written confirmation that they fall within the scope
of the Addendum, are aware of the meaning of same and agree to it.
Notice to Investors in Switzerland
The securities may not be publicly offered in
Switzerland and will not be listed on the SIX Swiss Exchange (the “SIX”) or on any other stock exchange or regulated
trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses
under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of
the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document
nor any other offering or marketing material relating to the securities or the offering may be publicly distributed or otherwise made
publicly available in Switzerland.
Neither this document nor any other offering or
marketing material relating to the offering, or the securities have been or will be filed with or approved by any Swiss regulatory authority.
In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market
Supervisory Authority FINMA, and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective
Investment Schemes (“CISA”). Accordingly, no public distribution, offering or advertising, as defined in CISA, its implementing
ordinances and notices, and no distribution to any non-qualified investor, as defined in CISA, its implementing ordinances and notices,
shall be undertaken in or from Switzerland, and the investor protection afforded to acquirers of interests in collective investment schemes
under CISA does not extend to acquirers of securities.
Notice to Investors in Australia
No placement document, prospectus, product disclosure
statement or other disclosure document has been lodged with the Australian Securities and Investments Commission, in relation to the offering.
This prospectus does not constitute a prospectus,
product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”) and
does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under
the Corporations Act.
Any offer in Australia of the securities may only
be made to persons (the Exempt Investors) who are “sophisticated investors” (within the meaning of section 708(8)
of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise
pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the securities without
disclosure to investors under Chapter 6D of the Corporations Act.
The securities applied for by Exempt Investors
in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except
in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption
under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter
6D of the Corporations Act. Any person acquiring securities must observe such Australian on-sale restrictions.
This prospectus contains general information only
and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not
contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether
the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice
on those matters.
Notice to Investors in the Cayman Islands
No invitation, whether directly or indirectly,
may be made to the public in the Cayman Islands to subscribe for our securities.
Notice to Investors in the People’s Republic
of China
This prospectus may not be circulated or distributed
in the PRC and the shares may not be offered or sold, and will not offer or sell to any person for re-offering or resale directly or indirectly
to any resident of the PRC except pursuant to applicable laws, rules and regulations of the PRC. For the purpose of this paragraph only,
the PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.
Notice to Investors in Taiwan
The securities have not been and will not be registered
with the Financial Supervisory Commission of Taiwan (“FSCT”) pursuant to relevant securities laws and regulations and may
not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the meaning
of the Securities and Exchange Act of Taiwan that requires a registration or approval of the FSCT. No person or entity in Taiwan
has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale of the securities in Taiwan.
Notice to Investors in Hong Kong
The contents of this prospectus have not been
reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt
about any of the contents of this prospectus, you should obtain independent professional advice. Please note that (i) our shares
may not be offered or sold in Hong Kong, by means of this prospectus or any document other than to “professional investors”
within the meaning of Part I of Schedule 1 of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) (the “SFO”)
and any rules made thereunder, or in other circumstances which do not result in the document being a “prospectus” within
the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong) (the “CO”) or which do not constitute an offer or invitation
to the public for the purpose of the CO or the SFO, and (ii) no advertisement, invitation or document relating to our shares may
be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere) which is
directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under
the securities laws of Hong Kong) other than with respect to the shares which are or are intended to be disposed of only to persons outside
Hong Kong or only to “professional investors” within the meaning of the SFO and any rules made thereunder.
MARKET PRICE AND DIVIDEND POLICY
Our shares of Common Stock are currently quoted
on The Nasdaq Capital Market under the symbol “SNOA”. On October 9, 2023, the last reported sales price of our Common Stock
on Nasdaq was $0.75.
Holders of Record
As of October 6, 2023, we had approximately
294 holders of record of our Common Stock. Because many of our shares of Common Stock are held by brokers and other institutions on behalf
of stockholders, this number is not indicative of the total number of stockholders represented by these stockholders of record.
Dividends
We have not declared or paid dividends to stockholders
since inception and do not plan to pay cash dividends in the foreseeable future. We currently intend to retain earnings, if any, to finance
our growth.
Issuer Purchases of Equity Securities
None.
DILUTION
Purchasers of Common Stock offered by this prospectus
will suffer immediate and substantial dilution in the net tangible book value per share of Common Stock. Our net tangible book value on
June 30, 2023 was approximately $7,242,000, or approximately $1.41 per share of Common Stock based upon 5,141,596 shares outstanding as
of June 30, 2023. Net tangible book value per share is determined by dividing our net tangible book value, which consists of tangible
assets less total liabilities, by the number of shares of Common Stock outstanding on that date.
The shares of Common Stock in this offering
will be sold at market prices which may fluctuate substantially. For purposes of calculating dilution, we have assumed a sale price of
$0.75 per share, which was the closing price of our Common Stock on October 9, 2023.
After giving effect to the sale of our Common
Stock in the aggregate amount of $5,000,000, or 6,666,666 shares, at an assumed offering price of $0.75 per share, and after deducting
placement agent and offering expenses payable by us, our net tangible book value as of June 30, 2023 would have been approximately $11,692,000
or $0.99 per share of Common Stock. This represents an immediate decrease in net tangible book value of $0.42 per share to existing stockholders
and immediate increase in net tangible book value of $0.24 per share to new investors purchasing our Common Stock in this offering at
the public offering price. The following table illustrates this calculation on a per share basis:
Assumed public offering price
per share |
|
$ |
0.75 |
|
Net tangible book value per share as of June 30,
2023 |
|
$ |
1.41 |
|
Decrease in net tangible book value per share attributable
to this offering |
|
$ |
(0.42 |
) |
|
|
|
|
|
As adjusted net tangible book value per share as
of June 30, 2023, after giving effect to this offering |
|
$ |
0.99 |
|
|
|
|
|
|
Increase in net tangible book value per share to
new investors purchasing our common stock in this offering |
|
$ |
0.24 |
|
An increase of $0.10 per share in the price
at which the shares are sold from the assumed public offering price of $0.75 per share shown in the table above would decrease our as
adjusted net tangible book value per share after the offering to $1.03 per share and result in an increase in net tangible book value
per share to new investors in this offering of $0.20 per share, after deducting placement agent fees and estimated offering expenses
payable by us.
A decrease of $0.10 per share in the price
at which the shares are sold from the assumed public offering price of $0.75 per share shown in the table above would decrease our adjusted
net tangible book value per share after the offering to $0.95 per share and result in an increase in net tangible book value per share
to new investors in this offering of $0.27 per share, after deducting placement agent fees and estimated offering expenses payable by
us.
This information is supplied for illustrative
purposes only and may differ based on the actual offering price and the actual number of shares offered.
The above discussion is based on 5,141,596 shares
of our common stock outstanding as of June 30, 2023, and excludes:
|
· |
547,000 shares of common stock issuable upon exercise of outstanding stock options, at a weighted average exercise price of $11.92 per share, under our equity incentive plans; |
|
|
|
|
· |
31,000 shares of common stock issuable upon exercise/vesting of restricted stock units; |
|
|
|
|
· |
628,547 additional shares of common stock reserved for future issuance under our equity incentive plans; |
|
|
|
|
· |
103,000 shares of common stock issuable upon exercise of outstanding warrants, with a current exercise price of $9.32 per share; and |
|
|
|
|
· |
30,668 restricted stock units and warrants to
purchase 15,332 shares of common stock, with current exercise price of $11.25 per unit.
|
To the extent that outstanding options or
warrants outstanding as of June 30, 2023, have been or may be exercised or we issue other shares investors purchasing our Common Stock
in this offering may experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic
considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional
capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to
our stockholders.
CAPITALIZATION
The following table sets forth our
capitalization as of June 30, 2023 on an actual basis and on an as adjusted basis, based upon an assumed public offering price of $0.75
per share to give effect to the sale of 6,666,666 shares of Common Stock in this offering, after deducting the placement agent fees and
estimated offering expenses payable by us.
The information below is for illustrative purposes
and our capitalization following the completion of this offering will be adjusted based on the actual offering price and other terms of
this offering determined at pricing. You should read this table in conjunction with “Use of Proceeds” above as well
as our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and financial
statements and the related notes appearing elsewhere in this prospectus.
|
|
June 30, 2023 |
|
|
|
Actual |
|
|
As Adjusted |
|
|
|
(in thousands)
(unaudited) |
|
Cash and cash equivalents |
|
$ |
3,544 |
|
|
$ |
7,994 |
|
Total liabilities |
|
|
8,651 |
|
|
|
8,651 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Convertible preferred stock, $0.0001 par value; 714,286 shares authorized, none issued and outstanding actual; and 714,286 shares authorized, none issued and outstanding as adjusted |
|
|
– |
|
|
|
– |
|
Common
stock, $0.0001 par value; 24,000,000 shares authorized, 5,141,596 shares issued and outstanding actual; and 24,000,000 shares authorized,
11,844,555 shares issued and outstanding as adjusted |
|
|
5 |
|
|
|
11 |
|
Additional paid-in capital |
|
|
201,076 |
|
|
|
205,521 |
|
Accumulated deficit |
|
|
(190,932 |
) |
|
|
(190,932 |
) |
Accumulated other comprehensive loss |
|
|
(2,907 |
) |
|
|
(2,907 |
) |
Total stockholders’ equity |
|
$ |
7,242 |
|
|
$ |
11,693 |
|
Total capitalization |
|
|
7,242 |
|
|
|
11,693 |
|
The foregoing table is based on 5,141,596 shares
of our common stock outstanding as of June 30, 2023, and excludes:
|
· |
547,000 shares of common stock issuable upon exercise of outstanding stock options, at a weighted average exercise price of $11.92 per share, under our equity incentive plans; |
|
|
|
|
· |
31,000 shares of common stock issuable upon exercise/vesting of restricted stock units; |
|
|
|
|
· |
628,547 additional shares of common stock reserved for future issuance under our equity incentive plans; |
|
|
|
|
· |
103,000 shares of common stock issuable upon exercise of outstanding warrants, with a current exercise price of $9.32 per share; and |
|
|
|
|
· |
30,668 restricted stock units and warrants to
purchase 15,332 shares of common stock, with current exercise price of $11.25 per unit.
|
Security
Ownership of Certain Beneficial Owners and Management
The following
table sets forth certain information as of October 9, 2023, as to shares of our common stock beneficially owned by: (1) stockholders
known to us who own more than 5%, (2) each of our Named Executive Officers, (3) each of our current directors, and (4) all of our directors
and Named Executive Officers as a group.
We have determined
beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information
furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares
of common stock that they beneficially own, subject to applicable community property laws.
In computing
the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding
shares of common stock subject to options held by that person that are currently exercisable or exercisable upon vesting. We did not deem
these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. All share numbers have been
adjusted to reflect a 1-for-7 reverse stock split, effective April 1, 2013, a 1-for-5 reverse stock split, effective June 24, 2016 and
a 1-for-9 reverse stock split, effective June 19, 2019.
| |
| |
Amount of Beneficial Ownership | |
| |
|
Name and address
of beneficial owner (1) | |
Nature of beneficial ownership | |
Shares Owned | |
Shares – Includes all Rights to Acquire (2) | |
Total | |
Percent of Shares Beneficially Owned Prior to Offering (3) | |
Percent of Shares Beneficially Owned After Offering |
Amy Trombly (4) | |
Chief Executive Officer | |
100,000 | |
54,388 | |
154,388 | |
3.0% | |
1.5% |
Jerry Dvonch (5) | |
Interim Chief Financial Officer | |
31,009 | |
73,281 | |
104,290 | |
2.0% | |
1.0% |
Chad White (6) | |
Former Chief Financial Officer | |
-- | |
-- | |
-- | |
0.0% | |
0.0% |
Bruce Thornton (7) | |
Chief Operating Officer | |
100,825 | |
57,322 | |
158,147 | |
3.1% | |
1.6% |
Jerry McLaughlin (8) | |
Lead Independent Director | |
5,414 | |
18,165 | |
23,579 | |
* | |
* |
Philippe Weigerstorfer (9) | |
Director | |
-- | |
22,500 | |
22,500 | |
* | |
* |
Jay Birnbaum (10) | |
Director | |
5,739 | |
22,776 | |
28,515 | |
* | |
* |
All directors and executive officers as a group (7 persons) | |
| |
242,987 | |
248,432 | |
491,419 | |
9.5% | |
4.8% |
*Indicates ownership of less than 1.0%
|
(1) |
Unless otherwise stated, the address of each beneficial owner listed in the table is c/o Sonoma Pharmaceuticals, Inc., 5445 Conestoga Court, Suite 150, Boulder, CO 80301. |
|
(2) |
Represents shares subject to outstanding stock options and warrants currently exercisable or exercisable within 60 days. |
|
(3) |
We had total shares of common stock issued and outstanding of 5,177,889 on September 12, 2023. |
|
(4) |
Ms. Trombly has been our Chief Executive Officer since September 27, 2019. She beneficially owns 100,000 shares of common stock and 54,388 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days. |
|
(5) |
Mr. Dvonch served as our Chief Financial Officer from September 8, 2020
to November 18, 2022 and currently serves as our Interim Chief Financial Officer. He beneficially owns 31,009 shares of common stock and
57,777 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days. |
|
(6) |
Mr. White served as our Interim Chief Financial Officer from October 3, 2022 to November 18, 2022 and as our Chief Financial Officer from November 18, 2022 to April 7, 2023. |
|
(7) |
Mr. Thornton is our Executive Vice President and Chief Operating Officer. He beneficially owns 100,825 shares of common stock and 57,322 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days. |
|
(8) |
Mr. McLaughlin is a member of our Board of Directors and was appointed as Lead Independent Director on March 26, 2014. He beneficially owns 5,414 shares of common stock and 18,165 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days. |
|
(9) |
Mr. Weigerstorfer is a member of our Board of Directors. He beneficially owns 2,500 shares of common stock yet to be issued and 20,000 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days. |
|
(10) |
Dr. Birnbaum is a member of our Board of Directors. He beneficially owns 5,739 shares of common stock and 22,776 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days. |
DESCRIPTION OF SECURITIES
The following description of our capital stock
and provisions of our Restated Certificate of Incorporation, as amended, and our Amended and Restated Bylaws, is only a summary. You should
also refer to our Restated Certificate of Incorporation, as amended, and our Amended and Restated Bylaws, copies of which are incorporated
by reference as exhibits to the registration statement of which this prospectus is a part.
Preferred Stock
Our Board of Directors is authorized to issue
714,286 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, qualifications, limitations and
restrictions thereof, including dividend rights and rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series or the designation of such series, without any vote or action by our shareholders.
Any preferred stock to be issued could rank prior to our common stock with respect to dividend rights and rights on liquidation. Our Board
of Directors, without shareholder approval, may issue preferred stock with voting and conversion rights which could adversely affect the
voting power of holders of our common stock and discourage, delay or prevent a change in control of the Company. As of the date of this
prospectus, no shares of preferred stock are outstanding.
Common Stock
We are authorized to issue up to a total of 24,000,000
shares of common stock, $0.0001 par value per share. Each holder of common stock is entitled to one vote for each share of common
stock held on all matters submitted to a vote of stockholders. We have not provided for cumulative voting for the election of directors
in our Restated Certificate of Incorporation, as amended. This means that the holders of a majority of the shares voted can elect all
of the directors then standing for election. Subject to preferences that may apply to shares of preferred stock outstanding at the time,
the holders of outstanding shares of our common stock are entitled to receive dividends out of assets legally available at the times and
in the amounts that our Board of Directors may determine from time to time.
Holders of common stock have no preemptive subscription,
redemption or conversion rights or other subscription rights. Upon our liquidation, dissolution or winding-up, the holders of
common stock are entitled to share in all assets remaining after payment of all liabilities and the liquidation preferences of any outstanding
preferred stock. Each outstanding share of common stock is, and all shares of common stock to be issued in this offering, when they are
paid for will be, fully paid and nonassessable.
Listing
Our common stock is traded on the Nasdaq Capital
Market under the symbol “SNOA.”
Transfer Agent and Registrar
The transfer agent for our common stock is Computershare,
Inc. located at 462 South 4th Street, Suite 1600, Louisville, KY 40202. Its telephone number is 1-888-647-8901.
CERTAIN PROVISIONS OF DELAWARE LAW AND
OUR CHARTER
AND BYLAWS
The following paragraphs summarize certain provisions
of Delaware law and our restated certificate of incorporation, as amended, and our amended and restated bylaws, as amended. The summary
does not purport to be complete and is subject to and qualified in its entirety by reference to Delaware law and to our restated certificate
of incorporation, as amended, and our amended and restated bylaws, as amended, copies of which are on file with the SEC as exhibits to
reports previously filed by us. See “Where You Can Find More Information.”
Delaware Law
We are subject to the provisions of Section 203
of the Delaware General Corporation Law regulating corporate takeovers. In general, this section prohibits a Delaware corporation from
engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder
became an interested stockholder, unless:
|
· |
the transaction is approved by the board of directors prior to the time that the interested stockholder became an interested stockholder; |
|
|
|
|
· |
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or |
|
|
|
|
· |
at or subsequent to such time that the stockholder became an interested stockholder, the business combination is approved by the board of directors and authorized at a meeting of stockholders by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder. |
Section 203 defines “business combination” to include
the following:
|
· |
any merger or consolidation involving the corporation and the interested stockholder; |
|
|
|
|
· |
any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; |
|
|
|
|
· |
subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
|
|
|
|
· |
any transaction involving the corporation that has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or |
|
|
|
|
· |
the receipt by the interested stockholder of the benefit, directly or indirectly, of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
In general, Section 203 defines an interested
stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity
or person affiliated with or controlling or controlled by any of these entities or persons.
A Delaware corporation may “opt out”
of these provisions either with an express provision in its original certificate of incorporation or in an amendment to its certificate
of incorporation or bylaws approved by its stockholders. However, we have not opted out, and do not currently intend to opt out of, these
provisions. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage
attempts to acquire us.
Charter and Bylaws
Our restated certificate of incorporation, as
amended, and our amended and restated bylaws, as amended, provide that:
|
· |
our amended and restated bylaws, as amended, may be amended or repealed only by the approval of at least sixty-six and two-thirds percent (66-2/3%) of the total number of directors then in office or the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the shares entitled to vote at an election of directors; |
|
|
|
|
· |
no action can be taken by stockholders except at an annual or special meeting of the stockholders called in accordance with our amended and restated bylaws, as amended, and stockholders may not act by written consent; |
|
|
|
|
· |
a stockholder must provide advance notice of stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of stockholders; |
|
· |
stockholders may not call special meetings of the stockholders or fill vacancies on the board; |
|
|
|
|
· |
the approval of holders of at least sixty-six and two-thirds percent (66-2/3%) of the shares entitled to vote at an election of directors is required to amend or repeal the provisions of our restated certificate of incorporation, as amended, regarding the inability of stockholders to take action by written consent; |
|
|
|
|
· |
our board of directors is authorized to issue preferred stock without stockholder approval; and |
|
|
|
|
· |
we will indemnify officers and directors against losses that they may incur in investigations and legal proceedings resulting from their services to us, which may include services in connection with takeover defense measures. |
LEGAL MATTERS
The validity of any securities offered by this prospectus will be passed
upon for us by Burns & Levinson LLP. Blank Rome LLP, New York, New York, is acting as counsel to the placement agent in connection
with certain legal matters related to this offering.
EXPERTS
The consolidated financial statements of Sonoma
Pharmaceuticals, Inc. and Subsidiaries (the “Company”) as of and for the years ended March 31, 2023 and 2022 have been
audited by Frazier & Deeter, LLC, an independent registered public accounting firm, as set forth in their report, which is incorporated
herein by reference in this prospectus. Such consolidated financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and auditing. The report on the consolidated financial statements
contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.
INTERESTS
OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this registration
statement as having prepared or certified any part of this registration statement or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed
for such purpose on a contingency basis, or had, or is to receive, in connection with this offering, a substantial interest, direct or
indirect, in us or any of our parents or subsidiaries, nor was any such person connected with us or any of our parents or subsidiaries
as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange
Commission, Washington, D.C., 20549, under the Securities Act of 1933, a registration statement on Form S-1 relating to the securities
offered hereby. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules
thereto. For further information with respect to our company and the securities we are offering by this prospectus you should refer to
the registration statement, including the exhibits and schedules thereto. You may inspect a copy of the registration statement without
charge at the Public Reference Section of the Securities and Exchange Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission
at 1-800-SEC-0330. The Securities and Exchange Commission also maintains an Internet site that contains reports, proxy and information
statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. The Securities
and Exchange Commission's World Wide Web address is http://www.sec.gov.
We file periodic reports, proxy statements and
other information with the Securities and Exchange Commission in accordance with requirements of the Exchange Act. These periodic reports,
proxy statements and other information are available for inspection and copying at the regional offices, public reference facilities and
Internet site of the Securities and Exchange Commission referred to above. In addition, you may request a copy of any of our periodic
reports filed with the Securities and Exchange Commission at no cost, by writing or telephoning us at the following address:
Investor Relations
Sonoma Pharmaceuticals, Inc.
5445 Conestoga Court, Suite 150
Boulder, CO 80301
(707) 283-0550
Investors and others should note that we announce
material financial information using our company website: www.sonomapharma.com, our investor relations website: ir.sonomapharma.com, SEC
filings, press releases, public conference calls and webcasts. The information on or accessible through our websites is not incorporated
by reference in this prospectus.
You should rely only on the information contained
in or incorporated by reference or provided in this prospectus or any supplement to this prospectus. We have not authorized anyone else
to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted.
You should not assume the information in this prospectus is accurate as of any date other than the date on the front of this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC permits us to “incorporate by reference”
the information contained in documents we file with the SEC, which means that we can disclose important information to you by referring
you to those documents rather than by including them in this prospectus. Information that is incorporated by reference is considered to
be part of this prospectus and you should read it with the same care that you read this prospectus. Later information that we file with
the SEC will automatically update and supersede the information that is either contained, or incorporated by reference, in this prospectus,
and will be considered to be a part of this prospectus from the date those documents are filed. We have filed with the SEC, and incorporate
by reference the following in this prospectus:
| · | our Annual Report on Form 10-K for the year ended March 31, 2023, filed on
June 21, 2023; |
| · | our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed
on August 10, 2023; |
| · | our Definitive Proxy Statement on Schedule 14A, as filed with the SEC on
July 27, 2023; and |
| · | our Registration Statement on Form 8-A as filed with the SEC on December
15, 2006. |
In addition, all documents that we file with the
SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of 1934, as amended, after the date of the initial
registration statement of which this prospectus is a part and prior to the effectiveness of the registration statement as well as all
such documents that we file with the SEC after the date of this prospectus and before the termination of the offering of our securities
shall be deemed incorporated by reference into this prospectus and to be a part of this prospectus from the respective dates of filing
such documents. Unless specifically stated to the contrary, none of the information that we disclose under Items 2.02 or 7.01 of any Current
Report on Form 8-K that we may from time to time furnish to the SEC will be incorporated by reference into, or otherwise included in,
this prospectus.
You may request a copy of any or all of the documents
incorporated by reference but not delivered with this prospectus, at no cost, by writing or telephoning us at the following address and
number: Investor Relations, Sonoma Pharmaceuticals, Inc., 5445 Conestoga Court, Suite 150, Boulder, Colorado 80301, telephone (800) 759-9305.
We will not, however, send exhibits to those documents, unless the exhibits are specifically incorporated by reference in those documents.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
Insofar as indemnification for liabilities arising
under the Securities Act, as amended, may be permitted to directors, officers, and controlling persons of the registrant pursuant to the
Company’s constituent documents, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling
person in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person connected
with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such issue.
Up to 6,666,666 Shares of Common Stock
PRELIMINARY PROSPECTUS
MAXIM GROUP LLC
The date of this prospectus is __________, 2023
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. |
Other Expenses of Issuance and Distribution. |
The following table sets forth the costs and expenses
payable by the registrant in connection with the offerings described in this registration statement. In addition to the costs and expenses
set forth below, the registrant will pay any selling commissions and brokerage fees and any applicable taxes, fees and disbursements with
respect to securities registered hereby sold by the registrant. All of the amounts shown are estimates, except for the SEC registration
fee:
|
|
Amount to
be Paid |
|
Approximate SEC Registration Fee |
|
$ |
551 |
|
Accountants’ Fees and Expenses |
|
|
* |
|
Legal Fees and Expenses |
|
|
* |
|
Miscellaneous Fees (including Transfer Agent and Printing fees) |
|
|
* |
|
Total |
|
$ |
* |
|
* To be filed by amendment.
Item 15. |
Indemnification of Directors and Officers. |
Section 145 of the Delaware General Corporation
Law provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection
with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person
being or having been a director, officer, employee or agent to the registrant or having served at the request of the corporation, if such
person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful; provided
that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any matter
as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the adjudicating court
determines that such indemnification is proper under the circumstances. The Delaware General Corporation Law provides that Section 145
is not exclusive of other rights to which those seeking indemnification may be entitled under any bylaws, agreement, vote of stockholders
or disinterested directors or otherwise.
Section 102(b)(7) of the Delaware General
Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation will not be personally
liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (1) for
any breach of the director’s duty of loyalty to the corporation or its stockholders; (2) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law; (3) for unlawful payments of dividends or unlawful stock
repurchases, redemptions or other distributions; or (4) for any transaction from which the director derived an improper personal
benefit.
Article VIII of our restated certificate of incorporation,
as amended, (included as Exhibit 3.1(i) to our annual report on Form 10-K for the year ended March 31, 2007, filed June 20, 2007) and
Article 6 of our amended and restated bylaws, as amended (included as Exhibit 3.2 to our current report on Form 8-K, filed December 7,
2016) provide for indemnification of our directors, officers, employees and other agents to the extent and under the circumstances permitted
by the Delaware General Corporation Law.
We have also entered into respective indemnification
agreements (the form of which is included as Exhibit 10.1 to our Registration Statement on Form S-1 (File No. 333-135584), as amended,
declared effective on January 24, 2007) with our officers and directors that will require us to, among other things, indemnify them against
certain liabilities that may arise by reason of their status or service as directors or officers to the fullest extent not prohibited
by law.
Exhibit Index
Exhibit No. |
Description |
|
|
1.1* |
Form of Placement Agency Agreement |
3.1 |
Restated Certificate of Incorporation of Oculus Innovative Sciences, Inc., effective January 30, 2006 (included as exhibit 3.1 of the Company’s Annual Report on Form 10-K filed June 20, 2007, and incorporated herein by reference). |
3.2 |
Certificate of Amendment of Restated Certificate of Incorporation of Oculus Innovative Sciences, Inc., effective October 22, 2008 (included as exhibit A in the Company’s Definitive Proxy Statement on Schedule 14A filed July 21, 2008, and incorporated herein by reference). |
3.4 |
Certificate of Amendment of Restated Certificate of Incorporation of Oculus Innovative Sciences, Inc., as amended, effective March 29, 2013 (included as exhibit 3.1 to the Company’s Current Report on Form 8-K filed March 22, 2013, and incorporated herein by reference). |
3.5 |
Certificate of Amendment of Restated Certificate of Incorporation of Oculus Innovative Sciences, Inc., as amended, effective December 4, 2014 (included as exhibit 3.1 to the Company’s Current Report on Form 8-K filed December 8, 2014, and incorporated herein by reference). |
3.6 |
Certificate of Amendment of Restated Certificate of Incorporation of Oculus Innovative Sciences, Inc., as amended, effective October 22, 2015 (included as exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 27, 2015, and incorporated herein by reference). |
3.7 |
Certificate of Amendment of Restated Certificate of Incorporation of Oculus Innovative Sciences, Inc., as amended, effective June 24, 2016 (included as exhibit 3.1 to the Company’s Current Report on Form 8-K filed June 28, 2016, and incorporated herein by reference). |
3.8 |
Certificate of Amendment of Restated Certificate of Incorporation of Sonoma Pharmaceuticals, Inc., as amended, effective December 6, 2016 (included as exhibit 3.1 to the Company’s Current Report on Form 8-K filed December 7, 2016, and incorporated herein by reference). |
3.9 |
Amended and Restated Bylaws, as amended, of Sonoma Pharmaceuticals, Inc., effective December 6, 2016 (included as exhibit 3.2 to the Company’s Current Report on Form 8-K filed December 7, 2016, and incorporated herein by reference). |
3.10 |
Certificate of Designation of Preferences, Rights and Limitations of Series A 0% Convertible Preferred Stock, filed with the Delaware Secretary of State on April 24, 2012 (included as exhibit 4.2 to the Company’s Current Report on Form 8-K, filed April 25, 2012, and incorporated herein by reference). |
3.11 |
Certificate of Designation of Series B Preferred Stock, effective October 18, 2016 (included as exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 21, 2016, and incorporated herein by references). |
3.12 |
Certificate of Amendment of Restated Certificate of Incorporation of Sonoma Pharmaceuticals, Inc., as amended, effective June 19, 2019 (included as exhibit 3.1 to the Company’s Current Report on Form 8-K filed June 19, 2019, and incorporated herein by reference). |
4.1 |
Specimen Common Stock Certificate (included as exhibit 4.1 to the Company’s Annual Report on Form 10-K filed June 28, 2017, and incorporated herein by reference). |
4.2 |
Section 382 Rights Agreement, dated as of October 18, 2016, between Oculus Innovative Sciences, Inc. and Computershare Inc., which includes the Form of Certificate of Designation of Series B Preferred Stock as Exhibit A, the Form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Stock as Exhibit C (included as exhibit 4.1 to the Company’s Current Report on Form 8-K filed October 21, 2016, and incorporated herein by reference). |
4.3 |
Form of Placement Agent Warrant granted to Dawson James Securities, Inc. and The Benchmark Company, LLC in connection with the March 2, 2018 public offering, dated March 6, 2018 (included as exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 6, 2018, and incorporated herein by reference). |
4.4 |
Form of Placement Agent Warrant granted to Dawson James Securities, Inc. in connection with the November 2019 public offering (included as exhibit 4.1 to the Company’s Current Report on Form 8-K filed on November 29, 2019, and incorporated herein by reference). |
5.1* |
Opinion of Burns & Levinson LLP |
10.1 |
Form of Indemnification Agreement between Oculus Innovative Sciences, Inc. and its officers and directors (included as exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-135584), as amended, declared effective on January 24, 2007, and incorporated herein by reference). |
10.2 |
Office Lease Agreement, dated May 18, 2006, between Oculus Technologies of Mexico, S.A. de C.V. and Antonio Sergio Arturo Fernandez Valenzuela (translated from Spanish) (included as exhibit 10.10 to the Company’s Registration Statement on Form S-1 (File No. 333-135584), as amended, declared effective on January 24, 2007, and incorporated herein by reference). |
10.3 |
Office Lease Agreement, dated July 2003, between Oculus Innovative Sciences, B.V. and Artikona Holding B.V. (translated from Dutch) (included as exhibit 10.11 to the Company’s Registration Statement on Form S-1 (File No. 333-135584), as amended, declared effective on January 24, 2007, and incorporated herein by reference). |
10.4 |
Form of Director Agreement (included as exhibit 10.20 to the Company’s Registration Statement on Form S-1 (File No. 333-135584), as amended, declared effective on January 24, 2007, and incorporated herein by reference). |
10.5 |
Amended and Restated Oculus Innovative Sciences, Inc. 2006 Stock Incentive Plan and related form stock option plan agreements (included as exhibit 10.2 to the Company’s Current Report on Form 8-K filed May 2, 2007, and incorporated herein by reference). |
10.6 |
Amendment to Office Lease Agreement, effective February 15, 2008, by and between Oculus Innovative Sciences Netherlands B.V. and Artikona Holding B.V. (translated from Dutch) (included as exhibit 10.44 to the Company’s Annual Report on Form 10-K filed June 13, 2008, and incorporated herein by reference). |
10.7 |
Oculus Innovative Sciences, Inc. 2011 Stock Incentive Plan (included as exhibit A in the Company’s Definitive Proxy Statement on Schedule 14A filed July 29, 2011, and incorporated herein by reference). |
10.8† |
Exclusive Sales and Distribution Agreement, dated November 6, 2015, by and between Oculus Innovative Sciences, Inc. and Manna Pro Products, LLC (included as exhibit 10.1 to the Company’s 8-K filed March 23, 2016 and incorporated herein by reference). |
10.9† |
Asset Purchase Agreement dated October 27, 2016, between Oculus Innovative Sciences, Inc. and Invekra, S.A.P.I de C.V. (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 31, 2016, and incorporated herein by reference). |
10.10† |
Amendment Agreement to Acquisition Option dated October 27, 2016, by and between More Pharma Corporation S. de R.L. de C.V. and Oculus Technologies of Mexico, S.A. de C.V. (included as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 31, 2016, and incorporated herein by reference). |
10.11 |
2016 Equity Incentive Plan (included as exhibit A in the Company’s Definitive Proxy Statement on Schedule 14A filed July 29, 2016, and incorporated herein by reference). |
10.12 |
Securities Purchase Agreement entered into by and between Sonoma Pharmaceuticals, Inc. and Montreux Equity Partners V, L.P., dated March 1, 2018 (included as exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 6, 2018, and incorporated herein by reference). |
10.13† |
Exclusive License and Distribution Agreement entered into by and between Sonoma Pharmaceuticals, Inc. and EMS.S.A., dated June 4, 2018 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 5, 2018, and incorporated herein by reference). |
10.14 |
Warrant Agency Agreement entered into by and among Sonoma Pharmaceuticals, Inc., Computershare, Inc. and Computershare Trust Company, N.A., dated November 21, 2018 (included as exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 21, 2018, and incorporated herein by reference). |
10.15⸸+ |
Asset Purchase Agreement dated May 14, 2019, between Sonoma Pharmaceuticals, Inc. and Petagon, Ltd. (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 22, 2019, and incorporated herein by reference). |
10.16⸸+ |
Asset Purchase Agreement dated February 21, 2020, between Sonoma Pharmaceuticals, Inc. and MicroSafe Group, DMCC (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 27, 2020, and incorporated herein by reference.) |
10.17⸸+ |
License, Distribution and Supply Agreement by and between Sonoma Pharmaceuticals, Inc. and Brill International, S.L. dated May 19, 2020 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 26, 2020, and incorporated herein by reference.) |
10.18 |
Consulting Agreement between the Company and Dr. Robert Northey, dated May 30, 2020. (included as exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 4, 2020, and incorporated herein by reference.) |
10.19⸸+ |
Asset Purchase Agreement between the Company and Infinity Labs SD, Inc., dated June 24, 2020 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 30, 2020, and incorporated herein by reference.) |
10.20+ |
Woodstock Lease Agreement between the Company and Fowler Crossing Partners, LP, dated October 1, 2018. |
10.21⸸ |
Licensing Agreement between Sonoma Pharmaceuticals, Inc. and MicroSafe Group, effective July 27, 2020 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 6, 2020, and incorporated herein by reference). |
10.22⸸ |
Licensing and Distribution Agreement between Sonoma Pharmaceuticals, Inc. and Gabriel Science, LLC, effective December 14, 2020 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 17, 2020, and incorporated herein by reference). |
10.23⸸ |
Exclusive Supply and Distribution Agreement between the Company and EMC Pharma, LLC, dated March 26, 2021 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 31, 2021, and incorporated herein by reference). |
10.24 |
Amended and Restated Employment Agreement by and between the Company and Amy Trombly, dated June 16, 2023 (included as exhibit 10.38 to the Company’s Current Report on Form 10-K filed on June 21, 2023, and incorporated herein by reference). |
10.25 |
Amended and Restated Employment Agreement by and between the Company and Bruce Thornton, dated June 16, 2023 (included as exhibit 10.39 to the Company’s Current Report on Form 8-K filed on June 21, 2023, and incorporated herein by reference). |
10.26 |
At-The-Market Offering Agreement, by and between the Company and H.C. Wainwright & Co., LLC, dated July 30, 2021 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 30, 2021, and incorporated herein by reference). |
10.27 |
2021 Equity Incentive Plan (included as appendix on the Company’s proxy statement filed on July 29, 2021 and incorporated herein by reference). |
10.28+⸸ |
Exclusive License and Distribution Agreement between the Company and Dyamed Biotech Pte Ltd., dated November 4, 2021 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 9, 2021, and incorporated herein by reference). |
10.29+⸸ |
Non-Exclusive Distribution and Supply Agreement between the Company and Salus Medical, LLC dated January 19, 2022 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 20, 2022, and incorporated herein by reference). |
10.30+⸸ |
Exclusive License and Distribution Agreement between Sonoma Pharmaceuticals, Inc. and Anlicare International dated January 18, 2022 (included as exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 20, 2022, and incorporated herein by reference). |
10.31 |
At-The-Market Offering Agreement, by and between the Company and Ladenburg Thalmann & Co. Inc., dated December 23, 2022 (included as exhibit 1.1 to the Company’s Current Report on Form 8-K filed on December 23, 2022, and incorporated herein by reference). |
10.32 |
Sonoma Pharmaceuticals, Inc. Non-Employee Director Compensation Program and Stock Ownership Guidelines, revised by the Board of Directors on December 29, 2022 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 30, 2022, and incorporated herein by reference). |
10.33+⸸ |
Exclusive Distribution and Supply Agreement, dated January 26, 2023, by and between Sonoma Pharmaceuticals, Inc. and Daewoong Pharmaceutical Co., Ltd. (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 31, 2023, and incorporated herein by reference). |
10.34 |
Amendment to At-The-Market Offering Agreement, by and between the Company and Ladenburg Thalmann & Co. Inc., dated February 24, 2023 (included as exhibit 1.1 to the Company’s Current Report on Form 8-K filed on February 24, 2023, and incorporated herein by reference). |
10.35 |
Consulting Agreement, by and between the Company and Jerome Dvonch, dated April 7, 2023 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 13, 2023, and incorporated herein by reference). |
10.36 |
Offer letter to John Dal Poggetto dated July 11, 2023 (included as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 14, 2023, and incorporated herein by reference). |
10.37 |
Consulting Agreement, by and between the Company and Jerome Dvonch Consulting, LLC, effective August 15, 2023 (included as exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 14, 2023, and incorporated herein by reference). |
10.38* |
Form of Securities Purchase Agreement |
14.1 |
Code of Business Conduct (included as Exhibit 14.1 to the Company’s Current Report on Form 8-K filed on January 23, 2017, and incorporated herein by reference). |
21.1 |
List of Subsidiaries (included as Exhibit 21.1 to the Company’s Annual Report on Form 10-K on June 28, 2017, and incorporated herein by reference). |
23.1* |
Consent of Frazier & Deeter, LLC, the Registrant’s independent public accounting firm |
23.2 |
Consent of Burns & Levinson LLP (incorporated in Exhibit 5.1) |
24.1 |
Power of Attorney (included in the registration statement on Form S-1 filed on September
19, 2023, and incorporated herein by reference) |
107* |
Calculation of Filing Fee |
|
|
__________________
* |
Filed herewith. |
† |
Confidential treatment has been granted with respect to certain portions of this agreement. |
⸸ |
Certain portions of the exhibit have been omitted to preserve the confidentiality of such information. The Company will furnish copies of any such information to the SEC upon request. |
+
** |
The schedules to the exhibit have been omitted
from this filing pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish copies of any such schedules to the
SEC upon request.
Indicates management contract or any compensatory
plan, contract or arrangement. |
Copies of above exhibits not contained herein
are available to any stockholder, upon payment of a reasonable per page fee, upon written request to: Chief Financial Officer, Sonoma
Pharmaceuticals, Inc., 5445 Conestoga Court, Suite 150, Boulder, Colorado 80301.
(a) The undersigned registrant
hereby undertakes:
(1) To file, during any
period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus
required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement;
(iii) To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to
such information in the registration statement;
provided, however, that paragraphs (a)(1)(i),
(a)(1)(ii), and (a)(1)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference into the registration statement or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose
of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose
of determining liability under the Securities Act of 1933 to any purchaser:
(A) Each prospectus filed
by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus
was deemed part of and included in the registration statement; and
(B) Each prospectus required
to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a)
of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such
form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter,
such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made
in any such document immediately prior to such effective date.
(5) That, for the purpose
of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will
be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus
or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any
other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and
(iv) Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant
hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s
annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant
hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of
section 310 of the Trust Indenture Act (“Act”) in accordance with the rules and regulations prescribed by the Commission under
section 305(b)(2) of the Act.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form
S-1 and has duly caused this Amendment No. 1 to registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Boulder, State of Colorado, on October 13, 2023.
|
SONOMA PHARMACEUTICALS, INC. |
|
|
|
By: |
/s/ Amy Trombly |
|
|
Amy Trombly
Chief Executive Officer
(Principal Executive Officer) |
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ Amy Trombly
Amy Trombly
/s/ Jerome Dvonch
Jerome Dvonch
/s/ *
Philippe Weigerstorfer
/s/ *
Jay Birnbaum
/s/ *
Jerry McLaughlin |
|
Chief Executive Officer
(Principal Executive Officer)
Interim Chief Financial Officer
(Principal Financial Officer, and Principal Accounting
Officer)
Director
Director
Director |
|
October 13, 2023
October 13, 2023
October 13, 2023
October 13, 2023
October 13, 2023 |
*By: Amy Trombly
Amy Trombly, Attorney-in -Fact
Exhibit 1.1
PLACEMENT AGENCY AGREEMENT
[______], 2023
Sonoma Pharmaceuticals, Inc.
5445 Conestoga Court, Suite 150
Boulder, Colorado 80301
Attention: Amy Trombly, Chief Executive Officer
Dear Ms. Trombly:
This letter agreement (the
“Agreement”) constitutes the agreement between Maxim Group LLC (“Maxim” or the “Placement
Agent”) and Sonoma Pharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, the “Company”),
that Maxim shall serve as the exclusive placement agent for the Company, on a “reasonable best efforts” basis, for the proposed
placement to certain purchasers (the “Purchasers”) of up to an aggregate of [_____] share (the “Shares”)
of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). The documents executed and delivered
by the Company and the Purchasers in connection with the Offering (as defined below), including, without limitation, a securities purchase
agreement (the “Purchase Agreement”), shall be collectively referred to herein as the “Transaction Documents.”
The purchase price to the Purchasers for each Share of Common Stock is $[__]. The Placement Agent may retain other brokers or dealers
to act as sub-agents or selected-dealers on its behalf in connection with the Offering.
Notwithstanding anything herein
to the contrary, in the event that the Placement Agent determines that any of the terms provided for hereunder do not comply with a rule
of the Financial Industry Regulatory Authority (“FINRA”), including but not limited to FINRA Rule 5110, then the
Company shall agree to amend this Agreement in writing upon the request of the Placement Agent to comply with any such rules; provided
that any such amendments shall not provide for terms that are less favorable to the Company than the terms of this Agreement.
Section 1. Agreement
to Act as Placement Agent.
(a) On the basis of the representations,
warranties and agreements of the Company herein contained, and subject to all the terms and conditions of this Agreement, the Placement
Agent shall be the exclusive placement agent in connection with the offering and sale by the Company of the Shares pursuant to the Company’s
Registration Statement (as defined below), with the terms of such offering (the “Offering”) to be subject to market
conditions and negotiations between the Company, the Placement Agent and the prospective Purchasers. The Placement Agent will act on a
reasonable best efforts basis and the Company agrees and acknowledges that there is no guarantee of the successful placement of the Shares,
or any portion thereof, in the prospective Offering. Under no circumstances will the Placement Agent or any of its “Affiliates”
(as defined below) be obligated to underwrite or purchase any of the Shares for its own account or otherwise provide any financing. The
Placement Agent shall act solely as the Company’s agent and not as principal. The Placement Agent shall have no authority to bind
the Company with respect to any prospective offer to purchase the Shares and the Company shall have the sole right to accept offers to
purchase the Shares and may reject any such offer, in whole or in part. Subject to the terms and conditions hereof, payment of the purchase
price for, and delivery of, the Shares shall be made at the closing (the “Closing” and the date on which the Closing
occurs, the “Closing Date”). The Closing shall occur via “Delivery Versus Payment” (“DVP”),
i.e., on the Closing Date, the Company shall issue the Shares directly to the account designated by the Placement Agent and, upon receipt
of such Shares, the Placement Agent shall electronically deliver such Shares to the applicable Purchaser and payment shall be made by
the Placement Agent (or its clearing firm) by wire transfer to the Company. As compensation for services rendered, the Company shall grant
to the Placement Agent the rights described below and pay to the Placement Agent the fees and expenses set forth below:
|
(i) |
a cash fee equal to seven percent 8.0% of the gross proceeds received by the Company from the sale of the Shares at the Closing; |
|
|
|
|
(ii) |
for a period of five (5) months from the Closing,
the Company grants the Placement Agent the right of first refusal to act as sole managing underwriter and sole book runner, sole placement
agent, or sole sales agent, for any and all future public or private equity, equity-linked or debt (excluding commercial bank debt and
loans against tax credits) offerings for which the Company retains the service of an underwriter, agent, advisor, finder or other person
or entity in connection with such offering during such five (5) month period of the Company, or any successor to or any subsidiary of
the Company (a “Subsequent Offering”). The Company shall not offer to retain any entity or person in connection with
any such Subsequent Offering on terms more favorable than terms on which it offers to retain the Placement Agent. Such offer shall be
made in writing in order to be effective. The Placement Agent shall notify the Company within ten (10) business days of its receipt of
the written offer contemplated above as to whether or not it agrees to accept such retention. If the Placement Agent should decline such
retention, the Company shall have no further obligations to the Placement Agent with respect to the offering for which it has offered
to retain the Placement Agent, except as otherwise provided for herein; and
|
|
(iii) |
reimburse the Placement Agent’s accountable expenses, including the Placement Agent’s legal counsel’s legal fees, up to $75,000 minus any amount previously paid by the Company to the Placement Agent as an advance. However, in the event this Agreement shall terminate prior to the consummation of the Offering, the Placement Agent, shall be entitled to reimbursement for actual expenses upon providing reasonable documentation relating to the incurrence of such expenses; provided, however, such expenses shall not exceed the aggregate amount of $40,000, taken together and not individually. |
The Placement Agent reserves
the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be
made by FINRA to the effect that the Placement Agent’s aggregate compensation is in excess of FINRA Rules or that the terms thereof
require adjustment.
(b) The Placement Agent’s
engagement hereunder shall become effective on the date hereof and shall continue until the earlier of (i) the Closing Date and (ii) December
31, 2023 (the “Termination Date”). Notwithstanding anything to the contrary contained herein, the provisions concerning
confidentiality, indemnification and contribution contained herein and the Company’s obligations contained in the indemnification
provisions will survive any expiration or termination of this Agreement, and the Company’s obligation to pay fees actually earned
and payable and to reimburse expenses actually incurred and reimbursable pursuant to Section 1 hereof and which are permitted
to be reimbursed under the FINRA Rules, will survive any expiration or termination of this Agreement. All such fees and reimbursements
due shall be paid to the Placement Agent on or before the Termination Date (in the event such fees and reimbursements are earned or owed
as of the Termination Date) or upon the closing of the Offering or any applicable portion thereof (in the event such fees are due pursuant
to the terms of Section 1 hereof).
(c) Nothing in this
Agreement shall be construed to limit the ability of the Placement Agent or its Affiliates to pursue, investigate, analyze, invest in,
or engage in investment banking, financial advisory or any other business relationship with Persons (as defined below) other than the
Company. As used herein (i) “Persons” 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 and (ii) “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 of 1933, as amended (the “Securities Act”).
Section 2. Representations,
Warranties and Covenants of the Company. The Company hereby represents, warrants and covenants to the Placement Agent as of the date
hereof, and as of the Closing Date, unless such representation, warranty or agreement specifies a different date or time, as follows:
(a) Securities Law Filings.
The Company has filed with the Securities and Exchange Commission (the “Commission”) a Registration Statement Form
S-1 (File No. 333-274582) under the Securities Act, which was filed on September 19, 2023, and declared effective on [___], 2023 for the
registration of the Securities under the Securities Act. Following the determination of pricing among the Company and the prospective
Purchasers introduced to the Company by Placement Agent, the Company will file with the Commission pursuant to Rules 430A and 424(b)
under the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the Commission promulgated
thereunder, a final prospectus relating to the placement of the Shares, their respective pricings and the plan of distribution thereof
and will advise the Placement Agent of all further information (financial and other) with respect to the Company required to be set forth
therein. Such registration statement, at any given time, including the exhibits thereto filed at such time, as amended at such time, and
including any registration statement prepared and filed by the Company in accordance with Rule 462(b) pursuant to the Shares, is
hereinafter called the “Registration Statement”; such prospectus in the form in which it appears in the Registration
Statement at the time of effectiveness, is hereinafter called the “Preliminary Prospectus”; and the final prospectus,
in the form in which it will be filed with the Commission pursuant to Rules 430A and/or 424(b) (including the Preliminary Prospectus
as it may be amended or supplemented) is hereinafter called the “Final Prospectus.” The Registration Statement at the
time it originally became effective is hereinafter called the “Original Registration Statement.” Any reference in this
Agreement to the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Final Prospectus shall
be deemed to refer to and include the documents incorporated by reference therein (the “Incorporated Documents”), if
any, which were or are filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at any given
time, 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 Original Registration Statement, the Preliminary Prospectus or the Final Prospectus 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 or the Final Prospectus, 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
Preliminary Prospectus or the Final Prospectus (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 Preliminary Prospectus or the Final Prospectus, as the case may be. As used in this paragraph and elsewhere in this Agreement, “General
Disclosure Package” means the Preliminary Prospectus, the Transaction Documents, the final terms of the Offering provided to
the Purchasers (orally or in writing), and any issuer free writing prospectus as defined in Rule 433 of the Act (each, an “Issuer
Free Writing Prospectus”), if any, that the parties hereto shall hereafter expressly agree in writing to treat as part of the
General Disclosure Package. The term “any Prospectus” shall mean, as the context requires, the Preliminary Prospectus,
the Final Prospectus and any supplement to either thereof. The Company has not received any notice that the Commission has issued or intends
to issue a stop order suspending the effectiveness of the Registration Statement or the use of the Preliminary Prospectus or the Final
Prospectus or intends to commence a proceeding for any such purpose.
(b) Assurances. The
Original Registration Statement, as amended, (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, at the time it became
effective, complied in all material respects with the Securities Act and the applicable Rules and Regulations and did 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 Final Prospectus, as of its date, complied or will comply in all material respects with the Securities Act
and the applicable Rules and Regulations. The Final Prospectus, 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 Incorporated Documents, 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 promulgated thereunder,
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 Incorporated Documents incorporated by reference in the
Final Prospectus), 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. Except for this Agreement and the Transaction
Documents, there are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that
(i) have not been filed as required pursuant to the Securities Act or (ii) will not be filed within the requisite time period under the
Rules and Regulations. Except for this Agreement and the Transaction Documents, there are no contracts or other documents required to
be described in the Final Prospectus, or to be filed as exhibits or schedules to the Registration Statement, which have not been described
or filed as required. No representation and warranty is made in this subsection (b), however, with respect to any information contained
in or omitted from the Registration Statement, the Preliminary Prospectus or the Final Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Placement Agent
specifically for use therein. The parties acknowledge and agree that such information provided by or on behalf of the Placement Agent
consists solely of: the statements set forth in the “Plan of Distribution” section of the Preliminary Prospectus and the Final
Prospectus only insofar as such statements relate to the name of the Placement Agent, the amount of placement agent fees and commissions,
and related activities that may be undertaken by the Placement Agent and the “Regulation M,” “Electronic Distribution,”
and “Other Relationships” sections of the Prospectus.
(c) Offering Materials.
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 Shares other than the General Disclosure Package.
(d) Authorization; Enforcement.
The Company has full legal right, power and authority to enter into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(e) No Conflicts. The
execution, delivery and performance by the Company of this Agreement, the Transaction Documents and the transactions contemplated pursuant
to the General Disclosure Package, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby
and thereby to which it is a party do not and will not (i) conflict with or violate any provision of the Company’s, or any of its
Subsidiaries’, certificate or articles of incorporation, bylaws or other organizational or charter documents, (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, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction upon any of the
properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a debt or otherwise) or other
understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) subject
to any 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 any Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of
clauses (ii) and (iii), such as would not reasonably be expected to result in a material adverse effect on: (x) the legality, validity
or enforceability of any Transaction Document; (y) the results of operations, assets, business, prospects or condition (financial or otherwise)
of the Company or any Subsidiary; or (z) the Company’s ability to perform in any material respect on a timely basis its obligations
under any Transaction Document (any of (x), (y), or (z), a “Material Adverse Effect”).
(f) Reliance. The Company
has not relied upon the Placement Agent or legal counsel for the Placement Agent for any legal, tax or accounting advice in connection
with the offering and sale of the Shares.
(g) Forward-Looking Statements.
No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act (“Forward-Looking
Statement”) contained in the General Disclosure Package has been made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.
(h) Certificates. Any
certificate signed by any duly authorized officer of the Company and delivered to the Placement Agent or counsel shall be deemed a representation
and warranty by the Company to the Purchasers as to the matters covered thereby.
(i) Representations and
Warranties Incorporated by Reference. Each of the representations and warranties (together with any related disclosure schedules thereto)
made by the Company to the Purchasers in the Purchase Agreement is hereby incorporated herein by reference (as though fully restated herein)
and is hereby made to, and in favor of, the Placement Agent.
(j) Statistical
or Market-Related Data. Any statistical, industry-related and market-related data included or incorporated by reference in the Time
of Sale Disclosure Package, are based on or derived from sources that the Company reasonably and in good faith believes to be reliable
and accurate, and such data agree with the sources from which they are derived.
(k) Certain
Fees; FINRA Affiliations. Except as set forth in the Registration Statement and the Final 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. There are no other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its
shareholders that may affect the Placement Agent’s compensation, as determined by FINRA. Other than payments to the Placement Agent
for this Offering, the Company has not made and has no agreements, arrangements or understanding to make 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 participating in the offering as defined in FINRA Rule 5110 (a “Participating Member”); or (iii) any person
or entity that has any direct or indirect affiliation or association with any Participating Member, within the 180-day period preceding
the initial filing of the Registration Statement through the 60-day period after the Effective Date. None of the net proceeds of the Offering
will be paid by the Company to any Participating Member or its affiliates, except as specifically authorized herein. To the Company’s
knowledge, no officer, director or any beneficial owner of 10% or more of the Company’s Common Stock or Common Stock Equivalents
has any direct or indirect affiliation or association with any Participating Member in the Offering. Except for securities purchased on
the open market, no Company Affiliate is an owner of stock or other securities of any Participating Member. No Company Affiliate has made
a subordinated loan to any Participating Member. No proceeds from the sale of the Shares (excluding placement agent compensation as disclosed
in the Registration Statement and the Prospectus) will be paid to any Participating Member, any persons associated with a Participating
Member or an affiliate of a Participating Member. Except as disclosed in the Prospectus, the Company has not issued any warrants or other
securities or granted any options, directly or indirectly, to the Placement Agent within the 180-day period prior to the initial filing
date of the Prospectus. Except for securities issued to the Placement Agent as disclosed in the Prospectus, no person to whom securities
of the Company have been privately issued within the 180-day period prior to the initial filing date of the Prospectus is a Participating
Member, is a person associated with a Participating Member or is an affiliate of a Participating Member. No Participating Member in the
Offering has a conflict of interest with the Company. For this purpose, a “conflict of interest” exists when a Participating
Member, the parent or affiliate of a Participating Member or any person associated with a Participating Member in the aggregate beneficially
own 5% or more of the Company’s outstanding subordinated debt or common equity, or 5% or more of the Company’s preferred equity.
“FINRA member participating in the Offering” includes any associated person of a Participating Member in the Offering,
any member of such associated person’s immediate family and any affiliate of a Participating Member in the Offering. When used in
this Section 3.1(j) the term “affiliate of a FINRA member” or “affiliated with a FINRA member” means
an entity that controls, is controlled by or is under common control with a FINRA member. The Company will advise the Placement Agent
and Placement Agent Counsel (as defined below) if it learns that any officer, director or owner of 10% 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 Participating Member.
(l) Board of
Directors. The Board of Directors is comprised of the persons set forth in the Registration Statement and the Prospectus. 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 (as defined below). 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.
(m) D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires most recently completed by each
of the Company’s directors and officers 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.
Section 3. Delivery
and Payment. The Closing shall occur at the offices of Blank Rome LLP, located at 1271 Avenue of the Americas, New York, New York
10020 (“Placement Agent Counsel”) (or at such other place as shall be agreed upon by the Placement Agent and the Company,
including remotely via electronic transmission). Subject to the terms and conditions hereof and of the Purchase Agreement, at the Closing,
payment of the purchase price for the Shares sold on the Closing Date shall be made by Federal Funds wire transfer, against delivery of
such Shares, and such Shares shall be registered in such name or names and shall be in such denominations, as the Placement Agent may
request at least one business day before the Closing Date. Deliveries of the documents with respect to the purchase of the Shares, if
any, shall be made at the offices of Placement Agent Counsel. All actions taken at the Closing shall be deemed to have occurred simultaneously.
Section 4. Covenants
and Agreements of the Company. The Company further covenants and agrees with the Placement Agent as follows:
(a) Registration Statement
Matters. The Company will advise the Placement Agent promptly after it receives notice thereof of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to the Final Prospectus has been filed and will furnish the
Placement Agent with copies thereof. The Company will file promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a), 14 or 15(d) of the Exchange Act subsequent to the date
of any Prospectus and for so long as the delivery of a prospectus is required in connection with the Offering. The Company will advise
the Placement Agent, promptly after it receives notice thereof (i) of any request by the Commission to amend the Registration Statement
or to amend or supplement any Prospectus or for additional information, (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment thereto or any order directed at any Incorporated Document,
if any, or any amendment or supplement thereto or any order preventing or suspending the use of the Preliminary Prospectus or the Final
Prospectus or any prospectus supplement or any amendment or supplement thereto or any post-effective amendment to the Registration Statement,
of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the institution or threatened institution
of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement
or a Prospectus or for additional information; (iii) of the issuance by any state securities commission of any proceedings for the
suspension of the qualification of the Shares 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(a) 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. The Company shall use its best efforts to prevent the issuance of any such stop order or prevention or
suspension of such use. If the Commission shall enter any such stop order or order or notice of prevention or suspension at any time,
the Company will use its best efforts to obtain the lifting of such order at the earliest possible moment, or will file a new registration
statement and use its best efforts to have such new registration statement declared effective as soon as practicable. Additionally, the
Company agrees that it shall comply with the provisions of Rules 424(b), 430A, 430B and 430C, as applicable, under the Securities
Act, including with respect to the timely filing of documents thereunder, and will use its reasonable efforts to confirm that any filings
made by the Company under such Rule 424(b) are received in a timely manner by the Commission.
(b) Blue Sky Compliance.
The Company will cooperate with the Placement Agent and the Purchasers in endeavoring to qualify the Shares for sale under the securities
laws of such jurisdictions (United States and foreign) as the Placement Agent and the Purchasers may reasonably request and will make
such applications, file such documents, and furnish such information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction where
it is not now so qualified or required to file such a consent, and provided further that the Company shall not be required to produce
any new disclosure document. The Company will, from time to time, prepare and file such statements, reports and other documents as are
or may be required to continue such qualifications in effect for so long a period as the Placement Agent may reasonably request for distribution
of the Shares. The Company will advise the Placement Agent promptly of the suspension of the qualification or registration of (or any
such exemption relating to) the Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding
for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company
shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.
(c) Amendments and Supplements
to a Prospectus and Other Matters. The Company will comply with the Securities Act and the Exchange Act, and the rules and regulations
of the Commission thereunder, so as to permit the completion of the distribution of the Shares as contemplated in this Agreement, the
Incorporated Documents and any Prospectus. If during the period in which a prospectus is required by law to be delivered in connection
with the distribution of Securities contemplated by the Incorporated Documents or any Prospectus (the “Prospectus Delivery Period”),
any event shall occur as a result of which, in the judgment of the Company or in the opinion of the Placement Agent or counsel for the
Placement Agent, it becomes necessary to amend or supplement the Incorporated Documents or any Prospectus in order to make the statements
therein, in light of the circumstances under which they were made, as the case may be, not misleading, or if it is necessary at any time
to amend or supplement the Incorporated Documents or any Prospectus or to file under the Exchange Act any Incorporated Document to comply
with any law, the Company will promptly prepare and file with the Commission, and furnish at its own expense to the Placement Agent and
to dealers, an appropriate amendment to the Registration Statement or supplement to the Registration Statement, the Incorporated Documents
or any Prospectus that is necessary in order to make the statements in the Incorporated Documents and any Prospectus as so amended or
supplemented, in light of the circumstances under which they were made, as the case may be, not misleading, or so that the Registration
Statement, the Incorporated Documents or any Prospectus, as so amended or supplemented, will comply with law. Before amending the Registration
Statement or supplementing the Incorporated Documents or any Prospectus in connection with the Offering, the Company will furnish the
Placement Agent with a copy of such proposed amendment or supplement and will not file any such amendment or supplement to which the Placement
Agent reasonably objects.
(d) Copies of any Amendments
and Supplements to a Prospectus. The Company will furnish the Placement Agent, without charge, during the period beginning on the
date hereof and ending on the Closing Date, as many copies of any Prospectus or prospectus supplement and any amendments and supplements
thereto, as the Placement Agent may reasonably request.
(e) Free Writing Prospectus.
The Company covenants that it will not, unless it obtains the prior written consent of the Placement Agent, make any offer relating to
the Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus”
(as defined in Rule 405 of the Securities Act) required to be filed by the Company with the Commission or retained by the Company
under Rule 433 of the Securities Act. In the event that the Placement Agent expressly consents in writing to any such free writing
prospectus (a “Permitted Free Writing Prospectus”), the Company covenants that it shall (i) treat each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) comply with the requirements of Rule 164 and 433 of the Securities
Act applicable to such Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record
keeping.
(f) Transfer Agent.
The Company will maintain, at its expense, a registrar and transfer agent for the Common Stock for at least three years after the final
Closing Date.
(g) Earnings Statement.
As soon as practicable and in accordance with applicable requirements under the Securities Act, but in any event not later than 18 months
after the Closing Date, the Company will make generally available to its security holders and to the Placement Agent an earnings statement,
covering a period of at least 12 consecutive months beginning after the Closing Date, that satisfies the provisions of Section 11(a)
and Rule 158 under the Securities Act.
(h) Periodic Reporting
Obligations. During the Prospectus Delivery Period, the Company will duly file, on a timely basis, with the Commission and the market
or exchange on which the Common Stock is listed or quoted for trading (the “Trading Market”) all reports and documents
required to be filed under the Exchange Act within the time periods and in the manner required by the Exchange Act.
(i) Additional Documents. The
Company will enter into any subscription, purchase or other customary agreements as the Placement Agent or the Purchasers deem necessary
or appropriate to consummate the Offering, all of which will be in form and substance reasonably acceptable to the Placement Agent and
the Purchasers. The Company agrees that the Placement Agent may rely upon, and each is a third party beneficiary of, the representations
and warranties, and applicable covenants, set forth in any such purchase, subscription or other agreement with Purchasers in the Offering.
(j) No Manipulation of
Price. Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders, 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 Shares.
(k) Acknowledgment.
The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit and use of the Board of
Directors of the Company and may not be used, reproduced, disseminated, quoted or referred to, without the Placement Agent’s prior
written consent.
(l) Publicity. The
Company acknowledges and agrees that the Placement Agent may, subsequent to the Closing, make public its involvement with the Offering.
The Company agrees that, until 45 days after the final Closing Date, it will not issue press releases or engage in any other publicity,
without Maxim’s prior written consent (not to be unreasonably withheld), other than normal and customary releases issued in the
ordinary course of the Company’s business. Notwithstanding the foregoing, in no event shall the Company be prohibited from issuing
any press releases or engaging in any other publicity required by law, except that including the name of the Placement Agent therein shall
require the prior written consent of the Placement Agent.
(m) Reliance on Others.
The Company confirms that it will rely on its own counsel and accountants for legal and accounting advice.
(n) Research Matters.
By entering into this Agreement, the Placement Agent does not provide any promise, either explicitly or implicitly, of favorable or continued
research coverage of the Company and the Company hereby acknowledges and agrees that the Placement Agent’s selection as a placement
agent for the Offering was in no way conditioned, explicitly or implicitly, on the Placement Agent providing favorable or any research
coverage of the Company. In accordance with the FINRA Rules, the parties acknowledge and agree that the Placement Agent has not directly
or indirectly offered favorable research, a specific rating or a specific price target, or threatened to change research, a rating or
a price target, to the Company or inducement for the receipt of business or compensation. The Company hereby waives and releases, to the
fullest extent permitted by law, any claims that the Company may have against the Placement Agent 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 the Placement Agent’s investment banking divisions.
The Company acknowledges that the Placement Agent 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.
(o) Trading Market.
The Company will use its best efforts to maintain the listing of its Common Stock on the Trading Market for a period of at least three
years after the Closing Date.
(p) Engagement of Professionals.
The Company will retain a nationally recognized, PCAOB registered firm of independent certified public accountants reasonably acceptable
to Maxim for a period of at least three years after the Closing Date. The Company will retain a financial printer reasonably acceptable
to Maxim to handle the printing and related aspects of the Offering.
(q) Subsequent Equity Sales.
From the date hereof until six (6) months after the final Closing Date, the Company shall not (i) 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 (ii) file any registration
statement or any amendment or supplement thereto, other than the Final Prospectus or in connection with any employee benefit plan (the
“Lock-Up Period”). In addition, from the date hereof until six (6) months after the final 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 shares
of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the
Purchase Agreement. Notwithstanding the foregoing, this Section 4(q) shall not apply in respect of an Exempt Issuance (as
defined in the Purchase Agreement), except that no Variable Rate Transaction shall be an Exempt Issuance.
(r) Lock-Up Agreements.
The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements except to extend the
term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms.
If any party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use
its best efforts to seek specific performance of the terms of such Lock-Up Agreement.
(s) FINRA. The Company
shall advise the Placement Agent (who shall make an appropriate filing with FINRA) if it is aware that any officer, director, 10% or greater
shareholder of the Company or Person that received the Company’s unregistered equity securities in the past one hundred eighty (180) days
is or becomes an affiliate or associated person of a FINRA member firm prior to the earlier of the termination of this Agreement or the 60-day period
after the Effective Date.
Section 5. Conditions
of the Obligations of the Placement Agent. The obligations of the Placement Agent hereunder shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 2 hereof and in the Purchase Agreement, in
each case as of the date hereof and as of the Closing Date as though then made, to the timely performance by each of the Company of its
covenants and other obligations hereunder on and as of such dates, and to each of the following additional conditions:
(a) Accountants’
Comfort Letter. At the pricing of the Offering and at the Closing, the Placement Agent shall have received, and the Company shall
have caused to be delivered to the Placement Agent, a cold “comfort letter” and a bring-down “comfort letter”,
respectively, from Frazier & Deeter, LLC, the current independent registered public accounting firm of the Company, addressed to the
Placement Agent, dated as of the date hereof and the Closing Date, respectively, in form and substance satisfactory to the Placement Agent.
The letter shall disclose no change in the condition (financial or other), earnings, operations, business or prospects of the Company
from that set forth in the Incorporated Documents or the applicable Prospectus, which, in the Placement Agent’s sole judgment, is
material and adverse and that makes it, in the Placement Agent’s sole judgment, impracticable or inadvisable to proceed with the
Offering of the Shares as contemplated by such Prospectus.
(b) Compliance with Registration
Requirements; No Stop Order; No Objection from the FINRA. Each Prospectus shall have been duly filed with the Commission, as appropriate;
no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the Commission; no order preventing or suspending the use of any Prospectus
shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no order having the
effect of ceasing or suspending the distribution of the Shares or any other securities of the Company shall have been issued by any securities
commission, securities regulatory authority or stock exchange and no proceedings for that purpose shall have been instituted or shall
be pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory authority or stock exchange;
all requests for additional information on the part of the Commission shall have been complied with; and, prior to the date hereof, FINRA
shall have raised no objection to the fairness and reasonableness of the placement terms and arrangements.
(c) Corporate Proceedings.
All corporate proceedings and other legal matters in connection with this Agreement, the Registration Statement and each Prospectus, and
the registration, sale and delivery of the Shares, shall have been completed or resolved in a manner reasonably satisfactory to the Placement
Agent’s counsel, and such counsel shall have been furnished with such papers and information as it may reasonably have requested
to enable such counsel to pass upon the matters referred to in this Section 5.
(d) No Material Adverse
Change. Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, in the Placement Agent’s sole
judgment after consultation with the Company, there shall not have occurred any Material Adverse Effect or any material adverse change
or development involving a prospective material adverse change in the condition or the business activities, financial or otherwise, of
the Company from the latest dates as of which such condition is set forth in the Registration Statement and Prospectus (“Material
Adverse Change”).
(e) Opinion of Counsel
for the Company. The Placement Agent shall have received on the Closing Date the favorable written opinion and negative assurance
letter of (i) Burns & Levinson LLP, legal counsel to the Company, addressed to the Placement Agent, dated as of the Closing
Date, and in form and substance reasonably satisfactory to the Placement Agent and the Placement Agent’s counsel. The Placement
Agent shall have received on the Closing Date a certificate of the Company, in form and substance reasonably satisfactory to the Placement
Agent and the Placement Agent’s counsel, certifying to certain regulatory matters contained in the Prospectus, and a certificate
of the Company, in form and substance reasonably satisfactory to the Placement Agent and the Placement Agent’s counsel, certifying
to certain intellectual property matters.
(f) Officers’ Certificate.
The Placement Agent shall have received on the Closing Date a certificate of the Company, dated as of the Closing Date, signed by the
Chief Executive Officer and Chief Financial Officer of the Company, to the effect that, and the Placement Agent shall be satisfied that,
the signers of such certificate have reviewed the Registration Statement, the Incorporated Documents, the Final Prospectus, the Transaction
Documents and this Agreement and to the further effect that:
(i) The representations
and warranties of the Company in this Agreement and the Purchase Agreement are true and correct as if made on and as of the Closing Date
(unless as of a specific date therein in which case they shall be accurate as of such date), and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;
(ii) No stop order
suspending the effectiveness of the Registration Statement or the use of the Final Prospectus has been issued and no proceedings for that
purpose have been instituted or are pending or, to the Company’s knowledge, threatened under the Securities Act; no order having
the effect of ceasing or suspending the distribution of the Shares or any other securities of the Company has been issued by any securities
commission, securities regulatory authority or stock exchange in the United States and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory authority or stock
exchange in the United States;
(iii) When the Registration
Statement became effective, at the time of sale, and at all times subsequent thereto up to the delivery of such certificate, the Registration
Statement and the Incorporated Documents, if any, when such documents became effective or were filed with the Commission, and any Prospectus,
contained all material information required to be included therein by the Securities Act and the Exchange Act and the applicable rules
and regulations of the Commission thereunder, as the case may be, and in all material respects conformed to the requirements of the Securities
Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and the Registration
Statement and the Incorporated Documents, if any, and any Prospectus, did not and do not include 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, in light of the circumstances
under which they were made, not misleading (provided, however, that the preceding representations and warranties contained in this paragraph
(iii) shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to
the Company by the Placement Agent expressly for use therein) and, since the effective date of the Registration Statement, there has occurred
no event required by the Securities Act and the rules and regulations of the Commission thereunder to be set forth in the Incorporated
Documents which has not been so set forth; and
(iv) Subsequent
to the respective dates as of which information is given in the Registration Statement, the Incorporated Documents and the Final Prospectus,
there has not been: (a) any Material Adverse Change; (b) any transaction that is material to the Company taken as a whole, except transactions
entered into in the ordinary course of business; (c) any obligation, direct or contingent, that is material to the Company taken as a
whole, incurred by the Company, except obligations incurred in the ordinary course of business; (d) any material change in the capital
stock (except changes thereto resulting from the exercise of outstanding stock options or warrants) or outstanding indebtedness of the
Company; (e) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company; or (f) any loss or damage
(whether or not insured) to the property of the Company which has been sustained or will have been sustained which has a Material Adverse
Effect.
(g) Secretary’s Certificate.
The Placement Agent shall have received on each Closing Date a certificate of the Company, dated as of such Closing Date, signed by the
Secretary of the Company, in a form reasonably satisfactory to the Placement Agent.
(h) Chief Financial Officer’s
Certificate. The Placement Agent shall have received on each Closing Date a certificate of the Company, dated as of such Closing Date,
signed by the Chief Financial Officer of the Company, in a form reasonably satisfactory to the Placement Agent.
(i) Stock Exchange Listing.
The Common Stock shall be registered under the Exchange Act and shall be listed on the Trading Market, and the Company shall not have
taken any action designed to terminate, or likely to have the effect of terminating, the registration of the Common Stock under the Exchange
Act or delisting or suspending from trading the Common Stock from the Trading Market, nor shall the Company have received any information
suggesting that the Commission or the Trading Market is contemplating terminating such registration or listing except as disclosed in
any Prospectus.
(j) Lock-Up Agreements.
On the Closing Date, the Placement Agent shall have received the executed lock-up agreement, in the form attached hereto as Exhibit
A, from each of the directors and officers and any holder of 10% or more of the outstanding Common Stock.
(k) Additional Documents.
On or before each Closing Date, the Placement Agent and counsel for the Placement Agent shall have received such information and documents
as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Shares as contemplated herein,
or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements,
herein contained.
If any condition specified
in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement
Agent by notice to the Company at any time on or prior to a Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Sections 1(a), 7 and 8 shall at all times be effective and shall survive
such termination.
Section 6. Further
Agreements.
(a) Other Activities.
The Company acknowledges that the Placement Agent has been, and may in the future be, engaged to provide services as an underwriter, placement
agent, finder, advisor or investment banker to other companies in the industry in which the Company is involved. The Company acknowledges
and agrees that nothing contained in this Agreement shall limit or restrict the right of the Placement Agent or of any member, manager,
officer, employee, agent or representative of the Placement Agent, to be a member, manager, partner, officer, director, employee, agent
or representative of, investor in, or to engage in, any other business, whether or not of a similar nature to the Company’s business,
nor to limit or restrict the right of the Placement Agent to render services of any kind to any other corporation, firm, individual or
association; provided that the Placement Agent and any of its members, managers, officers, employees, agents or representatives shall
not use the Information to the detriment of the Company.
(b) Placement Agent Introductions.
Upon Closing of the Offering, or if the Termination Date is prior to the Closing of the Offering (other than a termination for “Cause”),
then if within twelve (12) months following such time, the Company completes any financing of equity, equity-linked, or debt financing,
or any other capital raising activity with, or receives any proceeds from any of the investors contacted or introduced to the Company
by the Placement Agent, then the Company will pay the Placement Agent upon the closing of such financing or receipt of proceeds the compensation
equivalent to that set forth in Section 1(a) hereof.
Section 7. Indemnification
and Contribution.
(a) The Company agrees to
indemnify and hold harmless the Placement Agent, its affiliates and each person controlling the Placement Agent (within the meaning of
Section 15 of the Securities Act), and the directors, officers, agents and employees of the Placement Agent, its affiliates and each
such controlling person (the Placement Agent, and each such entity or person. an “Indemnified Person”) from and against
any losses, claims, damages, judgments, assessments, costs and other liabilities (collectively, the “Liabilities”),
and shall reimburse each Indemnified Person for all fees and expenses (including the reasonable fees and expenses of one counsel for all
Indemnified Persons, except as otherwise expressly provided herein) (collectively, the “Expenses”) as they are incurred
by an Indemnified Person in investigating, preparing, pursuing or defending any action, suit, inquiry, notice of violation, proceeding
or investigation (collectively, an “Action”), whether or not any Indemnified Person is a party thereto, (i) caused
by, or arising out of or in connection with, any untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, any Incorporated Document, or any Prospectus or by any omission or alleged omission to state therein a material fact necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading (other than untrue statements
or alleged untrue statements in, or omissions or alleged omissions from, information relating to an Indemnified Person furnished in writing
by or on behalf of such Indemnified Person expressly for use in the Incorporated Documents) or (ii) otherwise arising out of or in connection
with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement, the transactions contemplated
thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services or transactions; provided,
however, that, in the case of clause (ii) only, the Company shall not be responsible for any Liabilities or Expenses of any Indemnified
Person that are finally judicially determined to have resulted solely from such Indemnified Person’s (x) gross negligence or willful
misconduct in connection with any of the advice, actions, inactions or services referred to above or (y) use of any offering materials
or information concerning the Company in connection with the offer or sale of the Shares in the Offering which were not authorized for
such use by the Company and which use constitutes gross negligence or willful misconduct. The Company also agrees to reimburse each Indemnified
Person for all Expenses as they are incurred in connection with enforcing such Indemnified Person’s rights under this Agreement.
(b) Upon receipt by an Indemnified
Person of actual notice of an Action against such Indemnified Person with respect to which indemnity may be sought under this Agreement,
such Indemnified Person shall promptly notify the Company in writing; provided that failure by any Indemnified Person so to notify the
Company shall not relieve the Company from any liability which the Company may have on account of this indemnity or otherwise to such
Indemnified Person, except to the extent the Company shall have been prejudiced by such failure. The Company shall, if requested by the
Placement Agent, assume the defense of any such Action including the employment of counsel reasonably satisfactory to the Placement Agent,
which counsel may also be counsel to the Company. Any Indemnified Person shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless:
(i) the Company has failed promptly to assume the defense and employ counsel or (ii) the named parties to any such Action (including any
impeded parties) include such Indemnified Person and the Company, and such Indemnified Person shall have been advised in the reasonable
opinion of counsel that there is an actual conflict of interest that prevents the counsel selected by the Company from representing both
the Company (or another client of such counsel) and any Indemnified Person; provided that the Company shall not in such event be responsible
hereunder for the fees and expenses of more than one firm of separate counsel for all Indemnified Persons in connection with any Action
or related Actions, in addition to any local counsel. The Company shall not be liable for any settlement of any Action effected without
its written consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent
of the Placement Agent (which shall not be unreasonably withheld), settle, compromise or consent to the entry of any judgment in or otherwise
seek to terminate any pending or threatened Action in respect of which indemnification or contribution may be sought hereunder (whether
or not such Indemnified Person is a party thereto) unless such settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Person from all Liabilities arising out of such Action for which indemnification or contribution may be sought
hereunder. The indemnification required hereby shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as such expense, loss, damage or liability is incurred and is due and payable.
(c) In the event that the
foregoing indemnity is unavailable to an Indemnified Person other than in accordance with this Agreement, the Company shall contribute
to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion as is appropriate to reflect (i) the relative
benefits to the Company, on the one hand, and to the Placement Agent and any other Indemnified Person, on the other hand, of the matters
contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding clause is not permitted by applicable law,
not only such relative benefits but also the relative fault of the Company, on the one hand, and the Placement Agent and any other Indemnified
Person, on the other hand, in connection with the matters as to which such Liabilities or Expenses relate, as well as any other relevant
equitable considerations; provided that in no event shall the Company contribute less than the amount necessary to ensure that all Indemnified
Persons, in the aggregate, are not liable for any Liabilities and Expenses in excess of the amount of fees actually received by the Placement
Agent pursuant to this Agreement. For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to the Placement
Agent on the other hand, of the matters contemplated by this Agreement shall be deemed to be in the same proportion as (a) the total value
paid or contemplated to be paid to or received or contemplated to be received by the Company in the transaction or transactions that are
within the scope of this Agreement, whether or not any such transaction is consummated, bears to (b) the fees paid to the Placement Agent
under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of Section 11(f)
of the Securities Act, as amended, shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.
(d) The Company also agrees
that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for
or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement, the transactions
contemplated thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services or transactions
except for Liabilities (and related Expenses) of the Company that are finally judicially determined to have resulted solely from such
Indemnified Person’s gross negligence or willful misconduct in connection with any such advice, actions, inactions or services.
(e) The reimbursement, indemnity
and contribution obligations of the Company set forth herein shall apply to any modification of this Agreement and shall remain in full
force and effect regardless of any termination of, or the completion of any Indemnified Person’s services under or in connection
with, this Agreement.
Section 8. Representations
and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the
Company or any person controlling the Company, of its officers, and of the Placement Agent set forth in or made pursuant to this Agreement
and the Purchase Agreement, as applicable, will remain in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agent, the Company, or any of its or their partners, officers or directors or any controlling person, as the case may
be, and will survive delivery of and payment for the Shares sold hereunder and any termination of this Agreement. A successor to the Placement
Agent, or to the Company, its directors or officers or any person controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Agreement.
Section 9. Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered, e-mailed or telecopied and confirmed to the parties
hereto as follows:
If to the Placement Agent:
Maxim Group LLC
300 Park Avenue, 16th Floor
New York, NY 10022
Attention: Clifford A. Teller, Co-President
Email: cteller@maximgrp.com
With a copy to:
Blank Rome LLP
1271 Avenue of the Americas
New York, New York 10020
Attention: Leslie Marlow, Esq. or Patrick J. Egan, Esq.
Email: leslie.marlow@blankrome.com or patrick.egan@blankrome.com
If to the Company:
Sonoma Pharmaceuticals, Inc.
5445 Conestoga Court, Suite 150
Boulder, Colorado 80301
Attention: Amy Trombly
Chief Executive Officer
Email: amy@tromblybusinesslaw.com
With a copy to:
Burns & Levinson LLP
125 High Street
Boston, Massachusetts 02110-1624
Attention: Andrew J. Merken, Esq.
Email: amerken@burnslev.com
Any party hereto may change
the address for receipt of communications by giving written notice to the others.
Section 10. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 7 hereof, and to their respective successors, and personal representative,
and no other person will have any right or obligation hereunder.
Section 11. Partial
Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other section, paragraph or provision hereof. If any section, paragraph or provision of this Agreement
is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
Section 12. Governing
Law Provisions. This Agreement shall be deemed to have been made and delivered in New York City and both this Agreement and the transactions
contemplated hereby shall be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws
of the State of New York, without regard to the conflict of laws principles thereof. Each of the Placement Agent and the Company: (i)
agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby
shall be instituted exclusively in the New York Supreme Court, County of New York, or in the United States District Court for the Southern
District of New York (ii) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and
(iii) irrevocably consents to the jurisdiction of the New York Supreme Court, County of New York, or in the United States District Court
for the Southern District of New York in any such suit, action or proceeding. Each of the Placement Agent and the Company further agrees
to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York Supreme
Court, County of New York, or in the United States District Court for the Southern District of New York and agrees that service of process
upon the Company mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process
upon the Company, in any such suit, action or proceeding, and service of process upon the Placement Agent mailed by certified mail to
the Placement Agent’s address shall be deemed in every respect effective service process upon the Placement Agent, in any such suit,
action or proceeding. Notwithstanding any provision of this Agreement to the contrary, the Company agrees that neither the Placement Agent
nor its affiliates, and the respective officers, directors, employees, agents and representatives of the Placement Agent, its affiliates
and each other person, if any, controlling the Placement Agent or any of its affiliates, shall have any liability (whether direct or indirect,
in contract or tort or otherwise) to the Company for or in connection with the engagement and transaction described herein except for
any such liability for losses, claims, damages or liabilities incurred by us that are finally judicially determined to have resulted from
the willful misconduct or gross negligence of such individuals or entities. If either party shall commence an action or proceeding to
enforce any provision of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party
for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.
Section 13. General
Provisions.
(a) This Agreement constitutes
the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof.
(b) Notwithstanding anything
herein to the contrary, the engagement letter, dated August 31, 2023 (“Engagement Agreement”), between the Company
and the Placement Agent shall continue to be effective and the terms therein shall continue to survive and be enforceable by the Placement
Agent 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. 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. This Agreement may not be amended or modified
unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by
each party whom the condition is meant to benefit. Section headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement.
(c) The Company acknowledges
that in connection with the offering of the Shares: (i) the Placement Agent’s responsibility to the Company is solely contractual
and commercial in nature, (ii) the Placement Agent has acted at arm’s length, are not agents of, and owe no fiduciary duties to
the Company or any other person, (iii) the Placement Agent owes the Company only those duties and obligations set forth in this Agreement
and (iv) the Placement Agent may have interests that differ from those of the Company. The Company waives to the full extent permitted
by applicable law any claims it may have against the Placement Agent arising from an alleged breach of fiduciary duty in connection with
the offering of the Shares.
[The remainder of this page has been intentionally
left blank.]
If the foregoing is in accordance
with your understanding of our agreement, please sign below whereupon this instrument, along with all counterparts hereof, shall become
a binding agreement in accordance with its terms.
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Very truly yours, |
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MAXIM GROUP LLC
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By: |
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Name: |
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Title: |
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The foregoing Agreement is hereby confirmed and
accepted as of the date first written above.
SONOMA PHARMACEUTICALS,
INC.
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By: |
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Name: |
Amy Trombly |
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Title: |
Chief Executive Officer |
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[Signature Page to Placement Agency Agreement]
Exhibit A
Form of Lock-Up Agreement
______, 2023
Maxim Group LLC
300 Park Avenue, 16th Floor
New York, New York 10022
Re: Sonoma Pharmaceuticals, Inc.—Proposed
Offering of Common Stock
Ladies and Gentlemen:
The undersigned, a holder
of shares (the “Shares”) of common stock, par value $0.0001 per share (the “Common Stock”), or rights
to acquire shares of Common Stock, of Sonoma Pharmaceuticals, Inc., a company incorporated under the laws of the State of Delaware
(the “Company”), understands that you (“Maxim”) propose to enter into a Placement Agency Agreement
(the “Placement Agency Agreement”) providing for the offer and sale (the “Offering”) of the Shares
and potentially other securities of the Company (the “Securities”) pursuant to a registration statement on Form S-1,
as amended, filed with the U.S. Securities and Exchange Commission (the “SEC”). The Securities may also be directly
issued by the Company pursuant to the terms of that certain Securities Purchase Agreement (the “Purchase Agreement”)
between the Company and the purchasers signatory thereto (each, a “Purchaser” and, collectively, the “Purchasers”).
Capitalized terms used herein and not otherwise defined shall have the meanings set forth for them in the Placement Agency Agreement.
In consideration of the Maxim’s
agreement to enter into the Placement Agency Agreement and to proceed with the Offering of the Securities, and the Purchasers’ agreement
to enter into the Purchase Agreement and proceed with the purchase of the Securities, and for other good and valuable consideration, receipt
of which is hereby acknowledged, the undersigned hereby agrees, for the benefit of the Company, Maxim and the Purchasers that, without
the prior written consent of Maxim, the undersigned will not, during the period specified in the following paragraph (the “Lock-Up
Period”), directly or indirectly, unless otherwise provided herein, (a) offer, sell, hypothecate, pledge, lend, sell any option
or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, borrow or otherwise
dispose of or transfer (each a “Transfer”) any Relevant Security (as defined below) or otherwise publicly disclose
the intention to do so, or (b) establish or increase any “put equivalent position” or liquidate or decrease any “call
equivalent position” with respect to any Relevant Security (in each case within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder) with respect to any Relevant
Security or otherwise enter into any swap, derivative or other transaction or arrangement that Transfers to another, in whole or in part,
any economic consequence of ownership of a Relevant Security, whether or not such transaction is to be settled by the delivery of Relevant
Securities, other securities, cash or other consideration, or otherwise publicly disclose the intention to do so. As used herein, the
term “Relevant Security” means any Share, warrant to purchase Shares or any other security of the Company or any other
entity that is convertible into, or exercisable or exchangeable for, Shares or any other equity security of the Company, in each case
owned beneficially or otherwise by the undersigned as of the date of the Placement Agency Agreement or acquired by the undersigned during
the Lock-Up Period.
The restrictions in the foregoing
paragraph shall not apply to any exercise (including a cashless exercise or broker-assisted exercise and payment of tax obligations) of
options or warrants to purchase shares of Common Stock; provided that any shares of Common Stock received upon such exercise, conversion
or exchange will be subject to this Lock-Up Period, the transfer, sale or other disposition of any shares of Common Stock held by the
undersigned or issued or issuable pursuant to the Company’s equity incentive plans upon the exercise of any stock options or upon
the vesting of any other equity-based awards held by the undersigned through the net issuance by the Company of shares of Common Stock,
a broker-assisted cashless exercise or otherwise, in each case in order to satisfy any tax obligations due as a result of such exercise
or vesting; provided, that if any filing is required under Section 16(a) of the Exchange Act in connection with such exercise,
vesting or disposition, such filing shall include a statement to the effect that such filing is the result of the exercise or vesting
of equity-based securities pursuant to the Company’s equity incentive plans. The Lock-Up Period will commence on the date of this
Lock-up Agreement and continue and include the date that is six (6) months after the closing of the Offering.
In addition, the undersigned
further agrees that during the Lock-Up Period the undersigned will not, without the prior written consent of Maxim: (a) file or participate
in the filing with the SEC of any registration statement or circulate or participate in the circulation of any preliminary or final prospectus
or other disclosure document, in each case with respect to any proposed offering or sale of a Relevant Security, or (b) exercise any rights
the undersigned may have to require registration with the SEC of any proposed offering or sale of a Relevant Security.
In furtherance of the undersigned’s
obligations hereunder, the undersigned hereby authorizes the Company during the Lock-Up Period to cause any transfer agent for the Relevant
Securities to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to, Relevant
Securities for which the undersigned is the record owner and the transfer of which would be a violation of this Lock-Up Agreement and,
in the case of Relevant Securities for which the undersigned is the beneficial but not the record owner, agrees that during the Lock-Up
Period it will cause the record owner to cause the relevant transfer agent to decline to transfer, and to note stop transfer restrictions
on the stock register and other records relating to, such Relevant Securities to the extent such transfer would be a violation of this
Lock-Up Agreement.
Notwithstanding the foregoing,
the undersigned may transfer the undersigned’s Relevant Securities:
| (i) | as a bona fide gift or gifts, |
| (ii) | to any trust, partnership, limited liability company or other legal entity commonly used for estate planning
purposes which is established for the direct or indirect benefit of the undersigned or a member of members of the immediate family of
the undersigned, |
| (iii) | if the undersigned is a corporation, partnership, limited liability company, trust or other business entity
(1) to another corporation, partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate
(as defined in Rule 405 under the Securities Act) of the undersigned, (2) to limited partners, limited liability company members or stockholders
of the undersigned, or (3) in connection with a sale, merger or transfer of all or substantially all of the assets of the undersigned
or any other change of control of the undersigned, not undertaken for the purpose of avoiding the restrictions imposed by this Lock-Up
Agreement, |
| (iv) | if the undersigned is a trust, to the beneficiary of such trust, |
| (v) | to the undersigned’s affiliates (within the meaning set forth in Rule 405 under the Securities Act)
or to any investment fund or other entity controlled by or under common control or management with the undersigned or its affiliates; |
| (vi) | if the undersigned, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity,
any transfers of Relevant Securities to any shareholder, partner or member of, or owner of similar equity interests in, such entity, as
the case may be; |
| (vii) | by testate or intestate succession, |
| (viii) | by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, |
| (ix) | if such Relevant Securities are acquired in open market transactions after the completion of the Company’s initial public offering
(provided, that this subsection (ix) shall not apply where any Section 16(a) filing reporting a reduction in beneficial ownership is required
to be made by the Company or the undersigned, and provided further that no such filing shall be voluntarily made during the Lock-Up Period);
or |
| (x) | if the undersigned is or was an officer, director or employee of the Company, to the Company pursuant
to the Company’s right of repurchase upon termination of the undersigned’s service with the Company, or |
| (xi) | pursuant to the Securities Purchase Agreement; |
provided, in the case of clauses (i)-(xi),
that (A) such transfer shall not involve a disposition for value, (B) the transferee agrees in writing with Maxim and the Company to be
bound by the terms of this Lock-Up Agreement, and (C) such transfer would not require any filing under Section 16(a) of the Exchange Act
and no such filing is voluntarily made.
In addition, the restrictions
set forth herein shall not prevent the undersigned from entering into a sales plan pursuant to Rule 10b5-1 under the Exchange Act
after the date hereof, provided that (i) a copy of such plan is provided to Maxim promptly upon entering into the same
and (ii) no sales or transfers may be made under such plan until the Lock-Up Period ends or this Lock-Up Agreement is terminated
in accordance with its terms. In addition, notwithstanding the foregoing, this Lock-Up Agreement shall not restrict the undersigned from
exercising any stock option or other award under the Company’s equity-based incentive plan or warrants, or converting any notes
or preferred stock.
For purposes of this Lock-Up
Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.
The undersigned hereby represents
and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement and that this Lock-Up Agreement has
been duly authorized (if the undersigned is not a natural person) and constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will execute any additional documents necessary in connection
with the enforcement hereof. Any obligations of the undersigned shall be binding upon the successors and assigns of the undersigned from
the date of this Lock-Up Agreement.
The undersigned understands
that, if the Placement Agency Agreement does not become effective, or if the Placement Agency Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for and delivery of the Securities to be sold thereunder,
the undersigned shall be released from all obligations under this Lock-Up Agreement.
This Lock-Up Agreement is
intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person. “Persons” 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.
The undersigned, whether or
not participating in the Offering, understands that Maxim is entering into the Placement Agency Agreement and proceeding with the Offering
in reliance upon this Lock-Up Agreement.
[Signature page follows]
This Lock-Up Agreement shall
be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
Delivery of a signed copy of this Lock-Up Agreement by facsimile or e-mail/.pdf transmission shall be effective as the delivery of the
original hereof.
Very truly yours,
Signature: _______________________________
Name (printed):
Title (if applicable):
Entity (if applicable):
Exhibit 5.1
October 13, 2023
Sonoma Pharmaceuticals, Inc.
5445 Conestoga Court
Suite 150
Boulder, CO 80301
Dear Ladies and Gentlemen:
We have acted as legal counsel to Sonoma Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), in connection with the offering and sale by the Company of up to 6,666,666
shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (“Common Stock”),
to be offered and sold from time to time pursuant to the prospectus dated October 13, 2023 (the “Prospectus”) that
forms part of the Company’s registration statement on Form S-1 (File No. 333-274582) (together with the Prospectus, the “Registration
Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”) on September 19, 2023 and amended by the filing by the Company
with the Securities Exchange Commission of Amendment No. 1 to the Registration Statement on October 13, 2023. The Shares are to be sold
by the Company through Maxim Group, LLC (the “Placement Agent”), as placement agent, in accordance with that certain
Placement Agency Agreement to be entered into by and between the Company and the Manager and in the form agreed to as of the date hereof
(the “Placement Agency Agreement”) and a form of the Securities Purchase Agreement in the form agreed to as of the
date hereof (the “Purchase Agreement), by and between the Company and each of the Purchasers (as defined therein), each as
described in the Registration Statement.
In connection with this opinion, we have examined
originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) a specimen certificate
representing the Common Stock, (iii) the Placement Agency Agreement, (iv) a form of the Purchase Agreement (v) the Company’s Restated
Certificate of Incorporation of the Company, as currently in effect, (vi) the Company’s Bylaws, as currently in effect, and (vii)
certain resolutions adopted by the Board of Directors of the Company and committees thereof with respect to the Placement Agency Agreement,
the Purchase Agreement and the issuance of the Shares. We have also examined originals or copies, certified or otherwise identified to
our satisfaction, of such records of the Company and such agreements, certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents, certificates and records, as we have deemed necessary or appropriate
as a basis for the opinion set forth herein.
In our examination, we have assumed and have not
verified (i) the legal capacity of all natural persons, (ii) the genuineness of all signatures, (iii) the authenticity of all documents
submitted to us as originals, (iv) the conformity with the originals of all documents supplied to us as copies, (v) the accuracy and completeness
of all corporate records and documents made available to us by the Company, (vi) the truth, accuracy and completeness of the information,
representations and warranties contained in the records, documents, instruments and certificates we have reviewed; and (vii) that the
foregoing documents, in the form submitted to us for our review, have not been altered or amended in any respect material to our opinion
stated herein. We have relied as to factual matters upon certificates from officers of the Company and certificates and other documents
from public officials and government agencies and departments and we have assumed the accuracy and authenticity of such certificates and
documents. We have further assumed that the Shares will be issued and delivered in accordance with the terms of the Offering Agreement.
For purposes of the opinion set forth below, we
refer to the following as “Future Approval and Issuance”: (a) the approval by the Company’s board of directors (or a
duly authorized committee of the board of directors) of the issuance of the Shares (the “Approval”) and (b) the issuance
of the Shares in accordance with the Approval and the receipt by the Company of the consideration (which shall not be less than the par
value of such Shares) to be paid therefor in accordance with the Approval.
Based on the foregoing, and subject to the assumptions,
qualifications and limitations set forth herein, as of the date hereof, we are of the opinion that the Shares have been duly authorized
for issuance, and upon Future Approval and Issuance, will be validly issued, fully paid and non-assessable.
For purposes of our opinion above, we express
no opinion as to the law of any jurisdiction other than the General Corporation Law of the State of Delaware (including the statutory
provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the foregoing). No opinion
is expressed herein with respect to the qualification of the Shares under the securities or blue sky laws of any state or foreign jurisdiction.
The opinion expressed herein is given as of this date, and we do not undertake to supplement this opinion with respect to any events or
changes occurring subsequent to the date hereof.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the use of our name under the caption “Legal Matters” in the Registration
Statement. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.
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Very truly yours, |
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/s/ Burns & Levinson, LLP |
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Burns & Levinson, LLP |
Exhibit 10.38
SECURITIES PURCHASE AGREEMENT
This Securities Purchase
Agreement (this “Agreement”) is dated as of [____], 2023, between Sonoma Pharmaceuticals, Inc., a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns,
a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each Purchaser agree as follows:
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:
“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“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.
“Applicable Laws”
shall have the meaning ascribed to such term in Section 3.1(n).
“Authorizations”
shall have the meaning ascribed to such term in Section 3.1(n).
“Blank Rome”
means Blank Rome LLP, with offices located at 1271 Avenue of the Americas, New York, New York 10020, counsel to the Placement Agent.
“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 Shares pursuant to
Section 2.1.
“Closing Date”
means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and
all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations
to deliver the Shares, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading Day
following the date hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common Stock”
means the common stock of the Company, par value $0.0001 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 and 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.
“Company Counsel”
means Burns & Levinson LLP, with offices located at 125 High Street Boston, Massachusetts 02110.
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure Time”
means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight
(New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless
otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City
time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise
instructed as to an earlier time by the Placement Agent.
“Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees, officers, directors of the Company, shares of Common Stock upon
the exercise of currently outstanding options, options granted during the Company’s annual option grant at the end of the calendar
year and up to 5,000 shares of Common Stock to consultants per fiscal quarter pursuant to the Company’s Form S-8, in each case 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, (b) securities
upon the exercise or exchange of or conversion of 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, exchange price or conversion price of such securities (other
than in connection with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities
are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the
filing of any registration statement in connection therewith during the prohibition period in Section 4.12(a) herein, and provided
that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries,
an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide
to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
“FCPA” means
the Foreign Corrupt Practices Act of 1977, as amended.
“FDA” shall have the meaning ascribed
to such term in Section 3.1(n).
“FDCA” shall have
the meaning ascribed to such term in Section 3.1(n).
“Final Prospectus”
means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the Commission and delivered
by the Company to each Purchaser at the Closing.
“FTC” shall have the
meaning ascribed to such term in Section 3.1(n).
“GAAP” shall
have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual Property
Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Liens” means
a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up Agreement”
means the Lock-Up Agreement, dated as of the date of this Agreement, by and among the Company and the directors and officers of the Company,
in a form reasonably acceptable to the Purchasers.”
“Material Adverse Effect”
shall have the meaning assigned to such term in Section 3.1(b).
“Offering”
means the offering of the Shares hereunder.
“Personal Data”
shall have the meaning ascribed to such term in Section 3.1(jj).
“Per Share Purchase
Price” equals $[ ], 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 and before issuance of the Shares at Closing.
“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.
“Placement Agency Agreement”
means the Placement Agency Agreement by and between the Company and the Placement Agent dated the date hereof.
“Placement Agent”
means Maxim Group LLC.
“Preliminary Prospectus”
means any preliminary prospectus included in the Registration Statement, as originally filed or as part of any amendment thereto.
“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.
“Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.
“Registration Statement”
means the effective registration statement on Form S-1 (File No. 333-274582) filed with Commission and which registers the sale of the
Shares.
“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144”
means Rule 144 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 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.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“Short Sales”
means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include
locating and/or borrowing shares of Common Stock).
“Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares purchased hereunder as specified below such Purchaser’s
name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in
immediately available funds.
“Subsidiary”
means any subsidiary of the Company as disclosed in Schedule 3.1(a), 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, the New York Stock Exchange (or any
successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Placement Agency Agreement and the Lock-Up Agreements, all exhibits and schedules thereto and hereto, and any
other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent”
means Computershare, Inc., the current transfer agent and registrar of the Common Stock, with offices located at 462 South 4th Street,
Suite 1600, Louisville, Kentucky 40202 and any successor transfer agent of the Company.
“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(b).
“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 in 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 Purchasers of a majority in interest of the Shares then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to
purchase, up to an aggregate of $[____] of Shares as determined pursuant to Section 2.2(a), and the Company shall deliver to each
Purchaser its respective Shares as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the
other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set
forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Blank Rome or such other location as the parties
shall mutually agree. Unless otherwise directed by the Placement Agent, settlement of the Shares shall occur via “Delivery
Versus Payment” (“DVP”) (i.e., on the Closing Date, the Company shall issue the Shares registered
in the Purchasers’ names and addresses and released by the Transfer Agent directly to the account(s) at the Placement Agent identified
by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly electronically deliver such Shares to the applicable
Purchaser, and payment therefor shall be made by the Placement Agent (or its clearing firm) by wire transfer to the Company). Notwithstanding
anything to the contrary hereunder, to the extent that a Purchaser determines, in its sole discretion, that such Purchaser (together with
such Purchaser’s Affiliates, and any Person acting as a group together with such purchaser or any of such Holder’s Affiliates)
would beneficially own in excess of 9.99% of the number of shares of Common Stock outstanding immediately prior to giving effect to the
issuance of the Shares on the Closing Date (“Beneficial Ownership Maximum”), such Purchaser may elect to receive only
the Beneficial Ownership Maximum at the Closing with the balance of any share purchased hereunder, if any, held in abeyance for such Purchaser
and issued immediately following the Closing provided in no event shall such Purchaser’s beneficial ownership ever exceed the Beneficial
Ownership Maximum. The determination of whether a Purchaser’s beneficial ownership exceeds the Beneficial Ownership Maximum shall
be in the sole discretion of the Purchaser, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
2.2 Deliveries.
(a) On or prior
to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
legal opinion and negative assurance statement of Company Counsel, in a form reasonably satisfactory to the Placement Agent and the Purchaser;
(iii) a
certificate of the Company as to intellectual property matters, in a form reasonably satisfactory to the Placement Agent and the Purchaser;
(iv) a
certificate of the Company as to regulatory matters, in a form reasonably satisfactory to the Placement Agent and the Purchaser;
(v) subject
to the last sentence of Section 2.1, the Company shall have provided each Purchaser with the Company’s wire instructions, on
Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer;
(vi) subject
to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent
to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”)
Shares equal to such Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser;
(vii) the
Prospectus and Final Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act); and
(viii)
the duly executed Lock-Up Agreements.
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) such
Purchaser’s Subscription Amount, which shall be made available for “Delivery Versus Payment” settlement with the Company
or its designee.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(v) the
Registration Statement shall be effective on the date of this Agreement and at the Closing Date, 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 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 Placement Agent; and
(vi) from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude
in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser,
makes it impracticable or inadvisable to purchase the Shares at the Closing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation made herein to the extent of the disclosures contained in the corresponding section of the
Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). 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: (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, or financial condition 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 (any of (i), (ii) or (iii), 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
it 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, liquidation, possessory liens,
rights of set off, merger, consolidation, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the statutory limitation of the time within which proceedings may be brought or
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 Shares 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 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, except as set forth in the SEC Reports 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 any Subsidiary is subject (including federal and state securities laws and regulations), or by which
any property or asset of the Company or any Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii) such
as would not 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, provincial, 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 filings
required pursuant to Section 4.4 of this Agreement, (ii) such as have been obtained or made under the Securities Act, (iii) the
filing with the Commission of the Final Prospectus, (iii) application(s) to each applicable Trading Market for the listing of the Shares
for trading thereon in the time and manner required thereby, (iv) such filings as are required to be made under applicable state securities
laws and (v) such as those that, if not obtained, given or made, would not reasonably be expected to result in a Material Adverse Effect
(collectively, the “Required Approvals”).
(f) Issuance
of the Shares; Registration. (i) The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company.
(ii) The Company has
reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement. The
Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective
on [_____], 2023 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing
or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by
the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission.
The Company, if required by the rules and regulations of the Commission, shall file the Final Prospectus with the Commission pursuant
to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and
at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the
requirements of the Securities Act and did not and will not 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 not misleading; and the Prospectus and any amendments or
supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and
will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. All corporate action required to be taken for the authorization, issuance and sale of the
Shares has been duly and validly taken. The Shares conform in all material respects to all statements with respect thereto contained in
the Registration Statement and the Prospectus.
(g) Capitalization.
The capitalization of the Company is as disclosed in Schedule 3.1(g) as of the date thereof. Except as set forth in Schedule
3.1(g), the Company has not issued any capital stock since its most recently filed quarterly 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 or consultants pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or
exercise of Common Stock Equivalents which Common Stock Equivalents have been disclosed in Schedule 3.1(g). 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. The Shares 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. Except as set forth in Schedule 3.1(g), there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares
of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional
shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Shares will not obligate the Company or any Subsidiary
to issue shares of Common Stock or other securities to any Person (other than the Purchasers). Except as disclosed in Schedule 3.1(g),
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 a set forth
in Schedule 3.1(g), 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 any Subsidiary. The Company or any Subsidiary 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 or any Subsidiary 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. No further approval or authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Shares. There are no stockholders agreements, voting agreements or other similar agreements
with respect to the Company’s or any Subsidiary’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.
(h) 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 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, in each case to the extent incorporated by
reference in the Registration Statement, the Prospectus and the Final Prospectus, and together with the Registration Statement, the Prospectus
and the Final Prospectus, 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 Company is not and has never been an issuer subject to Rule 144(i) under the Securities Act. 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 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 and the SEC Reports
conform in all material aspects 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 Prospectus 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 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 that has had or that could reasonably be expected to result in a Material Adverse Effect. 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. The other financial and statistical information included in the SEC Reports present fairly, in all material respects,
the information included therein and have been prepared on a basis consistent with that of the financial statements that are included
in the SEC Reports and the books and records of the respective entities presented therein.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest financial statements included within the SEC
Reports, except as set forth in Schedule 3.1(i), (i) there has been no event, occurrence or development that has had or that would
reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any 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 and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
equity plans and employee stock purchase plans, and the issuance of Common Stock Equivalents as disclosed in Schedule 3.1(i). The
Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of
the Shares contemplated by this Agreement or as set forth in Schedule 3.1(i), 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 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 one (1) Trading Day
prior to the date that this representation is made. Unless otherwise disclosed in Schedule 3.1(i), 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.
(j) Litigation.
There has not been and to the knowledge of the Company, there is not pending or contemplated, any 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 its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”) that, if there were an unfavorable decision, would reasonably
be expected to result in a Material Adverse Effect. None of the Actions set forth in Schedule 3.1(j), (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares 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 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. To the knowledge of the Company there has
not been, and 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. There are no Actions required to be disclosed in Schedule 3.1(j) that have not been disclosed.
The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company
under the Exchange Act or the Securities Act.
(k) 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 that would reasonably be expected to have a Material Adverse Effect. 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.
(l) 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.
(m) 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 or receive would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. (1) The Company and its Subsidiaries possess all certificates, licenses, authorizations, approvals, clearances, consents,
registration and permits issued by the appropriate federal, state, local or foreign regulatory authorities including, without limitation,
those administered by the U.S. Food and Drug Administration (“FDA”) of the U.S. Department of Health and Human Services,
the Federal Trade Commission (the “FTC”), or by any foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA and the FTC, or reasonably necessary to conduct their respective businesses
as described in the Registration Statement, the General Disclosure Package or the Prospectus, except where the failure to possess such
permits would not reasonably be expected to result in a Material Adverse Effect (each, an “Authorization”), and the
Company has not received any notice of proceedings relating to the revocation or modification of any Authorization or the noncompliance
with any ordinance, law, rule or regulation applicable to the Company. The disclosures in the Registration Statement, if any 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. The Company is and has been in material compliance with any term of any such Authorizations, except for any
violations which would not reasonably be expected to have a Material Adverse Effect. The Company has not failed to file with the applicable
regulatory authorities (including the FDA or any foreign, federal, state or local governmental or regulatory authority performing functions
similar to those performed by the FDA) any filing, declaration, listing, registration, report or submission that is required to be so
filed for the Company’s business operation as currently conducted. All such filings were in material compliance with applicable
laws when filed and no deficiencies have been asserted in writing by any applicable regulatory authority (including, without limitation,
the FDA or any foreign, federal, state or local governmental or regulatory authority performing functions similar to those performed by
the FDA) with respect to any such filings, declarations, listings, registrations, reports or submissions.
(2) The Company:
(i) is and at all times has been in substantial compliance with all statutes, rules, or regulations applicable to the ownership, testing,
development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, advertising, sale, offer for sale,
storage, import, export or disposal of any product manufactured or distributed by the Company, including but not limited to the U.S. Food,
Drug and Cosmetic Act (the “FDCA”) (21 U.S.C. § 301 et seq.), the Federal Trade Commission Act (15 U.S.C. §
41-58) and the rules and regulations of the Consumer Product Safety Commission (“Applicable Laws”), except as could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (ii) has not received any warning letter,
untitled letter or other correspondence or notice from any other governmental authority alleging or asserting noncompliance with any Applicable
Laws or any Authorizations; (iii) possesses all material Authorizations and such Authorizations are valid and in full force and effect
and are not in material violation of any term of any such Authorizations; (iv) has not received notice of any claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action from any governmental authority or third party alleging that any product
operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority
or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (v) has not received
notice that any governmental authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations
and has no knowledge that any such governmental authority is considering such action and the FDA has not sent any warning letters; imposed
any fines, penalties or injunctions; or required or requested termination of any distribution of the Company’s products; requested
or required any recalls or seizures of products; or withdrawals or suspensions of clearances or approvals, resulting in prohibitions on
sales of our products; (vi) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports,
documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct on the date
filed (or were corrected or supplemented by a subsequent submission); and (vii) to the Company’s knowledge, has not, either voluntarily
or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement,
safety alert, post-sale warning, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged
product defect or violation and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate any
such notice or action.
(3) The Company
is not aware of any manufacturing site (whether Company-owned or that of a third-party manufacturer for the Company’s products)
that performs manufacturing activity for the Company subject to a governmental authority (including the FDA) shutdown or import or export
prohibition.
(4) The statements
included in the Registration Statement and the Prospectus under the caption: “Business—U.S. Regulatory Approvals and Clearances”
are true and correct in all material respects; and to the Company’s knowledge, there are no health care laws which as of this date
are material to the business of the Company which is not described in the Registration Statement or the Prospectus.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple or has valid and marketable rights to lease
or otherwise use to all real property and all personal property owned by them that is material to the business of the Company, free and
clear of all Liens, except for (i) Liens incurred in connection with purchase money security interests and equipment financings, (ii)
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 or any Subsidiary and (ii) Liens for the payment of federal, provincial, 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 any Subsidiary are held by them under valid, subsisting and enforceable
leases with which the Company and any Subsidiary is in compliance except where the failure to be 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 would reasonably be expected to have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None
of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) 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, except where such action would not reasonably be expected to have a Material Adverse Effect. 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,
except as could not have or reasonably be expected to not have a Material Adverse Effect. 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 in an amount sufficient to run the Company’s and the Subsidiaries’ current business.
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 Schedule 3.1(r), 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, bonus 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 equity incentive plan of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002,
as amended 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. The Company maintains a system of internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that is effective to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including
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 and liability accountability,
(iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization,
and (iv) the recorded accountability for assets and liabilities is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. The Company maintains disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) under the Exchange Act that information required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the
Commission, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely
decisions regarding required disclosure. Except as set forth in the SEC Reports, the Company has not received any notice or correspondence
from any accountant, Governmental Entity or other Person relating to any potential material weakness in any part of the internal controls
over financial reporting of the Company. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls
and procedures of the Company 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 that have materially affected, or is reasonably likely to materially affect,
the internal control over financial reporting of the Company.
(t) Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company 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 other than the compensation payable to the Placement Agent pursuant to the terms of the Placement
Agency Agreement. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf
of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the
Transaction Documents.
(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, 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. Except as disclosed in the SEC Reports, no Person has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company.
(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. Other
than the notice of noncompliance received on September 22, 2023 from the Nasdaq Stock Market LLC, as further described 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 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. he 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 to 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 to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations
or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of
the Shares and the Purchasers’ ownership of the Shares.
(y) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the Final Prospectus.
The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities
of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries,
and their respective businesses and the transactions contemplated hereby, is true and correct in all material respects and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading. 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. There are no documents required to be filed with the Commission in connection with
the transaction contemplated hereby that (a) have not been filed as required pursuant to the Securities Act or (b) will not be filed within
the requisite time period. There are no contracts or other documents required to be described in the Prospectus, or to be filed as exhibits
or schedules to the Registration Statement, which have not been described or filed as required. The statistical and market-related data
included in the Prospectus, if any, are based on or derived from sources that the Company reasonably and in good faith believes are reliable
and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources. The Company
has obtained all consents required for the inclusion of such statistical and market-related data in the Prospectus. No forward-looking
statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Prospectus has
been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. The Company acknowledges and agrees
that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.2 hereof.
(z) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither
the Company, nor any of its controlled 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
Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act and (ii) 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 and as set forth on Schedule 3.1(aa), after
giving effect to the receipt by the Company of the proceeds from the sale of the Shares 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. For the purposes of this Agreement, “Indebtedness”
means (x) 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), (y) 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 (z) the
present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. The Company
is not 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 (i) have made or filed or secured extensions for filing of, all applicable 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) have 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) have 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
know of no basis for any such claim. 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) Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor to the Company’s knowledge, after diligent inquiry,
any of the officers, directors, employees, agents or other representatives of the Company or any other business entity or enterprise with
which the Company is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution or
gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person or (ii)
to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political
contributions not involving the direct or indirect use of funds of the Company.
(ee) Accountants.
The Company’s registered independent accounting firm is Frazier & Deeter, LLC. To the knowledge and belief of the Company, such
accounting firm is a registered public accounting firm as required by the Exchange Act and shall express its opinion with respect to the
financial statements to be included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023.
(ff) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Shares. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(gg) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except
for Sections 3.2(f) and 4.13 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been
asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the
Company, or “derivative” securities based on securities issued by the Company or to hold the Shares for any specified term;
(ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future, private, placement transactions, may negatively impact the market price of
the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv)
each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various
times during the period that the Shares are outstanding, including, without limitation, during the periods that the value of the Warrant
Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of
the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted.
The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(hh) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Shares,
or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company,
other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Shares.
(ii) D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires most recently completed by each
of the Company’s directors and officers and beneficial owner of 5% or more of the Common Stock or Common Stock Equivalents 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.
(jj) Cybersecurity.
The Company’s information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications,
and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required
in connection with the operation of the business of the Company as currently conducted, and to the Company’s knowledge, after diligent
inquiry are free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants that would
reasonably be expected to have a Material Adverse Effect on the Company’s business. The Company has implemented and maintained commercially
reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and protect their material
confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal,
personally identifiable, sensitive, confidential or regulated data (“Personal Data”) used in connection with their
businesses To the Company’s knowledge, after diligent inquiry, there have been no breaches, violations, outages or unauthorized
uses of or access to the IT Systems or Personal Data in use or possession of the Company, and the Company is presently in 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 Personal Data and to the
protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification, in each case, except
for such breaches, violations, outages, unauthorized uses of or access to, or non-compliance, as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(kk) Compliance
with Data Privacy Laws. The Company is and to its knowledge, after diligent inquiry, in compliance with all applicable state, federal,
and international data privacy and security laws and regulations (collectively, the “Privacy Laws”), except where the
failure to so comply would not reasonably be expected to result in a Material Adverse Effect. To ensure compliance with the Privacy Laws,
the Company has in place and take appropriate steps reasonably designed to ensure compliance in all material respects with their policies
and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of Personal
Data (the “Policies”). The Company has made all disclosures to users or customers required by applicable laws and regulatory
rules or requirements, and none of such disclosures made or contained in any Policy have, to the knowledge of the Company, been inaccurate
or in violation of any applicable laws and regulatory rules or requirements, except for any disclosures, inaccuracies or violations that
would not reasonably be expected to result in a Material Adverse Effect. The Company further certifies that it: (i) has not received notice
of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge
of any event or condition that would reasonably be expected to result in any such notice; (ii) is not currently conducting or paying for,
in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is not a party to
any order, decree, or agreement that imposes any obligation or liability under any Privacy Law, in each case except as would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(ll) Stock Option
Plans or Equity Incentive Plans. Each stock option granted by the Company under the Company’s stock option plan or equity incentive
plan was granted (i) in accordance with the terms of the Company’s stock option plan or equity incentive 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 or equity incentive 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 financial results or prospects.
(mm) 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 (“OFAC”).
(nn) 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 Purchaser’s request.
(oo) 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 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.
(pp) 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.
(qq) Other Covered
Persons. Other than the Placement Agent, the Company is not aware of any person that has been or will be paid (directly or indirectly)
remuneration for solicitation of purchasers in connection with the sale of any Securities.
(rr) FINRA
Affiliation. No officer, director or any beneficial owner of 5% or more of the Company’s Common Stock or Common Stock Equivalents
has any direct or indirect affiliation or association with any member of the Financial Industry Regulatory Authority (“FINRA”)
(as determined in accordance with the rules and regulations of FINRA) that is participating in the offering. Except for securities purchased
on the open market, no Company Affiliate is an owner of stock or other securities of any member of FINRA. No Company Affiliate has made
a subordinated loan to any member of FINRA. No proceeds from the sale of the Shares (excluding compensation as disclosed in the Prospectus
to the Placement Agent) will be paid to any FINRA member, any persons associated with a FINRA member or an affiliate of a FINRA member.
Except as disclosed in the Registration Statement and Prospectus and except for securities issued to the Placement Agent as disclosed
in the Prospectus, no person to whom securities of the Company have been privately issued within the 180-day period prior to the initial
filing date of the Prospectus is a FINRA member, is a person associated with a FINRA member or is an affiliate of a FINRA member. No FINRA
member participating in the offering has a conflict of interest with the Company. For this purpose, a “conflict of interest”
exists when a FINRA member, the parent or affiliate of a FINRA member or any person associated with a FINRA member in the aggregate beneficially
own 5% or more of the Company’s outstanding subordinated debt or common equity, or 5% or more of the Company’s preferred equity.
“FINRA member participating in the offering” includes any associated person of a FINRA member that is participating in the
offering, any member of such associated person’s immediate family and any affiliate of a FINRA member that is participating in the
offering. “Any person associated with a FINRA member” means (1) a natural person who is registered or has applied for registration
under the rules of FINRA and (2) a sole proprietor, partner, officer, director, or branch manager of a FINRA member, or other natural
person occupying a similar status or performing similar functions, or a natural person engaged in the investment banking or securities
business who is directly or indirectly controlling or controlled by a FINRA member. When used in this Section 3.1(rr) the term “affiliate
of a FINRA member” or “affiliated with a FINRA member” means an entity that controls, is controlled by or is under common
control with a FINRA member. The Company will advise the Placement Agent and Blank Rome if it learns that any officer, director or owner
of 5% or more of the Company’s outstanding Common Stock or Common Stock Equivalents is or becomes an affiliate or associated person
of a FINRA member firm.
(ss) Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Purchasers shall be deemed
a representation and warranty by the Company to the Purchasers as to the matters covered thereby.
(tt) Board
of Directors. The qualifications of the persons serving as board members and the overall composition of the Board of Directors comply
with SOX 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 SOX 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.
(uu) Ineligible
Issuer Status. At the time of filing the Registration Statement and at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined under Rule 405 under the Securities Act.
(vv) [Reserved].
(ww) No Relationships
with Customers and Suppliers. No relationship, direct or indirect, exists between or among the Company, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of the Company’s affiliates, on the other hand, which is required
to be described in the Registration Statement and the Prospectus or a document incorporated by reference therein and which is not so described.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate
as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership limited liability company
or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against it 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.
(b) Understandings
or Arrangements. Such Purchaser is acquiring the Shares hereunder in the ordinary course of its business. Such Purchaser is acquiring
such Securities as principal for his, her or its own account and has no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting such Purchaser’s right to sell such Securities pursuant to a registration statement
or otherwise in compliance with applicable federal and state securities laws).
(c) Purchaser
Status. At the time such Purchaser was offered the Shares, it was, and as of the date hereof it is, and on the Closing Date it will
be: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12) or (a)(13)
under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Shares and, at the present time, is able to afford a complete loss of such investment.
(e) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and
the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity
to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement
Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Shares nor
is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation
as to the Company or the quality of the Shares and the Placement Agent and any Affiliate may have acquired non-public information with
respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance of the Shares to such Purchaser,
neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.
(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Registration Statement
was initially publicly filed with the Commission. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have
no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets,
the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Shares covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s
representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates,
such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence
and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a
representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar
transactions in the future.
The Company acknowledges and
agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any
other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation
of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute
a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or
similar transactions in the future.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Reserved
4.2 Furnishing
of Information. Until the time that no Purchaser owns any Shares, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any
Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval
is obtained before the closing of such subsequent transaction.
4.4 Securities
Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the
transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto,
with the Commission within the time required by the Exchange Act. From and after the issuance of such press release and through the Closing
Date, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to
any of the Purchasers by the Company, or any of their respective officers, directors, employees, controlled Affiliates or agents, including,
without limitation, the Placement agent, in connection with the transactions contemplated by the Transaction Documents. In addition, effective
upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under
any agreement, whether written or oral, between the Company or any of their respective officers, directors, agents, employees, controlled
Affiliates or agents, including, without limitation, the Placement Agent, on the one hand, and any of the Purchasers or any of their Affiliates
on the other hand, shall terminate and be of no further force or effect. The Company understands and confirms that each Purchaser shall
be relying on the foregoing covenant in effecting transactions in securities of the Company. The Company and each Purchaser shall consult
with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor
any Purchaser 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 any Purchaser, 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. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name
of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission
and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers
with prior notice of such disclosure permitted under this clause (b) and reasonably cooperate with such Purchaser regarding such disclosure.
4.5 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 Purchaser
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 Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Shares under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.6 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes
constitutes, material non-public information, unless prior thereto such Purchaser shall have consented in writing to the receipt of such
information and agreed in writing with the Company to keep such information confidential. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company
or any of their respective officers, directors, agents, employees or controlled Affiliates delivers any material, non-public information
to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any
duty of confidentiality to the Company or any of their respective officers, directors, employees, controlled Affiliates or agents, including,
without limitation, the Placement Agent, or a duty to the Company or any of their respective officers, directors, employees, Affiliates
or agents, including, without limitation, the Placement Agent, not to trade on the basis of, such material, non-public information, provided
that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information regarding the Company, the Company shall simultaneously with the delivery of
such notice file such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
4.7 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Shares hereunder for general corporate purposes, which may
include additions to working capital, research and development, financing of capital expenditures, and future acquisitions and strategic
investment opportunities. The Company shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt
(other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption
of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC
regulations.
4.8 Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners
or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court
costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such
stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which
is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against
any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify
the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable
period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a
material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable
to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage
or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements
made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section
4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills
are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of
any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9 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 the Shares pursuant
to this Agreement.
4.10 Listing of Common
Stock. The Company hereby agrees to use commercially 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 have applied to list or quote
all of the Shares on such Trading Market and promptly secure the listing of all of the 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 Shares, and will take such other action as is necessary to cause all of the 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.
4.11 [Reserved.]
4.12 Subsequent
Equity Sales. (a) From the date hereof until six (6) months after the final Closing Date, neither the Company nor any Subsidiary shall
(i) 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 (ii) file any registration statement or amendment or supplement thereto, other than the Final Prospectus or filing a registration
statement on Form S-8 in connection with any employee benefit, compensation or other equity incentive plan.
(b) From
the date hereof until six (6) months after the final 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 shares 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 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 (other than in connection with a stock split or stock dividend or similar
event) or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for shares of 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. Any Purchaser 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 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.
4.13 Equal
Treatment of Purchasers. No consideration (including any modification of this Agreement) shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of
the parties to this Agreement. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not
in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of the Shares
or otherwise.
4.14 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor
any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such
Purchaser will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding the foregoing, and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance
with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty
not to trade in the securities of the Company to the Company or any of their respective officers, directors, employees, Affiliates, or
agent, including, without limitation, the Placement Agent, after the issuance of the initial press release as described in Section
4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares
covered by this Agreement.
4.16 Lock-Up
Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements except to extend
the term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms. If any party to
a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use its commercially reasonable efforts
to seek specific performance of the terms of such Lock-Up Agreement.
4.17 Capital
Changes. Until the one-year anniversary of the final 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 Purchasers holding a majority in interest
of the Shares, other than a stock split that is required, in the good faith judgment of the Board of Directors, to maintain the listing
of the Common Stock on the current Trading Market.
ARTICLE V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated
on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination
will affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter delivered by the Company), stamp taxes and other taxes
and duties levied in connection with the delivery of any Shares to the Purchasers.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Final Prospectus, 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.
5.4 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 facsimile
at the facsimile number or email attachment at the email address as 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 facsimile at the facsimile number or email attachment at the email 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. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains,
material, non-public information regarding the Company, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K.
5.5 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 Purchasers which purchased at least 50.1% in interest of the Shares based on the initial
Subscription Amounts hereunder (or, prior to the Closing, by the Company and each Purchaser) or, in the case of a waiver, by the party
against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately
and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers)
shall also be required. 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.
Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser
relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected
Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and
the Company.
5.6 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.
5.7 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may
not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger).
Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Shares,
provided that such transferee agrees in writing to be bound, with respect to the transferred Shares, by the provisions of the Transaction
Documents that apply to the “Purchasers.”
5.8 No
Third-Party Beneficiaries. The Placement Agent shall be a third-party beneficiary of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
5.9 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 any 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 Section
4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Shares.
5.11 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 facsimile transmission or by e-mail delivery
of a “.pdf” format data file (including any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform
Electronic Transaction Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com), 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 facsimile or “.pdf” or electronic signature page were an original thereof.
5.12 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.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights.
5.14 Replacement
of Shares. If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs
(including customary indemnity) associated with the issuance of such replacement Shares.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
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.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
5.17 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.
Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For
reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through
Blank Rome. Blank Rome does not represent any of the Purchasers and only represents the Placement Agent. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested
to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other
Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not
between and among the Purchasers. Notwithstanding anything to the contrary in the foregoing, each of the Purchasers has been advised,
and is being advised by this Agreement, to consult with an attorney before executing this Agreement, and each Purchase has consulted (or
had an opportunity to consult) with counsel of such Purchaser’s choice concerning the terms and conditions of this Agreement and
the other Transaction Documents for a reasonable period of time prior to the execution hereof and thereof.
5.18 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
5.19 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.
5.20 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.
5.21 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH HEREBY KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
SONOMA PHARMACEUTICALS,
INC.
|
|
|
|
By: |
|
|
|
Name: |
Amy Trombly |
|
|
Title: |
Chief Executive Officer |
|
Address for Notice:
5445 Conestoga Court, Suite 150
Boulder, Colorado 80301
Email: amy@tromblybusinesslaw.com
Facsimile: [_____]
With a copy to (which shall not constitute notice):
Burns & Levinson LLP
125 High Street
Boston, Massachusetts 02110
Attention: Andrew J. Merken, Esq.
Facsimile: (617) 345-3299
Email: amerken@burnslev.com |
|
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO SONOMA PHARMACEUTICALS,
INC.
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser: ___________________________________________________________________
Signature of Authorized Signatory of Purchaser:
____________________________________________
Name of Authorized Signatory: __________________________________________________________
Title of Authorized Signatory: ___________________________________________________________
Email Address of Authorized Signatory:____________________________________________________
Facsimile Number of Authorized Signatory: _________________________________________________
Address for Notice to Purchaser: _________________________________________________________
Address for Delivery of the Shares to Purchaser (if not same as address
for notice): ___________________
___________________________________________________________________________________
DWAC for Shares: ____________________________________________________________________
Shares of Common Stock: $______________________________________________________________
EIN Number: _________________________________________________________________________
☐
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to
purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company
to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the Closing
shall occur no later than the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing
contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed
of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall instead
be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or
the like or purchase price (as applicable) to such other party on the Closing Date.
Exhibit 23.1
CONSENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration
Statement of Sonoma Pharmaceuticals, Inc. and Subsidiaries (the “Company”) on Form S-1A of our report dated June 21, 2023, with
respect to our audits of the consolidated financial statements of the Company as of March 31, 2023 and 2022 and for the years then ended,
which is incorporated by reference in this Prospectus on Form S-1A. Our report contained an explanatory paragraph regarding substantial
doubt about the Company's ability to continue as a going concern.
We also consent to the reference to our Firm under the caption “Experts”
in such Prospectus.
/s/ Frazier & Deeter, LLC
Tampa, Florida
October 13, 2023
Exhibit 107
Calculation of Filing Fee Tables
Form S-1
(Form Type)
Sonoma Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1 – Newly Registered Securities
Security Type |
|
Security Class Title |
|
Fee Calculation Rule |
|
Amount Registered(1)(2) |
|
|
Proposed Maximum Offering Price per Unit |
|
Maximum Aggregate Offering Price |
|
Fee Rate |
|
Amount of Registration Fee(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
Common stock, par value $0.0001 per share |
|
Rule 457(o) |
|
– |
|
|
$ |
– |
|
$ |
5,000,000 |
|
$147.60 per $1,000,000 |
|
$ |
738 |
|
Total Offering Amounts |
|
|
|
– |
|
|
|
– |
|
$ |
5,000,000 |
|
$147.60 per $1,000,000 |
|
$ |
738 |
|
Total Fee Offsets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
551 |
|
Net Fee Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
187 |
|
|
(1) |
Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”). |
|
|
|
|
(2) |
Pursuant to Rule 416(a) under the Securities Act, this registration statement also covers any additional securities that may be offered or issued in connection with any stock split, stock dividend or similar transaction. |
|
|
|
|
(3) |
Calculated pursuant to Rule 457(o) under the Securities Act based on an estimate of the proposed maximum offering price. |
Sonoma Pharmaceuticals (NASDAQ:SNOA)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Sonoma Pharmaceuticals (NASDAQ:SNOA)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024