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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM 8-K
__________________________
CURRENT REPORT
Pursuant to Section 13
OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 12, 2024 (July 11, 2024)
__________________________
Volcon, Inc.
(Exact Name of Registrant as Specified in its Charter)
__________________________
| Delaware |
001-40867 |
84-4882689 |
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(I.R.S. Employer
Identification Number) |
3121
Eagles Nest Street, Suite 120
Round Rock, TX 78665
(Address of principal executive offices and zip
code)
(512) 400-4271
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
|
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
| ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-14(c)). |
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
| Common Stock, par value $0.00001 per share |
|
VLCN |
|
NASDAQ |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
| Item 1.01. |
Entry into a Material Definitive Agreement. |
On July 11, 2024, Volcon,
Inc. (the “Company”) entered into Securities Purchase Agreements (the “Purchase Agreements”) with institutional
investors (collectively, the “Investors”) for the sale by the Company of 820,836 shares (the “Shares”) of the
Company’s common stock, par value $0.00001 per share, and pre-funded warrants to purchase 2,466,836 shares of common stock in lieu
thereof (the “Pre-Funded Warrants”) in a registered direct offering (the “Offering”) at a purchase price of $3.65
per share (or pre-funded warrant in lieu thereof). The closing of the Offering is expected to occur on July 12, 2024 (the “Closing
Date”).
Subject to certain ownership
limitations, each Pre-Funded Warrant is exercisable into one share of common stock at a price per share of $0.00001 (as adjusted from
time to time in accordance with the terms thereof). In lieu of making the cash payment otherwise contemplated to be made upon exercise
of the Pre-Funded Warrant, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares
of common stock determined according to a cashless exercise formula set forth in the Pre-Funded Warrant. The holder of a Pre-Funded Warrant
is prohibited from exercising of such warrants to the extent that such exercise would result in the number of shares of common stock beneficially
owned by such holder and its affiliates exceeding 4.99% or 9.99% (at the election of the Investor) of the total number of shares of common
stock outstanding immediately after giving effect to the exercise.
The gross proceeds to the
Company from the offering are expected to be approximately $12.0 million, before deducting the placement agent fees and other estimated
offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering to repay outstanding notes payable
and for working capital and general corporate purposes.
Under the terms of the Purchase
Agreements, the Company has agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of, any
shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock or file any registration
statement or prospectus, or any amendment or supplement thereto for 30 days after the Closing Date, subject to certain exceptions.
The Offering of the Shares
and Pre-Funded Warrants was made pursuant to a shelf registration statement on Form S-3 (File No. 333-269644) (the “Registration
Statement”), which was initially filed by the Company with the Securities and Exchange Commission on February 8, 2023, amended on
March 15, 2023, and declared effective on March 21, 2023.
On July 11, 2024, the Company
entered into a placement agent agreement with Aegis Capital Corp. (“Aegis”) (the “Placement Agent Agreement”),
pursuant to which the Company has agreed to pay Aegis an aggregate fee equal to 8.0% of the aggregate gross proceeds received by the Company
from the sale of the securities in the Offering. The Company also agreed to a non-accountable expense allowance for Aegis equal to 1.0%
of the aggregate gross proceeds received by the Company from the sale of the securities in the Offering. Under the terms of the Placement
Agent Agreement, the Company has agreed that it will not, subject to certain exceptions, for a period of 90 days after the Closing Date,
(i) offer, sell, issue, or otherwise transfer or dispose of, directly or indirectly, any equity of the Company or any securities convertible
into or exercisable or exchangeable for equity of the Company; (ii) file or cause to be filed any registration statement with the Securities
and Exchange Commission relating to the offering of any equity of the Company or any securities convertible into or exercisable or exchangeable
for equity of the Company; or (iii) enter into any agreement or announce the intention to effect any of the foregoing.
The representations, warranties
and covenants contained in the Purchase Agreement and Placement Agent Agreement were made solely for the benefit of the parties to the
Purchase Agreement and Placement Agent Agreement. In addition, such representations, warranties and covenants: (i) are intended as a way
of allocating the risk between the parties to such agreements and not as statements of fact, and (ii) may apply standards of materiality
in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. Accordingly, the
Purchase Agreement and Placement Agent Agreement are filed with this Current Report on Form 8-K only to provide investors with information
regarding the terms of the transactions described herein, and not to provide investors with any other factual information regarding the
Company. Information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement
or Placement Agent Agreement, which subsequent information may or may not be fully reflected in public disclosures.
The forms of the Purchase
Agreement, the Placement Agent Agreement, and the Pre-Funded Warrant are filed as Exhibits 10.1, 10.2, and 4.1, respectively, to this
Current Report on Form 8-K. The foregoing summaries of the terms of these documents are subject to, and qualified in their entirety by,
such documents, which are incorporated herein by reference.
On July 11, 2024, the Company
issued a press release regarding the transactions described above under Item 1.01 of this Current Report on Form 8-K. A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01. |
Financial Statements and Exhibits |
(d) Exhibits
SIGNATURES
Pursuant to the requirements of
the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| |
Volcon, Inc. |
| |
(Registrant) |
| |
|
| Date: July 12, 2024 |
/s/ Greg Endo |
| |
Greg Endo
Chief Financial Officer |
Exhibit 4.1
PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK
VOLCON, INC.
| Warrant Shares: [●] |
Initial Exercise Date: July [●], 2024 |
| |
Issue Date: July [●], 2024 |
THIS PRE-FUNDED WARRANT TO PURCHASE
COMMON STOCK (the “Warrant”) certifies that, for value received, [●] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time until this
Warrant is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from Volcon,
Inc., a Delaware corporation (the “Company”), up to [●] shares (as subject to adjustment hereunder, the “Warrant
Shares”) of Common Stock. The purchase price of one (1) share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section 1. Definitions.
In addition to the terms defined elsewhere in this Warrant or in the Securities Purchase Agreement dated July [●], 2024, the following
terms have the meanings indicated in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed
or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by
the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, $0.00001 par value per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Transaction
Documents” means the Securities Purchase Agreement dated July [●], 2024, these Warrants, such other Warrants as contemplated
in the Securities Purchase Agreement, and 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, the current transfer agent of the Company, with a mailing address of [●] and an email address
of [●], and any successor transfer agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
“Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Securities Purchase Agreement.
Section 2. Exercise.
a) Exercise of
Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or
after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise substantially in the form attached hereto as Exhibit A (the “Notice
of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised
in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date
on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion
of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise
within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of
Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price.
The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.00001 per Warrant Share, was pre-funded to the
Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price
of $0.00001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder
shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance
or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining
unpaid exercise price per share of Common Stock under this Warrant shall be $0.00001, subject to adjustment hereunder (the “Exercise
Price”).
c) Cashless Exercise.
This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation
NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice
of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including
until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)
the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise
is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading
Day;
(B) = the Exercise
Price of this Warrant, as adjusted hereunder; and
(X) = the number
of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were
by means of a cash exercise rather than a cashless exercise.
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act,
the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2(c).
d) Mechanics
of Exercise.
i. Delivery of
Warrant Shares upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent
to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to Holder or (B) this Warrant
is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, for the number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is
the earliest of (i) one (1) Trading Day after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery
of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the
delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of
the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment
of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) one (1) Trading
Day and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. Notwithstanding
anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for purposes of Regulation SHO under
the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery of the Warrant Shares. If the Company
fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the
Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share
Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a Transfer Agent
that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing,
with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which
may be delivered at any time after the time of execution of the Transaction Documents, the Company agrees to deliver the Warrant Shares
subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant
Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received by such Warrant Share Delivery Date.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored and
return any amount received by the Company in respect of the Exercise Price for those Warrant Shares (in which case such exercise shall
be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving
rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.
v. No Fractional
Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or
round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the
Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained
in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the
case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within
one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding
shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder
prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds
9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions
of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e)
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
a) Stock Dividends
and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution
or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this
Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
b) Reserved.
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any share of Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all (or substantially
all) of the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent
that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Pro Rata Distributions.
During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to all (or substantially all) holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the
time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has
exercised this Warrant.
e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one
or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock or 50% or more of the
voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in
one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other
Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity
of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at
the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant that is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value
of the shares of Common Stock prior to such Fundamental Transaction and the value of such shares of capital stock, such number of shares
of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that
from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor
Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise
every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations
of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor
Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall
be entitled to the benefits of the provisions of this Section 3(e) regardless of (i) whether the Company has sufficient authorized shares
of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise
Date.
f) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g) Notice to
Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to
Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock,
(B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize
the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class
or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the
Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or
substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or
property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear
upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer
or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in
the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that
any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.
Section 4. Transfer
of Warrant.
a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto as Exhibit B duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants.
This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent
or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical
with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder
of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No Rights
as Stockholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or
other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth
in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section
2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to
net cash settle an exercise of this Warrant.
b) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Authorized
Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
(which means that no further sums are required to be paid by the holders thereof in connection with the issue thereof) and free from all
taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary
to enable the Company to perform its obligations under this Warrant.
Before taking any
action that would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
e) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough
of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in
such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding the foregoing, nothing
in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities
laws.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. No provision of this Warrant shall be construed
as a waiver by the Holder of any rights which the Holder may have under the federal securities laws and the rules and regulations of the
Commission thereunder. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the
Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.
h) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed
to the Company, at 3121 Eagles Nest Street, Suite 120, Round Rock, TX 78665 Attention: Greg Endo, Chief Financial Officer, email address:
warrants2023@volcon.com, or such other email address or address as the Company may specify for such purposes by notice to the Holders.
Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally,
by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such
Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective
on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth
in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such
notice or communication is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any
Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder, on the other hand.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
[VLCN Pre-Funded Warrant Signature Page Follows]
[VLCN Pre-Funded Warrant Signature Page]
IN WITNESS WHEREOF, the Company
has caused this Pre-Funded Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| |
VOLCON, INC. |
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By:_________________________
|
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Name: Greg Endo |
| |
Its: Chief Financial Officer |
Exhibit A
NOTICE OF EXERCISE
To:VOLCON,
INC.
(1) The undersigned
hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full),
and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall
take the form of (check applicable box):
[_] in lawful money of the United States;
or
[_] if permitted the cancellation of
such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue
said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following
DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
| Name of Investing Entity: |
|
| |
|
| Signature of Authorized Signatory of Investing Entity: |
|
| |
|
| Name of Authorized Signatory: |
|
| |
|
| Title of Authorized Signatory: |
|
| |
|
| Date: |
|
Exhibit B
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
______________________________________ |
| |
(Please Print) |
| |
|
| Address: |
______________________________________ |
| |
(Please Print) |
| Phone Number: |
______________________________________ |
| |
|
| Email Address: |
______________________________________ |
| |
|
| Dated: _______________ __, ______ |
|
| |
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| Holder’s Signature: _____________________________________ |
|
| |
|
| Holder’s Address:______________________________________ |
|
Exhibit 5.1
 |
ArentFox
Schiff LLP
1717
K Street, NW
Washington, DC 20006
202.857.6000 main
202.857.6395 fax
afslaw.com
|
July 12, 2024
Board of Directors
Volcon, Inc.
3121 Eagles Nest, Suite 120
Round Rock, TX 78665
Ladies and Gentlemen:
We have acted as counsel to
Volcon, Inc., a Delaware corporation (the “Company”), in connection with the Registration Statement on Form S-3,
Registration No. 333-269644 (as amended, 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”)
and the related prospectus supplement contained therein (the “Prospectus”). The Registration Statement, which was declared
effective on March 21, 2023, relates to the issuance and sale from time to time, pursuant to Rule 415 of the rules and regulations promulgated
under the Securities Act, of, among other securities, (i) shares of the Company’s common stock, par value $0.00001 per share (the
“Common Stock”), and (ii) warrants to purchase Common Stock. We have also acted as counsel to the Company in connection with
the issuance, offer and sale of up to an aggregate of: (i) 820,836 shares (the “Shares”) of Common Stock, and (ii) pre-funded
warrants (the “Pre-Funded Warrants”) to purchase up to 2,466,836 shares of Common Stock underlying the Pre-Funded Warrants,
the “Warrant Shares”). The Shares and the Pre-Funded Warrants are collectively referred to herein as the “Securities.”
The Securities are being sold pursuant to a securities purchase agreement by and among the Company and certain investors (the “Securities
Purchase Agreement”). This opinion letter is being delivered in accordance with the requirements of Item 601(b)(5) of Regulations
S-K under the Securities Act.
In connection with our opinion,
we have examined the Registration Statement, including the exhibits thereto, the Securities Purchase Agreement, the form of Pre-Funded
Warrants and such other documents, corporate records and instruments, and have examined such laws and regulations, as we have deemed necessary
for the purposes of this opinion. In making our examination, we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity with the originals of all documents submitted to us as copies and the legal capacity
of all natural persons. As to matters of fact material to our opinions in this letter, we have relied on certificates and statements from
officers and other employees of the Company, public officials and other appropriate persons.
Based on the foregoing and
subject to the qualifications set forth below, we are of the opinion that:
1. The
Shares, when issued by the Company against payment therefor in the circumstances contemplated by the Prospectus, will have been duly authorized
for issuance by all necessary corporate action by the Company, and will be validly issued, fully paid and non-assessable;
2. The
Pre-Funded Warrants when issued by the Company against payment therefor in the circumstances contemplated by the Prospectus, will have
been duly authorized by all necessary corporate action of the Company and will constitute a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms; and
3. The
Warrant Shares initially issuable upon exercise of the Pre-Funded Warrants when issued by the Company against payment therefor (not less
than par value) in the circumstances contemplated by the Pre-Funded Warrants will have been duly authorized by all necessary corporate
action of the Company, and will be validly issued, fully paid and non-assessable.
Smart
In
Your World®
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Volcon, Inc.
July 12, 2024
Page 2 |
The opinions set forth above
are subject to the following qualifications:
A. The
opinion expressed herein with respect to the legality, validity, binding nature and enforceability of the Pre-Funded Warrants is subject
to (i) applicable laws relating to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws
affecting creditors’ rights generally, whether now or hereafter in effect and (ii) general principles of equity, including,
without limitation, concepts of materiality, laches, reasonableness, good faith and fair dealing and the principles regarding when injunctive
or other equitable remedies will be available (regardless of whether considered in a proceeding at law or in equity).
B. The
foregoing opinions are limited to the General Corporation Law of Delaware and the State of New York, and we express no opinion as to the
laws of any other jurisdiction.
The opinions expressed in
this opinion letter are as of the date of this opinion letter only and as to laws covered hereby only as they are in effect on that date,
and we assume no obligation to update or supplement such opinion to reflect any facts or circumstances that may come to our attention
after that date or any changes in law that may occur or become effective after that date. The opinions herein are limited to the matters
expressly set forth in this opinion letter, and no opinion or representation is given or may be inferred beyond the opinions expressly
set forth in this opinion letter.
We hereby consent to
the filing of this opinion as Exhibit 5.1 to the Current Report on Form 8-K of the Company filed July 12, 2024, and to the reference to
us under the caption “Legal Matters” in the Prospectus with respect to the Securities and under the caption “Legal Matters”
in the Prospectus contained in the Registration Statement. In giving this consent, we do not thereby admit that we are within 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/ ArentFox Schiff, LLP |
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ArentFox Schiff LLP |
Exhibit 10.1
SECURITIES
PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of July 11, 2024, between Volcon, Inc., a Delaware corporation (the “Company”),
and each purchaser identified on the signature pages hereto (including their respective successors and assigns, each a “Purchaser”
and collectively, the “Purchasers”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to an effective shelf 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:
| 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: |
1.1.
“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.
1.2.
“Action” shall have the meaning ascribed to such term in Section 3.1.10.
1.3.
“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.
1.4.
“Agreement” shall have the meaning ascribed to such term in the preamble.
1.5.
“BHCA” shall have the meaning ascribed to such term in Section 3.1.40.
1.6.
“Board of Directors” means the board of directors of the Company.
1.7.
“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
are generally open for use by customers on such day.
1.8.
“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
1.9.
“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 Securities, in each case, have been satisfied or waived, but in no event
later than the second (2nd) Trading Day following the date hereof.
1.10.
“Code” means the Internal Revenue Code of 1986, as amended.
1.11.
“Commission” means the United States Securities and Exchange Commission.
1.12.
“Common Stock” means the common stock of the Company, par value $0.00001 per share, and any other class
of securities into which such securities may hereafter be reclassified or changed.
1.13.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle
the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant
or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof
to receive, Common Stock.
1.14.
“Company” shall have the meaning ascribed to such term in the preamble.
1.15.
“Company Counsel” means with respect to U.S. federal securities law and New York law, ArentFox Schiff
LLP, 1717 K Street NW, Washington, DC 20006.
1.16.
“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
1.17.
“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.
1.18.
“Disqualification Event” shall have the meaning ascribed to such term in Section 3.1.42.
1.19.
“DVP” shall have the meaning ascribed to such term in Section 2.1.
1.20.
“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1.19.
1.21.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
1.22.
“Exempt Issuance” means (i) any conventional bank loans that are not convertible into shares of Common
Stock or Common Stock Equivalents and do not involve any issuance of any shares of Common Stock or Common Stock Equivalents or other security
of the Company in connection therewith; (ii) shares of Common Stock or options issued to employees, officers or directors of the Company
pursuant to the Company’s equity incentive plans or pursuant to the compensation agreements previously authorized by the Board of
Directors; (iii) securities issued upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided
that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the
exercise price, 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 (iv) securities issued pursuant to acquisitions or strategic transactions (whether by merger,
consolidation, purchase of equity, purchase of assets, reorganization or otherwise) 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 thirty (30) days
following the Closing Date, 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.
1.23.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
1.24.
“Federal Reserve” shall have the meaning ascribed to such term in Section 3.1.40.
1.25.
“GAAP” shall have the meaning ascribed to such term in Section 3.1.8.
1.26.
“Indebtedness” shall have the meaning ascribed to such term in Section 3.1.27.
1.27.
“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1.16.
1.28.
“Issuer Covered Person” shall have the meaning ascribed to such term in Section 3.1.42.
1.29.
“IT Systems and Data” shall have the meaning ascribed to such term in Section 3.1.45.
1.30.
“Liens” means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction.
1.31.
“Lock-Up Agreement” means the Lock-Up Agreement, dated as of the date hereof, by and among the Company
and the directors and officers, in the form of Exhibit 1.31 attached hereto.
1.32.
“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1.2.
1.33.
“Material Permits” shall have the meaning ascribed to such term in Section 3.1.14.
1.34.
“Money Laundering Laws” shall have the meaning ascribed to such term in Section 3.1.41.
1.35.
“OFAC” shall have the meaning ascribed to such term in Section 3.1.38.
1.36.
“Per Share Purchase Price” equals $3.65 (less $0.00001 for each Pre-Funded Warrant), 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.
1.37.
“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.
1.38.
“PFIC” shall have the meaning ascribed to such term in Section 4.15.
1.39.
“Placement Agent” means Aegis Capital Corp.
1.40.
“Placement Agent Agreement” means the placement agent agreement, dated on or about the date hereof, between
the Company and the Placement Agent.
1.41.
“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.
1.42.
“Prospectus” means the final base prospectus filed for the Shelf Registration Statement.
1.43.
“Prospectus Supplement” 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.
1.44.
“Purchaser” shall have the meaning ascribed to such term in the preamble.
1.45.
“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.
1.46.
“Required Approvals” shall have the meaning ascribed to such term in Section 3.1.5.
1.47.
“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.
1.48.
“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.
1.49.
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1.8.
1.50.
“Securities” means the Shares and Warrants.
1.51.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
1.52.
“Shelf Registration Statement” means the effective registration statement on Form S-3 with Commission
(File No. 333-269644), including all information, documents and exhibits filed with or incorporated by reference into such registration
statement, which registers the sale of the Securities to the Purchasers.
1.53.
“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).
1.54.
“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants
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.
1.55.
“Subsidiary” means any subsidiary of the Company as set forth in the SEC Reports and shall, where applicable,
also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
1.56.
“Trading Day” means a day on which the principal Trading Market is open for trading.
1.57.
“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, the OTCQB, OTCQX, Pink Open Market (or any successors to any of the foregoing).
1.58.
“Transaction Documents” means this Agreement, the Securities, the Placement Agent Agreement, the Lock-Up
Agreement and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions
contemplated hereunder.
1.59.
“Transfer Agent” means Computershare, the current transfer agent of the Company, with a mailing address
of 150 Royall Street, Suite 101, Canton, MA 02021 and an email address of , and any successor transfer agent of the Company
1.60.
“Warrants” means, collectively, the pre-funded Common Stock purchase warrants delivered to the Purchasers
at the Closing in accordance with Section 2.2.1.2.3 hereof, in substantially the form attached hereto.
1.61.
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants.
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 approximately $12.0 million of Shares; provided, however, that a Purchaser in its
sole discretion, may elect to purchase Warrants in lieu of Shares in such manner to result in the same aggregate purchase price being
paid by such Purchaser less $0.00001 per Warrant. Each Purchaser shall deliver to the Company, via wire transfer, immediately available
funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the
Company shall deliver to each Purchaser its respective Shares, as determined pursuant to Section 2.2.1, and the Company and each Purchaser
shall deliver the other items set forth in Section 2.2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions
set forth in Sections 2.3.1 and 2.3.2, the Closing shall occur at the offices of counsel to the Placement Agent or such other location
(or remotely by electronic means) 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 herein and a Purchaser’s Subscription Amount set forth on the signature
pages attached hereto, the number of Shares purchased by a Purchaser (and its Affiliates) hereunder shall not, when aggregated with all
other shares of Common Stock owned by such Purchaser (and its Affiliates) at such time, result in such Purchaser beneficially owning (as
determined in accordance with Section 13(d) of the Exchange Act) in excess of 9.9% of the then issued and outstanding Common Stock outstanding
at the Closing (the “Beneficial Ownership Maximum”), and such Purchaser’s Subscription Amount, to the extent it would
otherwise exceed the Beneficial Ownership Maximum immediately prior to the Closing, shall be conditioned upon the issuance of Shares at
the Closing to the other Purchasers signatory hereto. To the extent that a Purchaser’s beneficial ownership of the Shares would
otherwise be deemed to exceed the Beneficial Ownership Maximum, such Purchaser’s Subscription Amount shall automatically be reduced
as necessary in order to comply with this paragraph. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise (as defined
in the Warrants) delivered on or prior to 12:00 p.m. (New York City time) on the Closing Date, which may be delivered at any time after
the time of execution of the this Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New
York City time) on the Closing Date and the Closing Date shall be the Warrant Share Delivery Date (as defined in the Warrants) for purposes
hereunder.
2.2.
Deliveries.
2.2.1.
The Company
shall deliver or cause to be delivered to each Purchaser the following at the times stated:
2.2.1.1on the date hereof:
2.2.1.1.1.
this
Agreement duly executed by the Company.
2.2.1.1.2.
a certificate executed by the Chief Financial Officer of the Company in customary form reasonably satisfactory to the Placement
Agent and its counsel.
2.2.1.2
on or prior to the Closing Date:
2.2.1.2.1.
a legal opinion of Company Counsel, addressed to the Placement Agent and the Purchasers, in form and substance reasonably acceptable
to the Placement Agent and Purchasers.
2.2.1.2.2.
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 a certificate (or at the request of the Purchaser, book entry statement) evidencing a number of
Shares equal to the portion of such Purchaser’s Subscription Amount applicable to Shares, divided by the Per Share Purchase Price,
registered in the name of such Purchaser.
2.2.1.2.3.
for each
Purchaser of Warrants pursuant to Section 2.1, a Warrant registered in the name of such Purchaser to purchase up to a number of
shares of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to Warrants divided by the Per
Share Purchase Price, with an exercise price equal to $0.00001, subject to adjustment as provided therein.
2.2.1.2.4.
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.
2.2.1.2.5.
a duly executed and delivered Officers’ Certificate, in customary form reasonably satisfactory to the Placement Agent and
its counsel.
2.2.1.2.6.
the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act)
2.2.1.2.7.
the Lock-Up Agreements.
2.2.2.
Each Purchaser shall deliver or cause to be delivered to the Company the following at the times stated:
2.2.2.1
on the date hereof, this Agreement duly executed by such Purchaser.
2.2.2.2
on or prior to the Closing Date, such Purchaser’s Subscription Amount by wire transfer to the account specified in writing
by the Company or, if directed by the Placement Agent, the Subscription Amount shall be made available for DVP settlement with the Company
or its designee.
2.3.
Closing Conditions.
2.3.1.
The obligations of the Company hereunder in connection with the Closing are subject to each of the following conditions being met:
2.3.1.1
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 Purchasers contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date).
2.3.1.2
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have
been performed.
2.3.1.3
the delivery by each Purchaser of the items set forth in Section 2.2.2 of this Agreement.
2.3.2.
The respective obligations of the Purchasers hereunder in connection with the Closing are subject to each of the following conditions
being met:
2.3.2.1
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).
2.3.2.2
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been
performed.
2.3.2.3
the delivery by the Company of the items set forth in Section 2.2.1 of this Agreement.
2.3.2.4
there shall have been no Material Adverse Effect with respect to the Company since the date hereof.
2.3.2.5
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 Securities at the Closing.
| 3. | Representations and Warranties. |
3.1.
Representations and Warranties of the Company. The Company hereby makes the following representations and warranties
to each Purchaser:
3.1.1.
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1.1. 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.
3.1.2.
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, prospects or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”; provided, however, that “Material Adverse Effect” shall not include any event,
occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions,
(ii) conditions generally affecting the industry in which the Company or any Subsidiary operates, (iii) any changes in financial or securities
markets in general, (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof,
(v) any pandemic, epidemics or human health crises (including COVID-19), (vi) any changes in applicable laws or accounting rules (including
), (vii) the announcement, pendency or completion of the transactions contemplated by the Transaction Documents, or (viii) any action
required or permitted by the Transaction Documents or any action taken (or omitted to be taken) with the written consent of or at the
written request of Purchaser) 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.
3.1.3.
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 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 legal, 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.
3.1.4.
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 Securities and the consummation by it of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.
3.1.5.
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement to the
Shelf Registration Statement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the
Securities and the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, (iv) the filing
of Form D with the Commission and such other filings as are required to be made under applicable state securities laws (the “Required
Approvals”).
3.1.6.
Issuance of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable (which means that no further
sums are required to be paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents and applicable law. The Warrant Shares, when issued
in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable (which means that no further
sums are required to be paid by the holders thereof in connection with the issue thereof), free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents and applicable law. The Company has reserved from
its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. The
Company has prepared and filed the Shelf Registration Statement in conformity with the requirements of the Securities Act, which became
effective on March 21, 2023, including the Prospectus, and such amendments and supplements thereto as may have been required to the date
of this Agreement. The Shelf Registration Statement is effective under the Securities Act and no stop order preventing or suspending the
effectiveness of the Shelf 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 Prospectus Supplement with the Commission pursuant to Rule
424(b). At the time the Shelf Registration Statement and any amendments thereto became effective, at the date of this Agreement and at
the Closing Date, the Shelf 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 light of the circumstances under
which they were made, not misleading. The Company was at the time of the filing of the Shelf Registration Statement eligible to use Form
S-3. The Company is eligible to use Form S-3 under the Securities Act and it meets the requirements set forth in General Instruction I.B.1
of Form S-3.
3.1.7.
Capitalization. The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1.7, which
Schedule 3.1.7 shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company
as of the date hereof. Other than as stated in Schedule 3.1.7, the Company has not issued any capital stock since its most recently filed
periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock
option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans. No Person
has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents. Except as set forth in Schedule 3.1.7, or pursuant to this Agreement, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common
Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary
is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The
issuance and sale of the Securities 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 set forth in Schedule 3.1.7, there are no outstanding securities or instruments of
the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument
upon an issuance of securities by the Company or any Subsidiary. Except as set forth in Schedule 3.1.7, there are no outstanding securities
or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such
Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar
plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders’ agreements,
voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s stockholders.
3.1.8.
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus
and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis
or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.
As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Company 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 , except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects
the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations
and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
3.1.9.
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial
statements included within the SEC Reports, except as set forth in the SEC Reports or on Schedule 3.1.9, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has
not incurred any 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 stock option plans. The Company does not have pending before the
Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement,
no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist
with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial
condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made
or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.
3.1.10.
Litigation. Except as set forth in Schedule 3.1.10, there is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”). None of the Actions set forth on Schedule 3.1.10, (i)
adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or (ii) would, 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 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. There has not been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the
Company except in the ordinary course of business that would not have a Material Adverse Effect. The Commission has not issued any stop
order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.
3.1.11.
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of
the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or
its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary,
and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or
any Subsidiary is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor
of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries
to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal,
state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
3.1.12.
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.
3.1.13.
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign
laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface
or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants,
or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”);
(ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),
(ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
3.1.14.
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued
by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described
in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse
Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.
3.1.15.
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid
and marketable rights to lease or otherwise use, all real property and all personal property that is material to the business of the Company
and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens that do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii)
Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with , and the payment
of which is neither delinquent nor subject to penalties. Neither the Company nor any of its Subsidiaries has received any written notice
of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or its Subsidiaries under any of the leases
or subleases or licenses or with respect to the properties mentioned above, or affecting or questioning the rights of the Company or any
Subsidiary to the continued possession or use of the leased or subleased or licensed premises or the properties mentioned above, other
than such claims which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
3.1.16.
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 so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received written notice that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.
Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the
rights of any Person, 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.
3.1.17.
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 amount deemed prudent by the Company. 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.
3.1.18.
Transactions with Affiliates and Employees. Except as set forth on the SEC Reports, during the past three fiscal
years and the subsequent interim period through the date of this Agreement, none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with
the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing
for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee
or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is
an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any stock option plan of the Company.
3.1.19.
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any
and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable
rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except
as set forth in the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to
any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated
the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by
the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company
presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness
of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its
Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting
of the Company and its Subsidiaries.
3.1.20.
Certain Fees. Except for the fees and expenses of the Placement Agent, no brokerage or finder’s fees or commissions
are or will be payable by the Company or any Subsidiary 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. 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 3.1.20 that may be due in connection with the transactions contemplated by the Transaction Documents.
3.1.21.
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for
the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act
of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company”
subject to registration under the Investment Company Act of 1940, as amended.
3.1.22.
Registration Rights. Except as disclosed on Schedule 3.1.22, no Person has any right to cause the Company or any
Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.
3.1.23.
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice
from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Company is, and has no
reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation
and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in
connection with such electronic transfer.
3.1.24.
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 Securities and the Purchasers’ ownership of the Securities.
3.1.25.
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. 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,
their respective businesses and the transactions contemplated hereby, is true and correct 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 the light of the circumstances under which they were made and
when made, not misleading. 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.
3.1.26.
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 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 Securities to be integrated with prior offerings by the Company for purposes of any applicable stockholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.
3.1.27.
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect
to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of
its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge
of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date. Schedule 3.1.27 sets forth as of the date hereof all outstanding secured
and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. 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. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
3.1.28.
Tax Status. The Company and its Subsidiaries each (i) has made or filed all material United States federal, state
and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all material taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment
of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any
Subsidiary know of no basis for any such claim.
3.1.29.
Foreign Corrupt Practices Act. 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.
3.1.30.
Accountants. The Company’s accounting firm is MaloneBailey, LLP, 10370 Richmond Ave., Suite 600, Houston, TX
77042. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the
Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual
Report for the now current fiscal year.
3.1.31.
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company
and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.
3.1.32.
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 Securities. 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.
3.1.33.
Acknowledgment Regarding Purchaser’s Trading Activity. Notwithstanding anything in this Agreement or elsewhere
herein to the contrary (except for Sections 3.2.6 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 Securities
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 Securities 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.
3.1.34.
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 Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases
of, any of the Securities, 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 Company’s placement agent
in connection with the placement of the Securities.
3.1.35.
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.
3.1.36.
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.
3.1.37.
Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan, if any,
was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to
the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No
stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there
is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant
of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their
financial results or prospects.
3.1.38.
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”).
3.1.39.
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.
3.1.40.
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%)
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the
Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal Reserve.
3.1.41.
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.
3.1.42.
Reserved..
3.1.43.
Commissions. 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.
3.1.44.
Reserved.
3.1.45.
Cybersecurity. (i) (a) There has been no security breach or other compromise of or relating to any of the Company’s
or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective
customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively,
“IT Systems and Data”) and (b) the Company and the Subsidiaries have not been notified of, and has no knowledge
of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and
Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders,
rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations
relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access,
misappropriation or modification, except, in the case of clauses (i) and (ii) herein, as would not, individually or in the aggregate,
have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards
to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all
IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with
industry standards and practices.
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):
3.2.1.
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly
existing and in good standing under the law 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 legal, valid and 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.
3.2.2.
Own Account. Such Purchaser is acquiring the Securities as principal for its own account and has no present intention
of distributing any of such Securities (this representation and warranty shall not limit such Purchaser’s right to sell the Securities
pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its business.
3.2.3.
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is,
and on each date on which it exercises any Warrants, it will be either: (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)(1) under the Securities Act. Such Purchaser hereby represents that neither such Purchaser nor any of its Rule
506(d) Related Parties (as defined below) is a “bad actor” within the meaning of Rule 506(d) promulgated under the Securities
Act. For purposes of this Agreement, “Rule 506(d) Related Party” shall mean a person or entity covered by the “Bad Actor
disqualification” provision of Rule 506(d) of the Securities Act.
3.2.4.
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 Securities, 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 Securities and, at the present time, is able to afford a complete loss of such investment.
3.2.5.
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 Securities and the merits and risks of investing in the Securities; (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 Securities 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 Securities 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 and has not been provided to it (other than with respect
to the transactions contemplated by the Transaction Documents). In connection with the issuance of the Securities to such Purchaser, neither
the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.
3.2.6.
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 such
Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. 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 Securities 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.
| 4. | Other Agreements of the Parties. |
4.1.
Warrant Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration
statement to cover the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant Shares
issued pursuant to any such exercise shall be issued free of all legends. If at any time following the date hereof the Shelf Registration
Statement (or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise
available for the sale or resale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing that
such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement is
effective again and available for the sale or resale of the Warrant Shares (it being understood and agreed that the foregoing shall not
limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance with applicable federal and
state securities laws). The Company shall use best efforts to keep a registration statement (including the Shelf Registration Statement)
registering the issuance or resale of the Warrant Shares effective during the term of the Warrants.
4.2.
Furnishing of Information. Until no Purchaser owns any Securities and the Warrants have terminated, the Company covenants
to maintain the effectiveness of the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to use reasonable
best efforts 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 Securities for
purposes of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such
other transaction unless stockholder 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, within the time required by the Exchange Act, a Current Report
on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission. From and after the issuance of such press release,
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 its Subsidiaries, or any of their respective officers, directors, employees 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, any of its Subsidiaries, or any of their respective officers, directors,
agents (including, without limitation, the Placement Agent), employees or Affiliates 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, or without the prior consent of each Purchaser, with respect
to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required
by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.
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) to the extent 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 such cases the Company shall (x) obtain
prior advice of competent counsel that such disclosure is required, (y) provide the Purchasers with prior notice of such disclosure permitted
under this Section 4.4 and (z) reasonably cooperate with such Purchasers regarding such disclosure.
4.5.
Stockholder 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 Securities 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, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or 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, any of its Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers,
directors, agents, employees or Affiliates 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 or any Subsidiaries, 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 Securities hereunder for general corporate
purposes (which for the avoidance of doubt may include acquisitions, in the Company’s discretion), including working capital. The
Company shall not, except as set forth below, 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 shares of Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA
or OFAC regulations. The Company shall be permitted to utilize the net proceeds from this offering to redeem the notes in principal amount
of $2,942,352 issued on or about May 22, 2024.
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, (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.
Subsequent Equity Sales.
4.9.1.
From the date hereof until thirty (30) days after the 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 any amendment or supplement thereto, in each case other than solely with respect to securities
issued pursuant to any share or option plan duly adopted for such purpose by the Board of Directors or a committee of non-employee directors
established for such purpose for services rendered to the Company, on Form S-8.
4.9.2.
Notwithstanding the foregoing, this Section 4.9 shall not apply in respect of an Exempt Issuance.
4.10.
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be
offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the
same consideration is also offered to all of the parties to the Transaction Documents. 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 Securities or otherwise.
4.11.
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, any of its Subsidiaries, or any of their respective
officers, directors, employees, agents or Affiliates 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 Securities covered by this
Agreement.
4.12.
Capital Changes. Until the date that is thirty (30) days after the Closing Date, the Company shall not undertake
a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a
majority in interest of the Shares and Warrants, based on the initial Subscription Amounts hereunder.
4.13.
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of
the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges
that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares and Warrant Shares
pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.
4.14.
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.
4.15.
QEF Election. If a Purchaser so requests in writing for any taxable year of the Company, the Company, after consulting
with its outside accounting firm, shall within fifteen (15) Business Days notify such Purchaser in writing that either (A) neither the
Company nor any of its Subsidiaries was a “passive foreign investment company” as defined in Section 1297 of the Code (“PFIC”)
for such year, or (B) the Company and/or one or more of its Subsidiaries was a PFIC for such year, in which event the Company shall provide
to such Purchaser, upon the reasonable written request of such Purchaser, the information reasonably necessary to allow such Purchaser
to elect to treat each of the Company and any applicable Subsidiaries (if any), respectively, as a “qualified electing fund”
(within the meaning of Section 1295 of the Code for such year, including a “PFIC Annual Information Statement” as described
in Treasury Regulation Section 1.1295-1(g)(1) (or any successor Treasury Regulation).
4.16.
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 Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.17.
Exercise Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures
required of the Purchasers in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be
required of the Purchasers to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required
in order to exercise the Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with
the terms, conditions and time periods set forth in the Transaction Documents.
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 and any exercise
notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the
Purchasers.
5.3.
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and
the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules.
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 email 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 email
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 or any of the Subsidiaries,
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 and Warrants based on the initial Subscription Amounts hereunder (or, prior to Closing, 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 Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8.
No Third-Party Beneficiaries. The Placement Agent shall be the 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 law of the State of New York. 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, stockholders, 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 and County of New York 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 Securities.
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
e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such “.pdf” signature page were an original
thereof.
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; provided, however, that, in the case
of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to
any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company
for such Shares and the restoration of such Purchaser’s right to acquire such Shares pursuant to such Purchaser’s Warrant
(including, issuance of a replacement warrant certificate evidencing such restored right).
5.14.
Replacement of Securities. If any certificate or instrument evidencing any Securities 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 Securities.
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 the legal counsel to the Placement Agent. The legal counsel of the Placement Agent 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.
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 KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
[VLCN Securities Purchase Agreement Signature
Pages Follows]
[VLCN Securities Purchase Agreement –
Company Signature Page]
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.
| VOLCON, INC. |
|
Address for Notice: |
| |
|
|
|
| By: |
|
|
Email: |
| Name: |
Greg Endo |
|
|
| Title: |
Chief Financial Officer |
|
|
[VLCN Securities Purchase Agreement –
Investor Signature Page]
IN WITNESS WHEREOF, the undersigned
has caused this Securities Purchase Agreement to be duly executed by its authorized signatory 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: |
[●] |
| Address for Notice to Purchaser: |
[●] |
| Address for Delivery of Securities to Purchaser (if not same as address for notice): |
[●] |
| Subscription Amount: |
[●] |
| Shares: |
[●] |
| Warrants: |
[●] |
| Beneficial Ownership Blocker: |
[●] |
| Employer Identification Number: |
[●] |
Exhibit 1.31
Form of Lock-Up Agreement
Exhibit 10.2
July 11, 2024
PERSONAL AND CONFIDENTIAL
Mr. Greg Endo, Chief Financial Officer
Volcon, Inc.
3121 Eagles Nest Street, Suite 120
Round Rock, TX 78665
| Re: | VLCN | Registered Direct Shelf Takedown | Placement Agent Agreement |
Dear Mr. Endo:
The purpose of this placement
agent agreement is to outline our agreement pursuant to which Aegis Capital Corp. (“Aegis”) will act as the
placement agent on a “best efforts” basis in connection with the proposed Registered Direct Shelf Takedown (the “Placement”)
by Volcon, Inc. (collectively, with its subsidiaries and affiliates, the “Company”) of its shares of Common
Stock (the “Securities”). This placement agent agreement sets forth certain conditions and assumptions upon
which the Placement is premised. The Company expressly acknowledges and agrees that Aegis’s obligations hereunder are on a reasonable
“best efforts” basis only and that the execution of this Agreement does not constitute a commitment by Aegis to purchase the
Securities and does not ensure the successful placement of the Securities or any portion thereof or the success of Aegis with respect
to securing any other financing on behalf of the Company. The Company confirms that entry into this placement agent agreement and completion
of the Placement with Aegis will not breach or otherwise violate the Company’s obligations to any other party or require any payments
to such other party. For the sake of clarity, such obligations may include but not be limited to obligations under an engagement letter,
placement agency agreement, underwriting agreement, advisory agreement, right of first refusal, tail fee obligation or other agreement.
The terms of our agreement
are as follows:
| 1. | Engagement. The Company hereby engages Aegis, for the period beginning on the date hereof
and ending six (6) months thereafter or upon the completion of the Placement, whichever is sooner (the “Engagement Period”),
to act as the Company’s exclusive investment bank in connection with the proposed Placement. During the Engagement Period or until
the consummation of the Placement, and as long as Aegis is proceeding in good faith with preparations for the Placement, the Company agrees
not to solicit, negotiate with or enter into any agreement with any other source of financing (whether equity, debt or otherwise), any
underwriter, potential underwriter, placement agent, financial advisor, investment banking firm or any other person or entity in connection
with an offering of the Company’s debt or equity securities or any other financing by the Company. Aegis will use its reasonable
“best efforts” to solicit offers to purchase the Securities from the Company on the terms, and subject to the conditions,
set forth in the Prospectus (as defined below). Aegis shall use commercially reasonable efforts to assist the Company in obtaining performance
by each Purchaser (as defined below) whose offer to purchase Securities has been solicited by Aegis, but Aegis shall not, except as otherwise
provided in this Agreement, be obligated to disclose the identity of any potential purchaser or have any liability to the Company in the
event any such purchase is not consummated for any reason. The Company acknowledges that under no circumstances will Aegis be obligated
to underwrite or purchase any Securities for its own account and, in soliciting purchases of the Securities, Aegis shall act solely as
an agent of the Company. The services provided pursuant to this placement agent agreement shall be on an “agency” basis and
not on a “principal” basis. |
1345
Avenue of the Americas · New
York, New York · 10105
(212)
813-1010 · Fax
(212) 813-1047 · Member
FINRA, SIPC
| 2. | The Placement. The Placement is expected to consist of a sale of approximately $15.0 million
of the Company’s Securities. Aegis will act as placement agent for the Placement subject to, among other matters referred to herein
and additional customary conditions, completion of Aegis’s due diligence examination of the Company and its affiliates, listing
approval by the Nasdaq Capital Market (“Exchange”) of the Securities to be issued, and the execution of a definitive
Securities Purchase Agreement in connection with the Placement (the “Securities Purchase Agreement”). The actual
size of the Placement, the precise number of Securities to be offered by the Company and the offering price will be the subject of continuing
negotiations between the Company and the investors thereto. In connection with the entry into the Securities Purchase Agreement, the Company
(i) will meet with Aegis and its representatives to discuss such due diligence matters and to provide such documents as Aegis may require;
(ii) will not file with the Commission any document regarding the Placement without the prior approval of Aegis and its counsel; (iii)
will deliver to Aegis and the investors in the Placement such legal and accounting opinions and letters (including, without limitation,
accounting comfort letters, legal opinions, negative assurance letters, good standing certificates and officers’ and secretary certificates)
as Aegis may require, all in form and substance acceptable to Aegis and (iv) will ensure that Aegis is a third party beneficiary of all
representations, warranties, covenants, closing conditions and deliverables in connection with the Placement. |
| | |
| 3. | Placement Compensation. The placement commission will be 8.0% for the Placement and a non-accountable
expense allowance equal to 1.0% of the Placement. |
| | |
| 4. | Registration Statement. To the extent the Company decides to proceed with the Placement,
the Company will, as soon as practicable, prepare and file with the Securities and Exchange Commission (the “Commission”)
a Registration Statement on Form S-3 (the “Registration Statement”) under the Securities Act of 1933, as amended
(the “Securities Act”) and a prospectus and prospectus supplement included therein (together, the “Prospectus”)
covering the Securities to be offered and sold in the Placement. The Registration Statement (including the Prospectus therein), and all
amendments and supplements thereto, will be in form reasonably satisfactory to Aegis and counsel to Aegis. Other than any information
provided by Aegis in writing specifically for inclusion in the Registration Statement or the Prospectus, the Company will be solely responsible
for the contents of its Registration Statement and Prospectus and any and all other written or oral communications provided by or on behalf
of the Company to any actual or prospective investor of the Securities, and the Company represents and warrants that such materials and
such other communications will not, as of the date of the offer or sale of the Securities, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. If at any time prior to the completion of the offer and sale of the Securities
an event occurs that would cause the Registration Statement or Prospectus (as supplemented or amended) to contain an untrue statement
of a material fact or to 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 Company will notify Aegis immediately of such event and Aegis will suspend solicitations
of the prospective purchasers of the Securities until such time as the Company shall prepare a supplement or amendment to the Registration
Statement or Prospectus that corrects such statement or omission. |
| | |
| 5. | Lock-Ups. In connection with the Placement, the Company’s directors, executive officers,
employees and shareholders holding at least five percent (5%) of the outstanding common stock will enter into customary “lock-up”
agreements in favor of the Placement Agent for a period of ninety (90) days after the Closing of the Placement (the “Lock-Up
Period”); provided, however, that any sales by parties to the lock-ups shall be subject to the lock-up agreements and provided
further, that none of such common stock shall be saleable in the public market until the expiration of the Lock-Up Period. |
| 6. | Company Standstill. In connection with the Placement, without the prior written consent
of the investors, the Company will not, for a period of ninety (90) days after the Closing of the Placement (the “Standstill
Period”), (a) offer, sell, issue, or otherwise transfer or dispose of, directly or indirectly, any equity of the Company
or any securities convertible into or exercisable or exchangeable for equity of the Company; (b) file or caused to be filed any registration
statement with the Commission relating to the offering of any equity of the Company or any securities convertible into or exercisable
or exchangeable for equity of the Company; or (c) enter into any agreement or announce the intention to effect any of the actions described
in subsections (a) or (b) hereof (all of such matters, the “Standstill Restrictions”). So long as none of such
equity securities shall be saleable in the public market until the expiration of the Standstill Period, the following matters shall not
be prohibited by the Standstill Restrictions: (i) the adoption of an equity incentive plan and the grant of awards or equity pursuant
to any equity incentive plan, and the filing of a registration statement on Form S-8; (ii) securities issued pursuant to agreements, options,
restricted share units or convertible securities existing as of the date hereof provided the terms are not modified; and (iii) securities
issued pursuant to acquisitions or strategic transactions (whether by merger, consolidation, purchase of equity, purchase of assets, reorganization
or otherwise) 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 Standstill Period, and provided that any such issuance shall only be to a person or entity (or to the
equityholders of an entity) 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. In no event should any equity transaction during the Standstill Period result in the sale
of equity at an offering price to the public less than that of the Placement referred herein. |
| | |
| 7. | Expenses. The Company will be responsible for and will pay all expenses relating to the
Placement, including, without limitation, (a) all filing fees and expenses relating to the registration of the Securities with the Commission;
(b) all FINRA Public Offering filing fees; (c) all fees and expenses relating to the listing of the Company’s equity or equity-linked
securities on an Exchange; (d) all fees, expenses and disbursements relating to the registration or qualification of the Securities under
the “blue sky” securities laws of such states and other jurisdictions as Aegis may reasonably designate (including, without
limitation, all filing and registration fees, and the reasonable fees and disbursements of the Company’s “blue sky”
counsel, which will be Aegis’s counsel) unless such filings are not required in connection with the Company’s proposed Exchange
listing; (e) any fees for counsel to lead investors in the Placement; (f) all fees, expenses and disbursements relating to the registration,
qualification or exemption of the Securities under the securities laws of such foreign jurisdictions as Aegis may reasonably designate;
(g) the costs of all mailing and printing of the Placement documents; (h) transfer and/or stamp taxes, if any, payable upon the transfer
of Securities from the Company to Aegis; (i) the fees and expenses of the Company’s accountants; and (j) $100,000 for reasonable
legal fees and disbursements for Aegis’s counsel. |
| | |
| 8. | Tail Financing. Aegis shall be entitled to compensation under Section 3
herein, calculated in the manner set forth therein, with respect to any public or private offering or other financing or capital raising
transaction of any kind (“Tail Financing”) to the extent that such financing or capital is provided to the Company
by investors Aegis has introduced to and/or contacted on behalf of the Company through an in-person, electronic or telephonic communication
or investors that Aegis had “wall-crossed” in connection with this Placement (or any entity under common management or having
a common investment advisor), if such Tail Financing is consummated at any time within twelve (12) months after the Closing, expiration
or termination of this placement agent agreement. |
| | |
| 9. | Closing; Closing Deliverables. Unless otherwise directed by the Placement Agent, settlement
of the Securities shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date,
the Company shall cause the Depositary to issue the Securities directly to the clearing firm designated by the Placement Agent; upon receipt
of such Securities, the Placement Agent shall promptly electronically deliver such Securities to the applicable Purchaser, and payment
therefor shall be made by the Placement Agent (or its clearing firm) by wire transfer to the Company). |
9.1.
Company Deliveries.
9.1.1.
On the date hereof, the Company shall deliver each of the following:
9.1.1.1
This Agreement duly executed by the Company.
9.1.1.2
A certificate executed by the Chief Financial Officer of the Company in customary form reasonably satisfactory to the Placement
Agent and its counsel.
9.1.1.3
The Lock-Up Agreements.
9.1.1.4
The Registration Rights Agreement duly executed by the Company.
9.1.2.
On or prior to the Closing Date, the Company shall deliver each the following:
9.1.2.1
A legal opinion of ArentFox Schiff LLP, addressed to the Placement Agent and the Purchasers, in form and substance reasonably acceptable
to the Placement Agent and Purchasers.
9.1.2.2
A copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis,
a certificate (or at the request of the Purchaser, book entry statement) evidencing a number of Shares equal to such Purchaser’s
Subscription Amount divided by the Per Unit Purchase Price, registered in the name of such Purchaser, 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 the portion of such Purchaser’s Subscription Amount applicable
to Shares, divided by the Per Unit Purchase Price, registered in the name of such Purchaser.
9.1.2.3
For each Purchaser of Pre-Funded Warrants, a Pre-Funded Warrant registered in the name of such Purchaser to purchase up to a number
of shares of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to Pre-Funded Warrants divided
by the Per Unit Purchase Price, with an exercise price equal to $0.00001, subject to adjustment as provided therein.
9.1.2.4
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.
9.1.2.5
A duly executed and delivered Officers’ Certificate, in customary form reasonably satisfactory to the Placement Agent and
its counsel.
9.1.2.6
The Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).
| 10. | 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 the Securities
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: |
10.1.
Regulatory Matters.
10.1.1.
Effectiveness of Registration Statement; Rule 424 Information. The Registration Statement is effective on the date
of this Agreement, and, on the Closing Date no stop order suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s
knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information.
All filings with the Commission required by Rule 424 under the Securities Act to have been filed by the Closing Date shall have been made
within the applicable time period prescribed for such filing by Rule 424.
10.1.2.
FINRA Clearance. On or before the Closing Date, the Placement Agent shall have received clearance from FINRA as to
the amount of compensation allowable or payable to the Placement Agent as described in the Registration Statement.
10.1.3.
Listing of Additional Shares. On or before the Closing Date, the Company shall have filed a notice with the Exchange
with respect to the Company’s additional listing of the securities sold in the Offering.
10.2.
Closing Deliverables. The Company shall have delivered all closing deliverables to the Placement Agent as set forth
in Section 9.1 as of the time required and in form reasonably satisfactory to the Placement
Agent.
10.2.1.
No Material Changes. Prior to and on the Closing Date: (i) there shall have been no Material Adverse Effect or development
involving a prospective Material Adverse Effect in the condition or prospects or the business activities, financial or otherwise, of the
Company from the latest dates as of which such condition is set forth in the Registration Statement, the Disclosure Package and the Prospectus;
(ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any affiliates of
the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision,
ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company,
except as set forth in the Registration Statement and the Prospectus; (iii) no stop order shall have been issued under the Securities
Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement and the
Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in
accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of
the Securities Act and the Securities Act Regulations, and neither the Registration Statement nor the Prospectus nor any amendment or
supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
10.2.2.
Additional Documents. At the Closing Date, Placement Agent’s counsel shall have been furnished with such documents
and opinions as they may require in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the Placement Agent and Placement Agent’s counsel.
| 11. | Prior Agreement. By entering into this Agreement, the parties agree that that certain letter
of engagement, dated July 11, 2024, entered into between the same parties hereof, shall automatically terminate and cease to have any
effect whatsoever and shall be superseded in its entirety by this Agreement. |
| | |
| 12. | Termination. Notwithstanding anything to the contrary contained herein, the Company agrees
that the provisions relating to the payment of fees, reimbursement of expenses, tail fee, indemnification and contribution, confidentiality,
conflicts, independent contractor and waiver of the right to trial by jury will survive any termination or expiration of this placement
agent agreement. Notwithstanding anything to the contrary contained herein, the Company has the right to terminate the placement agent
agreement for cause in compliance with FINRA Rule 5110(g)(5)(B)(i). The exercise of such right of termination for cause eliminates the
Company’s obligations with respect to the provisions relating to the tail fees. Notwithstanding anything to the contrary contained
in this placement agent agreement, in the event that no Placement is completed for any reason whatsoever during the Engagement Period,
the Company shall be obligated to pay to Aegis its actual and accountable out-of-pocket expenses related to the Placement (including the
fees and disbursements of Placement Agent’s legal counsel) and if applicable, for electronic road show service used in connection
with the Placement. During the engagement hereunder: (i) the Company will not, and will not permit its representatives to, other than
in coordination with Aegis, contact or solicit institutions, corporations or other entities or individuals as potential purchasers of
the Securities and (ii) the Company will not pursue any financing transaction which would be in lieu of the Placement. Furthermore, the
Company agrees that during Aegis’s engagement hereunder, all inquiries from prospective investors will be referred to Aegis. Regardless
of termination and except as stated in this Section 12, Section 8
of this placement agent agreement will still remain in full effect if an offering is consummated. |
| | |
| 13. | Publicity. The Company agrees that it will not issue press releases or engage in any other
publicity, without Aegis’s prior written consent, commencing on the date hereof and continuing until the final Closing of the Placement. |
| | |
| 14. | Information. During the Engagement Period or until the Closing, the Company agrees to cooperate
with Aegis and to furnish, or cause to be furnished, to Aegis, any and all information and data concerning the Company, and the Placement
that Aegis deems appropriate (the “Information”). The Company will provide Aegis reasonable access during normal
business hours from and after the date of execution of this placement agent agreement until the Closing to all of the Company’s
assets, properties, books, contracts, commitments and records and to the Company’s officers, directors, employees, appraisers, independent
accountants, legal counsel and other consultants and advisors. Except as contemplated by the terms hereof or as required by applicable
law, Aegis will keep strictly confidential all non-public Information concerning the Company provided to Aegis. No obligation of confidentiality
will apply to Information that: (a) is in the public domain as of the date hereof or hereafter enters the public domain without a breach
by Aegis, (b) was known or became known by Aegis prior to the Company’s disclosure thereof to Aegis as demonstrated by the existence
of its written records, (c) becomes known to Aegis from a source other than the Company which information is not provided by the breach
of an obligation of confidentiality owed to the Company, (d) is disclosed by the Company to a third party without restrictions on its
disclosure or (e) is independently developed by Aegis as demonstrated by its written records. For the avoidance of doubt, except as otherwise
provided herein, all information which is not publicly available relating to the Company’s proprietary technology is proprietary
and confidential. |
| | |
| 15. | No Third Party Beneficiaries; No Fiduciary Obligations. This placement agent agreement does
not create, and shall not be construed as creating, rights enforceable by any person or entity not a party hereto, except those entitled
hereto by virtue of the indemnification provisions hereof. The Company acknowledges and agrees that: (i) Aegis is not and shall not be
construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company
or any other person or entity by virtue of this placement agent agreement or the retention of Aegis hereunder, all of which are hereby
expressly waived; and (ii) Aegis is a full service securities firm engaged in a wide range of businesses and from time to time, in the
ordinary course of its business, Aegis or its affiliates may hold long or short positions and trade or otherwise effect transactions for
its own account or the account of its customers in debt or equity securities or loans of the companies which may be the subject of the
transactions contemplated by this placement agent agreement. During the course of Aegis’s engagement with the Company, Aegis may
have in its possession material, non-public information regarding other companies that could potentially be relevant to the Company or
the transactions contemplated herein but which cannot be shared due to an obligation of confidence to such other companies. |
| 16. | Indemnification, Advancement & Contribution. |
16.1.
Indemnification. The Company agrees to indemnify and hold harmless Aegis, its affiliates and each person controlling
Aegis (within the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of Aegis, its affiliates
and each such controlling person (Aegis, and each such entity or person hereafter is referred to as 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 counsel for the Indemnified
Persons) (collectively, the “Expenses”) and agrees to advance payment of such Expenses as they are incurred
by an Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Indemnified Person is a party
thereto, arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in (A) the Registration
Statement, Prospectus or any other offering documents (as from time to time each may be amended and supplemented), (B) any materials or
information provided to investors by, or with the approval of, the Company in connection with the marketing of the Placement, including
any “road show” or investor presentations made to investors by the Company (whether in person or electronically), or (C) any
application or other document or written communication (collectively called “application”) executed by the Company or based
upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities laws thereof
or to file for an exemption from such requirement or filed with the Commission, any state securities commission or agency, any national
securities exchange; or (ii) the omission or alleged omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information provided to the Company by Aegis in writing specifically for use
in the Registration Statement, Prospectus or any other offering documents with respect which or resulting from conduct by Aegis or another
Indemnified Party, as to which Aegis shall indemnify and hold harmless the Company, its officers, directors and controlling parties in
the manner set forth in this Section 16. The Company also agrees to reimburse and advance each
Indemnified Person for all Expenses as they are incurred in connection with such Indemnified Person’s enforcement of his or its
rights under this Section 16.
16.2.
Procedure. Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with
respect to which indemnity may reasonably be expected to be sought under this Section 16, 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 obligation or liability which the Company may have on account of this Section 16
or otherwise to such Indemnified Person. The Company shall, if requested by Aegis, assume the defense of any such action (including the
employment of counsel designated by Aegis and reasonably satisfactory 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 separate counsel
reasonably acceptable to Aegis for the benefit of Aegis and the other Indemnified Persons or (ii) such Indemnified Person shall have been
advised that in the opinion of counsel that there is an actual or potential conflict of interest that prevents (or makes it imprudent
for) the counsel designated by and engaged by the Company for the purpose of representing the Indemnified Person, to represent both such
Indemnified Person and any other person represented or proposed to be represented by such counsel, in which event the Company shall pay
the reasonable fees and expenses of one counsel, plus local counsel, for all Indemnified Parties, which counsel shall, if Aegis is a defendant,
be designated by Aegis. 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 Aegis, 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 advancement, reimbursement,
indemnification or contribution may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement,
compromise, consent or termination (i) includes an unconditional release of each Indemnified Person, acceptable to such Indemnified Party,
from all Liabilities arising out of such action for which indemnification or contribution may be sought hereunder and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Person. The advancement,
reimbursement, indemnification and contribution obligations of the Company required hereby shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as every Liability and Expense is incurred and is due and payable, and in such
amounts as fully satisfy each and every Liability and Expense as it is incurred (and in no event later than 30 days following the date
of any invoice therefore).
16.3.
Contribution. In the event that a court of competent jurisdiction makes a finding, final beyond right of review,
that indemnity is unavailable to an Indemnified Person, 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 Aegis and any other Indemnified Person, on the other hand, of the matters contemplated by this Section 16
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 Aegis 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 commissions and non-accountable expense allowance actually received
by Aegis in the Placement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company
on the one hand or Aegis on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and Aegis agree that it would not be just and equitable if contributions pursuant to
this subsection 16.3 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in this subsection 16.3.
For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to Aegis on the other hand, of the matters
contemplated by this Section 16 shall be deemed to be in the same proportion as: (a) the total
value received by the Company in the Placement, whether or not such Placement is consummated, bears to (b) the commissions paid to Aegis
under the Placement Agent Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of
Section 11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.
16.4.
Limitation. 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 placement agent agreement, the transactions contemplated thereby or any Indemnified Person’s actions or
inactions in connection with any such advice, services or transactions, except to the extent that a court of competent jurisdiction has
made a finding that Liabilities (and related Expenses) of the Company have resulted exclusively from such Indemnified Person’s gross
negligence or willful misconduct in connection with any such advice, actions, inactions or services.
| 17. | Equitable Remedies. Each party to this placement agent agreement acknowledges and agrees
that (a) a breach or threatened breach by the Company of any of its obligations under Section 8
or the exclusivity provisions of Section 1 would give rise to irreparable harm to Aegis for
which monetary damages would not be an adequate remedy and (b) if a breach or a threatened breach by the Company of any such obligations
occurs, Aegis will, in addition to any and all other rights and remedies that may be available to such party at law, at equity, or otherwise
in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance
of the terms of Section 8 or the exclusivity provisions of Section 1,
as applicable, and any other relief that may be available from a court of competent jurisdiction, without any requirement to (i) post
a bond or other security, or (ii) prove actual damages or that monetary damages will not afford an adequate remedy. Each party to this
placement agent agreement agrees that such party shall not oppose or otherwise challenge the existence of irreparable harm, the appropriateness
of equitable relief or the entry by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent
with the terms of this Section 17. |
| 18. | Governing Law; Venue. This placement agent agreement will be deemed to have been made and
delivered in the State of New York, USA, and both the binding provisions of this placement agent agreement and the transactions contemplated
hereby will 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 Aegis and the Company: (i) agrees that any legal suit,
action or proceeding arising out of or relating to this placement agent agreement and/or the transactions contemplated hereby will be
instituted exclusively in the courts located in the Borough of Manhattan, City of New York, County of New York, State 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 courts located in the City of New York, County of New York and State of New York, in any such suit, action
or proceeding. Each of Aegis 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 such courts and agrees that service of process upon the Company mailed by certified mail to
the Company’s address will be deemed in every respect effective service of process upon the Company, in any such suit, action or
proceeding, and service of process upon Aegis mailed by certified mail to Aegis’s address will be deemed in every respect effective
service process upon Aegis, in any such suit, action or proceeding. Notwithstanding any provision of this placement agent agreement to
the contrary, the Company agrees that neither Aegis nor its affiliates, and the respective officers, directors, employees, agents and
representatives of Aegis, its affiliates and each other person, if any, controlling Aegis or any of its affiliates, will 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 the Company that are finally judicially
determined to have resulted from the bad faith or gross negligence of such individuals or entities. Aegis will act under this placement
agent agreement as an independent contractor with duties to the Company. |
| | |
| 19. | Miscellaneous. The Company represents and warrants that it has all required power and authority
to enter into and carry out the terms and provisions of this placement agent agreement and the execution, delivery and performance of
this placement agent agreement does not breach or conflict with any agreement, document or instrument to which it is a party or bound.
The binding provisions of this placement agent agreement are legally binding upon and inure to the benefit of both the Company and Aegis
and their respective assigns, successors, and legal representatives. If any provision of this placement agent agreement is determined
to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect, and the remainder
of the placement agent agreement shall remain in full force and effect. This placement agent agreement may be executed in counterparts
(including electronic counterparts), each of which shall be deemed an original but all of which together shall constitute one and the
same instrument. The undersigned hereby consents to receipt of this placement agent agreement in electronic form and understands and agrees
that this placement agent agreement may be signed electronically. Signatures to this placement agent agreement transmitted in electronic
form will have the same effect as physical delivery of a paper document bearing the original signature, and if any signature is delivered
electronically evidencing an intent to sign this placement agent agreement, such electronic mail or other electronic transmission shall
create a valid and binding obligation of the undersigned with the same force and effect as if such signature were an original. Execution
and delivery of this placement agent agreement by electronic mail or other electronic transmission is legal, valid and binding for all
purposes. |
If you are in agreement with
the foregoing, please sign and return to us one copy of this placement agent agreement. This placement agent agreement may be executed
in counterparts (including facsimile or .pdf counterparts), each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
[Signature Page of VLCN Registered Direct Shelf
Takedown Placement Agent Agreement Follows]
[Signature Page of VLCN Registered Direct Shelf
Takedown Placement Agent Agreement]
| |
Very truly yours, |
| |
|
| |
Aegis Capital Corp. |
| |
|
| |
|
| |
By: |
/s/ Robert Eide |
| |
Name: |
Robert Eide |
| |
Title: |
Chief Executive Officer |
AGREED AND ACCEPTED:
The foregoing accurately sets forth our understanding and agreement
with respect to the matters set forth herein.
Volcon, Inc.
| By: |
/s/ Greg Endo |
|
| Name: |
Greg Endo |
|
| Title: |
Chief Financial Officer |
|
Exhibit 99.1
Volcon Announces Pricing of $12 Million
Registered Direct Offering Priced At-The-Market
AUSTIN, TX / ACCESSWIRE / July 11, 2024 / Volcon Inc. (NASDAQ:VLCN),
("Volcon" or the "Company"), the first all-electric, off-road powersports company, today announced that it has entered
into securities purchase agreements with certain institutional investors for the purchase and sale of 3,287,671 shares of common stock
and/or pre-funded warrants to acquire common stock in a registered direct offering. The purchase price of each share is $3.65. The purchase
price for the pre-funded warrants is identical to the purchase price for the shares, less the exercise price of $0.00001.
The aggregate gross proceeds to the Company are expected to be approximately
$12 million. The transaction is expected to close on or about July 12, 2024, subject to the satisfaction of customary closing conditions.
Aegis Capital Corp. is acting as exclusive placement agent for the
offering. ArentFox Schiff LLP is acting as counsel to the Company for the offering. Kaufman & Canoles, P.C. is acting as counsel to
Aegis for the offering.
A registration statement on Form S-3 (File No. 333-269644) relating
to the offering of the securities was filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on
March 21, 2023. The offering is being made only by means of a prospectus. A final prospectus supplement and accompanying prospectus describing
the terms of the proposed transaction may be obtained, when available, on the SEC's website, www.sec.gov or by contacting Aegis Capital
Corp., 1345 Avenue of the Americas, 27th Floor, New York, NY 10105, by telephone at (212) 813-1010 or by email at syndicate@aegiscap.com.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities
in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction.
Proceeds from the offering will be used, in part, to repay approximately
$2.94 million of principal on the notes issued on May 22, 2024. In addition, all previously issued Series A convertible preferred stock
has been converted to common stock effective July 10, 2024, and as of such date, the Company had approximately 2.63 million shares of
common stock outstanding. Upon completion of the proposed offering, the Company will have no convertible debt or preferred stock outstanding,
and less than $40,000 in debt outstanding.
About Volcon
Based in the Austin, Texas area, Volcon was founded as the first all-electric
power sports company producing high-quality and sustainable electric vehicles for the outdoor community. Volcon electric vehicles are
the future of off-roading, not only because of their environmental benefits but also because of their near-silent operation, which allows
for a more immersive outdoor experience.
Volcon's vehicle roadmap includes both motorcycles and UTVs. Its first
product, the innovative Grunt, began shipping to customers in late 2021 and combines a fat-tired physique with high-torque electric power
and a near-silent drive train. The Volcon Grunt EVO, an evolution of the original Grunt with a belt drive, an improved suspension, and
seat, began shipping to customers in October 2023. The Brat is Volcon's first foray into the wildly popular eBike market for both on-road
and off-road riding and is currently being delivered to dealers across North America. Volcon debuted the Stag in July 2022 and entered
the rapidly expanding UTV market and shipped its first production unit in February 2024. The Stag empowers the driver to explore the outdoors
in a new and unique way that gas-powered UTVs cannot. The Stag offers the same thrilling performance of a standard UTV without the noise
(or pollution), allowing the driver to explore the outdoors with all their senses.
Volcon Contacts
For Media: media@volcon.com
For Dealers: dealers@volcon.com
For Investors: investors@volcon.com
For Marketing: marketing@volcon.com
For more information on Volcon or to learn more about its complete
motorcycle and side-by-side line-up, visit: www.volcon.com
FORWARD-LOOKING STATEMENTS:
This press release contains “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,” “anticipates,”
“intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions
or variations of such words are intended to identify forward-looking statements. Forward-looking statements are not historical facts,
and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain.
Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations,
beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking
statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ
materially from those expressed in the forward-looking statements, including the risk factors described from time to time in the Company's
reports to the SEC, including, without limitation the risk factors discussed in the Company's annual report on Form 10-K filed with the
SEC on March 28, 2024. Readers are cautioned that it is not possible to predict or identify all the risks, uncertainties and other factors
that may affect future results. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected.
Volcon undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events,
or otherwise. References and links to websites have been provided as a convenience, and the information contained on such websites is
not incorporated by reference into this press release. Volcon is not responsible for the contents of third-party websites.
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