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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of report (date of earliest event reported):
December 20, 2023
TONIX PHARMACEUTICALS HOLDING CORP.
(Exact name of registrant as specified in its charter)
Nevada |
001-36019 |
26-1434750 |
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
26 Main Street, Chatham, New Jersey 07928
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area
code: (862) 904-8182
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-4(c))
Securities registered pursuant
to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock |
TNXP |
The NASDAQ Capital Market |
Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or
Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 |
Entry into a Material Definitive Agreement. |
On December 20,
2023, Tonix Pharmaceuticals Holding Corp. (the “Company”), entered into a securities purchase agreement (the “Purchase
Agreement”) with certain institutional investors (collectively, the “Purchasers”). The Purchase Agreement provides for
the sale and issuance by the Company of an aggregate of: (i) 25,343,242 shares (the “Shares”) of the Company’s common
stock, $0.001 par value per share (the “Common Stock”), (ii) pre-funded warrants (the “Pre-Funded Warrants”) to
purchase up to 28,710,812 shares of Common Stock and (iii) Series C warrants to purchase up to 81,081,081 shares of Common Stock (the “Series
C Warrants”) and (iv) Series D warrants to purchase up to 81,081,081 shares of Common Stock (the “Series D Warrants”
and, together with the Series C Warrants, the “Common Warrants) (the “Common Warrants” together with the Shares and
the Pre-Funded Warrants, the “Securities”). The offering price per Share and accompanying Common Warrants is $0.555 and the
offering price per Pre-Funded Warrant and accompanying Common Warrants is $0.5549.
The Pre-Funded Warrants are immediately exercisable subject to certain
ownership limitations, have an exercise price of $0.0001 per share, and may be exercised at any time until all of the Pre-Funded Warrants
are exercised in full. The Series C Warrants are exercisable on the later of approval by the Company’s stockholders of (A) a proposal
to approve the filing of an amendment to the Company’s Articles of Incorporation, as amended, increasing the number of authorized
shares of Common Stock from 160,000,000 to 1,000,000,000 (the “Amendment to Increase Authorized”) with the Nevada Secretary
of State and (B) a proposal to allow the Warrants to become exercisable in accordance with Nasdaq Listing Rule 5635 (the “Initial
Exercise Date”), at an exercise price of $0.555 per share and will expire on the later of (A) ten trading days following the Initial
Exercise Date and (B) the earlier of (i) the two year anniversary of the Initial Exercise Date and (ii) ten trading days following the
public announcement of the U.S. Food and Drug Administration’s acknowledgement and acceptance of our new drug application relating
to the Company’s TNX-102 SL product candidate in patients with fibromyalgia. The Series D Warrants are exercisable on the Initial
Exercise Date at an exercise price of $0.85 per share and will expire on the five-year anniversary of the Initial Exercise Date.
The offering is expected to result in gross proceeds to the Company of up to approximately $144 million. The Company intends to use the
net proceeds from the offering of securities for the preparation of the new drug application relating to TNX-102
SL in patients with fibromyalgia, as well as working capital and general corporate purposes. The Company has no current intention to prepay
any existing indebtedness and will pay its existing indebtedness as it becomes due.
The Purchase
Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification
obligations of the Company, other obligations of the parties, and termination provisions. In the Purchase Agreement, 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 90 days after the closing date of the offering, subject to certain exceptions. In addition, the Company has
agreed not to effect or enter into an agreement to effect any issuance of Common Stock or any securities convertible into or exercisable
or exchangeable for shares of Common Stock involving a variable rate transaction (as defined in the Purchase Agreement) until 180 days
after the closing date of the offering, subject to certain exceptions. Additionally, each of the directors and officers of the Company,
pursuant to lock-up agreements, agreed not to sell or transfer any of the Company securities which they hold, subject to certain exceptions,
during the 45-day period following the closing of the offering.
Pursuant to the
Purchase Agreement each of Common Stock or Pre-Funded Warrants in the Offering has agreed to use commercially reasonable best efforts
(i) to vote the shares of our common stock that they own or control on the record date of the stockholder meeting (or any postponement,
adjournment or reconvening thereof) at which our stockholders consider and vote upon a proposal to approve the Amendment to Increase Authorized.
This proposal will be submitted to our stockholders at a special meeting of stockholders scheduled to be held on January 25, 2024, and
any adjournment thereof. The record date for the special meeting of stockholders will be set on or about December 22, 2023.
On December 20,
2023, the Company also entered into a placement agent agreement (the “Placement Agent Agreement”) with A.G.P./Alliance Global
Partners (the “Placement Agent”). Pursuant to the terms of the Placement Agent Agreement, the Placement Agent agreed to use
its reasonable best efforts to arrange for the sale of the Securities. The Company will pay the Placement Agent a cash fee equal to 7.0%
of the aggregate purchase price paid by any and all Purchasers in connection with the sale of the Securities and will reimburse the Placement
Agent for certain of its expenses in an aggregate amount up to $100,000.
The Placement
Agent Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification
obligations of the Company, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties,
and termination provisions.
The offering
is being made pursuant to two registration statements on Form S-3 (File Nos. 333-254975 and 333-266982), which were declared effective
by the Securities and Exchange Commission on May 5, 2021, and August 26, 2022, respectively, as supplemented by a prospectus supplement
dated December 20, 2023.
The Placement
Agent Agreement, form of Purchase Agreement, form of Pre-Funded Warrant, the form of Series C Warrant and the form of Series D Warrant
are filed as Exhibits 1.01, 10.01, 4.01,4.02 and 4.03, respectively, to this Current Report on Form 8-K and are incorporated herein by
reference. The above descriptions of the terms of the Placement Agent Agreement, Purchase Agreements, Pre-Funded Warrants, Series C Warrants
and Series D Warrants are qualified in their entirety by reference to such exhibits.
On December 20, 2023,
the Company issued a press release announcing the pricing of the offering on December 20, 2023. A copy of the press release
is attached hereto as Exhibits 99.01 and is incorporated herein by reference.
Item 9.01 |
Financial Statements and Exhibits. |
(d) |
|
Exhibit
No. |
|
Description. |
|
|
1.01 |
|
Placement Agent Agreement, dated December 20,
2023, between Tonix Pharmaceuticals Holding Corp. and
A.G.P./Alliance Global Partners |
|
|
4.01 |
|
Form of Pre-Funded Warrant |
|
|
4.02 |
|
Form of Series C Warrant |
|
|
4.03 |
|
Form of Series D Warrant |
|
|
5.01 |
|
Opinion of Brownstein Hyatt Farber Schreck, LLP |
|
|
5.02 |
|
Opinion of Lowenstein Sandler LLP |
|
|
10.01 |
|
Form of Securities Purchase Agreement |
|
|
23.01 |
|
Consent of Brownstein Hyatt Farber Schreck, LLP (contained in Exhibit 5.01) |
|
|
23.02 |
|
Consent of Lowenstein Sandler LLP (contained in Exhibit 5.02) |
|
|
99.01 |
|
Press Release, dated December 20, 2023 |
|
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirement of
the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
TONIX PHARMACEUTICALS HOLDING CORP. |
|
|
Date: December 21, 2023 |
By: |
/s/ Bradley Saenger |
|
|
|
Bradley Saenger |
|
|
Chief Financial Officer |
TONIX PHARMACEUTICALS HOLDING CORP. 8-K
Exhibit 1.01
Execution Version
A.G.P./Alliance
Global Partners
590
Madison Avenue, 28th Floor
New
York, NY 10022
December
20, 2023
Tonix
Pharmaceuticals Holding Corp.
Attention: Seth Lederman
26 Main Street, Suite 101
Chatham,
New Jersey 07928
Re: |
Placement
Agency Agreement |
Dear
Mr. Lederman:
Subject to the terms and conditions of this letter agreement (the “Agreement”)
between A.G.P./Alliance Global Partners (the “Placement Agent”), as sole placement agent, and Tonix Pharmaceuticals
Holding Corp., a Nevada corporation (the “Company”), the parties hereby agree that the Placement Agent shall serve
as the placement agent for the Company, in connection with the proposed registered direct offering (the “Placement”)
of securities of the Company, consisting of: (i) shares of common stock, par value $0.001 per share (“Common Stock”),
(ii) pre-funded warrants to purchase Common Stock (the “Pre-Funded Warrants”), and (iii) Series C warrants and Series
D warrants to purchase Common Stock (the “Common Warrants” and collectively with the Pre-Funded Warrants, the “Warrants”).
The Common Stock and Warrants actually sold by the Placement Agent are referred to herein as the “Placement Agent Securities.”
The Placement Agent Securities and shares of Common Stock issuable upon the exercise of the Warrants shall be offered and sold under the
Company’s registration statement on Form S-3 (File No. 333-254975), which was declared effective by the Securities and Exchange
Commission (the “Commission”) on May 5, 2021. The documents executed and delivered by the Company and the Purchasers
(as defined below) in connection with the Placement, including, without limitation, a securities purchase agreement (the “Purchase
Agreement”), shall be collectively referred to herein as the “Transaction Documents.” The terms of the Placement
shall be mutually agreed upon by the Company and the purchasers listed in the Purchase Agreement (each, a “Purchaser”
and collectively, the “Purchasers”), and nothing herein constitutes that the Placement Agent would have the power or
authority to bind the Company or any Purchaser, or an obligation for the Company to issue any Placement Agent Securities or complete the
Placement. The Company expressly acknowledges and agrees that the Placement Agent’s obligations hereunder are on a reasonable best
efforts basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase the Placement
Agent Securities and does not ensure the successful placement of the Placement Agent Securities or any portion thereof or the success
of the Placement Agent with respect to securing any other financing on behalf of the Company. The Placement Agent may retain other brokers
or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Placement. Certain affiliates of the Placement
Agent may participate in the Placement by purchasing some of the Placement Agent Securities. The sale of Placement Agent Securities to
any Purchaser will be evidenced by the Purchase Agreement between the Company and such Purchaser, in a form reasonably acceptable to the
Company and the Purchaser; provided, that, at a Purchaser’s option, Purchaser’s who do not enter into a securities purchase
agreement shall rely solely on the Preliminary Prospectus and the Prospectus in connection with the purchase of securities in the offering.
Capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Purchase Agreement. Prior to the
signing of any Purchase Agreement, officers of the Company will be available to answer inquiries from prospective Purchasers.
SECTION
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.
| A. | Representations
of the Company. With respect to the Placement Agent Securities, each of the representations
and warranties (together with any related disclosure schedules thereto) and covenants
made by the Company to the Purchasers in the Purchase Agreement in connection with the
Placement, is hereby incorporated herein by reference into this Agreement (as though
fully restated herein) and is, as of the date of this Agreement and as of the Closing
Date, hereby made to, and in favor of, the Placement Agent. In addition to the foregoing,
the Company represents and warrants that there are no affiliations with any Financial
Industry Regulatory Authority (“FINRA”) member firm participating
in the Placement among the Company’s officers, directors or, to the knowledge of
the Company, any five percent (5.0%) or greater stockholder of the Company. |
| B. | Covenants
of the Company. The Company covenants and agrees to continue to retain (i) a firm
of Public Company Accounting Oversight Board independent registered public accountants
for a period of at least two (2) years after the Closing Date and (ii) a reputable transfer
agent for a period of two (2) years after the Closing Date, provided the Company is then
subject to the reporting requirement of the Exchange Act (as defined below). Furthermore,
for forty five (45) days after the Closing Date, the Company shall not, without the prior
written consent of the Placement Agent, (i) issue, enter into any agreement to issue
or announce the issuance or proposed issuance of any shares of Common Stock or common
share equivalents or (ii) file any registration statement or amendment or supplement
thereto, other than the Preliminary Prospectus, the Prospectus or a registration statement
on Form S-8 in connection with any employee benefit plan; provided, however, such restrictions
shall not apply with respect to an Exempt Issuance. In addition, for one hundred and
eighty (180) days after the Closing Date, the Company shall be prohibited from effecting
or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries
(as defined in the Purchase Agreement) of shares of Common Stock or common share equivalents
(or a combination of units thereof) involving a Variable Rate Transaction (as defined
in the Purchase Agreement); provided, however, that after ninety (90) days after the
Closing Date, the entry into and/or issuance of shares of Common Stock in an “at-the-market”
offering with the Placement Agent as sales agent shall not be deemed a Variable Rate
Transaction. Notwithstanding the foregoing, this Section 1(B) shall not apply with respect
to an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance. |
SECTION
2. REPRESENTATIONS OF THE PLACEMENT AGENT. The Placement Agent represents and warrants that it (i) is a member in good standing
of the FINRA, (ii) is registered as a broker/dealer under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), (iii) is licensed as a broker/dealer under the laws of the United States of America, applicable to the offers
and sales of the Placement Agent Securities by the Placement Agent, (iv) is and will be a corporate body validly existing under
the laws of its place of incorporation, and (v) has full power and authority to enter into and perform its obligations under this
Agreement. The Placement Agent will immediately notify the Company in writing of any change in its status with respect to subsections
(i) through (v) above. The Placement Agent
covenants that it will use its reasonable best efforts to conduct the Placement hereunder
in compliance with the provisions of this Agreement and the requirements of applicable law.
SECTION
3. COMPENSATION. In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agent
and/or its respective designees a cash fee of 7.0% of the aggregate purchase price paid by any and all Purchasers at the Closing
(the “Cash Fee”).
SECTION
4. EXPENSES. The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with the performance
of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation: (i) all
expenses incident to the issuance, delivery and qualification of the Placement Agent Securities (including all printing and engraving
costs); (ii) all fees and expenses of the transfer agent; (iii) all necessary issue, transfer and other stamp taxes in connection
with the issuance and sale of the Placement Agent Securities; (iv) all fees and expenses of the Company’s counsel, independent
public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), the Preliminary Prospectus and the Prospectus, and all amendments and supplements thereto,
and this Agreement; (vi) all filing fees, reasonable attorneys’ fees and expenses incurred by the Company in connection
with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Placement
Agent Securities for offer and sale under the state securities or blue sky laws or the securities laws of any other country; (vii)
the fees and expenses associated with including the Placement Agent Securities on the Trading Market; and (viii) up to $100,000
for accountable expenses related to legal fees of counsel to the Placement Agent.
SECTION
5. INDEMNIFICATION.
| A. | To
the extent permitted by law, with respect to the Placement Agent Securities, the Company shall indemnify and hold harmless the
Placement Agent and its affiliates, agents, stockholders, directors, officers, employees, members and controlling persons (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each such entity or person, an “Indemnified
Person”) from and against all claims, actions, suits, proceedings (including those of stockholders), damages, costs
and liabilities (collectively, “Claims”), and shall reimburse each Indemnified Person for all reasonable fees and
expenses (including the reasonable fees and expenses of counsel) (collectively, the “Expenses”) as they are
incurred by an Indemnified Person in investigating, preparing, pursuing or defending any Claim that is caused by, arises out of,
or is based upon (i) any untrue statements made or any statements omitted to be made in the Registration Statement, the Preliminary
Prospectus or the Prospectus, or by any omission or alleged omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading (other than untrue statements or alleged untrue
statements in, or omissions or alleged omissions from, information relating to an Indemnified Person furnished in writing by or
on behalf of such Indemnified Person for use in the Registration Statement, Preliminary Prospectus or any Prospectus) or (ii)
any other actions taken or omitted to be taken by the Company or any Indemnified Person in connection with this Agreement; provided,
however, the Company will not be responsible for any Claims or Expenses of any Indemnified Person that are judicially determined
to have resulted primarily from such Indemnified Person’s (x) willful misconduct, violation of law or gross negligence in
connection with any of the action, inaction or the services described herein, or (y) use of any offering materials or information
concerning |
| | the
Company in connection with the offer or sale of the Placement Agent Securities in the
Placement, which were not authorized for such use by the Company and which use constitutes
gross negligence, violation of law or willful misconduct. |
| | |
| B. | Promptly
after receipt by the Placement Agent of notice of any claim or the commencement of any
action or proceeding with respect to which any Indemnified Person is entitled to indemnity
hereunder, the Placement Agent will notify the Company in writing of such claim or of
the commencement of such action or proceeding, but failure to so notify the Company shall
not relieve the Company from any obligation it may have hereunder, except and only to
the extent such failure results in the forfeiture by the Company of substantial rights
and defenses. If the Company so elects or is requested by the Placement Agent, the Company
will assume the defense of such action or proceeding and will employ counsel reasonably
satisfactory to the Placement Agent and will pay the fees and expenses of such counsel.
Notwithstanding the preceding sentence, the Placement Agent will be entitled to employ
its own counsel separate from counsel for the Company and from any other party in such
action if counsel for the Placement Agent reasonably determine that they would be inappropriate
under the applicable rules of professional responsibility for the same counsel to represent
both the Company and the Placement Agent. In such event, the reasonable fees and disbursements
of no more than one such separate counsel will be paid by the Company, in addition to
fees of local counsel. |
| C. | The
Company may not settle, compromise or consent to the entry of any judgment in any pending
or threatened Claim, in which indemnification may be sought hereunder (whether or not
any Indemnified Person is an actual or potential party thereto), without the prior written
consent of the Placement Agent (which will not be unreasonably delayed or withheld) unless
such settlement, compromise or consent provides for an unconditional and irrevocable
release of each Indemnified Person from any and all liability arising out of such Claim. |
| D. | The
Company agrees to notify the Placement Agent promptly of the assertion against either
of them or any other person of any Claim or the commencement of any action or proceeding
relating to a transaction contemplated by this Agreement. |
| E. | If
for any reason the foregoing indemnity is unavailable to the Placement Agent or insufficient to hold the Placement Agent harmless,
then the Company shall contribute to the amount paid or payable by the Placement Agent as a result of such Claim or Expenses in
such proportion as is appropriate to reflect (a) the relative benefits to the Company on the one hand, and the Placement Agent
on the other hand, in connection with the Placement, (b) the relative fault of the parties, and (c) other equitable considerations;
provided, however, that in no event shall the amount to be contributed by the Placement Agent exceed the fees actually received
by the Placement Agent under this Agreement. Notwithstanding the immediately preceding sentence, to the extent the exception to
indemnification contemplated by Paragraph A of this Section applies with respect to the Placement Agent, the Company shall contribute
to the amount paid or payable by the Placement Agent as a result of such Claim or Expenses in such proportion as is appropriate
to reflect the relative fault of the Company, on the one hand, and the Placement Agent, on the other hand, in connection with
the matters contemplated by the Agreement; provided, however, that in no event shall the amount to be |
| | contributed
by Placement Agent exceed the fees actually received by Placement Agent under the Agreement.
The Company agrees that for the purposes of this paragraph the relative benefits to the
Company and the Placement Agent of the contemplated transaction (whether or not such
transaction is consummated) shall be deemed to be in the same proportion that the aggregate
cash consideration payable (or contemplated to be payable) in such transaction bears
to the fees paid or payable to the Placement Agent under the Agreement. |
| | |
| F. | These
indemnification provisions shall remain in full force and effect whether or not the transaction
contemplated by this Agreement is completed, survive the termination of this Agreement,
and be in addition to any liability that the Company might otherwise have to any Indemnified
Person. |
SECTION
6. ENGAGEMENT TERM. The Placement Agent’s engagement hereunder will be until the earlier of the Closing Date and January
15, 2024. The date of termination of this Agreement is referred to herein as the “Termination Date.” In the
event, however, in the course of the Placement Agent’s performance of due diligence they deem it necessary to terminate
the engagement, the Placement Agent may do so prior to the Termination Date. The Company may elect to terminate the engagement
hereunder for any reason prior to the Termination Date but will remain responsible for fees pursuant to Section 3 hereof with
respect to the Placement Agent Securities if sold in the Placement. Notwithstanding anything to the contrary contained herein,
the provisions concerning the Company’s obligation to pay any fees actually earned pursuant to Section 3 hereof and the
provisions concerning confidentiality, indemnification and contribution contained herein, as well as provisions in Sections 10
– 14 hereof will survive any expiration or termination of this Agreement. If this Agreement is terminated prior to the completion
of the Placement, all fees and expenses due to the Placement Agent as set forth in Section 3 and Section 4 (except for the $25,000
non-accountable expense allowance) shall be paid by the Company to the Placement Agent on or before the Termination Date (in the
event such fees are earned or owed as of the Termination Date). The Placement Agent agrees not to use any confidential information
concerning the Company provided to the Placement Agent by the Company for any purposes other than those contemplated under this
Agreement.
SECTION
7. PLACEMENT AGENT INFORMATION. The Company agrees that any information or advice rendered by the Placement Agent in connection
with this engagement is for the confidential use of the Company only in its evaluation of the Placement and, except as otherwise
required by law, the Company will not disclose or otherwise refer to the advice or information in any manner without the Placement
Agent’s prior written consent.
SECTION
8. NO FIDUCIARY RELATIONSHIP. This 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 the Placement Agent is not and shall not be construed as 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 by virtue of this Agreement
or the retention of the Placement Agent hereunder, all of which are hereby expressly waived.
SECTION
9. CLOSING. The obligations of the Placement Agent, and the closing of the sale of the Placement Agent Securities hereunder
are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company
contained herein and in the Purchase Agreement, to the performance by the Company of its obligations hereunder, and to each of
the following additional terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement Agent:
| A. | All
corporate proceedings and other legal matters incident to the authorization, form, execution,
delivery and validity of each of this Agreement, the Placement Agent Securities, and
all other legal matters relating to this Agreement and the transactions contemplated
hereby with respect to the Placement Agent Securities shall be reasonably satisfactory
in all material respects to the Placement Agent. |
| B. | The
Placement Agent shall have received from the Company’s counsel, Lowenstein Sandler
LLP, such counsel’s written opinion with respect to the Placement Agent Securities,
addressed to the Placement Agent and dated as of the Closing Date, in form and substance
reasonably satisfactory to the Placement Agent. |
| C. | The
Placement Agent shall have received an executed FINRA questionnaire from each of the
Company and the Company’s executive officers and directors as well as executed
Lock-Up Agreements from the Company’s executive officers and directors. |
| D. | Shares
of Common Stock sold in the Placement, including shares of Common Stock issuable upon
the exercise of the Warrants, must be registered under the Exchange Act. The Company
shall have taken no action designed to, or likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act or delisting or suspending
from trading the Common Stock from the Trading Market or other applicable U.S. national
exchange, nor has the Company received any information suggesting that the Commission
or the Trading Market or other U.S. applicable national exchange is contemplating terminating
such registration or listing, except as disclosed in the Registration Statement, the
Preliminary Prospectus and the Prospectus. |
| E. | No
action shall have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any governmental agency or body which would, as of the
Closing Date, prevent the issuance or sale of the Placement Agent Securities or materially
and adversely affect or potentially and adversely affect the business or operations of
the Company; and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as of the Closing
Date which would prevent the issuance or sale of the Placement Agent Securities or materially
and adversely affect or potentially and adversely affect the business or operations of
the Company. |
| F. | The
Company shall have entered into a Purchase Agreement with each of the Purchasers who
elect to purchase the Placement Agent Securities through the Purchase Agreement (and
not by reliance on the Preliminary Prospectus or Prospectus) and such agreements shall
be in full force and effect and shall contain representations, warranties and covenants
of the Company as agreed upon between the Company and the Purchasers. |
| G. | FINRA
shall have raised no objection to the fairness and reasonableness of the terms and arrangements
of this Agreement. In addition, the Company shall, if requested by the Placement Agent,
make or authorize Placement Agent’s counsel to make on the Company’s behalf,
any filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110
with respect to the Placement and pay all filing fees required in connection therewith. |
| I. | The
Placement Agent shall have received customary certificates of the Company’s executive
officers, as to the accuracy of the representations and warranties contained in the Purchase
Agreement, and a certificate of the Company’s secretary certifying (i) that the
Company’s charter documents are true and complete, have not been modified and are
in full force and effect; (ii) that the resolutions of the Company’s Board of Directors
relating to the Placement are in full force and effect and have not been modified; and
(iii) as to the incumbency of the officers of the Company. |
| J. | The
Placement Agent shall have received from Haley Giuliano LLP, intellectual property counsel
to the Company, such counsel’s written opinion, addressed to the Placement Agent
and dated as of the Closing Date, in form and substance reasonably satisfactory to the
Placement Agent. |
| K. | The
Placement Agent shall have received from Brownstein Hyatt Farber Schreck LLP, local Nevada
counsel to the Company, such counsel’s written opinion, addressed to the Placement
Agent and dated as of the Closing Date, in form and substance reasonably satisfactory
to the Placement Agent. |
If
any of the conditions specified in this Section 9 shall not have been fulfilled when and as required by this Agreement, all obligations
of the Placement Agent hereunder may be cancelled by the Placement Agent at, or at any time prior to, the Closing Date. Notice
of such cancellation shall be given to the Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter
in writing.
SECTION
10. GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York
applicable to agreements made and to be performed entirely in such State, without regard to principles of conflicts of law. This
Agreement may not be assigned by either party without the prior written consent of the other party. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial
by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived.
Any dispute arising under this Agreement may be brought into the courts of the State of New York or into the Federal Court located
in New York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof
via 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 manner permitted by law. If either party shall commence
an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
SECTION
11. ENTIRE AGREEMENT/MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto,
and supersedes all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement
is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect
or any other provision of this Agreement, which will remain in full force and effect. This Agreement
may not be amended or otherwise
modified or waived except by an instrument in writing signed by both the Placement Agent and the Company. The representations,
warranties, agreements and covenants contained herein shall survive the Closing Date of the Placement and delivery of the Placement
Agent Securities for the applicable statute of limitations. 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 the other party, it being understood that both parties need not sign the same counterpart.
In the event that any signature is delivered by facsimile transmission or a .pdf format 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 facsimile or .pdf signature page were an original thereof.
SECTION
12. 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 date of transmission, if such notice or communication
is sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business
day, (b) the next business day after the date of transmission, if such notice or communication is sent to the email address on
the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business
day, (c) the third business day following the date of mailing, if sent by an internationally recognized air 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 hereto.
SECTION
13. PRESS ANNOUNCEMENTS. The Company agrees that the Placement Agent shall, on and after the Closing Date, have the right
to reference the Placement and the Placement Agent’s role in connection therewith in the Placement Agent’s marketing
materials and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own
expense.
SECTION
14. PAYMENTS. All payments made or deemed to be made by the Company to the Placement Agent, its affiliates, stockholders,
directors, officers, employees, members and controlling persons (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) (each, a “Payee”), if any, will be made without withholding or deduction for or on
account of any present or future taxes, duties, assessments or governmental charges of whatever nature (other than taxes on net
income or similar taxes) imposed or levied by or on behalf of the United States or any political subdivision or any taxing authority
thereof or therein unless the Company is or becomes required by law to withhold or deduct such taxes, duties, assessments or other
governmental charges. In such event, the Company will pay such additional amounts as will result, after such withholding or deduction,
in the receipt by the Payee of the amounts that would otherwise have been receivable in respect thereof. For the avoidance of
doubt, all sums payable, paid or deemed payable under this Agreement shall be considered exclusive of value added tax, sales tax
or other similar taxes which shall be borne by, paid, collected and remitted by the Company in accordance with applicable law.
Please
confirm that the foregoing correctly sets forth our agreement by signing and returning to the Placement Agent the enclosed copy
of this Agreement.
[The
remainder of this page has been intentionally left blank.]
The
foregoing Agreement is hereby accepted and agreed to as of the date first written above.
|
A.G.P./ALLIANCE
GLOBAL PARTNERS
|
|
|
|
By:
|
_______________________________
|
|
|
Name:
|
Thomas
J. Higgins |
|
|
Title: |
Managing
Director |
|
|
|
Address
for Notice:
|
|
|
|
590
Madison Avenue, 28th Floor |
|
New
York, NY 10022 |
|
Attn:
Thomas J. Higgins |
|
Email:
thiggins@allianceg.com |
Accepted
and agreed to as of the date first written above:
TONIX
PHARMACEUTICALS HOLDING CORP.
|
|
|
|
By: |
_____________________________ |
|
Name:
|
Seth
Lederman |
|
Title: |
Chief
Executive Officer |
|
|
|
|
Address
for Notice:
|
|
26
Main Street, Suite 101 |
Chatham,
New Jersey 07928 |
Attn:
Seth Lederman |
Email:
__________________ |
[Signature
Page to Placement Agent Agreement]
TONIX PHARMACEUTICALS HOLDING CORP. 8-K
Exhibit 4.01
PRE-FUNDED
WARRANT
TO
PURCHASE SHARES OF COMMON STOCK
TONIX
PHARMACEUTICALS HOLDING CORP.
Warrant
Shares: ________ |
Original
Exercise Date: December 22, 2023 |
THIS
PRE-FUNDED WARRANT TO PURCHASE SHARES OF COMMON STOCK (this “Warrant”) certifies that, for value received,
_____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise
and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”)
until this Warrant is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase
from TONIX PHARMACEUTICALS HOLDING CORP., a Nevada corporation (the “Company”), up to ______ shares
of Common Stock, par value $0.001 per share (the “Common Stock”), of the Company (as subject to adjustment
hereunder, the “Warrant Shares”). The purchase price of one Warrant Share under this Warrant shall be equal
to the Exercise Price, as defined in Section 2(b).
1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain
Securities Purchase Agreement (the “Purchase Agreement”), dated December 20, 2023, among the Company and the purchasers
signatory thereto.
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 facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto
(the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days 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) Business Day of receipt of such notice. 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 Purchase Agreement, the Company agrees to deliver, or cause to be delivered, 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 (as defined below) 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. 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 $0.0001 per Warrant
Share, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other
than the nominal exercise price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect
any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid
aggregate exercise price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have
been exercised prior to the Termination Date. The remaining unpaid exercise price per Warrant Share under this Warrant shall be
$0.0001, subject to adjustment hereunder (the “Exercise Price”).
(c)
Cashless Exercise. This Warrant may 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 (x) the VWAP on the Trading Day immediately preceding the date of the applicable
Notice of Exercise or (y) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. (“Bloomberg”) 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, 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).
“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 (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 VWAP 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 Purchasers of a majority in interest of the Securities then outstanding
and reasonably acceptable to the Company, the fees and expenses of which shall be paid by 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 (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 Purchasers of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
(d)
Mechanics of Exercise
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted
to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to, or
resale of the Warrant Shares by, the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical
delivery of the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for
the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder
in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days 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) two (2) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason
to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall
pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise
(based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20
per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share
Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a registrar
(which may be the Transfer Agent) that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.
As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of
Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of the Notice of Exercise.
(ii)
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder
a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant.
(iii)
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv)
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Transfer
Agent to transmit to the Holder the Warrant Shares in accordance with
the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and 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 (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 shares of Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants 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 of Common Stock.
(vi)
Charges, Taxes and Expenses. The issuance of Warrant Shares and delivery of Warrant Shares shall be made without charge
to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all
of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or
in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued
in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing
of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing
similar functions) required for same-day electronic delivery of the Warrant Shares.
(vii)
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
(viii)
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 (i) the Holder’s
Affiliates, (ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii)
any other Persons whose beneficial ownership of shares of Common Stock would or could be aggregated with the Holder’s for
the purposes of Section 13(d) (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 Warrant Shares issuable upon exercise of this Warrant with respect
to which such determination is being made, but shall exclude the Warrant Shares which would be issuable upon (i) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise
or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this
Section 2(d)(viii), 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(d)(viii) 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, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
For purposes of this Section 2(d)(viii), 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 Securities
and Exchange Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the Company
or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution
Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership
Limitation” shall be [4.99/9.99]% of the number of shares of Common Stock outstanding immediately after giving effect to the
issuance of the Warrant Shares 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(d)(viii), 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 Warrant Shares upon
exercise of this Warrant held by the Holder and the provisions of this Section 2(d)(viii) 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(d)(viii)
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. If the Warrant is unexercisable as a result of the Holder’s
Beneficial Ownership Limitation, no alternate consideration is owing to the Holder.
3.
Certain Adjustments.
(a) Share Dividends and
Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution
or distributions on shares of Common Stock or any other equity or Common Stock Equivalents securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any Warrant Shares 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 share 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 remains unchanged. Any adjustment made
pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or reclassification.
(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 Common Stock Equivalents or rights to purchase shares, warrants, securities or other property pro
rata to the record holders of any class 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 holders of shares of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, shares 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).
(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 the Company’s 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 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 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 prior to such Fundamental Transaction and shall, at the option of
the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account
the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of
this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form
and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein.
(f)
[RESERVED]
(g)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share
of Common Stock, 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.
(h)
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 facsimile or 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 declares a dividend (or any other distribution in whatever form)
on the shares of Common Stock, (B) the Company declares a special nonrecurring cash dividend on, or a redemption of, the shares
of Common Stock, (C) the Company authorizes the granting to all holders of the shares of 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 shareholders of the Company
is required in connection with a Fundamental Transaction, or (E) the Company authorizes 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 facsimile
or email to the Holder at its last facsimile number or 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
shares of 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 and provided, further that no notice shall be required if the information is disseminated in a
press release or document filed with the Securities and Exchange Commission. 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.
(i)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time
during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the board of directors of the Company.
4.
Transfer of Warrant.
(a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with
a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading
Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if
properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.
(b)
New Warrants. 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.
5.
Miscellaneous.
(a)
Currency. Unless otherwise indicated, all dollar amounts referred to in this Warrant are in United States Dollars (“U.S.
Dollars”). All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies
shall be converted in the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S.
Dollar exchange rate as published in the Wall Street Journal (NY edition) on the relevant date of calculation.
(b)
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.
(c)
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.
(d)
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.
(e)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares underlying
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 and delivered,
as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such
Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes,
liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its articles 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 shares of Common Stock
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 shares
of Common Stock upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company
to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.
(f)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be determined in accordance with the provisions of the Purchase Agreement.
(g)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
and if the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state, federal or foreign
securities laws.
(h)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting
any other provision of this Warrant 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.
(i)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Purchase Agreement.
(j)
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 shares of Common Stock or as a shareholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.
(k)
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.
(l)
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.
(m)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company
and the Holder.
(n)
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.
(o)
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.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first
above indicated.
|
TONIX
PHARMACEUTICALS HOLDING CORP. |
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
EXHIBIT
A
NOTICE
OF EXERCISE
TO:
TONIX PHARMACEUTICALS HOLDING CORP.
(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 purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
(Please
Print) |
Address: |
(Please
Print) |
Phone
Number: |
Email
Address: |
Dated: |
Holder’s
Signature: |
Holder’s
Address: |
TONIX PHARMACEUTICALS HOLDING CORP. 8-K
Exhibit
4.02
SERIES C WARRANT TO PURCHASE SHARES OF COMMON STOCK
TONIX
PHARMACEUTICALS HOLDING CORP.
Warrant
Shares: ________ |
Original
Issuance Date: December 22, 2023 |
|
|
THIS SERIES C WARRANT TO PURCHASE SHARES OF
COMMON STOCK (this “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the Approval Date (as defined in the Purchase Agreement) (the “Initial Exercise Date”) and on or prior to 5:00pm (New
York City time) on the later of (A) ten (10) Trading Days following the Approval Date and (B) the earlier of (1) the two year anniversary
of the Initial Exercise Date and (2) ten (10) Trading Days following notice to the Holder of the Company’s public announcement of
the FDA’s acknowledgement and acceptance of the Company’s new drug application (NDA) relating to TNX-102 SL in patients with
Fibromyalgia (the “Termination Date”) but not thereafter, to subscribe for and purchase from TONIX PHARMACEUTICALS
HOLDING CORP., a Nevada corporation (the “Company”), up to ______ shares of Common Stock, par value $0.001 per
share (the “Common Stock”), of the Company (as subject to adjustment hereunder, the “Warrant Shares”).
The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain
Securities Purchase Agreement (the “Purchase Agreement”), dated December 20, 2023, among the Company and the purchasers
signatory thereto.
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 facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto
(the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days 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) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount
stated on the face hereof.
(b)
Exercise Price. The exercise price of this Warrant, shall be $0.555 per share, subject to adjustment hereunder (the “Exercise
Price”).
(c)
Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is
no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the
Warrants to the Holder, then 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 (x) the VWAP on the Trading Day immediately preceding the date of the applicable
Notice of Exercise or (y) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. (“Bloomberg”) 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, 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).
“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 (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 VWAP 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 Purchasers of a majority in interest of the Securities then outstanding
and reasonably acceptable to the Company, the fees and expenses of which shall be paid by 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 (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 Purchasers of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
(d)
Mechanics of Exercise
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted
to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or
resale of the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical
delivery of the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for
the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder
in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days 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) two (2) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason
to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall
pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise
(based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20
per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share
Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a registrar
(which may be the 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
Purchase Agreement, the Company agrees to deliver, or cause to be delivered, 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 (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 shares of Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants 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 of Common Stock.
(vi)
Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and
expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than
the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of
any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar
functions) required for same-day electronic delivery of the Warrant Shares.
(vii)
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
(viii)
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 (i) the Holder’s
Affiliates, (ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii)
any other Persons whose beneficial ownership of the shares of Common Stock would or could be aggregated with the Holder’s
for the purposes of Section 13(d) (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 Warrant Shares issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Warrant
Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by
the Holder or any of its
Affiliates or Attribution Parties. Except
as set forth in the preceding sentence, for purposes of this Section 2(d)(viii), 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(d)(viii) 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, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Section 2(d)(viii), 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 Securities and Exchange Commission (the “Commission”),
as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer
Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall
within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of
the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be [4.99%/9.99%] of the
number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Warrant Shares 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(d)(viii), 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 Warrant Shares upon exercise of this Warrant held by the Holder and the
provisions of this Section 2(d)(viii) 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(d)(viii) 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. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate
consideration is owing to the Holder.
3.
Certain Adjustments.
(a) Share Dividends and Splits. If the Company, at any time while
this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on shares of Common Stock or
any other equity or Common Stock Equivalents payable in shares of Common Stock (which, for avoidance of doubt, shall not include any Warrant
Shares 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 share 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 remains unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
(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 Common
Stock Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class 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 holders of shares of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, shares 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).
(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 the Company’s 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 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 shares of Common Stock
or any compulsory share exchange pursuant to which the shares of Common Stock are 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 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(d)(viii) 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(d)(viii) on the exercise of this Warrant). For purposes of any such exercise, the determination of
the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a
Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at
any time concurrently with, or within thirty (30) days after, the consummation of the Fundamental Transaction (or, if later, the
date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the
Holder, as described below, an amount of consideration equal to the Black Scholes Value (as defined below) of the remaining
unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction, provided, however, that, if the
Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors,
Holder shall only be entitled to receive from the Company or any Successor Entity, as of the date of the consummation of such
Fundamental Transaction, the same type or form of consideration (and in the same proportion), valued at the Black Scholes Value of
the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection
with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether
the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the
Fundamental Transaction; provided further, that if holders of Common Stock of the Company are not offered or paid any consideration
in such Fundamental Transaction, such holders of Common Stock will be deemed to have received shares of the Successor Entity (which
Successor Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes
Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and
reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of
the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of (1) the 30 day volatility, (2) the 100 day volatility or (3) the 365 day volatility, each of clauses (1)-(3)
as obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization factor) as of the Trading Day
immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per
share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the
value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the
period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental
Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day immediately
prior to the consummation of such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the
public announcement of the applicable contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow.
The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the
Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in
writing all of the obligations of the Company under this Warrant 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 prior to
such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security
of the
Successor Entity evidenced by
a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant
and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
(f)
[RESERVED]
(g)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share
of Common Stock, 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.
(h)
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 facsimile or 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 declares a dividend (or any other distribution in whatever form)
on the shares of Common Stock, (B) the Company declares a special nonrecurring cash dividend on, or a redemption of, the shares
of Common Stock, (C) the Company authorizes the granting to all holders of the shares of 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 shareholders of the Company
is required in connection with a Fundamental Transaction, or (E) the Company authorizes 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 facsimile
or email to the Holder at its last facsimile number or 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 shares of 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 shares of 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 and provided, further that no notice shall be required if the information is disseminated
in a press release or document filed with the Securities and Exchange Commission. 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.
(i)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time
during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the board of directors of the Company.
4.
Transfer of Warrant.
(a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with
a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading
Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if
properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.
(b)
New Warrants. 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.
5.
Miscellaneous.
(a)
Currency. All dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”).
All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies shall be converted
in the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange
rate as published in the Wall Street Journal (NY edition) on the relevant date of calculation.
(b)
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.
(c)
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.
(d)
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.
(e) Authorized Shares.
The Company covenants that, from and after the date that the Authorized Common Stock Increase Proposal is obtained and during the period
that the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares
to provide for the issuance of the Warrant Shares underlying 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 and delivered, 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 underlying this Warrant which
may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its articles 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 shares of Common Stock
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 shares
of Common Stock upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company
to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.
(f)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be determined in accordance with the provisions of the Purchase Agreement.
(g)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
and if the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state, federal or foreign
securities laws.
(h)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting
any other provision of this Warrant 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.
(i)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Purchase Agreement.
(j)
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 shares of Common Stock or as a shareholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.
(k)
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.
(l)
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.
(m)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company
and the Holder.
(n)
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.
(o)
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.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first
above indicated.
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TONIX
PHARMACEUTICALS HOLDING CORP. |
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By: |
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Name: |
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Title: |
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EXHIBIT
A
NOTICE
OF EXERCISE
TO:
TONIX PHARMACEUTICALS HOLDING CORP.
(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] |
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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 purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
(Please
Print) |
Address: |
(Please
Print) |
Phone
Number: |
Email
Address: |
Dated: |
Holder’s
Signature: |
Holder’s
Address: |
TONIX PHARMACEUTICALS HOLDING CORP. 8-K
Exhibit 4.03
SERIES
D WARRANT TO PURCHASE SHARES OF COMMON STOCK
TONIX
PHARMACEUTICALS HOLDING CORP.
Warrant
Shares: ________ |
Original
Issuance Date: December 22, 2023 |
THIS SERIES D WARRANT TO PURCHASE SHARES OF
COMMON STOCK (this “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the Approval Date (as defined in the Purchase Agreement) (the “Initial Exercise Date”) and on or prior to 5:00pm (New
York City time) on the five year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter,
to subscribe for and purchase from TONIX PHARMACEUTICALS HOLDING CORP., a Nevada corporation (the “Company”),
up to ______ shares of Common Stock, par value $0.001 per share (the “Common Stock”), of the Company (as subject to
adjustment hereunder, the “Warrant Shares”). The purchase price of one Warrant Share under this Warrant shall be equal
to the Exercise Price, as defined in Section 2(b).
1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated December 20, 2023, among the Company and the purchasers signatory thereto.
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 facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of
Exercise”). Within the earlier of (i) two (2) Trading Days 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) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated
on the face hereof.
(b)
Exercise Price. The exercise price of this Warrant, shall be $0.85 per share, subject to adjustment hereunder (the “Exercise
Price”).
(c)
Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is no effective
registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrants to the Holder,
then 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 (x) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (y) the Bid Price
of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”)
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, 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).
“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 (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 VWAP 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
Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by 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 (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 Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
(d)
Mechanics of Exercise
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted to
the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through
its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either
(A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by
the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of the Warrant Shares, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest
of (i) two (2) Trading Days 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) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise
(based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per
Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date
until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a registrar (which may be the
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 Purchase Agreement, the Company agrees to deliver, or cause
to be delivered, 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 (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 shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise
of Warrants 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 of Common Stock.
(vi)
Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue
or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall
be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and
the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.
The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of
the Warrant Shares.
(vii)
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
(viii) 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 (i) the Holder’s Affiliates, (ii) any other Persons acting as a group together with
the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership of the shares of Common Stock
would or could be aggregated with the Holder’s for the purposes of Section 13(d) (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 Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the
number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(d)(viii), 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(d)(viii) 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, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Section
2(d)(viii), 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 Securities and Exchange Commission
(the “Commission”), as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written
notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall
be [4.99%/9.99%] of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Warrant Shares
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(d)(viii), 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 Warrant Shares upon exercise of this Warrant held by the
Holder and the provisions of this Section 2(d)(viii) 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(d)(viii) 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. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership
Limitation, no alternate consideration is owing to the Holder.
3.
Certain Adjustments.
(a)
Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise
makes a distribution or distributions on shares of Common Stock or any other equity or Common Stock Equivalents payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares 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 share
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 remains unchanged.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or reclassification.
(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 Common Stock Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record
holders of any class 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 holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, shares 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).
(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 the Company’s
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 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 shares of Common Stock or any compulsory share exchange pursuant to which the shares of Common Stock are 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 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(d)(viii) 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(d)(viii) on the exercise of this Warrant).
For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the
event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable
at any time concurrently with, or within thirty (30) days after, the consummation of the Fundamental Transaction (or, if later, the date
of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder,
as described below, an amount of consideration equal to the Black Scholes Value (as defined below) of the remaining unexercised portion
of this Warrant on the date of the consummation of such Fundamental Transaction, provided, however, that, if the Fundamental Transaction
is not within the Company’s control, including not approved by the Company’s Board of Directors, Holder shall only be entitled
to receive from the Company or any Successor Entity, as of the date of the consummation of such Fundamental Transaction, the same type
or form of consideration (and in the same proportion), valued at the Black Scholes Value of the unexercised portion of this Warrant, that
is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration
be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from
among alternative forms of consideration in connection with the Fundamental Transaction; provided further, that if holders of Common Stock
of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed
to have received shares of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in
such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal
to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date,
(B) an expected volatility equal to the greater of (1) the 30 day volatility, (2) the 100 day volatility or (3) the 365 day volatility,
each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization factor) as of the
Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price
per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the
value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period
beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or
the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day immediately prior to the consummation
of such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable
contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will
be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later, on the
effective date of the Fundamental Transaction). The Company shall cause any successor entity in a Fundamental Transaction in which the
Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this
Warrant 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 prior to such Fundamental Transaction and shall, at the option of the Holder, deliver
to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity
(or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard
to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant
to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the
other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
(f)
[RESERVED]
(g)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share of Common
Stock, 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.
(h)
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 facsimile or 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 declares a dividend (or any other distribution in whatever form) on the
shares of Common Stock, (B) the Company declares a special nonrecurring cash dividend on, or a redemption of, the shares of Common Stock,
(C) the Company authorizes the granting to all holders of the shares of 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 shareholders of the Company is required in connection
with a Fundamental Transaction, or (E) the Company authorizes 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 facsimile or email to the Holder at its last
facsimile number or 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 shares of 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 shares of 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 and provided, further that no notice shall be required
if the information is disseminated in a press release or document filed with the Securities and Exchange Commission. 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.
(i)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during
the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and
for any period of time deemed appropriate by the board of directors of the Company.
4.
Transfer of Warrant.
(a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
(b)
New Warrants. 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.
5.
Miscellaneous.
(a)
Currency. All dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”). All
amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies shall be converted in the
U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means,
in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange rate as published
in the Wall Street Journal (NY edition) on the relevant date of calculation.
(b)
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.
(c)
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.
(d)
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.
(e) Authorized Shares.
The Company covenants that, from and after the date that the Authorized Common Stock Increase Proposal is obtained and during the period
that the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares
to provide for the issuance of the Warrant Shares underlying 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 and delivered, 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 underlying this Warrant which
may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its articles 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 shares of Common Stock 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 shares of Common Stock upon the exercise of this Warrant and (iii)
use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
(f)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined
in accordance with the provisions of the Purchase Agreement.
(g)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
if the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state, federal or foreign securities
laws.
(h)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant 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.
(i)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Purchase Agreement.
(j)
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 shares of Common Stock or as a shareholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
(k)
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.
(l)
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.
(m)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holder.
(n)
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.
(o)
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.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
|
TONIX
PHARMACEUTICALS HOLDING CORP. |
|
By: |
|
|
Name: |
|
|
Title: |
|
EXHIBIT
A
NOTICE
OF EXERCISE
TO:
TONIX PHARMACEUTICALS HOLDING CORP.
(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 purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
(Please
Print) |
Address: |
(Please
Print) |
Phone
Number: |
Email
Address: |
Dated: |
Holder’s
Signature: |
Holder’s
Address: |
TONIX PHARMACEUTICALS HOLDING CORP. 8-K
Exhibit 5.01
| Brownstein
Hyatt Farber Schreck, LLP
702.382.2101
main
100
North City Parkway, Suite 1600
Las Vegas, Nevada 89106 |
December
21, 2023
Tonix
Pharmaceuticals Holding Corp.
28
Main Street, Suite 101
Chatham, New Jersey 07928
To
the addresse referenced above:
We have acted as local Nevada counsel to Tonix Pharmaceuticals Holding
Corp., a Nevada corporation (the “Company”), in connection with the issuance and sale by the Company of (i) 25,343,242
shares (the “Common Shares”) of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 28,710,812 shares of Common
Stock (the “Pre-Funded Warrant Shares”), (iii) Series C Warrants (the “Series C Warrants”) to purchase
up to 81,081,081 shares of Common Stock (the “Series C Warrant Shares”), and (iv) Series D Warrants (the “Series
D Warrants” and together with the Pre-Funded Warrants and the Series C Warrants, the “Warrants”) to purchase
up to 81,081,081 shares of Common Stock (the “Series D Warrant Shares” and together with the Pre-Funded Warrant Shares
and the Series C Warrant Shares, the “Warrant Shares”), under that certain Placement Agent Agreement, dated December
20, 2023 (the “Placement Agent Agreement”), by and between the Company and A.G.P./Alliance Global Partners, as sole
placement agent, including pursuant to that certain Securities Purchase Agreement, dated as of December 20, 2023 (the “Purchase
Agreement”), by and between the Company and each of the Purchasers (as defined therein) party thereto, and pursuant to the Registration
Statements on Form S-3 (File Nos. 333-254975 and 333-266982) (as amended through the date hereof, collectively, the “Registration
Statement”), including the base prospectus dated May 5, 2021, contained therein (the “Base Prospectus”),
as supplemented by the prospectus supplement dated December 20, 2023 (the Base Prospectus as so supplemented, the “Prospectus”),
each as filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended
(the “Act”). The Common Shares and the Warrant Shares are hereinafter collectively referred to as the “Shares”
and the Shares and the Warrants are hereinafter collectively referred to as the “Securities”. This opinion letter is
being furnished at your request in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.
In
our capacity as such counsel, we are familiar with the proceedings taken and proposed to be taken by the Company in connection with the
authorization, issuance and sale of the Securities as contemplated by the Transaction Documents and as described in the Registration
Statement and the Prospectus. For purposes of this opinion letter, and except to the extent set forth in the opinions below, we have
assumed that all such proceedings have been or will be timely completed in the manner presently proposed in the Transaction Documents
and the Registration Statement and the Prospectus.
Tonix
Pharmaceuticals Holding Corp.
December
21, 2023
Page
2
For
purposes of issuing this opinion letter, we have made such legal and factual examinations and inquiries, including an examination of
originals or copies certified or otherwise identified to our satisfaction as being true copies of (i) the Registration Statement and
the Prospectus, (ii) the Purchase Agreement (including the respective forms of the Warrants attached thereto) and the Placement Agent
Agreement (collectively, including the Warrants, the “Transaction Documents”); (iii) the articles of incorporation
and bylaws of the Company; and (iv) such agreements, instruments, resolutions of the board of directors of the Company and committees
thereof and other corporate records, and such other documents as we have deemed necessary or appropriate for the purpose of issuing this
opinion letter, and we have obtained from officers and other representatives and agents of the Company and from public officials, and
have relied upon, such certificates, representations and assurances, and public filings, as we have deemed necessary or appropriate.
Without
limiting the generality of the foregoing, in our examination, we have, with your permission, assumed without independent verification:
(i) the statements of fact and all representations and warranties set forth in the documents we have reviewed are true and correct as
to factual matters, in each case as of the date or dates of such documents and as of the date hereof; (ii) each natural person executing
any of the documents we have reviewed has sufficient legal capacity to do so; (iii) all documents submitted to us as originals are authentic,
the signatures on all documents that we have reviewed are genuine and all documents submitted to us as certified, conformed, photostatic,
facsimile or electronic copies conform to the original document; (iv) all corporate records made available to us by the Company, and
all public records we have reviewed, are accurate and complete; (v) the obligations of each party set forth in the Transaction Documents
are its valid and binding obligations, enforceable in accordance with their respective terms; (vi) each of the Warrants will be executed
in substantially the form thereof attached to the Purchase Agreement; and (vii) after any issuance of Warrant Shares, the total number
of issued and outstanding shares of Common Stock, together with the total number of shares of Common Stock then reserved for issuance
or obligated to be issued by the Company pursuant to any agreement or arrangement or otherwise, will not exceed the total number of shares
of Common Stock then authorized under the Company’s articles of incorporation.
We
are qualified to practice law in the State of Nevada. The opinions set forth herein are expressly limited to and based exclusively on
the general corporate laws of the State of Nevada, and we do not purport to be experts on, or to express any opinion with respect to
the applicability or effect of, the laws of any other jurisdiction. We express no opinion concerning, and we assume no responsibility
as to laws or judicial decisions related to, or any orders, consents or other authorizations or approvals as may be required by, any
federal laws, rules or regulations, including, without limitation, any federal securities laws, rules or regulations, or any state securities
or “blue sky” laws, rules or regulations.
Based
upon the foregoing and in reliance thereon, and having regard to legal considerations and other information that we deem relevant, we
are of the opinion that:
1.
The Warrants have been duly authorized by the Company.
Tonix
Pharmaceuticals Holding Corp.
December
21, 2023
Page
3
2.
The Common Shares have been duly authorized by the Company and if, when and to the extent any Common Shares are issued and sold in accordance
with all applicable terms and conditions set forth in, and in the manner contemplated by, the relevant Transaction Documents, and as
described in the Registration Statement and Prospectus (including payment in full of all consideration required for such Common Shares),
such Common Shares will be validly issued, fully paid and nonassessable.
3.
The Warrant Shares have been duly authorized by the Company and if, when and to the extent any Warrant Shares are issued and sold in
accordance with all applicable terms and conditions set forth in, and in the manner contemplated by, the relevant Transaction Documents
(including the prior effectiveness of the Common Stock Increase Amendment (as defined in the Purchase Agreement), as applicable, due
and proper exercise of the relevant Warrant(s) in accordance with such Warrant(s) and payment in full of all consideration required thereunder
for such Warrant Shares), and as described in the Registration Statement and Prospectus, such Warrant Shares will be validly issued,
fully paid and nonassessable.
The
opinions expressed herein are based upon the applicable laws of the State of Nevada and the facts in existence on the date hereof. In
delivering this opinion letter to you, we disclaim any obligation to update or supplement the opinions set forth herein or to apprise
you of any changes in any laws or facts after the later of the date hereof and the filing date of the Prospectus Supplement. No opinion
is offered or implied as to any matter, and no inference may be drawn, beyond the strict scope of the specific issues expressly addressed
by the opinion set forth herein.
We
hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and the Prospectus, and to the reference
to our firm therein under the heading “Legal Matters”. In giving such consent, we do not admit that we are in the category
of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.
Subject to all of the qualifications, limitations, restrictions, exceptions and assumptions set forth herein, Lowenstein Sandler LLP
may rely on numbered opinion paragraph 1 of this opinion letter as if it were an addressee hereof on this date for the sole purpose of
issuing its opinion letter to the Company relating to the validity of the Warrants, as filed with the Commission as an exhibit to the
Registration Statement.
Very
truly yours,
/s/
Brownstein Hyatt Farber Schreck, LLP
TONIX PHARMACEUTICALS HOLDING CORP. 8-K
Exhibit 5.02
| December
21, 2023 |
Tonix
Pharmaceuticals Holding Corp.
26
Main Street – Suite 101
Chatham,
NJ 07928
Ladies
and Gentlemen:
We
have acted as counsel to Tonix Pharmaceuticals Holding Corp., a Nevada corporation (the “Company”) in connection with
the sale and issuance of 25,343,242 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”
and such shares, the “Shares”), Series C Warrants (the “Series C Warrants”) to purchase up to an
aggregate of 81,081,081 shares of Common Stock (the “Series C Warrant Shares”), Series C Warrants (the “Series
D Warrants”) to purchase up to an aggregate of 81,081,081 shares of Common Stock (the “Series D Warrants Shares”),
and Pre-Funded Warrants (the “Pre-Funded Warrants” and, together with the Series C Warrants and Series D Warrants,
the “Warrants”) to purchase up to an aggregate of 28,710,812 shares of Common Stock (the “Pre-Funded Warrant
Shares” and, together with the Series C Warrant Shares and Series D Warrant Shares, the “Warrant Shares”)
being issued to the Purchasers (as defined below), pursuant to the Registration Statement on Form S-3 (File No. 333-254975) (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 rules and regulations promulgated thereunder, together
with a base prospectus dated May 5, 2021 included in the Form S-3 (the “Base Prospectus”) and a final prospectus supplement
dated December 20, 2023, filed with the Commission pursuant to Rule 424(b)(5) under the Securities Act (together with the Base Prospectus,
the “Prospectus”). Certain of the Shares and Warrants are to be sold pursuant to a Securities Purchase Agreement (the
“Purchase Agreement”) between the Company and each purchaser signatory thereto (each, a “Purchaser”
and collectively, the “Purchasers”). We have been requested by the Company to render this opinion in connection with
the filing of the Form 8-K with respect to the sale and issuance by the Company of the Warrants (the “Form 8-K”).
As
counsel to the Company in connection with the proposed potential issuance and sale of the above-referenced Shares, Warrants and Warrant
Shares, we have reviewed the Registration Statement, Prospectus and the respective exhibits thereto. We have also reviewed such corporate
documents and records of the Company, such certificates of public officials and officers of the Company and such other matters as we
have deemed necessary or appropriate for purposes of this opinion. In our examination, we have assumed: (i) the authenticity of original
documents and the genuineness of all signatures; (ii) the conformity to the originals of all documents submitted to us as copies; (iii)
the truth, accuracy and completeness of the information, representations and warranties contained in the instruments, documents, certificates
and records we have reviewed; (iv) that, as set forth in a separate opinion delivered to the Company on the date hereof by Brownstein
Hyatt Farber Schreck, LLP, special Nevada counsel to the Company, the Warrants have been duly authorized; and (v) the legal capacity
for all purposes relevant hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto
other than the Company, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform
such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise),
executed and delivered by such parties and that such agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to any facts material to the opinions expressed herein that were not independently established or verified, we have
relied upon oral or written statements and representations of officers and other representatives of the Company.
Based
on the foregoing, and subject to the assumptions, limitations and qualifications set forth herein, we are of the opinion that when the
Warrants are duly executed and delivered by the Company and paid for by the Purchasers , such Warrants will constitute the legal, valid
and binding obligation of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency
or other similar laws affecting creditors’ rights and to general equitable principles.
The
opinion set forth above is subject to the following exceptions, limitations and qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors; (ii) the effect of general principles of equity, including without limitation, concepts of materiality, reasonableness,
good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether enforcement
is considered in a proceeding in equity or at law, and the discretion of the court before which any proceeding therefor may be brought;
and (iii) the unenforceability under certain circumstances under law or court decisions of provisions providing for the indemnification
of, or contribution to, a party with respect to liability where such indemnification or contribution is contrary to public policy. We
express no opinion concerning the enforceability of any waiver of rights or defenses with respect to stay, extension or usury laws.
Our
opinion is limited to the laws of New York. We express no opinion as to the effect of the law of any other jurisdiction. Our opinion
is rendered as of the date hereof, and we assume no obligation to advise you of changes in law or fact (or the effect thereof on the
opinions expressed herein) that hereafter may come to our attention. We advise you that matters of Nevada law are covered in the opinion
of Brownstein Hyatt Farber Schreck, LLP, special Nevada counsel for the Company, in Exhibit 5.01 to the Form 8-K.
We
hereby consent to the inclusion of this opinion as Exhibit 5.02 to the Form 8-K and to the references to our firm in the Prospectus under
the caption “Legal Matters.” In giving our consent, we do not admit that we are in the category of persons whose consent
is required under Section 7 of the Securities Act or the rules and regulations thereunder.
Very
truly yours,
/s/
Lowenstein Sandler LLP
TONIX PHARMACEUTICALS HOLDING CORP. 8-K
Exhibit
10.01
Execution Version
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of December 20, 2023, between Tonix Pharmaceuticals
Holding Corp., a Nevada corporation (the “Company”), and each purchaser identified on the signature pages hereto
(each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the
Securities Act (as defined below), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE
I.
DEFINITIONS
1.1
Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following
terms have the meanings set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Approval Date”
means the earlier of the date that all components of the Stockholder Approval is obtained and/or the date that the consent of the Board
of Directors in lieu thereof with respect to the same components is obtained.
“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 banking institutions in the State of New York
are authorized or required by law to remain closed.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date” means the Trading Day on which all of
the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the
Purchasers’ obligations to pay the Subscription Amount at the Closing and (ii) the Company’s obligations to deliver the Securities,
in each case, at the Closing have been satisfied or waived, but in no event later than the second (2nd) Trading Day following the date
hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means common stock of the Company, par value $0.001 per share.
“Common Warrants”
means, collectively, the Series C Warrants and the Series D Warrants to be delivered to the Purchasers at the Closing in accordance with
Section 2.2(a) hereof.
“Company
Counsel” means Lowenstein Sandler LLP, with offices located at One Lowenstein Drive, Roseland, NJ 07068.
“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time)
and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following
the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed
between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York
City time) on the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent.
“DVP”
shall have the meaning ascribed to such term in Section 2.1(v).
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(r).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock, restricted stock units or options to employees, consultants, officers, or directors
of the Company pursuant to any share or option plan in existence as of the date hereof or subsequently approved by a vote of the shareholders
of the Company, provided that such issuances to consultants are issued as “restricted securities” (as defined in Rule 144)
and carry no registration rights, (b) shares of Common Stock upon the exercise or exchange of or conversion of securities exercisable
or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities or to extend the term (but not, for purposes of clarity, the exercise period
of stock options) of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority
of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith
during the prohibition period in Section 4.10(a) herein, and provided that any such issuance shall only be to a Person (or to the equityholders
of a Person), which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with
the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities (for avoidance of doubt, securities issued to a venture arm of a strategic investor shall be deemed
an “Exempt Issuance”), provided that such securities are issued as “restricted securities” (as defined in Rule
144) and carry no registration rights during the prohibition period in Section 4.10(a) herein, (d) issuances of shares of Common Stock
to consultants or vendors of the Company, provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights during the prohibition period in Section 4.10(a) herein; and (e) issuances of shares of
Common Stock to existing holders of the Company’s securities in compliance with the terms of agreements entered into with, or instruments
issued to, such holders, provided that such agreements regarding 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 or
to extend the term of such securities, and provided further that such securities are issued as “restricted securities” (as
defined in Rule 144) and carry no registration rights.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP”
means generally accepted accounting principles in the United States.
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up
Agreement” means each Lock-Up Agreement, dated as of the date hereof, by and among the Company and the directors and
officers of the Company, in the form of Exhibit C attached hereto.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m).
“Meeting” shall
mean one or more meetings of the Company’s stockholders (or any postponement, adjournment or reconvening thereof) at which the Company’s
stockholders of record as of the record date for such Meeting (each, a “Record Date”) shall be asked to adopt and/or
approve, among other things, (i) an amendment to the Company’s Articles of Incorporation, as amended, to increase the number of
authorized shares of Common Stock from 160,000,000 to 1,000,000,000 (the “Authorized Common Stock Increase Proposal”)
and (ii) to allow the Common Warrants to become exercisable in accordance with Nasdaq Listing Rule 5635 (the “Warrant Proposal”).
“Per Share Purchase Price”
equals $0.555, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of shares of Common Stock that occur between the date hereof and the Closing Date.
“Per Pre-Funded Warrant
Purchase Price” equals the Per Share Purchase Price less $0.0001, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions relating to shares of Common Stock that occur after the date of this
Agreement.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement
Agent” means A.G.P./Alliance Global Partners.
“Placement
Agent Counsel” means Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with offices located at 919 Third Avenue,
New York, NY 10022.
“Pre-Funded
Warrants” means, collectively, the warrants delivered to the Purchasers at Closing in accordance with Section 2.2(a)
hereof, which Pre-Funded Warrants shall be exercisable immediately upon issuance and shall expire in accordance with the terms
thereof, in the form of Exhibit B attached hereto.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
“Prospectus”
means the final prospectus filed pursuant to the Registration Statement.
“Prospectus
Supplement” means the prospectus supplement filed pursuant to the Registration Statement relating to the offering of
Securities pursuant to this Agreement.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration
Statement” means the effective registration statement with the Commission on Form S-3 (File No. 333-254975), which registers
the sale of the Securities and includes any Rule 462(b) Registration Statement.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.
“Rule
462(b) Registration Statement” means any registration statement prepared by the Company registering additional Securities,
which was filed with the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b)
promulgated by the Commission pursuant to the Securities Act.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Shares, the Warrants and the Warrant Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series C Warrants”
means, collectively, the Series C Common Stock purchase warrants to be delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Series C Common Stock purchase warrants shall be exercisable from and after the Approval Date (as defined below)
and have a term equal to the later of (A) ten (10) Trading Days following the Approval Date and (B) the earlier of (x) two years from
the Initial Exercise Date (as defined therein) and (y) ten (10) Trading Days following the Company’s public announcement of the
FDA’s (as defined below) acknowledgement and acceptance of the Company’s new drug application (NDA) relating to TNX-102 SL
in patients with Fibromyalgia, such Series C Warrant in substantially the form of Exhibit A-1 attached hereto.
“Series D Warrants”
means, collectively, the Series D Common Stock purchase warrants to be delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Series D Common Stock purchase warrants shall be exercisable from and after the Approval Date and have a term equal
to the later of (A) ten (10) Trading Days following the Approval Date and (B) five years from the Initial Exercise Date (as defined therein),
such Series D Warrant in substantially the form of Exhibit A-2 attached hereto.
“Shares”
means the shares of Common Stock issued and issuable to each Purchaser pursuant to this Agreement.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include locating and/or borrowing shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for shares of Common Stock, and Pre-Funded 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.
“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.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the shares of Common Stock are listed or quoted for
trading on the date in question: the NYSE American, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Warrants, the Lock-Up Agreements 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 vStock Transfer, LLC, the current transfer agent of the Company, with a mailing address at 18 Lafayette
Place, Woodmere, NY 11598.
“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.10(b).
“Warrants”
means the Common Warrants and the Pre-Funded Warrants.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE
II.
PURCHASE AND SALE
2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, (i) the number of shares of Common Stock set forth under the heading “Subscription Amount”
on the Purchaser’s signature page hereto, at the Per Share Purchase Price, and (ii) Common Warrants exercisable for shares
of Common Stock as calculated pursuant to 2.2(a); provided, however, that, to the extent that a Purchaser determines, in its sole
discretion, that such Purchaser (together with such Purchaser’s Affiliates, and any Person acting as a group together with
such Purchaser or any of such Purchaser’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation,
or as such Purchaser may otherwise choose, in lieu of purchasing shares of Common Stock, such Purchaser may elect to purchase
Pre-Funded Warrants in lieu of shares of Common Stock in such manner to result in the full Subscription Amount being paid by such
Purchaser to the Company. The “Beneficial Ownership Limitation” shall be 4.99% (or, at the election of the
Purchaser, 9.99%) of the number of shares of Common Stock, in each case, outstanding immediately after giving effect to the issuance
of the Securities on the Closing Date.
Each
Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available
for Delivery Versus Payment (“DVP”) settlement with the Company or its designees. The Company shall deliver
to each Purchaser its respective Shares and Warrants as determined pursuant to Section 2.2(a), and the Company and each Purchaser
shall deliver the other items set forth in Section 2.2 at the Closing. Upon satisfaction of the covenants and conditions set forth
in Sections 2.2 and 2.3, the Closing shall occur at the office of the Placement Agent or such other location as the parties shall
mutually agree. Unless otherwise directed by the Placement Agent, settlement of the Shares shall occur via 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 herein to the contrary, if at
any time on or after the time of execution of this Agreement by the Company and an applicable Purchaser through the Closing (the
“Pre-Settlement Period”), such Purchaser sells to any Person all, or any portion, of any Shares to be issued
hereunder to such Purchaser at the Closing (collectively, the “Pre-Settlement Shares”), such Person shall,
automatically hereunder (without any additional required actions by such Purchaser or the Company), be deemed to be a Purchaser
under this Agreement
unconditionally bound to purchase, and the Company shall be deemed unconditionally bound to sell, such Pre-Settlement
Shares to such Person at the Closing; provided, that the Company shall not be required to deliver any Pre-Settlement Shares to
such Purchaser prior to the Company’s receipt of the Subscription Amount for such Pre-Settlement Shares hereunder; provided,
further, that the Company hereby acknowledges and agrees that the forgoing shall not constitute a representation or covenant by
such Purchaser as to whether or not such Purchaser will elect to sell any Pre-Settlement Shares during the Pre-Settlement Period.
The decision to sell any Shares will be made in the sole discretion of such Purchaser from time to time, including during the
Pre-Settlement Period. 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 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.
| (a) | On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser the following: |
| (i) | this
Agreement duly executed by the Company; |
| (ii) | the
Company’s wire instructions, on Company letterhead and executed by the Company’s
Chief Executive Officer or Chief Financial Officer; |
| (iii) | subject
to the third sentence in Section 2.1, a copy of the irrevocable instructions to the Transfer
Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository
Trust Company Deposit or Withdrawal at Custodian system shares of Common Stock equal
to the portion of such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such Purchaser; |
| (iv) | for
each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, 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 sum of the Per Pre-Funded Warrant Purchase Price plus the exercise
price per Warrant Share underlying such Pre-Funded Warrants, subject to adjustment therein; |
| (v) | the
Prospectus and the Prospectus Supplement (which may be delivered in accordance with Rule
172 under the Securities Act); |
| (vi) | a Series C Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to 150% of such Purchaser’s shares of Common Stock or Pre-Funded Warrants, as applicable,
with an exercise price equal to $0.555 per share, subject to adjustment therein; |
| (vii) | a Series D Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to 150% of such Purchaser’s shares of Common Stock or Pre-Funded Warrants, as applicable,
with an exercise price equal to $0.85 per share, subject to adjustment therein; |
| (viii) | the
duly executed Lock-Up Agreements; |
| (ix) | a
certificate executed by the Chief Executive Officer and Chief Financial Officer of the
Company, dated as of the date of the Closing Date, in form and substance reasonably acceptable
to the Purchasers and Placement Agent; |
| (x) | a
certificate executed by the Secretary of the Company, dated as of the date of Closing,
in form and substance reasonable acceptable to the Purchasers and Placement Agent; |
| (xi) | a
legal opinion of Company Counsel, in form reasonably acceptable to the Placement Agent
and the Purchasers; |
| (xii) | a
legal opinion of Haley Giuliano LLP, intellectual property counsel to the Company, in
form reasonably acceptable to the Placement Agent and the Purchasers; and |
| (xiii) | a
legal opinion of Brownstein Hyatt Farber Schreck, LLP, local Nevada counsel to the Company,
in form reasonably acceptable to the Placement Agent and the Purchasers. |
| (b) | On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to
the Company, the following: |
| (i) | this
Agreement duly executed by such Purchaser; and |
| (ii) | such
Purchaser’s Subscription Amount with respect to the Securities purchased by such
Purchaser, which shall be made available for DVP settlement with the Company or its designees. |
2.3
Closing Conditions.
| (a) | The
obligations of the Company hereunder in connection with the Closing are subject to the
following conditions being met: |
| (i) | the
accuracy in all material respects (or, to the extent representations or warranties are
qualified by materiality or Material Adverse Effect, in all respects) 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); |
| (ii) | all
obligations, covenants and agreements of each Purchaser required to be performed at or
prior to the Closing Date shall have been performed; and |
| (iii) | the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement. |
| (b) | The
respective obligations of the Purchasers hereunder in connection with the Closing are
subject to the following conditions being met: |
| (i) | the
accuracy in all material respects (or, to the extent representations or warranties are
qualified by materiality or Material Adverse Effect, in all respects) when made and on
the Closing Date of the representations and warranties of the Company contained herein
(unless as of a specific date therein in which case they shall be accurate as of such
date); |
| (ii) | all
obligations, covenants and agreements of the Company required to be performed at or prior
to the Closing Date shall have been performed; |
| (iii) | the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; |
| (iv) | there
shall have been no Material Adverse Effect with respect to the Company since the date
hereof; and |
| (v) | from
the date hereof to the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or any 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 after the date of this Agreement 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. |
ARTICLE
III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation made herein to the extent of the disclosures contained in the
corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each
Purchaser:
| (a) | Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule
3.1(a). The Company owns, directly or indirectly, all of the capital stock or other
equity interests of each Subsidiary, free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are validly issued and are
fully paid, non-assessable and free of preemptive and similar rights to subscribe for
or purchase securities. If the Company has no subsidiaries, all other references to the
Subsidiaries or any of them in the Transaction Documents shall be disregarded. |
| (b) | Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated
or otherwise organized, validly existing, and, if applicable under the laws of the jurisdiction
in which they are formed, 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 memorandum of association, articles of association, certificate or articles
of incorporation, bylaws, operating agreement, 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”) and no Proceeding has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit
or curtail such power and authority or qualification. |
| (c) | Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents 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, a committee of the Board of Directors
or the Company’s shareholders in connection herewith or therewith other than in connection with the Required Approvals.
This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed
by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation
of the Company enforceable against the Company in accordance with its terms, |
| | except
(i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar
as indemnification and contribution provisions may be limited by applicable law. |
| | |
| (d) | No
Conflicts. Except as set forth in Schedule 3.1(d), 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 memorandum
of association, articles of association, certificate or articles of incorporation, bylaws,
operating agreement, or other organizational or charter documents, or (ii) conflict with,
or constitute a default (or an event that with notice or lapse of time or both would
become a default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary, or give to others any rights of termination,
amendment, anti-dilution or similar adjustments acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding
to which the Company or any Subsidiary is a party or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state securities
laws and regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect. |
| (e) | Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or registration with,
any court or other federal, state, local or other governmental authority or other Person
in connection with the execution, delivery and performance by the Company of the Transaction
Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement,
(ii) the filing with the Commission of the Prospectus Supplement, (iii) notices and/or
application(s) to and approvals by each applicable Trading Market for the listing of
the applicable Securities for trading thereon in the time and manner required thereby,
and (iv) filings required by the Financial Industry Regulatory Authority (“FINRA”)
(collectively, the “Required Approvals”). |
| (f) | Issuance
of the Securities; Registration. The Shares and Warrant Shares underlying the Pre-Funded Warrants are duly
authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully
paid and non-assessable, free and clear of all Liens imposed by the Company. From and after the Common Stock Increase Effective Date,
the Warrant Shares underlying the Common Warrants will be duly authorized, and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company.
The Warrants are duly authorized and, when issued in accordance with this Agreement, will be duly and validly issued, fully paid and non-assessable,
and free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number
of shares of Common Stock issuable pursuant to this Agreement and the Pre-Funded Warrants. From and after the Common Stock Increase Effective
Date, the Company will have reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant
to the Common Warrants. |
| | The Company has prepared and filed the Registration Statement in conformity
with the requirements of the Securities Act, which Registration Statement became effective on May 5, 2021, including the Prospectus, and
such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective
under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing
the use of the Prospectus or the Prospectus Supplement 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 or Prospectus Supplement with the Commission pursuant to Rule 424(b). At the time the Registration
Statement and any amendments thereto became effective as determined under the Securities Act, at the date of this Agreement and at the
Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements
of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading; and the Prospectus, Prospectus Supplement and any amendments
or supplements thereto, at the time the Prospectus, the Prospectus Supplement or any amendment or supplement thereto was issued and at
the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not
contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The Company was at the time of the filing of the 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 transaction requirements
with respect to the aggregate market value of the common equity held by non-affiliates prior to this offering as set forth in General
Instruction I.B.I of Form S-3. |
| | |
| (g) | Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) 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.
The Company has not issued any shares since its most recently filed periodic report under the Exchange Act. No Person has any right of
first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as set forth on Schedule 3.1(g) and as a result of the purchase and sale of the Securities, there
are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary
is or may become bound to issue additional shares of Common Stock or securities convertible, exercisable or exchangeable into shares
of Common Stock (“Common Stock Equivalents”). 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
on Schedule 3.1(g), there are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts
the exercise, conversion, exchange or reset price under any of such securities. 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 share appreciation rights or “phantom share” plans or agreements or any similar plan or agreement.
All of the outstanding shares of the Company are duly authorized, validly issued, fully paid and non-assessable, have been issued in
compliance with all federal and state securities laws where applicable, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals, no further approval
or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Securities. There
are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s share capital to which
the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders. |
| | Except
for the Required Approvals, no further approval or authorization of any shareholder,
the Board of Directors or others is required for the issuance and sale of the Securities.
There are no shareholders agreements, voting agreements or other similar agreements with
respect to the Company’s share capital to which the Company is a party or, to the
knowledge of the Company, between or among any of the Company’s shareholders. |
| | |
| (h) | SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
one year preceding the date hereof (or such shorter period as the Company was required
by law or regulation to file such materials) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, together with the Prospectus,
being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any such
SEC Reports prior to the expiration of any such extension. As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. In addition, any further
documents so filed and incorporated by reference to the Prospectus and Prospectus Supplement,
when such documents are filed with the Commission, will conform in all material respects
to the requirements of the Exchange Act and the applicable rules and regulations, as
applicable, and will not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in light of the circumstances
under which they were made not misleading. 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 GAAP,
except as may be otherwise specified in such financial statements or the notes thereto
and except that unaudited financial statements may not contain all footnotes required
by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments. |
| (i) | 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 on Schedule 3.1(i), (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 strategic acquisitions 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 shareholders or purchased, redeemed or made any agreements to purchase or redeem any of its shares other than the repurchase of Common Stock pursuant to a stock buyback program and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company share option plans. Except for the issuance of the Securities
|
| | contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or 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. |
| | |
| (j) | Litigation.
Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or administrative agency
or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents, the Shares or the Warrant
Shares (ii) could, if there were an unfavorable decision, have or reasonably be expected
to result in a Material Adverse Effect. Except as set forth on Schedule 3.1(j),
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, which could result in
a Material Adverse Effect. There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the Commission involving the Company
or any current or former director or officer of the Company. The Commission has not issued
any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. |
| (k) | Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent
with respect to any of the employees of the Company, which could reasonably be expected
to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with
the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is
a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company,
no executive officer of the Company or any Subsidiary, is, or is now expected to be,
in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract
or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters. The Company
and its Subsidiaries are in compliance with all applicable U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms
and conditions of employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. |
| (l) | Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of time or
both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is bound
(whether |
| | or not such default or violation has been waived), (ii) is in violation of any
judgment, decree or order of any court, arbitrator or other governmental authority or
(iii) is or has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state and
local laws relating to taxes, environmental protection, occupational health and safety,
product quality and safety and employment and labor matters, except in each case of (i),
(ii) and (iii) as could not have or reasonably be expected to result in a Material Adverse
Effect. |
| | |
| (m) | Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state,
local and foreign laws relating to pollution or protection of human health or the environment
(including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively,
“Hazardous Materials”) into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands,
or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental
Laws”); (ii) have received all permits licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective businesses; and
(iii) are in compliance with all terms and conditions of any such permit, license or
approval where in each clause (i), (ii) and (iii), the failure to so comply could be
reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. |
| (n) | Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such certificates, authorizations or 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. |
| (o) | Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee
simple to all real property owned by them and good and marketable title in all personal
property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect
the value of such property and do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries and (ii) Liens for the
payment of federal, state or other taxes, for which appropriate reserves have been made
therefor in accordance with GAAP and, the payment of which is neither delinquent nor
subject to penalties. Any real property and facilities held under lease by the Company
and the Subsidiaries are held by them under valid, subsisting and enforceable leases
with which the Company and the Subsidiaries are in compliance in all material respects. |
| (p) | Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports
and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and |
| | neither
the Company nor any Subsidiary has received a notice (written or otherwise) that any
of, the Intellectual Property Rights has expired, terminated or been abandoned, or is
expected to expire or terminate or be abandoned, within two (2) years from the date of
this Agreement except as would not reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any Subsidiary has received, since the date of the latest
audited financial statements included within the SEC Reports, a written notice of a claim
or otherwise has any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any Person, except as could not have or reasonably be expected to
not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all
of their intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has no knowledge of any facts that would preclude it from having valid license rights
or clear title to the Intellectual Property Rights. The Company has no knowledge that
it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property
Rights that are necessary to conduct its business. |
| | |
| (q) | Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary in the
businesses in which the Company and the Subsidiaries are engaged, including, but not
limited to, directors and officers insurance coverage at least equal to the aggregate
Subscription Amount. Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost. |
| (r) | Transactions
with Affiliates and Employees. Except as set forth on Schedule 3.1(r), none of the
officers or directors of the Company or any Subsidiary and, to the knowledge of the Company,
none of the employees of the Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to
or from, providing for the borrowing of money from or lending of money to or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee, shareholder, 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 or a Subsidiary and (iii) other employee benefits, including share option agreements
under any share option plan of the Company. |
| (s) | 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. 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 Form
10-K under the Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed Form 10-K 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. Except as set forth on Schedule
3.1(s), 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) that have materially
affected, or is reasonably likely to materially affect, the internal control over financial
reporting of the Company and its Subsidiaries. |
| | |
| (t) | Certain
Fees. Except as set forth in the Prospectus Supplement, 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
(for the avoidance of doubt, the foregoing shall not include any fees and/or commissions
owed to the Transfer Agent). Other than for Persons engaged by any Purchaser, if any,
the Purchasers shall have no obligation with respect to any fees or with respect to any
claims made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by the Transaction
Documents. |
| (u) | Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt
of payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment
company” subject to registration under the Investment Company Act of 1940, as amended. |
| (v) | Registration
Rights. Except as set forth on Schedule 3.1(v), no Person has any right to cause
the Company to effect the registration under the Securities Act of any securities of
the Company or any Subsidiary. |
| (w) | Listing
and Maintenance Requirements. The shares of Common Stock are 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 previously disclosed in the SEC Reports, the Company has not, in the 12 months preceding
the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance |
| | with
the listing or maintenance requirements of such Trading Market. The Company is, and has
no reason to believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements. The Common Stock is currently eligible
for electronic transfer through The Depository Trust Company or another established clearing
corporation and the Company is current in payment of the fees to The Depository Trust
Company (or such other established clearing corporation) in connection with such electronic
transfer. |
| | |
| (x) | Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s articles of incorporation 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. |
| (y) | Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, the Company confirms that neither it nor any other Person
acting on its behalf has provided any of the Purchasers or their agents or counsel with
any information that it believes constitutes or might constitute material, non-public
information which is not otherwise disclosed in the Prospectus or Prospectus Supplement.
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, including the Disclosure
Schedules to this Agreement, is true and correct in all material respects and does not
contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading. The press releases disseminated by the Company
during the twelve (12) months preceding the date of this Agreement taken as a whole do
not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made and when made, not misleading.
The Company acknowledges and believes, to its best knowledge, that no Purchaser makes
or has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3.2 hereof. |
| (z) | No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2, neither the Company, nor any of its 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 shareholder approval provisions of any
Trading Market on which any of the securities of the Company are listed or designated. |
| (aa) | Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the 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(aa) 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 by the Company 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 to third parties, 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. |
| | |
| (bb) | Tax
Compliance. Except for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, or as set forth
on Schedule 3.1(bb), the Company and its Subsidiaries each (i) has made or filed
all federal, state and local income and all foreign income and franchise tax returns,
reports and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges, fines or penalties that
are material in amount, shown or determined to be due on such returns, reports and declarations
and (iii) has set aside on its financial statements provision reasonably adequate for
the payment of all material tax liability of which has not been finally determined and
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. |
| (cc) | Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of
the Company or any Subsidiary, any agent or other person acting on behalf of the Company
or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political
activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary
(or made by any person acting on its behalf of which the Company is aware) which is in
violation of law, or (iv) violated in any material respect any provision of FCPA. |
| (dd) | Accountants.
The Company’s independent registered public accounting firm is as set forth in the Prospectus Supplement. 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 fiscal year ended December 31, 2022. |
| | |
| (ee) | 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. |
| (ff) | Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere
herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.12 hereof),
it is understood and acknowledged by the Company that: (i) none of the Purchasers has
been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing
or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Shares for any specified
term; (ii) past or future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or “derivative” transactions,
before or after the closing of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded securities; (iii) any
Purchaser, and counter-parties in “derivative” transactions to which any
such Purchaser is a party, directly or indirectly, presently may have a “short”
position in the shares of Common Stock, and (iv) each Purchaser shall not be deemed to
have any affiliation with or control over any arm’s length counter-party in any
“derivative” transaction. The Company further understands and acknowledges
that (y) one or more Purchasers may engage in hedging activities at various times during
the period that the shares of Common Stock are outstanding, and (z) such hedging activities
(if any) could reduce the value of the existing shareholders’ 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. |
| (gg) | Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf
has, (i) taken, directly or indirectly, any action designed to cause or to result in
the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the shares of Common Stock, (ii) except as previously disclosed
in the SEC Reports and pursuant to the Company’s stock buyback program, sold, bid
for, purchased, or, paid any compensation for soliciting purchases of, any of the shares
of Common Stock, or (iii) except as previously disclosed in the SEC Reports and pursuant
to the Company’s stock buyback program, 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 shares of Common Stock. |
| (hh) | Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. The Company’s execution, delivery and performance
of this Agreement and |
| | consummation
of the transactions contemplated hereby will not (A) result in a material violation of
any existing applicable law, rule, regulation, judgment, order or decree of any governmental
entity as of the date hereof (including, without limitation, those promulgated by the
Food and Drug Administration of the U.S. Department of Health and Human Services (the
“FDA”) or by any foreign, federal, state or local regulatory authority
performing functions similar to those performed by the FDA), (B) conflict with, result
in any violation or breach of, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation (with or without notice, lapse of
time or both) (a “Default Acceleration Event”) of, any agreement,
lease, credit facility, debt, note, bond, mortgage, indenture or other instrument (“Contract”)
or obligation or other understanding to which the Company is a party or by which any
property or asset of the Company is bound or affected, except to the extent that such
conflict, default, or Default Acceleration Event is not reasonably likely to result in
a Material Adverse Effect, or (C) result in a breach or violation of any of the terms
and provisions of, or constitute a default under, the Company’s articles of incorporation
(as the same may be amended or restated from time to time) or bylaws (as the same may
be amended or restated from time to time). The Company is not in violation, breach or
default under its articles of incorporation (as the same may be amended or restated from
time to time) or bylaws (as the same may be amended or restated from time to time). Neither
the Company nor, to its knowledge, any other party is in violation, breach or default
of any Contract that has resulted in or could reasonably be expected to result in a Material
Adverse Effect. Each approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other governmental body necessary
in connection with the execution and delivery by the Company of this Agreement and the
performance of the Company of the transactions herein contemplated has been obtained
or made and is in full force and effect, except filings with the Commission required
under the Securities Act or the Exchange Act, or filings with the Exchange pursuant to
the rules and regulations of the Exchange, in each case that are contemplated by this
Agreement to be made after the date of this Agreement. |
| | |
| (ii) | Stock
Option Plans. Each stock option granted by the Company under the Company’s
stock option plan was granted (i) in accordance with the terms of the Company’s
stock option plan and (ii) with an exercise price at least equal to the fair market value
of the Common Stock on the date such stock option would be considered granted under GAAP
and applicable law. No stock option granted under the Company’s stock option plan
has been backdated. The Company has not knowingly granted, and there is no and has been
no Company policy or practice to knowingly grant, stock options prior to, or otherwise
knowingly coordinate the grant of stock options with, the release or other public announcement
of material information regarding the Company or its Subsidiaries or their financial
results or prospects. |
| (jj) | Cybersecurity.
(i)(x) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s
information technology and computer systems, networks, hardware, software, data (including the data of its respective customers,
employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively,
“IT Systems and Data”) and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge
of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems
and Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments,
orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual |
| | obligations
relating to the privacy and security of IT Systems and Data and to the protection of
such IT Systems and Data from unauthorized use, access, misappropriation or modification,
except as would not, individually or in the aggregate, have a Material Adverse Effect;
(iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable
safeguards to maintain and protect its material confidential information and the integrity,
continuous operation, redundancy and security of all IT Systems and Data; and (iv) the
Company and the Subsidiaries have implemented backup and disaster recovery technology
consistent with commercially reasonable industry standards and practices. |
| | |
| (kk) | 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”). |
| (ll) | U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real
property holding corporation within the meaning of Section 897 of the Internal Revenue
Code of 1986, as amended, and the Company shall so certify upon the Purchasers’
request. |
| (mm) | 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. |
| (nn) | 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, suit 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. |
| (oo) | [Intentionally Omitted] |
| (pp) | Promotional
Stock Activities. Neither the Company nor any Subsidiary of the Company and none
of their respective officers, directors, managers, affiliates or agents have engaged
in any stock promotional activity that could give rise to a complaint, inquiry, or trading
suspension by the SEC alleging (i) a violation of the anti-fraud provisions of the federal
securities laws, (ii) violations of the anti-touting provisions, (iii) improper “gun-jumping”;
or (iv) promotion without proper disclosure of compensation. |
| (qq) | Regulatory
Matters; Compliance. All preclinical and other nonclinical studies and clinical trials
conducted by or on behalf of the Company that are material to the Company have been adequately
described in the Registration Statement, in all material respects. The clinical trials
and nonclinical studies conducted by or on behalf of the Company that are described in
the Registration Statement or the results of such trials and studies which are referred
to in the Registration Statement were and, if still ongoing, are being conducted in material
compliance with all laws and regulations applicable thereto in the jurisdictions in which
they are being conducted. The descriptions in the Registration Statement of the results
of such trials and studies are accurate and complete in all material respects and fairly
present the data derived from such trials and studies, and the Company has no knowledge
of any clinical trials the aggregate results of which are inconsistent with or otherwise
call into question the results of any clinical trial conducted by or on behalf of the
Company that are described in the Registration Statement or the results of which are
referred to in the Registration Statement. Except as disclosed in the Registration Statement,
the Company has not received any written notices or other communications from the FDA,
the European Medicines Agency (“EMA”) or any other governmental agency or
authority imposing, requiring, requesting or suggesting a clinical hold, termination,
suspension or material modification of any clinical trial that is described in the Registration
Statement or the results of which are referred to in the Registration Statement. Except
as disclosed in the Registration Statement, the Company has not received any written
notices or other communications from the FDA, the EMA or any other governmental agency,
and otherwise has no knowledge of, or reason to believe that, (i) any investigational
new drug application for a potential product of the Company is or has been rejected or
determined to be non-approvable or conditionally approvable; and (ii) any license, approval,
permit or authorization to conduct any clinical trial of any potential product of the
Company has been, will be or may be suspended, revoked, modified or limited. |
3.2
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein,
in which case they shall be accurate as of such date):
| (a) | Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership limited liability
company or similar power and authority to enter into and to consummate the |
| | transactions
contemplated by the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the Transaction Documents
have been duly authorized by all necessary corporate, partnership, limited liability
company or similar action, as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in accordance with
its terms, except: (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies
and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law. |
| | |
| (b) | Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its
own account and has no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such Securities (this representation
and warranty not limiting such Purchaser’s right to sell the Securities pursuant
to the Registration Statement or otherwise in compliance with applicable federal and
state securities laws). |
| (c) | 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) or (a)(8) under the Securities Act, or (ii) a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act. |
| (d) | Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial matters so
as to be capable of evaluating the merits and risks of the prospective investment in
the 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. |
| (e) | Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it
has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the
offering of the 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 provided to it. 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. |
| | |
| (f) | Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated
hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant
to any understanding with such Purchaser, directly or indirectly executed any purchases
or sales, including Short Sales, of the securities of the Company during the period commencing
as of the time that 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,
which terms include definitive pricing 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 order to effect
Short Sales or similar transactions in the future. |
| (g) | No
Voting Agreements. The Purchaser is not a party to any agreement or arrangement,
whether written or oral, between the Purchaser and any other Purchaser and any of the
Company’s shareholders as of the date hereof, regulating the management of the
Company, the shareholders’ rights in the Company, the transfer of shares in the
Company, including any voting agreements, shareholder agreements or any other similar
agreement even if its title is different or has any other relations or agreements with
any of the Company’s shareholders, directors or officers. |
| (h) | Brokers.
Except as set forth on Schedule 3.2(h) or in the Prospectus or Prospectus Supplement,
no agent, broker, investment banker, person or firm acting in a similar capacity on behalf
of or under the authority of the Purchaser is or will be entitled to any broker’s
or finder’s fee or any other commission or similar fee, directly or indirectly,
for which the Company or any of its Affiliates after the Closing could have any liabilities
in connection with this Agreement, any of the transactions contemplated by this Agreement,
or on account of any action taken by the Purchaser in connection with the transactions
contemplated by this Agreement. |
| (i) | Independent
Advice. Each Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with the purchase
of the Securities constitutes legal, tax or investment advice. |
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, except as set forth in this Agreement, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.
ARTICLE
IV.
OTHER AGREEMENTS OF THE PARTIES
4.1
Legends. The shares of Common Stock and, 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 shall be issued free of legends. If at any time following the date hereof the Registration Statement is not
effective or is not otherwise available for the sale of the shares of Common Stock, the Warrants or the Warrant Shares, the Company
shall immediately notify the holders of the Warrants in writing that such registration statement is not then effective and thereafter
shall promptly notify such holders when the registration statement is effective again and available for the sale of the Shares,
the Warrants or 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 Shares, the Warrants or the Warrant Shares in compliance with applicable federal
and state securities laws). The Company shall use commercially reasonable best efforts to keep a registration statement (including
the Registration Statement) registering the issuance of the Warrant Shares effective during the term of the Warrants.
4.2
Furnishing of Information; Public Information. Until the earliest of the time that (i) no Purchaser owns Securities, or
(ii) the Common Warrants have expired, the Company covenants to maintain the registration of the Common Stock under Section 12(b)
or 12(g) of the Exchange Act and 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.
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 shareholder approval prior to the closing
of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4
Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the
material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents
as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press
release, 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 Affiliates, 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, employees or Affiliates, including, without limitation, the
Placement Agent, on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, with respect to the
transactions contemplated hereby shall terminate and be of no further force or effect. 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) as required by federal securities law in connection with the filing of final Transaction
Documents with the Commission, and (b) to the extent such disclosure is required by law or Trading Market regulations, in which
case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).
4.5
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving 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 the Company
reasonably believes constitutes material non-public information, unless prior thereto such Purchaser shall have entered into a written
agreement with the Company regarding the confidentiality and use of such information. 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, and 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 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 working capital purposes and general corporate procedures, the build out of the Company’s manufacturing and research
and development facilities, and the acquisition or licensing of approved products and products in development, and shall not use such
proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course
of the Company’s business or repayment of obligations outstanding as of the date of this Agreement consistent with prior practices),
(b) for the redemption of any shares of Common Stock or Common Stock Equivalents; provided that the Company shall be permitted to repurchase
shares of its Common Stock pursuant to a stock buyback program, (c) for the settlement of any outstanding litigation or (d) in violation
of FCPA or OFAC regulations or similar applicable regulations.
4.8
Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each
Purchaser and its directors, officers, shareholders, members, partners, employees
and agents (and any other Persons with a functionally equivalent role of
a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents,
members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur
as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in
this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser Party in any capacity (including
a Purchaser Party’s status as an investor), or any of them or their respective Affiliates, by the Company or any shareholder of
the Company who is not an Affiliate of such Purchaser Party, arising out of or relating to any of the transactions contemplated by the
Transaction Documents. For the avoidance of doubt, the indemnification provided herein is intended to, and shall also cover, direct claims
brought by the Company against any Purchaser Parties; provided, however, that such indemnification shall not cover any loss,
claim, damage or liability to the extent it is finally judicially determined to be attributable to any Purchaser Party’s breach
of any of the representations, warranties, covenants or agreements made by such Purchaser Party in any Transaction Document or any conduct
by a 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, except with respect to direct claims brought by the Company, 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 to the applicable Purchaser Party (which may be internal
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 for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed. In addition, if any Purchaser Party take action to collect
amounts due under any Transaction Documents or to enforce the provisions of any Transaction Documents, then the Company shall pay the
costs incurred by such Purchaser Party for such collection, enforcement or action, including, but not limited to, attorneys’ fees
and disbursements. The indemnification and other payment obligations required by this Section 4.8 shall be made by periodic payments of
the amount thereof during the course of the investigation, defense, collection, enforcement or action, as and when bills are received
or are incurred; provided, that if any Purchaser Party is finally judicially determined not to be entitled to indemnification or payment
under this Section 4.8, such Purchaser Party shall promptly reimburse the Company for any payments that are advanced under this sentence.
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
Listing of Common Stock. The Company hereby agrees to use commercially reasonable best efforts to maintain the listing
or quotation of the shares of Common Stock on each Trading Market on which each is currently listed, and concurrently with the
Closing, the Company shall apply to list or quote all of the Shares and Warrant Shares on such Trading Markets and promptly secure
the listing of all of the Shares and Warrant Shares on such Trading Markets. The Company further agrees, if the Company applies
to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Shares and Warrant
Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on
such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the
listing and trading of the Common Stock on a Trading Market and will comply in all material respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to use commercially
reasonable efforts to maintain the eligibility of the electronic transfer through the Depository Trust Company or another
established clearing corporation, including,
without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in
connection with such electronic transfer.
4.10
Subsequent Equity Sales.
| (a) | From the date hereof until ninety (90) 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 amendment or supplement thereto, other than the Prospectus Supplement or filing a registration statement on Form S-8 in connection with any employee benefit plan.
|
| (b) | From the date hereof until one hundred and eighty (180) days after the Closing Date, the Company shall
be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of shares
of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable
Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price,
exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange
price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the shares of Common
Stock, or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit or
an “at-the-market offering”, whereby the Company may issue securities at a future determined price regardless of whether shares
pursuant to such agreement have actually been issued and regardless of whether such agreement is subsequently cancelled; provided, however,
that after ninety (90) days after the Closing Date, the entry into and/or issuance of shares of Common Stock in an “at-the-market”
offering with the Placement Agent as sales agent shall not be deemed a Variable Rate Transaction. Any Purchaser shall be entitled to obtain
injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. |
| (c) | Notwithstanding
the foregoing, this Section 4.10 shall not apply in respect of an Exempt Issuance, except
that no Variable Rate Transaction shall be an Exempt Issuance. |
4.11
Equal Treatment of Purchasers. No consideration (including any modification of the Transaction Documents) 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 the shares of Common Stock or otherwise.
4.12
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 and the information included in the Disclosure
Schedules. 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, Affiliates or agents 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.
4.13
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.
4.14 Reservations of Shares. 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 of Common Stock pursuant to this
Agreement and the Pre-Funded Warrants, and, from and after the Common Stock Increase Effective Date, the Warrant Shares pursuant to any
exercise of the Common Warrants.
4.15 Lock-Up Agreements. The Company shall
not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements (or any substantially similar lock-up agreements
signed by transferees of the initial parties to the Lock-Up Agreements) except to extend the term of the lock-up period and shall enforce
the provisions of each Lock-Up Agreement (or any substantially similar lock-up agreements signed by transferees of the initial parties
to the Lock-Up Agreements) in accordance with its terms. If any party to a Lock-Up Agreement (or any substantially similar lock-up agreements
signed by transferees of the initial parties to the Lock-Up Agreements) breaches any provision of such agreement, the Company shall promptly
use its best efforts to seek specific performance of the terms of such agreement.
4.16 Agreement to Vote. Each Purchaser, solely
in its capacity as a stockholder of the Company, agrees to use commercially reasonable efforts to vote (or cause to be voted) all of the
shares of Common Stock that it either owns or that it has or shares discretion to vote as of the Record Date, at the Meeting or any adjournment
thereof, and/or in any action by written consent of the stockholders of the Company, in favor of (i) the Authorized Common Stock Increase
Proposal and (ii) any other matter specifically relating to the Authorized Common Stock Increase Proposal. Each Purchaser hereby agrees
not to grant any proxy with respect to such shares of Common Stock or to enter into or agree to be bound by any voting trust or agreement
or other arrangement of any kind that is inconsistent with the provisions of this Agreement. Each Purchaser agrees not to revoke any such
vote or change any vote once voted in favor of the Authorized Common Stock Increase Proposal.
4.17 Stockholder Approval. Promptly following
the Closing Date, the Company shall file with the Commission one or more definitive proxy statements, at the expense of the Company, for
one or more Meetings (which such initial Meetings shall be called not later than 60 days following the Closing Date), soliciting stockholder
approval at such Meetings for the Authorized Common Stock Increase Proposal and the Warrant Proposal (collectively, such affirmative approval
being referred to herein collectively as the "Stockholder Approval" and the date such Stockholder Approval is obtained,
the "Stockholder Approval Date"). The Company shall use its reasonable best efforts to obtain all components of the Stockholder
Approval. If the Company does not obtain all components of the Stockholder Approval at Meetings prior to the 60th day following
the Closing Date, the Company shall call additional Meetings four months thereafter to seek any remaining components of the Stockholder
Approval. If the Company does not obtain all components of the Stockholder Approval at such additional Meetings, the Company shall call
a Meeting every sixty (60) days thereafter to seek any remaining components of the Stockholder Approval using printed proxy materials
until the earlier of the date that all components of the Stockholder Approval are obtained or consent of the Board of Directors in lieu
thereof is obtained that satisfied Nasdaq Listing Rule 5635. Upon receipt of the Stockholder Approval with respect to the Authorized Common
Stock Increase Proposal, the Company shall cause the amendment to the Company’s Articles of Incorporation, as amended, approved
thereby (the “Common Stock Increase Amendment”) to be filed with the Nevada Secretary of State on the date of such
Stockholder Approval or as soon as practicable thereafter (the effective date of such amendment, the “Common Stock Increase Effective
Date”).
ARTICLE
V.
MISCELLANEOUS
5.1
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided,
however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the
Company 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 facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages
attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission,
if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as
set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time)
on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any 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 the Purchasers who purchased at least 50.1% in interest of the sum of (i) the Shares and (ii) the Pre-Funded Warrant Shares
initially issuable upon exercise of the Pre-Funded Warrants based on the initial Subscription Amounts hereunder (or, if 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 at least 50.1% in interest of such disproportionately impacted 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 third-party beneficiary of the representations and warranties
of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended
for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard
to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any 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 Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either
party shall commence an action, suit 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, suit or proceeding shall be reimbursed
by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
5.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities
for the applicable statute of limitations.
5.11
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other
party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page was 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 Placement Agent Counsel. Placement
Agent Counsel 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
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.
5.19
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.
5.20
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
relating to shares of 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.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
TONIX
PHARMACEUTICALS HOLDING CORP. |
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Address
for Notice: |
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By: |
_____________________________
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Name:
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Email: |
Title: |
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Fax: |
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With
a copy to (which shall not constitute notice): |
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Email: |
Attention: |
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Fax: |
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name
of Purchaser: _____________________________________________________
Signature
of Authorized Signatory of Purchaser: ______________________________
Name
of Authorized Signatory: _____________________________________________
Title
of Authorized Signatory: ______________________________________________
Email
Address of Authorized Signatory: _______________________________________
Facsimile
Number of Authorized Signatory: ____________________________________
Address
for Notice to Purchaser:
Address
for Delivery of Warrant Shares to the Purchaser (if not same address for notice):
DWAC
for Common Stock:
Subscription
Amount: $___________________
Shares
of Common Stock: ___________________
Shares
of Common Stock underlying the Pre-Funded Warrants: ________
Beneficial
Ownership Blocker ☐ 4.99% or ☐ 9.99%
Warrant
Shares underlying the Common Warrants: ________
Beneficial
Ownership Blocker ☐ 4.99% or ☐ 9.99%
EIN
Number: ___________________
☐
Notwithstanding anything contained in this Agreement to the contrary, by
checking this box (i) the obligations of the above-signed to purchase the securities set forth in this Agreement to be purchased from
the Company by the above-signed, and the obligations of the Company to sell such securities to the above-signed, shall be unconditional
and all conditions to Closing shall be disregarded, (ii) the Closing shall occur on the second (2nd) Trading Day following the date of
this Agreement and (iii) any condition to Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above)
that required delivery by the Company or the above-signed of any agreement, instrument, certificate or the like or purchase price (as
applicable) shall no longer be a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable)
to deliver such agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.
[SIGNATURE
PAGES CONTINUE]
Exhibit
A
Form of Common Warrant
(See
Attached)
Exhibit
B
Form of Pre-Funded Warrant
(See
Attached)
Exhibit
C
Form of Lock-Up Agreement
(See
Attached)
TONIX PHARMACEUTICALS HOLDING CORP. 8-K
Exhibit 99.01
Tonix
Pharmaceuticals Announces Registered Direct Offering of up to $144 Million
Led
by healthcare-focused institutional investors.
$30
million financing upfront with up to an additional $114 million tied to the exercise of warrants.
CHATHAM,
N.J., December 20, 2023 (GLOBE NEWSWIRE) -- Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP), a
biopharmaceutical company with marketed products and a pipeline of development candidates, today announced
that the Company has signed securities purchase agreements with certain healthcare-focused institutional investors that have agreed to
provide up to $144 million in gross proceeds to Tonix through a registered direct offering that includes initial upfront
funding of $30 million.
About
the Registered Direct Offering
Pursuant
to the securities purchase agreements, the Company has agreed to issue an aggregate of 54,054,054 shares of common stock (or prepaid
warrants) and two series of registered warrants to purchase an aggregate of 162,162,162 shares of common stock for a purchase price of
$0.555 per share and associated warrants (less $0.0001 in the case of prepaid warrants). The Series C warrants are exercisable at $0.555
per share and the Series D warrants are exercisable at $0.85 per share as follows:
| ● | Series
C warrants for an aggregate cash exercise price of approximately $45 million, exercisable
until the earlier of two years from the initial exercisable date and 10 trading days
following notice by the Company to the warrant holder of the Company’s public announcement
of the U.S. Food and Drug Administration’s acknowledgement and acceptance of the Company’s
new drug application relating to TNX-102 SL in patients with Fibromyalgia; |
| ● | Series
D warrants for an aggregate cash exercise price of approximately $69 million exercisable
for five years from the initial exercisable date. |
Neither
the Series C nor the Series D warrants shall be exercisable until the Company receives shareholder approval authorizing the exercise
of such warrants.
A.G.P./Alliance
Global Partners is acting as the sole placement agent for the offering.
The
closing of the offering is expected to occur on December 22, 2023, subject to customary closing conditions.
Tonix
currently intends to use the net proceeds from the offering for the preparation of their new drug application relating to TNX-102 SL
in patients with fibromyalgia, as well as working capital and general corporate purposes. For further information, please see the Company's
current report on Form 8-K to be filed with the SEC.
Tonix
Pharmaceuticals Holding Corp.*
Tonix
is a biopharmaceutical company focused on commercializing, developing, discovering and licensing therapeutics to treat and prevent human
disease and alleviate suffering. Tonix Medicines, our commercial subsidiary, markets Zembrace® SymTouch® (sumatriptan injection)
3 mg and Tosymra® (sumatriptan nasal spray) 10 mg under a transition services agreement with Upsher-Smith Laboratories, LLC from
whom the products were acquired on June 30, 2023. Zembrace SymTouch and Tosymra are each indicated for the treatment of acute migraine
with or without aura in adults. Tonix’s development portfolio is composed of central nervous system (CNS), rare disease, immunology
and infectious disease product candidates. Tonix’s CNS development portfolio includes both small molecules and biologics to treat
pain, neurologic, psychiatric and addiction conditions. Tonix’s lead development CNS candidate, TNX-102 SL (cyclobenzaprine HCl
sublingual tablet), has completed two positive Phase 3 studies for the management of fibromyalgia. Tonix intends to meet with the FDA
and submit an NDA for the approval of TNX-102 SL for the management of fibromyalgia in the second half of 2024. TNX-102 SL is also being
developed to treat fibromyalgia-type Long COVID, a chronic post-acute COVID-19 condition, and topline results were reported in the third
quarter of 2023. TNX-1900 (intranasal potentiated oxytocin) is being studied in binge eating disorder, pediatric obesity, bone health
in autism and social anxiety disorder by academic collaborators under investigator-initiated INDs. TNX-1300 (cocaine esterase) is a biologic
designed to treat cocaine intoxication and has been granted Breakthrough Therapy designation by the FDA. A Phase 2 study of TNX-1300
is expected to be initiated in the first quarter of 2024 Tonix’s rare disease development portfolio includes TNX-2900 (intranasal
potentiated oxytocin) for the treatment of Prader-Willi syndrome. TNX-2900 has been granted Orphan Drug designation by the FDA. Tonix’s
immunology development portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500,
which is a humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of allograft rejection
and for the treatment of autoimmune diseases. A Phase 1 study of TNX-1500 was initiated in the third quarter of 2023. Tonix’s infectious
disease pipeline includes TNX-801, a vaccine in development to prevent smallpox and mpox. TNX-801 also serves as the live virus vaccine
platform or recombinant pox vaccine platform for other infectious diseases, including TNX-1800, in development as a vaccine to protect
against COVID-19. During the fourth quarter of 2023, TNX-1800 was selected by the U.S. National Institutes of Health (NIH), National
Institute of Allergy and Infectious Diseases (NIAID) Project NextGen for inclusion in Phase 1 clinical trials. The infectious disease
development portfolio also includes TNX-3900 and TNX-4000, which are classes of broad-spectrum small molecule oral antivirals.
*
Tonix’s product development candidates are investigational new drugs or biologics and have not been approved for any indication.
Zembrace
SymTouch and Tosymra are registered trademarks of Tonix Medicines. All other marks are property of their respective owners.
Forward
Looking Statements
Certain
statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 including
those relating to the completion of the offering, the satisfaction of customary closing conditions, the intended use of proceeds
from the offering and other statement that are predictive in nature. These statements may be identified by the use of forward-looking
words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,”
and “intend,” among others. These forward-looking statements are based on Tonix's current expectations and actual results
could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such
forward-looking statements. These factors include, but are not limited to, statements about the expected closing of the offering; anticipated
gross proceeds from the offering; risks related to the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations;
risks related to the failure to successfully market any of our products; risks related to the timing and progress of clinical development
of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government
or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition.
As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization
of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the
risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange
Commission (the “SEC”) on March 13, 2023, and periodic reports filed with the SEC on or after the date thereof. All of Tonix's
forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth
herein speaks only as of the date thereof.
Investor
Contact
Jessica
Morris
Tonix Pharmaceuticals
investor.relations@tonixpharma.com
(862) 904-8182
Peter
Vozzo
ICR Westwicke
peter.vozzo@westwicke.com
(443) 213-0505
Media
Contact
Ben
Shannon
ICR Westwicke
ben.shannon@westwicke.com
(919) 360-3039
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Tonix Pharmaceuticals (NASDAQ:TNXP)
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부터 6월(6) 2024 으로 7월(7) 2024
Tonix Pharmaceuticals (NASDAQ:TNXP)
과거 데이터 주식 차트
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