As
filed with the Securities and Exchange Commission on November 14, 2019
Registration
No. 333-234263
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 1 to
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
TONIX
PHARMACEUTICALS HOLDING CORP.
(Exact
name of registrant as specified in its charter)
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Nevada
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2834
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26-1434750
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(State
or other jurisdiction of
incorporation
or organization)
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(Primary
Standard Industrial
Classification
Code Number)
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(I.R.S.
Employer
Identification
Number)
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509
Madison Avenue, Suite 1608
New
York, New York 10022
(212)
980-9155
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Seth
Lederman
Chief
Executive Officer
Tonix
Pharmaceuticals Holding Corp.
509
Madison Avenue, Suite 1608
New
York, New York 10022
(212)
980-9155
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
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Michael
J. Lerner, Esq.
Steven
M. Skolnick, Esq.
Lowenstein
Sandler LLP
1251
Avenue of the Americas
New
York, New York 10020
(973)
597-6394
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Ivan
K. Blumenthal, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
666 Third Avenue
New York, NY 10017
(212) 692-6784
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Approximate date of commencement of proposed sale to public:
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As soon as practicable after this Registration Statement is declared effective.
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If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the
same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☒
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Emerging Growth Company
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☐
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
☐
CALCULATION
OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered
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Proposed
Maximum
Aggregate
Offering Price (1)(2)
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Amount of
Registration Fee
(3)
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Class A Units consisting of: (4)
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$
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5,000,000
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$
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—
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(i) Common Stock, par value $0.001 per share
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(ii) Warrants to purchase Common Stock (5)
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(iii) Common Stock Purchase Warrants (5)
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Class B Units consisting of: (4)
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$
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5,000,000
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$
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—
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(i) Series A Convertible Preferred Stock, par value $0.001 per share
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(ii) Warrants to purchase Common Stock (5)
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(iii) Common Stock issuable upon conversion of the Series A Convertible Preferred Stock
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(iv) Common Stock Purchase Warrants (5)
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Common Stock issuable upon the exercise of the warrants to purchase Common
Stock and Common Stock Purchase Warrants (6)
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$
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15,000,000
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$
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—
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Total
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$
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25,000,000
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$
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3,245
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(1)
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Estimated
solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) of the Securities Act of
1933, as amended. See “Underwriting.”
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(2)
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Pursuant to Rule
416, the securities being registered hereunder include such indeterminate number of additional securities as may be issued
after the date hereof as a result of stock splits, stock dividends or similar transactions.
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(3)
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$2,239
of the Registration Fee has been previously paid.
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(4)
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The proposed maximum aggregate offering price of Class A Units proposed to be sold in the offering will be
increased on a dollar-for-dollar basis on the proposed maximum offering price of any Class B Units offered but not sold in the
offering, and as such the proposed aggregate maximum offering price of the Class A Units and Class B Units, if any, is $10,00,000.
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(5)
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No
fee pursuant to Rule 457(g) under the Securities Act of 1933, as amended.
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(6)
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The Warrants to purchase common stock and the Common Stock Purchase Warrants are exercisable at a per share
exercise price equal to 100% of the public offering price of a Class A Unit. The proposed maximum aggregate public offering price
of the shares of Common Stock issuable upon exercise of the Warrants to purchase common stock and the Common Stock Purchase Warrants
was calculated to be $15,000,000, which is equal to 100% of $15,000,000.
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The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall
become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.
The
information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
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Preliminary
Prospectus
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Subject
to Completion, dated November 14, 2019
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1,893,939 Class A Units Consisting
of Common Stock and Warrants and Common Stock Purchase Warrants
and
5,000 Class B Units Consisting
of Series A Convertible Preferred Stock and Warrants and Common Stock Purchase Warrants
We
are offering 1,893,939 Class
A Units consisting of, in the aggregate, 1,893,939 shares of our common
stock, warrants to purchase, in the aggregate, 1,893,939 shares of our
common stock, which we refer to as Warrants, and common stock purchase warrants, which we refer to as Common Warrants, to
purchase, in the aggregate, 946,970 shares of our common stock. The Warrants and
Common Warrants will have an exercise price equal to 100%
of the public offering price of the Class A Units per share of common stock, which Warrants and Common Warrants will
be exercisable upon issuance. Each Class A Unit sold in this offering consists of one share of our common stock, a Warrant to
purchase one share of our common stock and a Common Warrant to purchase one-half of a share common stock.
The shares of common stock, Warrants and Common Warrants that
are part of a Class A Unit are immediately separable and will be issued separately in this offering. The number of Class A
Units sold in this offering will increase to the extent that fewer, if any, Class B Units are purchased in this
offering.
We are also offering to those purchasers, if any, whose purchase of Class A Units in this offering would otherwise
result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of our outstanding
common stock immediately following the consummation of
this offering, the opportunity, in lieu of purchasing Class A Units, to purchase Class B Units (together with the Class A Units,
the “Units”). Each Class B Unit will consist of one share of our newly designated
Series A Convertible Preferred Stock, or the Series A Preferred Shares, with a stated value of $1,000 and convertible into shares
of our common stock at the public offering price of the Class A Units, together with the equivalent number of Warrants and
Common Warrants as would have been issued to such purchaser of Class B Units if they had
purchased Class A Units based on the public offering price. Assuming an offering price of $2.64 per
Class A Unit (the closing price of our common stock as reported on the Nasdaq Global Market on November 13,
2019), the Series A Preferred Shares included in a Class B Units will be convertible into an aggregate of 1,893,940 shares
of our common stock (378.788 shares per Class B Unit) and the Warrants and
Common Warrants included in a Class B Units will be exercisable for an aggregate of 2,840,910
shares of common stock (378.788 shares per Class
B Unit at an exercise price of 100% of the public offering price of the Class A Units per share of common stock). The Series A
Preferred Shares do not generally have any voting rights unless and until converted into shares of common stock. The Series A Preferred
Shares, Warrants and Common Warrants that
are part of a Class B Unit are immediately separable and will be issued separately in this offering.
The
number of shares of our common stock outstanding after this offering will fluctuate depending on how many Class B Units are sold
in this offering and whether and to what extent holders of Series A Preferred Shares convert their shares to common stock. To
the extent we sell any Class B Units in this offering, the same aggregate number of common stock equivalents resulting from this
offering would be convertible under the Series A Preferred Shares issued as part of the Class B Units.
Our common stock is listed on The
Nasdaq Global Market under the symbol “TNXP.” On November 13,
2019, the last reported sale price of our common stock as reported on The Nasdaq Global Market was $2.64 per
share. The public offering price per Class A Units will be determined between us and the underwriter based on the closing price
of our common stock prior to pricing and market conditions at the time of pricing, and may be at a discount to the current market
price. The public offering price of the Class B Units will be $1,000 per unit.
There is no established trading market for the Warrants,
Common Warrants or Series A Preferred Shares, and we do not expect an active trading market
to develop. We do not intend to list the Warrants, Common Warrants or Series A Preferred
Shares on any securities exchange or other trading market. Without an active trading market, the liquidity of the Warrants,
Common Warrants and Series A Preferred Shares will be limited.
Investing in our securities involves
risks that are described in the “Risk Factors” section beginning on page 5 of this prospectus.
This
prospectus contains or incorporates by reference summaries of certain provisions contained in some of the documents described
herein, but reference is made to the actual documents for complete information. All the summaries are qualified in their entirety
by the actual documents. Copies of some of the documents referred to herein have been filed or have been incorporated by reference
as exhibits to the registration statement of which this prospectus forms a part, and you may obtain copies of those documents
as described in this prospectus under the heading “Where You Can Find More Information.”
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Per
Class A
Unit
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Per
Class B
Unit
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Total
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Public
offering price
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$
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$
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Underwriting
discount(1)
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$
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$
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Proceeds,
before expenses, to us
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$
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$
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(1)
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We refer you to the “Underwriting”
section of this prospectus for additional information regarding total underwriter compensation.
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Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
underwriter expects to deliver the shares against payment therefor on or about ,
2019.
Sole
Book-Running Manager
A.G.P.
The
date of this prospectus is , 2019
TABLE
OF CONTENTS
You
should rely only on the information contained or incorporated by reference in this prospectus and any related free writing prospectus
that we may provide to you in connection with this offering. We have not, and the underwriter has not, authorized any other person
to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely
on it. We are not, and the underwriter is not, making an offer to sell these securities in any jurisdiction where the offer or
sale is not permitted. You should assume that the information appearing or incorporated by reference in this prospectus is accurate
only as of the date on the front cover of this prospectus or the date of the applicable document incorporated by reference. Our
business, financial condition, results of operations and prospects may have changed since that date.
For
investors outside the United States: neither we nor the underwriter has done anything that would permit this offering or possession
or distribution of this prospectus or any free writing prospectus we may provide to you in connection with this offering in any
jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who
come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of
the securities and the distribution of this prospectus and any such free writing prospectus outside of the United States.
In
this prospectus, we rely on and refer to information and statistics regarding our industry. We obtained this statistical, market
and other industry data and forecasts from publicly available information.
SUMMARY
This
summary highlights information contained in other parts of this prospectus and in the documents incorporated by reference. Because
it is a summary, it does not contain all of the information that you should consider in making your investment decision. Before
investing in our securities, you should carefully read this prospectus and the documents incorporated by reference in their entirety
including “Risk Factors” included in this prospectus and incorporated by reference and “Management’s Discussion
and Analysis of Financial Condition and Results of Operation” and the financial statements and the notes to those financial
statements incorporated by reference in this prospectus.
When
used herein, unless the context requires otherwise, references to the “Company,” “we,” “our”
and “us” refer to Tonix Pharmaceuticals Holding Corp., a Nevada corporation.
All
trademarks or trade names referred to in this prospectus are the property of their respective owners. Solely for convenience,
the trademarks and trade names in this prospectus are referred to without the ® and ™ symbols, but such references should
not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their
rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship
with, or endorsement or sponsorship of us by, any other companies.
Company
Overview
We
are a clinical-stage biopharmaceutical company focused on discovering and developing small molecules and biologics to treat psychiatric,
pain and addiction conditions, to improve biodefense through potential medical counter-measures, to treat transplant rejection
and to treat gastric and pancreatic cancers. Our most advanced drug development program is focused on delivering a safe and effective
long-term treatment for posttraumatic stress disorder, or PTSD. PTSD is characterized by chronic disability, inadequate treatment
options, high utilization of healthcare services, and significant economic burden. We have assembled a management team with significant
industry experience to lead the development of our product candidates. We complement our management team with a network of scientific,
clinical, and regulatory advisors that includes recognized experts in the fields of PTSD, other central nervous system disorders
and biodefense.
Our lead product candidate, TNX-102
SL is a proprietary sublingual tablet formulation of cyclobenzaprine, or CBP, designed for bedtime administration. TNX-102 SL
is an investigational new drug that has not been approved for any indication. TNX-102 SL is in Phase 3 development as a potential
treatment for PTSD. We are currently enrolling participants in the Phase 3 RECOVERY trial, which is a double-blind, placebo-controlled
study evaluating daily bedtime administration of TNX-102 SL in individuals with PTSD from trauma within 9 years of screening.
The FDA has conditionally accepted the proposed trade name Tonmya® for TNX-102 SL for the treatment of PTSD. Tonix
is also developing TNX-102 SL as a bedtime treatment for fibromyalgia and agitation in Alzheimer’s disease, under separate
Investigational New Drug applications, or INDs, to support potential pivotal efficacy studies. Tonix has met with FDA to discuss
a separate IND for treating alcohol use disorder. The fibromyalgia program is in Phase 3 development, the agitation in Alzheimer’s
program is Phase 2 ready and the alcohol use disorder program is in the pre-IND application stage. TNX-1300 (double-mutant cocaine
esterase) is being developed under an IND and is in Phase 2 development for the treatment of life-threatening cocaine intoxication.
Tonix has two other programs in the pre-IND application stage of development for PTSD, but with different mechanisms than TNX-102
SL and designed for daytime dosing: TNX-601 (tianeptine oxalate) and TNX-1600, a triple reuptake inhibitor. TNX-601 is also in
development for a potential indication - neurocognitive dysfunction associated with corticosteroid use. Data on TNX-601 from a
Phase 1 clinical formulation selection pharmacokinetic study that is being conducted outside of the U.S. is expected in the second
half of 2019. TNX-801 (live virus vaccine for percutaneous [scarification] administration) is a potential smallpox-preventing
vaccine based on a live synthetic version of horsepox virus, currently in the pre-IND application stage. TNX-1500 is being developed
to prevent and treat organ transplant rejection, as well as to treat autoimmune conditions, and is in the pre-IND application
stage. Finally, TNX-1700 is being developed to treat gastric and pancreatic cancers and is currently in the pre-IND application
stage.
Risk
Factors
Investing
in our securities involves a high degree of risk. You should carefully consider all of the information in this prospectus and
in the documents incorporated by reference prior to investing in our securities. These risks are discussed more fully in the section
titled “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2018, which is
incorporated by reference in this prospectus. These risks and uncertainties include, but are not limited to, the following:
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We have incurred
significant losses and anticipate that we will continue to incur significant losses for the foreseeable future and may never
achieve or maintain profitability.
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Our profitability
depends on our ability to develop and commercialize our current and future product candidates.
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Our ability to
continue as a going concern will require us to obtain additional financing to fund our current operations, which may be unavailable
on acceptable terms, or at all.
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Because our product
candidates are in the clinical stage of development, there is a high risk of failure, and we may never succeed in developing
marketable products or generating product revenue.
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We may encounter
substantial delays in our clinical trials, or our clinical trials may fail to demonstrate the safety and efficacy of our product
candidates to the satisfaction of applicable regulatory authorities.
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It may be difficult
for us to predict the time and cost of product development. Unforeseen problems may prevent further development or approval
of our product candidates.
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We will require
substantial additional financing to achieve our goals, and a failure to obtain necessary capital when needed would force us
to delay, limit, reduce or terminate our product development or commercialization efforts.
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We rely, and expect
to continue to rely, on third parties to conduct preclinical studies and clinical trials for our product candidates, and if
they do not properly and successfully perform their obligations to us, we may not be able to obtain regulatory approvals for
our product candidates.
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We face substantial
competition from other pharmaceutical and biotechnology companies, which may result in others discovering, developing or commercializing
products before, or more successfully, than we do.
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It is difficult and costly to protect our proprietary
rights, and we may not be able to ensure their protection. If our patent position and other intellectual property rights do
not adequately protect our product candidates, others could compete against us (including directly), which could materially
harm our business, results of operations and financial condition.
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Corporate
Information
We
were incorporated on November 16, 2007 under the laws of the State of Nevada as Tamandare Explorations Inc. On October 11, 2011,
we changed our name to Tonix Pharmaceuticals Holding Corp. Our principal executive offices are located at 509 Madison Avenue,
Suite 1608, New York, New York 10022, and our telephone number is (212) 980-9155. Our website addresses are www.tonixpharma.com,
www.tonix.com, and www.krele.com. The information on our websites is not part of this prospectus. We have included
our website addresses as a factual reference and do not intend them to be active links to our websites.
On November 1, 2019, we effected a one-for-ten reverse stock split of our issued and outstanding shares of
common stock and corresponding proportional reduction in the number of shares of common stock authorized for issuance under our
articles of incorporation. All per share amounts and number of shares in this prospectus give retroactive effect to the reverse
stock split.
THE
OFFERING
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Class A Units offered
by us
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1,893,939 Class A Units, each consisting
of one share of our common stock, par value $0.001 per share, one Warrant to purchase one share of our common stock at an exercise
price per share equal to 100% of the public offering price of a Class A Unit, and a Common Warrant to purchase one-half of a share
of our common stock at an exercise price per share equal to 100% of the public offering price of a Class A Unit. The number of
Class A Units sold in this offering will increase to the extent that fewer, if any, Class B Units are purchased in this offering.
The Class A Units will not be certificated and the shares of common stock, Warrants and Common Warrants that are part of such units
will be immediately separable and will be issued separately in this offering.
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Class B Units offered by us
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5,000 Class B Units, each consisting of one Series A Preferred Share with a stated value of $1,000,
one Warrant to purchase 378.788 shares of our common stock at an exercise price per share equal to 100% of the public offering
price of a Class A Unit, and one Common Warrant to purchase 189.394 shares of our common stock at an exercise price per share equal
to 100% of the public offering price of a Class A Unit, are also being offered to those purchasers, if any, whose purchase of Class
A Units in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially
owning more than 4.99% of our outstanding common stock immediately following the consummation of this offering. Each Series A Preferred
Share will convert into shares of our common stock at the public offering price of the Class A Units (which would be 378.788 shares
assuming a public offering price of $2.64 per Class A Unit, the closing price of our common stock as reported on the NASDAQ Global
Market on November 13, 2019) (1,893,940 shares in the aggregate). The Series A Preferred Shares generally do not have any voting
rights and will not be certificated. The Series A Preferred Shares, Warrants and Common Warrants that are part of the Class B Units
are immediately separable and will be issued separately in this offering. See “Description of Securities — Preferred
Stock — Series A Convertible Preferred Stock” for a discussion of the terms of the Series A Preferred
Shares.
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Series A Convertible Preferred Stock
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The
Series A Preferred Shares will be convertible into shares of our common stock (subject to adjustment as provided in the
related certificate of designation) at any time at the option of the holder, at the public offering price of the Class
A Units. See “Description of Securities — Preferred Stock — Series A Convertible
Preferred Stock” for a discussion of the terms of the Series A Preferred Shares.
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Common stock outstanding immediately
prior to this offering (as of November 13, 2019)
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1,575,246 shares
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Common stock to be outstanding
immediately following this offering
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5,363,125 shares, assuming 3,787,879 Class A Units are sold and no Class B Units are sold in this offering.
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Warrants
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Each Warrant included in the Class A Units and Class B Units will be exercisable for one of a share of common
stock, will have an exercise price per share equal to 100% of the public offering price of a Class A Unit, will be exercisable
upon issuance, and will expire five years from the date of issuance.
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Common Stock Purchase Warrants
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Each Common Warrant included in the Class A Units and Class B Units will be exercisable for one-half of a
share of common stock, will have an exercise price per share equal to 100% of the public offering price of a Class A Unit, will
be exercisable upon issuance, and will expire one year from the date of issuance. Beginning 30 days after issuance, the Common
Warrants may be exercised at the option of the holder on a cashless basis, in whole or in part for a whole number of shares, for
one share of common stock, during the period of time between the date that is 30 days after issuance and the date that is 12 months
after issuance.
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Use of proceeds
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We estimate that we will receive net proceeds from this offering of approximately $9.0 million based upon an assumed public
offering price of $2.64 per Class A Unit and $1,000 per Class B Unit and after deducting the underwriting discounts and commissions
and estimated offering expenses payable by us. We intend to use the net proceeds from this offering, together with our existing
cash, to fund Phase 3 development for our lead product candidate, TNX-102 SL, to advance the development of our other product candidates,
including in-licensed product candidates, to repurchase shares of our common stock pursuant to a stock buyback program, and for
working capital and other general corporate purposes. See “Use of Proceeds.”
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Dividend Policy
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We have never declared or paid any cash dividends
on our common stock, and currently do not plan to declare cash dividends on shares of our common stock in the foreseeable
future. We expect that we will retain all of our available funds and future earnings, if any, for use in the operation and
expansion of our business. See the section titled “Dividend Policy” for a more complete description of our dividend
policy.
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Risk Factors
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An investment in our securities
involves a high degree of risk. You should read the “Risk Factors” section of this prospectus for a discussion
of factors to consider carefully before deciding to invest in our securities.
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The Nasdaq Global Market symbol
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TNXP
There is no established public trading market for the Warrants,
Common Warrants or Series A Preferred Shares, and we do not expect an active trading market
to develop. We do not intend to list the Warrants, Common Warrants or Series A Preferred
Shares on any securities exchange or other trading market. Without an active trading market, the liquidity of the Warrants,
Common Warrants and Series A Preferred Shares will be limited.
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The number of shares of common stock to
be outstanding after this offering is based on 1,575,246 shares of common stock outstanding at November 13, 2019, assuming that
only Class A Units are purchased in this offering and excludes the following:
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shares of common
stock that may be issued upon conversion of the Series A Preferred Shares to be issued in this offering;
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shares of common stock that may be issued upon exercise of Warrants and Common Warrants to be issued in this
offering;
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109,036
shares of common stock issuable upon exercise of stock options outstanding at a weighted-average exercise price of $199.57
per share;
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496,486 shares of common stock issuable upon exercise of warrants outstanding at a weighted-average exercise
price of $42.14 per share;
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55,825
shares of common stock reserved and available for issuance under our equity compensation plan; and
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12,619
shares of common stock reserved and available for issuance under our employee stock purchase plan.
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Unless
otherwise indicated, all information in this prospectus reflects or assumes the following:
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no
issuance or exercise of stock options or warrants on or after September 30, 2019; and
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a one-for-ten reverse stock split of our issued and outstanding shares of common stock, options and warrants
effected on November 1, 2019 and the corresponding adjustment of all common stock prices per share and stock option and warrant
exercise prices per share.
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RISK
FACTORS
An
investment in our securities is speculative and involves a high degree of risk including the risk of a loss of your entire investment.
You should carefully consider the following risk factors, as well as those set forth under the heading “Risk Factors”
in our Annual Report on Form 10-K for the year ended December 31, 2018, as updated by our Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, which are incorporated by reference in this prospectus. These
risk factors contain, in addition to historical information, forward looking statements that involve risks and uncertainties.
Our actual results could differ significantly from the results discussed in the forward looking statements. The occurrence of
any of the following adverse developments described in the following risk factors and in the documents incorporated by reference
could materially and adversely harm our business, financial condition, results of operations or prospects. In such event, the
value of our securities could decline, and you could lose all or a substantial portion of the money that you pay for our securities.
In addition, the risks and uncertainties discussed below and in the documents incorporated by reference are not the only ones
we face. Our business, financial condition, results of operations or prospects could also be harmed by risks and uncertainties
not currently known to us or that we currently do not believe are material, and these risks and uncertainties could results in
a complete loss of your investment. In assessing the risks and uncertainties described below, you should also refer to the other
information contained in this prospectus (as supplemented or amended) and the documents incorporated by reference in this prospectus.
Risks
Related to our Securities and the Offering
If
we sell securities in future financings, stockholders may experience immediate dilution and, as a result, our stock price may
decline.
We
may from time to time issue additional shares of common stock at a discount from the current market price of our common stock.
As a result, our stockholders would experience immediate dilution upon the purchase of any of our securities sold at such discount.
In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including
the issuance of debt securities, preferred stock or common stock. If we issue common stock or securities convertible into common
stock, our common stockholders could experience additional dilution and, as a result, our stock price may decline.
We
will have broad discretion in how we use the net proceeds of this offering. We may not use these proceeds effectively, which could
affect our results of operations and cause our stock price to decline.
We
will have considerable discretion in the application of the net proceeds of this offering, including for any of the purposes described
in the section entitled “Use of Proceeds.” We intend to use the net proceeds from this offering to fund clinical development
of our product candidates and working capital and other general corporate purposes. As a result, investors will be relying upon
management’s judgment with only limited information about our specific intentions for the use of the balance of the net
proceeds of this offering. We may use the net proceeds for purposes that do not yield a significant return or any return at all
for our stockholders. In addition, pending their use, we may invest the net proceeds from this offering in a manner that does
not produce income or that loses value.
An
active trading market for our common stock may not be sustained.
Although
our common stock is listed on the NASDAQ Global Market, the market for our shares has demonstrated varying levels of trading activity.
Furthermore, the current level of trading may not be sustained in the future. The lack of an active market for our common stock
may impair investors’ ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable,
may reduce the fair market value of their shares and may impair our ability to raise capital to continue to fund operations by
selling shares and may impair our ability to acquire additional intellectual property assets by using our shares as consideration.
The
market price for our common stock may be volatile, and your investment in our securities could decline in value.
The
stock market in general has experienced extreme price and volume fluctuations. The market prices of the securities of biotechnology
and specialty pharmaceutical companies, particularly companies like ours without product revenues and earnings, have been highly
volatile and may continue to be highly volatile in the future. This volatility has often been unrelated to the operating performance
of particular companies. The following factors, in addition to other risk factors described in this section, may have a significant
impact on the market price of our common stock:
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announcements
of technological innovations or new products by us or our competitors;
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announcement
of FDA approval or disapproval of our product candidates or other product-related actions;
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developments
involving our discovery efforts and clinical studies;
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developments
or disputes concerning patents or proprietary rights, including announcements of infringement, interference or other litigation
against us or our potential licensees;
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developments
involving our efforts to commercialize our products, including developments impacting the timing of commercialization;
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announcements
concerning our competitors, or the biotechnology, pharmaceutical or drug delivery industry in general;
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public
concerns as to the safety or efficacy of our product candidates or our competitors’ products;
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changes
in government regulation of the pharmaceutical or medical industry;
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changes
in the reimbursement policies of third party insurance companies or government agencies;
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actual
or anticipated fluctuations in our operating results;
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changes
in financial estimates or recommendations by securities analysts;
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developments
involving corporate collaborators, if any;
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changes
in accounting principles; and
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the
loss of any of our key scientific or management personnel.
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In
the past, securities class action litigation has often been brought against companies that experience volatility in the market
price of their securities. Whether or not meritorious, litigation brought against us could result in substantial costs and a diversion
of management’s attention and resources, which could adversely affect our business, operating results and financial condition.
We could be delisted from Nasdaq, which could seriously
harm the liquidity of our stock and our ability to raise capital.
On August 28, 2019, we received a written
notice from Nasdaq staff indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business
days, we no longer met the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5450(a)(1).
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided a period of 180 calendar days, or until February 24, 2020,
in which to regain compliance. On November 1, 2019, we effected a one-for-ten reverse stock split and as of November 13, 2019
have been trading above the minimum bid price of $1 per share for a nine consecutive trading days. However, we have not yet and
may be unable to regain compliance with our current minimum bid price obligation or other listing requirements, which could cause
us to lose eligibility for continued listing on the Nasdaq Capital Market or any comparable trading market.
If we cease to be eligible to trade on Nasdaq:
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We may have to pursue trading on
a less recognized or accepted market, such as the OTC Bulletin Board or the “pink sheets.”
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Shares of our common stock could
be less liquid and marketable, thereby reducing the ability of stockholders to purchase or sell our shares as quickly and as inexpensively
as they have done historically. If our stock is traded as a “penny stock,” transactions in our stock would be more
difficult and cumbersome.
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We may be unable to access capital
on favorable terms or at all, as companies trading on alternative markets may be viewed as less attractive investments with higher
associated risks, such that existing or prospective institutional investors may be less interested in, or prohibited from, investing
in our common stock. This may also cause the market price of our common stock to decline.
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We
do not anticipate paying dividends on our common stock and, accordingly, stockholders must rely on stock appreciation for any
return on their investment.
We
have never declared or paid cash dividends on our common stock and do not expect to do so in the foreseeable future. The declaration
of dividends is subject to the discretion of our board of directors and limitations under applicable law, and will depend on various
factors, including our operating results, financial condition, future prospects and any other factors deemed relevant by our board
of directors. You should not rely on an investment in our company if you require dividend income from your investment in our company.
The success of your investment will likely depend entirely upon any future appreciation of the market price of our common stock,
which is uncertain and unpredictable. There is no guarantee that our common stock will appreciate in value.
There
is no active, public market for the Series A Preferred Shares being offered in this offering.
There
is no established public trading market for the Series A Preferred Shares being offered in this offering. We do not intend to
apply to list the Series A Preferred Shares on a securities exchange. Without an active trading market, the liquidity of the Series
A Preferred Shares will be limited.
The Series A Preferred Shares have limited voting rights.
Holders
of Series A Preferred Shares generally will not have the right to vote on any matters brought before the Company’s stockholders,
either as a separate class or on an as-converted-to-common stock-basis, and will not have the right to vote on members of the
Company’s board of directors. The holders of Series A Preferred Shares will have the right to vote only on certain material
changes in the terms of the Series A Preferred Stock and on other matters as may be required by Nevada law.
There is no public market for the Warrants or Common Warrants being sold in this offering.
There
is no established public trading market for the Warrants or Common Warrants contained in the units being offered in this offering,
and we do not expect a market to develop. We do not intend to apply for listing of any such warrants on any national securities
exchange or other trading market. Without an active market, there will be no or limited liquidity for the warrants.
The Warrants included
in this offering may not have any value.
The
Warrants will be immediately exercisable, and will expire on the fifth anniversary of the date of issuance. In the event the trading
price of our common stock does not exceed the exercise price of the Warrants during the period when the warrants are exercisable,
the warrants may not have any value.
As a holder of Warrants
or Common Warrants, you will have no rights as a common stockholder with respect to the common stock underlying the warrants until
you acquire our common stock.
Until
you acquire our common stock upon exercise of your Warrants or Common Warrants, you will have no rights with respect to the common
stock underlying those Warrants and Common Warrants. Upon exercise of your Warrants or Common Warrants, you will be entitled to
exercise the rights of a common stockholder only as to matters for which the record date for actions to be taken by our common
stockholders occurs after the date you exercise your Warrants or Common Warrants.
We
expect that our quarterly results of operations will fluctuate, and this fluctuation could cause our stock price to decline.
Our
quarterly operating results are likely to fluctuate in the future. These fluctuations could cause our stock price to decline.
The nature of our business involves variable factors, such as the timing of the research, development and regulatory pathways
of our product candidates, which could cause our operating results to fluctuate.
Due
to the possibility of fluctuations in our revenues and expenses, we believe that quarter-to-quarter comparisons of our operating
results are not a good indication of our future performance.
The
rights of the holders of our securities may be impaired by the potential issuance of preferred stock.
Our
articles of incorporation give our board of directors the ability to designate and issue preferred stock in one or more series.
As a result, the board of directors may, without stockholder approval, issue preferred stock with voting, dividend, conversion,
liquidation or other rights which could adversely affect the relative voting power and equity interest of the holders of common
stock. Preferred stock, which could be issued with the right to more than one vote per share, could have the effect of discouraging,
delaying or preventing a change of control of us. The possible impact on takeover attempts could adversely affect the price of
our securities. Although we have no present intention to designate any series, or issue any shares, of preferred stock, other
than pursuant to this offering, we may do so in the future.
If
securities or industry analysts do not publish research or reports about our business, or if they change their recommendations
regarding our stock adversely, our stock price and trading volume could decline.
The
trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish
about us or our business. Our research coverage by industry and financial analysts is currently limited. Even if our analyst coverage
increases, if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline. If one or more
of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial
markets, which in turn could cause our stock price or trading volume to decline.
Our
bylaws designate the Eighth Judicial District Court of Clark County, Nevada as the sole and exclusive forum for certain types
of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain
a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
Our
bylaws require that, to the fullest extent permitted by law, and unless the Company consents in writing to the selection of an
alternative forum, the Eighth Judicial District Court of Clark County, Nevada, will, to the fullest extent permitted by law, be
the sole and exclusive forum for each of the following:
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any derivative action
or proceeding brought in the name or right of the Company or on its behalf,
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any action asserting
a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of the Company to the Company or
the Company’s stockholders,
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any action arising
or asserting a claim arising pursuant to any provision of NRS Chapters 78 or 92A or any provision of our articles of incorporation
or bylaws, or
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any action asserting a claim governed by the
internal affairs doctrine, including, without limitation, any action to interpret, apply, enforce or determine the validity
of our articles of incorporation or bylaws.
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Because
the applicability of the exclusive forum provision is limited to the extent permitted by law, we believe that the exclusive forum
provision would not apply to suits brought to enforce any duty or liability created by the Securities Exchange Act of 1934, as
amended (Exchange Act), or any other claim for which the federal courts have exclusive jurisdiction, and that federal courts have
concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act of 1933, as amended
(Securities Act). We note that there is uncertainty as to whether a court would enforce the provision and that investors cannot
waive compliance with the federal securities laws and the rules and regulations thereunder. Although we believe this provision
benefits us by providing increased consistency in the application of Nevada law in the types of lawsuits to which it applies,
the provision may have the effect of discouraging lawsuits against our directors and officers.
FORWARD-LOOKING
STATEMENTS
This
prospectus and the documents incorporated by reference in this prospectus contain, and our officers and representatives may from
time to time make, “forward-looking statements,” which include information relating to future events, future financial
performance, financial projections, strategies, expectations, competitive environment and regulation. Words such as “may,”
“should,” “could,” “would,” “predicts,” “potential,” “continue,”
“expects,” “anticipates,” “future,” “intends,” “plans,” “believes,”
“estimates,” “goal,” “seek,” “project,” “strategy,” “likely,”
and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements
are neither historical facts, nor should they be read as a guarantee of future performance or results and may not be accurate
indications of when such performance or results will be achieved. Forward-looking statements are based on information we have
when those statements are made or management’s good faith belief as of that time with respect to future events, and are
subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited
to:
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our history of operating losses and expectation
that we will continue to incur operating losses for the foreseeable future;
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our current and future capital requirements
to support our development efforts and our ability to satisfy our capital needs;
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our ability to obtain FDA approval for any of
our product candidates;
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our ability to maintain or protect the validity
of our patents and other intellectual property;
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our ability to retain key executives and medical
and science personnel;
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our ability to internally develop new inventions
and intellectual property;
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interpretations of current laws and the passages
of future laws;
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acceptance of our business model by investors;
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the accuracy of our estimates regarding expenses
and capital requirements; and
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our ability to adequately support growth.
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The
foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein
and in the documents incorporated by reference herein or risk factors that we are faced with that may cause our actual results
to differ from those anticipate in our forward-looking statements. Please see “Risk Factors” for additional risks
which could adversely impact our business and financial performance.
Moreover,
new risks regularly emerge and it is not possible for our management to predict or articulate all risks we face, nor can we assess
the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to
differ from those contained in any forward-looking statements. The Private Securities Litigation Reform Act of 1995 and Section
27A of the Securities Act of 1933, as amended, do not protect any forward-looking statements that we make in connection with this
offering. All forward-looking statements included in this prospectus and in the documents incorporated by reference in this prospectus
are based on information available to us on the date of this prospectus or the date of the applicable document incorporated by
reference. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise
any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information,
future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on
our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus
and in the documents incorporated by reference in this prospectus. We qualify all of our forward-looking statements by these cautionary
statements.
IN
ADDITION TO THE ABOVE RISKS, BUSINESSES ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY OUR MANAGEMENT. IN REVIEWING
THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS, POTENTIAL INVESTORS SHOULD KEEP IN MIND THAT THERE
MAY BE OTHER POSSIBLE RISKS THAT COULD BE IMPORTANT.
USE
OF PROCEEDS
We estimate that we will receive net proceeds of approximately $9.0 million from the sale of the units offered
in this offering based on an assumed public offering price of $2.64 per Class A Unit (the last reported sale price of our common
stock on The Nasdaq Global Market on November 13, 2019) and $1,000 per Class B Unit, and after deducting the underwriting discounts
and commissions and estimated offering expenses payable by us. This amount does not include the proceeds which we may receive in
connection with the exercise of Warrants or Common Warrants. We cannot predict when or if the warrants will be exercised, and it
is possible that the warrants may expire and never be exercised.
Assuming 3,787,879 Class
A Units sold in the offering and no Class B Units are sold in the offering, each $0.50 increase (decrease) in the assumed public
offering price of $2.64 per Class A Unit (the last reported sale price of our common
stock on The Nasdaq Global Market on November 13, 2019) would increase (decrease)
the net proceeds to us from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses
payable by us, by approximately $1.8 million.
We
currently expect to use the net proceeds from this offering to fund Phase 3 development for our lead product candidate, TNX-102
SL, to advance the development of our other product candidates, including in-licensed product candidates, to repurchase shares
of our common stock pursuant to a stock buyback program, and for working capital and other general corporate purposes.
Although
we may use a portion of the net proceeds of this offering for the acquisition or licensing, as the case may be, of additional
technologies, other assets or businesses, or for other strategic investments or opportunities, we have no current understandings,
agreements or commitments to do so.
We may also increase or decrease the total number of shares of Class A Units we are offering. Assuming 3,787,879
Class A Units are sold in the offering and no Class B Units are sold in the offering, an
increase (decrease) of 100,000 in the total number of Class A Units we are offering would increase (decrease) the net proceeds
to us from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses payable by
us, by approximately $0.2 million, assuming the public offering price stays the same.
Assuming 3,787,879 Class A Units are sold in the offering and no Class B Units are
sold in the offering, an increase of 100,000 in the total number of shares of common stock we are offering, together with a $0.50
increase in the assumed public offering price of $2.64 per Class A Unit (the last
reported sale price of our common stock on The Nasdaq Global Market on November 13,
2019) would increase the net proceeds to us from this offering, after deducting the underwriting discounts and commissions and
estimated offering expenses payable by us, by approximately $2.1 million. Assuming
3,787,879 Class A Units are sold in the offering and no Class B Units are sold in
the offering, a decrease of 100,000 in the total number of Units we are offering, together with a $0.50 decrease in the assumed
public offering price of $2.64 per Class A Unit (the last reported sale price of our
common stock on The Nasdaq Global Market on November 13, 2019) would decrease the
net proceeds to us from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses
payable by us, by approximately $2.0 million. We do not expect that a change in the
offering price or the total number of shares by these amounts would have a material effect on our intended uses of the net proceeds
from this offering, although it may impact the amount of time prior to which we may need to seek additional capital.
Pending
our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments,
including short-term, investment-grade, interest-bearing instruments and U.S. government securities.
MARKET
PRICE OF OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Our common stock trades on The Nasdaq Global Market under the symbol “TNXP”. The last reported
closing price of our common stock on The Nasdaq Global Market was on November 13, 2019 was $2.64 per share.
Holders
As of November 13, 2019 we had 105 registered holders of record of our common stock. A substantially greater
number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held through
banks, brokers, other financial institutions and registered clearing agencies.
DIVIDEND
POLICY
We
have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings and do
not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at
the discretion of our Board of Directors, subject to applicable laws, and will depend on a number of factors, including our financial
condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors
that our Board of Directors may deem relevant. In addition, the terms of our revolving credit facility place certain limitations
on the amount of cash dividends we can pay, even if no amounts are currently outstanding.
CAPITALIZATION
The
following table sets forth our capitalization as of September 30, 2019:
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on
an actual basis, adjusted to reflect the reverse stock split of one-for-ten effective November 1, 2019;
and
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on an as-adjusted basis to reflect the issuance and sale by us of (i) 3,787,879 Class A Units in this offering
at the assumed public offering price of $2.64 per unit, and (ii) no Class B Units, after deducting underwriting discounts and commissions
and estimated offering expenses payable by us and the receipt by us of the proceeds of such sale.
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You
should read this information together with the sections titled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2018 and our Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, which are incorporated by reference
in this prospectus, and our consolidated financial statements and related notes incorporated by reference in this prospectus.
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As of September 30, 2019
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Actual
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As Adjusted
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(unaudited)
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(in thousands, except per share data)
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Cash and cash equivalents
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$
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10,024
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$
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19,014
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Other long-term liabilities
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$
|
51
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$
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51
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Stockholders’ equity (deficit):
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Common stock, $0.001 par value; 15,000,000 authorized, 1,575,246
issued and outstanding (actual); 5,363,125, issued and outstanding, as adjusted
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2
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5
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Preferred stock, $0.001 par value; 5,000,000 authorized, zero issued and outstanding (actual), 5,000,000 authorized, zero issued and outstanding, as adjusted
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—
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—
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Additional paid-in capital
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218,258
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|
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227,245
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Accumulated deficit
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(208,363
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)
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(208,363
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)
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Accumulated other comprehensive loss
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(42
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)
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|
(42
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)
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Total shareholders’ equity
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|
|
9,855
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|
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|
18,845
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Total capitalization
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$
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9,906
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|
$
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18,906
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|
To
the extent we sell any Class B Units in this offering, the same aggregate number of common stock equivalents resulting from this
offering would be convertible under the Series A Preferred Shares issued as part of the Class B Units.
Assuming 3,787,879 Class A Units are sold in the offering and no Class B Units are sold in this offering,
each $0.50 increase (or decrease) in the assumed public offering price of $2.64
per unit (the last reported sale price of our common stock on The Nasdaq Global Market on
November 13, 2019) would increase (or decrease) the amount of cash and cash equivalents,
additional paid-in capital, total stockholders’ equity and total capitalization
on an as adjusted basis by approximately $1.8 million, assuming the number of
units offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts
and commissions and estimated offering expenses payable by us. Similarly, assuming 3,787,879 Class
A Units are sold in the offering and no Class B Units are sold in this offering, each increase (decrease) of 100,000 units offered
by us would increase (decrease) cash and cash equivalents, total stockholders’ equity
and total capitalization on an as adjusted basis by approximately $0.2 million, assuming
the assumed public offering price of $2.64 per unit (the last reported sale price
of our common stock on The Nasdaq Global Market on November 13, 2019) remains the
same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Assuming 3,787,879
Class A Units are sold in the offering and no Class B Units are sold in this offering, each
100,000 unit increase in the number of units offered by us together with a concomitant $0.50 increase in the assumed public offering
price of $2.64 per unit (the last reported sale price of our common stock on The Nasdaq
Global Market on November 13, 2019) would increase each of cash and cash equivalents
and total stockholders’ equity by approximately $2.1 million
after deducting underwriting discounts and commissions and any estimated offering expenses payable by us. Conversely, assuming
3,787,879 Class A Units are sold in the offering and no Class B Units are sold in
this offering, each 100,000 unit decrease in the number of unit offered by us together with a concomitant $0.50 decrease in the
assumed public offering price of $2.64 per unit (the last reported sale price of our
common stock on The Nasdaq Global Market on November 13, 2019) would decrease each
of cash and cash equivalents and total stockholders’ equity by approximately
$2.0 million after deducting underwriting discounts and commissions and any estimated
offering expenses payable by us. The as adjusted information discussed above is illustrative only and will be adjusted based on
the actual public offering price and other terms of this offering determined at pricing.
The
number of shares of our common stock to be outstanding upon completion of this offering is based on 1,575,246 shares of our
common stock outstanding as of September 30, 2019 and excludes:
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shares
of common stock that may be issued upon conversion of the Series A Preferred Shares to be issued in this offering;
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●
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shares of common stock that may be issued upon exercise of Warrants and Common Warrants to be issued in this
offering;
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●
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109,036
shares of common stock issuable upon exercise of stock options outstanding at a weighted-average exercise price of $199.57
per share;
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496,486
shares of common stock issuable upon exercise of warrants outstanding at a weighted-average exercise price of $42.14 per share;
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55,825 shares
of common stock reserved and available for issuance under our equity compensation plan; and
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12,619 shares of common stock reserved and available for issuance under our employee stock purchase plan.
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PRINCIPAL
STOCKHOLDERS
The
following table sets forth information regarding the beneficial ownership of our common stock as of November 13, 2019 by:
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each of our stockholders who is known by us
to beneficially own 5% or more of our common stock;
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each of our named executive officers;
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●
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each of our directors; and
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●
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all of our directors and current officers as
a group.
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Beneficial
ownership is determined based on the rules and regulations of the Securities and Exchange Commission, or the SEC. A person has
beneficial ownership of shares if such individual has the power to vote and/or dispose of shares. This power may be sole or shared
and direct or indirect. In computing the number of shares beneficially owned by a person and the percentage ownership of that
person, shares of our common stock that are subject to options or warrants held by that person and exercisable as of, or within
60 days of, November 13, 2019 are counted as outstanding. These shares, however, are not counted as outstanding for the
purposes of computing the percentage ownership of any other person(s). Except as may be indicated in the footnotes to this table
and pursuant to applicable community property laws, each person named in the table has sole voting and dispositive power with
respect to the shares of our common stock set forth opposite that person’s name. Unless indicated below, the address of
each individual listed below is c/o Tonix Pharmaceuticals Holding Corp., 509 Madison Avenue, Suite 1608, New York, New York 10022.
Applicable percentage ownership in the following table is based on 1,575,246 shares of our common stock outstanding
as of November 13,
2019 and also lists applicable percentage ownership based on 5,363,125 shares of our
common stock assumed to be outstanding after completion of the offering.
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PERCENTAGE
OF
SHARES BENEFICIALLY OWNED
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NAME
OF OWNER
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NUMBER
OF
SHARES OWNED(1)
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Before Offering(2)
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After Offering
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Seth Lederman
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7,054
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(3)
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*
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*
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Jessica Morris
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660
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(4)
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*
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*
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Bradley Saenger
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1,502
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(5)
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*
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*
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Gregory Sullivan
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2,309
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(6)
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*
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*
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Margaret Smith Bell
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400
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(7)
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*
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*
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David Grange
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270
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(8)
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*
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*
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John Rhodes
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900
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(9)
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*
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Adeoye Olukotun
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150
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(10)
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*
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*
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James Treco
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1,000
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(11)
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*
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*
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Daniel Goodman
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6
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(12)
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*
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*
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Officers and Directors as a Group (10 persons)
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14,251
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(13)
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*
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*
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Iroquois Capital Management LLC
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198,066
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(14)
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11.8
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3.6
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*
Denotes less than 1%
(1)
Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with
respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable
or convertible within 60 days of November 13, 2019 are deemed outstanding for computing the percentage of the person holding
such option or warrant but are not deemed outstanding for computing the percentage of any other person.
(2) Percentage based upon 1,575,246 shares of common stock
issued and outstanding as of November 13, 2019.
(3)
Includes 2,758 shares of common stock underlying options which are currently exercisable or become exercisable within 60 days,
5 shares of common stock underlying warrants, 205 shares of common stock owned by Lederman & Co, 33 shares of common stock
owned by L&L, 59 shares of common stock owned by Targent, 30 shares of common stock owned by Leder Laboratories, Inc. (Leder
Labs), 30 shares of common stock owned by Starling, 3,267 shares owned through a 401(k) account, 459 shares owned through an IRA
account and 31 shares owned by Dr. Lederman’s spouse. Seth Lederman, as the Managing Member of Lederman & Co and Targent,
the Manager of L&L and the Chairman of Leder Labs and Starling, has investment and voting control over the shares held by
these entities.
(4)
Includes 640 shares of common stock underlying options which are currently exercisable or become exercisable within 60 days, and
3 shares of common stock underlying warrants.
(5)
Includes 598 shares of common stock underlying options which are currently exercisable or become exercisable within 60 days.
(6)
Includes 904 shares of common stock underlying options which are currently exercisable or become exercisable within 60 days.
(7)
Includes 400 shares of common stock underlying options which are currently exercisable or vested or become exercisable within
60 days.
(8)
Includes 270 shares of common stock underlying options which are currently exercisable or vested or become exercisable within
60 days.
(9)
Includes 652 shares of common stock underlying options which are currently exercisable or become exercisable within 60 days, and
13 shares of common stock underlying warrants
(10)
Includes 150 shares of common stock underlying options which are currently exercisable or vested or become exercisable within
60 days.
(11)
Includes 1,000 shares of common stock underlying options which are currently exercisable or become exercisable within 60 days.
(12)
Includes 5 shares of common stock underlying options which are currently exercisable or become exercisable within 60 days.
(13)
Includes 7,377 shares of common stock underlying options which are currently exercisable or vested or become exercisable within
60 days, 205 shares of common stock owned by Lederman & Co, 33 shares of common stock owned by L&L, 59 shares of common
stock owned by Targent, 30 shares of common stock owned by Leder Labs, 30 shares of common stock owned by Starling, 3,267 shares
owned through a 401(k) account of Dr. Lederman, 459 shares owned through an IRA account of Dr. Lederman, 31 shares owned by Dr.
Lederman’s spouse, and 21 shares of common stock underlying warrants owned directly by the executive officers and directors.
(14)
Based upon a Schedule 13G (as amended) filed with the SEC on February 14, 2019 by Iroquois Capital Management
L.L.C., and notifications to the Company received through March 13, 2019, Richard Abbe and Kimberly Page, Iroquois Master Fund
Ltd. held 35,502 shares of common stock and warrants to purchase 35,698 shares of common stock; and Iroquois Capital Investment
Group LLC held 62,563 shares of common stock and warrants to purchase 64,303 shares of common stock. Mr. Abbe shares authority
and responsibility for the investments made on behalf of Iroquois Master Fund with Ms. Kimberly Page, each of whom is a director
of the Iroquois Master Fund Ltd. As such, Mr. Abbe and Ms. Page may each be deemed to be the beneficial owner of all shares of
common stock held by, and underlying the preferred stock and warrants held by, Iroquois Master Fund. Iroquois Capital is the investment
advisor for Iroquois Master Fund and Mr. Abbe is the President of Iroquois Capital. Mr. Abbe has the sole authority and responsibility
for the investments made on behalf of Iroquois Capital Investment Group LLC. As such, Mr. Abbe may be deemed to be the beneficial
owner of all shares of common stock held by, and underlying the preferred stock and warrants held by, Iroquois Master Fund and
Iroquois Capital Investment Group LLC. Each of the Reporting Persons disclaims any beneficial ownership of any shares of common
stock except to the extent of their pecuniary interest therein. The mailing address for each beneficial owner is 125 Park Ave,
25th floor, NY, NY 10017.
CERTAIN
RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
Other
than compensation arrangements for our named executive officers and directors, we describe below each transaction or series of
similar transactions, since January 1, 2016, to which we were a party or will be a party, in which:
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the amounts involved exceeded or will exceed
the lesser of (i) $120,000 or (ii) 1% of the average total assets of the Company at year end for the last two completed fiscal
years; and
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any of our directors, executive officers, promoters
or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will
have a direct or indirect material interest.
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Compensation
arrangements for our named executive officers and directors are described in the section titled “Executive Compensation”
in our Annual Report on Form 10-K for the year ended December 31, 2018, which is incorporated by reference in this prospectus.
DESCRIPTION
OF CAPITAL STOCK
The
following is a summary of all material characteristics of our capital stock as set forth in our articles of incorporation and
bylaws. The summary does not purport to be complete and is qualified in its entirety by reference to our articles of incorporation
and bylaws, each as amended, and to the provisions of Chapters 78 and 92A of the Nevada Revised Statutes, as amended (“NRS”).
Common
Stock
We are authorized to issue up to 15,000,000
shares of our common stock, par value $0.001 per share. As of November 13, 2019, there were 1,575,246 shares of our common stock
issued and outstanding. The outstanding shares of our common stock are validly issued, fully paid and nonassessable.
Holders
of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of our common
stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of our common stock voting for the
election of directors collectively hold the voting power to elect all of our directors. Holders of our common stock representing
a majority of the voting power of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy,
are necessary to constitute a quorum at any meeting of stockholders. A vote by the holders of a majority of our outstanding shares
is required to effectuate certain fundamental corporate changes such as dissolution, merger or an amendment to our articles of
incorporation. However, a two-thirds vote is required for stockholders to amend our bylaws.
Subject
to the rights of holders of shares of our preferred stock, if any, the holders of our common stock are entitled to share in all
dividends that our board of directors, in its discretion, declares on our common stock from legally available funds. In the event
of a liquidation, dissolution or winding up, each outstanding share of our common stock entitles its holder to participate pro
rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference
over our common stock. Our common stock has no pre-emptive, subscription or conversion rights and there are no redemption provisions
applicable to our common stock.
Exchange
Listing
Our
common stock is listed on The Nasdaq Global Market under the trading symbol “TNXP.”
Transfer
Agent and Registrar
The
Transfer Agent and Registrar for our common stock is vStock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598.
Preferred
Stock
We
are authorized to issue up to 5,000,000 shares of preferred stock, par value $0.001 per share, none of which are currently outstanding.
The shares of preferred stock may be issued in series, and each such series shall have such voting powers, full or limited, or
no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, as shall be stated and expressed in the certificate of designation relating to such series,
as approved by the board of directors and filed with the Nevada Secretary of State. Pursuant to our articles of incorporation,
the board of directors is expressly vested with the authority, without further action by the stockholders, to determine and fix
in the resolution or resolutions providing for the issuances of preferred stock the voting powers, designations, preferences and
rights, and the qualifications, limitations or restrictions thereof, of each such series to the full extent now or hereafter permitted
by the laws of the State of Nevada.
Prior
to the issuance of any series of preferred stock, we will further amend our articles of incorporation, as amended, by way of a
certificate of designation designating such series and its terms. We will file a copy of the certificate of designation that contains
the terms of each such series of preferred stock with the Nevada Secretary of State and the SEC each time we issue a new series
of preferred stock. Each certificate of designation will establish the number of shares included in a designated series and fix
the designation, powers, privileges, preferences and rights of the shares of each series as well as any applicable qualifications,
limitations or restrictions, including, as applicable:
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the designation,
stated value and liquidation preference of the series;
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the number of shares
within the series;
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the offering price;
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the dividend rate
or rates (or method of calculation), the date or dates from which dividends shall accrue, and whether such dividends shall
be cumulative or noncumulative and, if cumulative, the dates from which dividends shall commence to cumulate;
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any redemption or
sinking fund provisions;
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the amount that
shares of the series shall be entitled to receive in the event of our liquidation, dissolution or winding-up;
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the terms and conditions,
if any, on which shares of the series shall be convertible or exchangeable for shares of our stock of any other class or classes,
or other series of the same class;
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the voting rights,
if any, of shares of the series; the status as to reissuance or sale of shares of the series redeemed, purchased or otherwise
reacquired, or surrendered to us on conversion or exchange;
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the conditions and
restrictions, if any, on the payment of dividends or on the making of other distributions on, or the purchase, redemption
or other acquisition by us or any subsidiary, of the common stock or of any other class of our shares ranking junior to the
shares of the series as to dividends or upon liquidation;
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the conditions and
restrictions, if any, on the creation of indebtedness by us or by any subsidiary, or on the issuance of any additional stock
ranking on a parity with or prior to the shares of the series as to dividends or upon liquidation; and
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any additional dividend,
liquidation, redemption, sinking or retirement fund and other rights, preferences, privileges, limitations and restrictions
of the series.
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The
issuance of any preferred stock could adversely affect the rights of the holders of common stock and, therefore, reduce the value
of the common stock. The ability of our board of directors to issue preferred stock could discourage, delay or prevent a takeover
or other corporate action.
On
December 7, 2018, we filed with the Nevada Secretary of State a certificate of designation designating 11,984 shares of our preferred
stock as Series A Convertible Preferred Stock, which we refer to as the 2018 Series A Preferred Stock, in connection with a units
offering that included the issuance of all 11,984 designated shares of the 2018 Series A Preferred Stock. Prior to the date of
this prospectus, all shares of the 2018 Series A Preferred Stock have been converted into shares of our common stock, and pursuant
to the terms of the certificate of designation, all such converted shares have resumed the status of authorized but undesignated
and unissued shares of our preferred stock and are no longer designated as Series A Convertible Preferred Stock. The certificate
of designation relating to the 2018 Series A Preferred Stock was withdrawn on October 17, 2019.
Series
A Convertible Preferred Stock
The
following is a summary of the material terms of the Series A Convertible Preferred Stock, which we refer to as the Series A Preferred
Shares or the Series A Preferred Stock. This summary is not complete. The following summary of the terms and provisions of the
Series A Preferred Stock is qualified in its entirety by reference to the certificate of designation for the Series A Convertible
Preferred Stock, the form of which has been filed as an exhibit to the registration statement of which this prospectus is a part.
General
Our
board of directors has designated up to shares of the 5,000,000 authorized shares of preferred stock as Series A Preferred Shares,
par value $0.001 per share. When issued, the Series A Preferred Shares will be validly issued, fully paid and non-assessable.
Each share of Series A Preferred Shares will have a stated value of $1,000 per share.
Rank
The
Series A Preferred Stock will rank on parity to our common stock with respect to dividends and liquidation rights.
Conversion
Each
Series A Preferred Share is initially convertible into shares of our common stock (subject to adjustment as provided in the certificate
of designation for the Series A Preferred Stock) at any time at the option of the holder at a conversion price equal to the stated
value of the Series A Preferred Shares of $1,000 divided by the public offering price of the Class A Units in this offering. Holders
of Series A Preferred Shares will be prohibited from converting the Series A Preferred Shares into shares of our common stock
if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the total number of
shares of our common stock then issued and outstanding. However, any holder may increase or decrease such percentage to any other
percentage not in excess of 9.99% upon at least 61 days’ prior notice from the holder to us.
Liquidation
Preference
In
the event of our liquidation, dissolution or winding-up, holders of Series A Preferred Shares will be entitled to receive the
same amount that a holder of our common stock would receive if the Series A Preferred Shares were fully converted into shares
of our common stock at the conversion price (disregarding for such purposes any conversion limitations) which amounts shall be
paid pari passu with all holders of common stock.
Voting
Rights
Holders
of Series A Preferred Shares generally will not have the right to vote on any matters brought before the Company’s common
stockholders, either as a separate class or on an as-converted-to-common-stock basis, and will not have the right to vote for
members of the Company’s board of directors. However, the affirmative vote of the holders of a majority of the then-outstanding
Series A Preferred Shares will be required to (a) alter or change adversely the powers, preferences or rights of the Series A
Preferred Shares, (b) amend our articles of incorporation or other charter documents in any manner that materially adversely affects
any rights of the holders of Series A Preferred Shares, (c) increase the number of authorized Series A Preferred Shares, (c) issue
any Series A Preferred Shares other than pursuant to the certificate of designation for the Series A Convertible Preferred Stock,
or (d) enter into any agreement with respect to any of the foregoing.
Dividends
Series
A Preferred Shares will not be entitled to receive any dividends, unless and until specifically declared by our board of directors.
The holders of the Series A Preferred Shares will participate, on an as-if-converted-to-common stock-basis, in any dividends paid
to the holders of common stock.
Redemption
We
are not obligated to redeem or repurchase any Series A Preferred Shares. Series A Preferred Shares are not otherwise entitled
to any redemption rights or mandatory sinking fund or analogous fund provisions.
Exchange
Listing
We
do not plan on making an application to list the Series A Preferred Shares on any national securities exchange or other nationally
recognized trading system.
Warrants
The
following is a summary of the material terms of the Warrants. This summary is not complete. The following summary of the terms
and provisions of the Warrants is qualified in its entirety by reference to the Warrants and the warrant agency agreement, the
forms of which have been filed as exhibits to the registration statement of which this prospectus is a part.
Form
The Warrants will be issued in electronic book-entry form to the investors. You should review a copy of the
form of Warrant, which is filed as an exhibit to the registration statement of which this prospectus forms a part, for a complete
description of the terms and conditions applicable to the Warrants.
Exercisability
The Warrants are exercisable at any time after their original issuance, and at any time up to the date that
is five years after their original issuance. The Warrants will be exercisable, at the option of each holder, in whole or in part
by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the shares
of common stock underlying the Warrants under the Securities Act is effective and available for the issuance of such shares, or
an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full in immediately
available funds for the number of shares of common stock purchased upon such exercise. If a registration statement registering
the issuance of the shares of common stock underlying the Warrants under the Securities Act is not effective or available and an
exemption from registration under the Securities Act is not available for the issuance of such shares, the holder may, in its sole
discretion, elect to exercise the Warrant through a cashless exercise, in which case the holder would receive upon such exercise
the net number of shares of common stock determined according to the formula set forth in the Warrant. No fractional shares of
common stock will be issued in connection with the exercise of a Warrant. In lieu of fractional shares, we will pay the holder
an amount in cash equal to the fractional amount multiplied by the exercise price.
Exercise
Limitation
A holder will not have the right to exercise any portion of the Warrant if the holder (together with its affiliates)
would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect
to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants.
Exercise
Price
The exercise price per share of common stock purchasable upon exercise of the Warrants is equal to 100% of
the public offering price of a Class A Unit. The exercise price is subject to appropriate adjustment in the event of certain stock
dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock and
also upon any distributions of assets, including cash, stock or other property to our stockholders.
Cashless
Exercise
The exercise price and the number of shares issuable upon exercise of the Warrants is subject to appropriate
adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations
or similar events affecting our common stock. The warrant holders must pay the exercise price in cash upon exercise of the Warrants,
unless such warrant holders are utilizing the cashless exercise provision of the Warrants, which is only available in certain circumstances
such as if the underlying shares are not registered with the SEC pursuant to an effective registration statement. We intend to
use commercially reasonable efforts to have the registration statement of which this prospectus forms a part, effective when the
Warrants are exercised.
Anti-Dilution
In addition to the adjustments noted above under “Exercise Price,” the Warrants also contain anti-dilution
protection upon the issuance of any common stock, securities convertible into common stock or certain other issuances at a price
below the then-existing exercise price of the Warrants within two years of the date of issuance, with certain exceptions. The anti-dilution
protection contained in the Warrants does not provide for the issuance of additional securities in the event of, or in place of,
an adjustment to the then-existing exercise price of the Warrants. The terms of the Warrants, including these anti-dilution protections,
may make it difficult for us to raise additional capital at prevailing market terms in the future.
Transferability
Subject
to applicable laws, the Warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange
Listing
We
do not plan on making an application to list the Warrants on any national securities exchange or other nationally recognized trading
system.
Fundamental
Transactions
In
the event of a fundamental transaction, as described in the Warrants and generally including any reorganization, recapitalization
or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties
or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common
stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock,
the holders of the Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash
or other property that the holders would have received had they exercised the Warrants immediately prior to such fundamental transaction.
Rights as
a Stockholder
Except
as otherwise provided in the Warrants or by virtue of such holder’s ownership of shares of our common stock, the holder
of a Warrant does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder
exercises the Warrant.
Common Warrants
The
following is summary of the material terms of the Common Warrants. This summary is not complete. The following summary of the
terms and provisions of the Common Warrants is qualified in its entirety by reference to the Common Warrants, the form of which
has been filed as an exhibit to the registration statement of which this prospectus is a part.
Form
The
Common Warrants will be issued in electronic book-entry form to the investors. You should review a copy of the form of Common
Warrant and the warrant agency agreement, the forms of which have been filed as exhibits to the registration statement of which
this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants.
Exercisability
The
Common Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering a duly executed exercise
notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except in the
case of a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the Common
Warrant to the extent that the holder would own more than [4.99][9.99]% of the outstanding common stock immediately after exercise,
except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership of
outstanding stock after exercising the holder’s warrants. No fractional shares of common stock will be issued in connection
with the exercise of a Common Warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional
amount multiplied by the exercise price.
Exercise Price
The
exercise price per share of common stock purchasable upon exercise of the Common Warrants is equal to 100% of the public offering
price of a Class A Unit. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions
of assets, including cash, stock or other property to our stockholders.
Cashless Exercise
The
exercise price and the number of shares issuable upon exercise of the Common Warrants is subject to appropriate adjustment in
the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or
similar events affecting our common stock. The common warrant holders must pay the exercise price in cash upon exercise of the
Common Warrants, unless such holders are utilizing the cashless exercise provision of the Common Warrants, which is available
in certain circumstances such as if the underlying shares are not registered with the SEC pursuant to an effective registration
statement. Notwithstanding the foregoing, the Common Warrants may be exercised at the option of the holder on a cashless basis,
in whole or in part, for a whole number of shares, for one share of common stock, during the period of time between the date that
is 30 days after issuance and the date that is 12 months after issuance. We intend to use commercially reasonable efforts to have
the registration statement of which this prospectus forms a part, effective when the Common Warrants are exercised.
Fundamental Transaction
In the event of a fundamental transaction, as described in the Common Warrants and generally including any
reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially
all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our
outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding
common stock, the holders of the Common Warrants will be entitled to receive upon exercise of the common warrants the kind and
amount of securities, cash or other property that the holders would have received had they exercised the Common Warrants immediately
prior to such fundamental transaction.
Rights
as a Stockholder
Except as otherwise provided in the Common Warrants or by virtue of such holder’s ownership of shares
of our common stock, the holder of a Common Warrant does not have the rights or privileges of a holder of our common stock, including
any voting rights, until the holder exercises the Common Warrant.
Anti-Takeover
Effects of Provisions of the Articles of Incorporation and Bylaws
Articles
of Incorporation and Bylaw Provisions. Our articles of incorporation and bylaws include a number of provisions that may
have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate
with our board of directors rather than pursue non-negotiated takeover attempts. They are intended to enhance long-term value
to our stockholders by increasing the likelihood of continued stability in the composition of our board of directors and its policies
and may have the effect of discouraging certain types of transactions that may involve an actual or threatened acquisition of
us. These provisions are also designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain
tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender
offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our stock that could result
from actual or rumored takeover attempts. These provisions include the items described below.
Filling
Vacancies. Any vacancy on our board of directors, however occurring, including a vacancy resulting from an increase in
the size of our board of directors, may only be filled by the affirmative vote of a majority of our directors then in office even
if less than a quorum.
Meetings
of Stockholders. Our bylaws provide that our president, our board of directors or a duly authorized committee of the
board of directors may call special meetings of stockholders and only those matters set forth in the notice of the special meeting
may be considered or acted upon at a special meeting of stockholders. Our bylaws limit the business that may be conducted at an
annual meeting of stockholders to those matters properly brought before the meeting.
Advance
Notice Requirements. Our bylaws include advance notice procedures with regard to stockholder proposals relating to the
nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures
provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at
which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less
than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice
must contain certain information specified in the amended and restated bylaws.
Amendment
to Bylaws and Articles of Incorporation. As required by Nevada law, any amendment of our articles of incorporation must
first be approved by a majority of our board of directors and, if required by law or our articles of incorporation, thereafter
be approved by a majority of the outstanding shares entitled to vote on the amendment, and a majority of the outstanding shares
of each class entitled to vote thereon as a class. Our bylaws may be amended by the affirmative vote of a majority vote of the
directors then in office, subject to any limitations set forth in the bylaws, or by the holders of at least sixty-six and two-thirds
percent (66 2/3%) of the outstanding voting power of our company, voting together as a single class.
Blank
Check Preferred Stock. Our articles of incorporation provides for 5,000,000 authorized shares of preferred stock. The
existence of authorized but unissued shares of preferred stock may have the effect of discouraging an attempt to obtain control
of us by means of a merger, tender offer, proxy contest, or otherwise. For example, if in the due exercise of its fiduciary obligations,
our board of directors were to determine that a takeover proposal is not in the interests of our company or our stockholders,
our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more offerings
or other transactions that might have the effect of diluting the relative voting or other rights of the proposed acquirer or activist
stockholder or stockholder group. The issuance of shares of preferred stock with rights preferential to the common stock could
have the effect of decreasing the amounts available for distribution to holders of shares of common stock. The issuance may also
adversely affect the relative rights and powers, including voting rights, of these holders and may have the effect of delaying,
deterring, or preventing a change of control of us.
Exclusive
Forum Bylaws Provision. Our bylaws require that, to the fullest extent permitted by law, and unless the Company consents in
writing to the selection of an alternative forum, the Eighth Judicial District Court of Clark County, Nevada, will, to the fullest
extent permitted by law, be the sole and exclusive forum for each of the following:
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any
derivative action or proceeding brought in the name or right of the Company or on its behalf,
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any
action asserting a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of the Company
to the Company or the Company’s stockholders,
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any
action arising or asserting a claim arising pursuant to any provision of NRS Chapters 78 or 92A or any provision of our articles
of incorporation or bylaws, or
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any
action asserting a claim governed by the internal affairs doctrine, including, without limitation, any action to interpret,
apply, enforce or determine the validity of our articles of incorporation or bylaws.
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Because
the applicability of the exclusive forum provision is limited to the extent permitted by law, we believe that the exclusive forum
provision would not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for
which the federal courts have exclusive jurisdiction, and that federal courts have concurrent jurisdiction over all suits brought
to enforce any duty or liability created by the Securities Act. We note that there is uncertainty as to whether a court would
enforce the provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations
thereunder. Although we believe this provision benefits us by providing increased consistency in the application of Nevada law
in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors
and officers.
MATERIAL
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The
following is a summary of the material United States federal income tax consequences to U.S. holders and non-U.S. holders (each
as defined below) of their ownership and disposition of our common stock and Series A Convertible Preferred Stock or the related
warrants, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary
is based upon current provisions of the Internal Revenue Code of 1986, as amended, or Code, existing and proposed United States
Treasury Regulations promulgated thereunder, current administrative rulings, and judicial decisions, all as in effect as of the
date hereof. These authorities may be changed, possibly retroactively, so as to result in United States federal tax consequences
different from those set forth below. We have not obtained, and do not intend to obtain, any opinion of counsel or ruling from
the Internal Revenue Service, or the IRS, with respect to the statements made and the conclusions reached in the following summary,
and there can be no assurance that the IRS will agree with such statements and conclusions.
This
summary also does not address the tax considerations arising under the laws of any non-United States, state or local jurisdiction
or under any non-income tax laws, including United States federal gift and estate tax laws, except to the limited extent set forth
below. In addition, this discussion does not address the potential application of the tax on net investment income or the alternative
minimum tax. This discussion may not apply, in whole or in part, to particular U.S. holders and non-U.S. holders in light of their
individual circumstances or to holders subject to special treatment under the United States federal income tax laws, including,
without limitation:
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insurance companies,
banks or other financial institutions;
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tax-exempt organizations;
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pension plans;
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controlled foreign
corporations or passive foreign investment companies;
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brokers or dealers
in securities or currencies;
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traders in securities
that elect to use a mark-to-market method of accounting for their securities holdings;
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persons that own,
or are deemed to own, more than 5% of our capital stock (except to the extent specifically set forth below);
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certain former
citizens or long-term residents of the United States;
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persons
that hold our common stock, warrants, and Series A Convertible Preferred Stock as a position in a hedging transaction, straddle,
conversion transaction, synthetic security or other integrated investment;
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persons
that hold or receive our common stock, warrants, and Series A Convertible Preferred Stock pursuant to the exercise of any
employee stock option or otherwise as compensation; and
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persons
that do not hold our common stock, warrants, and Series A Convertible Preferred Stock as a capital asset within the meaning
of Section 1221 of the Code.
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In
addition, this discussion does not address the tax treatment of partnerships, including any entity or arrangement treated as a
partnership for United States federal income tax purposes. Generally, the tax treatment of a person treated as a partner in such
an entity will depend on the status of the partner, the activities of the partner and the partnership, and certain determinations
made at the partner level. Accordingly, partnerships that hold our common stock, warrants, and Series A Convertible Preferred
Stock, and partners in such partnerships, should consult their tax advisors.
THIS
SUMMARY IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE. WE RECOMMEND THAT PROSPECTIVE INVESTORS CONSULT THEIR TAX ADVISORS REGARDING
THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK,
WARRANTS AND SERIES A CONVERTIBLE PREFERRED STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL OR FOREIGN TAX
LAWS, ANY APPLICABLE INCOME TAX TREATIES, OR ANY OTHER U.S. FEDERAL TAX LAWS (INCLUDING ESTATE AND GIFT TAX LAWS).
Allocation
of Purchase Price
For U.S. federal income tax purposes, each investor must allocate the purchase price paid by such investor
among the purchased common stock, warrants, and Series A Convertible Preferred Stock, as applicable, based on their relative fair
market values at the time of issuance. This allocation of the purchase price will establish the holder’s initial tax basis
for U.S. federal income tax purposes in such investor’s purchased common stock, warrants, or Series A Convertible Preferred
Stock, as applicable. The separation (as opposed to the disposition) of common stock, warrants, or Series A Convertible Preferred
Stock pursuant to this offering should not be a taxable event for U.S. federal income tax purposes. Certain warrants may be treated
as common stock for U.S. federal income tax purposes. Each holder should consult its own tax advisor regarding the allocation of
the purchase price described herein.
The
foregoing treatment of our common stock, warrants, and Series A Convertible Preferred Stock and an investor’s purchase price
allocation are not binding on the IRS or the courts. Because there are no statutory, administrative or judicial authorities that
directly address such investment units, no assurance can be given that the IRS or the courts will agree with the characterization
described above or the discussion below. Accordingly, each investor should consult with tax advisors regarding the risks associated
with the acquisition of our common stock, warrants, and Series A Convertible Preferred Stock pursuant to this offering (including
potential alternative characterizations) and regarding an allocation of the purchase price among the purchased common stock, warrants,
and Series A Convertible Preferred Stock, as applicable, that each investor is treated as acquiring. The balance of this discussion
generally assumes that the characterization described above is respected for U.S. federal income tax purposes.
U.S.
Holders
Definition
of U.S. Holder
For
purposes of this discussion, a “U.S. holder” is any beneficial owner of our securities that is, for U.S. federal income
tax purposes:
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an individual citizen or resident
of the United States;
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a corporation, or other entity taxable
as a corporation, created or organized in the United States or under the laws of the United States or any political subdivision
thereof;
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an estate whose income is subject
to United States federal income tax regardless of its source; or
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a trust whose administration is
subject to the primary supervision of a United States court and which has one or more “United States persons” (as defined
in the Code) who have the authority to control all substantial decisions of the trust, or which has made a valid election to be
treated as a United States person.
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If
you are not a U.S. holder, this section does not apply to you. Please see the discussion under “Non-U.S. Holders”
below.
Exercise
or Expiration of Warrants and Constructive Distributions on Warrants
Sale,
Exchange, Redemption or other Taxable Disposition of Warrants
Upon
the sale, exchange, redemption or other taxable disposition of a warrant, in general, a U.S. holder will recognize taxable gain
or loss measured by the difference, if any, between (i) the amount of cash and the fair market value of any property received
upon such taxable disposition and (ii) the U.S. holder’s adjusted tax basis in the warrant. Such gain or loss generally
will be capital gain or loss and generally will be long-term capital gain or loss if, at the time of the sale or other disposition,
the U.S. holder’s holding period for the warrant is more than one year. The deductibility of capital losses is subject to
limitations.
Exercise
or Expiration of Warrants
Upon
the exercise of a warrant by paying the exercise price in cash, in general, a U.S. holder will not recognize gain or loss for
U.S. federal income tax purposes, except to the extent the U.S. holder receives a cash payment for any fractional share of common
stock that would otherwise have been issuable upon exercise of the warrant. The U.S. holder’s initial tax basis in a share
of common stock received upon exercise will be equal to the sum of (1) the U.S. holder’s adjusted tax basis in the warrant
and (2) the exercise price of the warrant. The U.S. holder’s holding period in the shares received upon exercise will commence
on the day of exercise. If a warrant expires without being exercised, a U.S. holder will recognize a capital loss in an amount
equal to the U.S. holder’s adjusted tax basis in the warrant. Such loss will be long-term capital loss if, at the time of
the expiration, the warrant has been held by the U.S. holder for more than one year. The deductibility of capital losses is subject
to limitations.
Constructive
Distributions on Warrants
Under
Section 305 of the Code, an adjustment to the number of common shares that will be issued on the exercise of the warrants, or
an adjustment to the exercise price of the warrants, may be treated as a constructive distribution if, and to the extent that,
such adjustment has the effect of increasing a U.S. holder’s proportionate interest in our earnings and profits or assets,
depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash
or other property to the holders of our common stock). An adjustment made pursuant to a bona fide reasonable adjustment formula
that has the effect of preventing dilution should generally not be considered to result in a constructive distribution. Any such
constructive distribution could be taxable whether or not there is an actual distribution of cash or other property. See the more
detailed discussion of the rules applicable to distributions made by us under the heading “Distributions on Common Stock
and Series A Convertible Preferred Stock to U.S. Holder” below. U.S. holders should consult with tax advisors regarding
the proper treatment of any adjustments to the warrants.
Distributions
on Common Stock and Series A Convertible Preferred Stock to U.S. Holders
As
described in the section captioned “Dividend Policy,” we do not anticipate declaring or paying distributions to holders
of our common stock in the foreseeable future. In addition, as described in the section captioned “Description of Capital
Stock—Preferred Stock—Series A Convertible Preferred Stock—Dividends,” Series A Convertible Preferred
Stock will not be entitled to receive any dividends, unless and until specifically declared by our board of directors. However,
if we do make distributions of cash or property on our common stock or Series A Convertible Preferred Stock, those payments will
constitute dividends for United States federal income tax purposes to the extent paid from our current or accumulated earnings
and profits, as determined under United States federal income tax principles. To the extent those distributions exceed both our
current and accumulated earnings and profits, the excess will constitute a return of capital and will first reduce a U.S. holder’s
tax basis in our common stock or Series A Convertible Preferred Stock, but not below zero, and then will be treated by a U.S.
holder as gain from the sale of stock as described below under “Gain on Dispositions of Our Common Stock or Series A Convertible
Preferred Stock by U.S. Holders.”
Dividends
we pay to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite
holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for
purposes of investment interest deduction limitations), and provided the common shares are held for more than 60 days during the
121-day period beginning 60 days before the exdividend date and certain other holding period requirements are met, dividends we
pay to a non-corporate U.S. holder generally will constitute “qualified dividends” that will be subject to tax at
the maximum tax rate accorded to long-term capital gains. Dividends paid by us will generally be treated as income from U.S. sources.
U.S. holders should consult their own tax advisors regarding the holding period and other requirements that must be satisfied
in order to qualify for the reduced maximum tax rate on dividends.
Gain
on Disposition of Our Common Stock or Series A Convertible Preferred Stock by U.S. Holders
If
a U.S holder sells or otherwise disposes of our common stock or Series A Convertible Preferred Stock (other than by conversion)
in a taxable transaction, the U.S. holder will generally recognize capital gain or loss equal to the difference between the amount
realized and the U.S. holder’s adjusted tax basis in the common stock or Series A Convertible Preferred Stock. The capital
gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period for the common stock or Series A
Convertible Preferred Stock is more than one year at the time of the disposition. Long-term capital gain of a non-corporate U.S.
holder is generally taxed at preferential rates. The deductibility of capital losses is subject to limitations.
Conversion
of Our Series A Convertible Preferred Stock into Our Common Stock
Generally,
a U.S. holder will not recognize any gain or loss in respect of the receipt of our common stock upon the conversion of our Series
A Convertible Preferred Stock (except to the extent the U.S. holder receives a cash payment for any fractional share that would
otherwise have been issuable upon conversion of the Series A Convertible Preferred Stock). The adjusted tax basis of our common
stock that a U.S. holder receives on conversion will equal the adjusted tax basis of the Series A Convertible Preferred Stock
converted (decreased by the adjusted tax basis allocable to any fractional share that would otherwise have been issued upon conversion
of the Series A Convertible Preferred Stock), and the holding period of such common stock received on conversion will include
the period during which the U.S. holder held the Series A Convertible Preferred Stock prior to conversion.
In the event a U.S. holder’s Series
A Convertible Preferred Stock is converted pursuant to an election by such U.S. holder in the case of certain acquisitions or fundamental
changes or pursuant to certain other transactions (including our consolidation or merger into another person), the tax treatment
of such a conversion will depend upon the facts underlying the particular transaction triggering such a conversion. In this regard,
it is possible that any related adjustment of the conversion rate would be treated as a constructive distribution to the U.S. holder
as described below under “U.S. Holders—Constructive Dividends on Series A Convertible Preferred Stock.” U.S.
holders should consult their own tax advisors to determine the specific tax treatment of a conversion under such circumstances.
Constructive
Dividends on Series A Convertible Preferred Stock
The conversion rate of our Series A Convertible Preferred Stock is subject to adjustment under certain circumstances,
as described above under “Description of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock.”
Section 305(c) of the Code and Treasury regulations thereunder may treat a U.S. holder of our Series A Convertible Preferred Stock
as having received a constructive distribution includable in such U.S. holder’s income in the manner as described above under “U.S.
Holders—Distributions on Common Stock and Series A Convertible Preferred Stock to U.S. Holders,” if and to the extent
that certain adjustments in the conversion rate (or failures to make such an adjustment) increase the proportionate interest of
such U.S. holder in our earnings and profits. In certain other circumstances, an adjustment to the conversion rate of our Series
A Convertible Preferred Stock or a failure to make such an adjustment could potentially give rise to constructive distributions
to U.S. holders of our common stock. Thus, under certain circumstances, U.S. holders may recognize income in the event of a constructive
distribution even though they may not receive any cash or property.
Information
Reporting and Backup Withholding
U.S.
holders may be subject to information withholding and/or backup withholding with respect to the gross proceeds from the disposition
of our securities, or from payments of dividends. Backup withholding (currently at the rate of 24%) may apply under certain circumstances
if a U.S. holder (1) fails to furnish a social security or other taxpayer identification number, or TIN, (2) furnishes an incorrect
TIN, (3) fails to report interest or dividends properly or (4) fails to provide a certified statement, signed under penalties
of perjury, that the TIN provided is correct, that the U.S. holder is not subject to backup withholding and that the U.S. holder
is a U.S. person for U.S. federal income tax purposes on IRS Form W-9. Any amount withheld from a payment under the backup withholding
rules is allowable as a credit against (and may entitle a U.S. holder to a refund with respect to) such U.S. holder’s federal
income tax liability, provided that the required information is timely furnished to the IRS. Certain persons, including corporations
and certain financial institutions, that demonstrate this fact if requested, are exempt from information reporting and backup
withholding. U.S. holders should consult with tax advisors as to their qualification for exemption.
Non-U.S.
Holders
Definition
of Non-U.S. Holder
For
purposes of this discussion, you are a non-U.S. holder if you are a beneficial owner of our common stock, warrants, or Series
A Convertible Preferred Stock that is not, for United States federal income tax purposes:
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an
individual citizen or resident of the United States;
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a
corporation, or other entity taxable as a corporation, created or organized in the United States or under the laws of the
United States or any political subdivision thereof;
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an
estate whose income is subject to United States federal income tax regardless of its source; or
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a
trust whose administration is subject to the primary supervision of a United States court and which has one or more “United
States persons” (as defined in the Code) who have the authority to control all substantial decisions of the trust, or
which has made a valid election to be treated as a United States person.
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Exercise
or Expiration of Warrants and Constructive Distributions on Warrants
Exercise
or Expiration of Warrants
For
certain Non-U.S. holders engaged in the conduct of a trade or business in the United States, the U.S. federal income tax treatment
of the exercise of a warrant, or the expiration of a warrant, generally will correspond to the U.S. federal income tax treatment
of the exercise or expiration of a warrant by a U.S. holder. For all other Non-U.S. holders, the exercise or expiration of a warrant
generally will not be a U.S. taxable event.
Constructive
Distributions on Warrants
Under
Section 305 of the Code, an adjustment to the number of common shares that will be issued on the exercise of the warrants, or
an adjustment to the exercise price of the warrants, may be treated as a constructive distribution if, and to the extent that,
such adjustment has the effect of increasing a non-U.S. holder’s proportionate interest in our earnings and profits or assets,
depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash
or other property to the holders of our common stock). An adjustment made pursuant to a bona fide reasonable adjustment formula
that has the effect of preventing dilution should generally not be considered to result in a constructive distribution. Any such
constructive distribution would be taxable whether or not there is an actual distribution of cash or other property. See the more
detailed discussion of the rules applicable to distributions made by us under the heading “Distributions to Non-U.S. Holders”
below. Non-U.S. holders should consult with tax advisors regarding the proper treatment of any adjustments to the warrants.
Distributions
to non-U.S. Holders
As
described in the section titled “Dividend Policy,” we do not anticipate paying any cash dividends or making distributions
of other property on our common stock in the foreseeable future. In addition, as described in the section captioned “Description
of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock—Dividends,” Series A Convertible
Preferred Stock will not be entitled to receive any dividends, unless and until specifically declared by our board of directors.
However, if we do make distributions of cash or property on our common stock or Series A Convertible Preferred Stock, those payments
will constitute dividends for United States federal income tax purposes to the extent paid from our current or accumulated earnings
and profits, as determined under United States federal income tax principles. To the extent those distributions exceed both our
current and accumulated earnings and profits, the excess will constitute a return of capital and will first reduce a non-U.S.
holder’s tax basis in our common stock or Series A Convertible Preferred Stock, but not below zero, and then will be treated
by a non-U.S. holder as gain from the sale of stock as described below under “Gain on Dispositions of Our Common Stock,
Warrants, or Series A Convertible Preferred Stock by Non-U.S. Holders.”
Subject
to the discussion below on effectively connected income, backup withholding, and FATCA, any dividend paid to a non-U.S. holder
generally will be subject to United States withholding tax either at a rate of 30% of the gross amount of the dividend or such
lower rate as may be specified by an applicable income tax treaty. To receive a reduced treaty rate, a non-U.S. holder must provide
us with an IRS Form W-8BEN or W-8BEN-E (or applicable successor form) and certify qualification for the reduced rate. If a non-U.S.
holder is eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty, such non-U.S. holder
may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim with the IRS. If a non-U.S.
holder holds our common stock and Series A Convertible Preferred Stock through a financial institution or other agent acting on
such non-U.S. holder’s behalf, appropriate documentation will need to be provided to the agent, which then will be required
to provide certification to us or our paying agent, either directly or through other intermediaries.
Dividends
received by a non-U.S. holder that are effectively connected with such non-U.S. holder’s conduct of a trade or business
in the United States (and, if an applicable income tax treaty so provides, that are attributable to a permanent establishment
or a fixed base maintained by such non-U.S. holder in the United States), are generally exempt from the 30% withholding tax if
certain certification and disclosure requirements are satisfied. To obtain this exemption, a non-U.S. holder must provide us with
an IRS Form W-8ECI (or applicable successor form) properly certifying such exemption. However, such effectively connected dividends,
although not subject to withholding tax, generally are taxed at the same United States federal income tax rates applicable to
United States persons, net of certain deductions and credits. In addition, dividends received by a corporate non-U.S. holder that
are effectively connected with the conduct of a trade or business in the United States may also be subject to a branch profits
tax at a rate of 30% or such lower rate as may be specified by an applicable income tax treaty. Non-U.S. holders should consult
with tax advisors regarding any applicable income tax or other treaties that may provide for different rules.
Any
documentation provided to an applicable withholding agent may need to be updated in certain circumstances. The certification requirements
described above also may require a non-U.S. holder to provide a United States taxpayer identification number.
For
additional withholding rules that may apply to dividends, including dividends paid to foreign financial institutions (as specifically
defined by the applicable rules) or to certain other foreign entities that have substantial direct or indirect United States owners,
see the discussion below under the headings “Information Reporting and Backup Withholding” and “Withholdable
Payments to Foreign Financial Institutions and Other Foreign Entities.”
Gain
on Disposition of Our Common Stock, Warrants, or Series A Convertible Preferred Stock by Non-U.S. Holders
Subject
to the discussion below under the headings “Information Reporting and Backup Withholding” and “Withholdable
Payments to Foreign Financial Institutions and Other Foreign Entities,” a non-U.S. holder generally will not be required
to pay United States federal income tax or withholding tax on any gain recognized upon the sale, exchange or other taxable disposition
of our common stock, warrants, or Series A Convertible Preferred Stock unless:
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the
gain is effectively connected with the conduct of a trade or business by such non-U.S. holder in the United States (and, if
an applicable income tax treaty so provides, the gain is attributable to a permanent establishment or a fixed base maintained
by such non-U.S. holder in the United States), in which case the non-U.S. holder will be required to pay tax on the net gain
derived from the sale or disposition at the rates and in the manner applicable to United States persons, and an additional
branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) may also apply
to a corporate non-U.S. holder;
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such
non-U.S. holder is a nonresident alien individual who is present in the United States for a period or periods aggregating
183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met, in
which case the non-U.S. holder will be required to pay a flat 30% tax (or such lower rate as may be specified by an applicable
income tax treaty) on the gain derived from the sale or disposition, which gain may be offset by United States-source capital
losses for the taxable year of the sale or disposition; or
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our
common stock, warrants, and Series A Convertible Preferred Stock constitute a United States real property interest by reason
of our status as a “United States real property holding corporation”, or USRPHC, for United States federal income
tax purposes at any time within the shorter of the five-year period preceding such non-U.S. holder’s disposition of,
or holding period for, our common stock, warrants, or Series A Convertible Preferred Stock, in which case the non-U.S. holder
generally will be taxed on net gain derived from the sale or disposition at the rates applicable to United States persons.
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We
believe that we are not currently and will not become a USRPHC and the remainder of this discussion so assumes. However, because
the determination of whether we are a USRPHC depends on the fair market value of our United States real property relative to the
fair market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even
if we become a USRPHC, however, as long as our common stock is regularly traded on an established securities market, such common
stock will be treated as United States real property interests only if a non-U.S. holder actually or constructively holds more
than 5% of such regularly traded common stock at any time during the shorter of the five-year period preceding such non-U.S. holder’s
disposition of, or holding period for, our common stock or Series A Convertible Preferred Stock. Non- U.S. holders should consult
with tax advisors regarding any applicable income tax or other treaties that may provide for different rules.
Conversion
of Our Series A Convertible Preferred Stock into Our Common Stock
A
non-U.S. holder generally will not recognize any gain or loss in respect of the receipt of our common stock upon the conversion
of our Series A Convertible Preferred Stock (except to the extent the non-U.S. holder receives a cash payment for any fractional
share that would otherwise have been issuable upon conversion of the Series A Convertible Preferred Stock).
Constructive
Dividends on Series A Convertible Preferred Stock
The
conversion rate of our Series A Convertible Preferred Stock is subject to adjustment under certain circumstances, as described
above under “Description of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock.” In certain
circumstances, an adjustment to the conversion rate of our Series A Convertible Preferred Stock or a failure to make such an adjustment
could potentially give rise to constructive distributions to non-U.S. holders of our common stock that are treated as dividends
for U.S. federal income tax purposes. Any constructive dividend deemed paid to a non-U.S. holder will be subject to U.S. federal
income tax or withholding tax in the manner described above under “Distributions to Non-U.S Holders.” It is possible
that U.S. federal tax on the constructive dividend would be withheld, if applicable, from subsequent payments on the Series A
Convertible Preferred Stock or our common stock.
Information
Reporting and Backup Withholding
We
(or the applicable paying agent) must report annually to the IRS the amount of dividends on our common stock or Series A Convertible
Preferred Stock paid to non-U.S. holders and the amount of tax withheld, if any. A similar report will be sent to each non-U.S.
holder. Copies of this information reporting may also be made available under the provisions of a specific income tax treaty or
agreement with the tax authorities in a non-U.S. holder’s country of residence.
Non-U.S.
holders will generally be subject to backup withholding (at a current rate of 24%) for dividends on our common stock or Series
A Convertible Preferred Stock paid to such non-U.S. holders unless an exemption is established such as by, for example, properly
certifying non-United States status on an IRS Form W-8BEN or W-8BEN-E (or applicable successor form). Notwithstanding the foregoing,
backup withholding and information reporting may apply if either we or our paying agent has actual knowledge, or reason to know,
that a holder of our common stock or Series A Convertible Preferred Stock is a United States person.
Information
reporting and backup withholding generally are not required with respect to the amount of any proceeds from the sale or other
disposition of our common stock, warrants, or Series A Convertible Preferred Stock by a non-U.S. holder outside the United States
through a foreign office of a foreign broker that does not have certain specified connections to the United States. However, if
a non-U.S. holder sells or otherwise disposes of shares of common stock, warrants, or Series A Convertible Preferred Stock through
a United States broker or the United States offices of a foreign broker, the broker will generally be required to report the amount
of proceeds paid to such non-U.S. holder to the IRS and also to backup withhold on that amount unless the broker is provided with
appropriate certification of status as a non-United States person or an exemption is otherwise established. Information reporting
will also apply if a non-U.S. holder sells shares of common stock, warrants, or Series A Convertible Preferred Stock through a
foreign broker deriving more than a specified percentage of its income from United States sources or having certain other connections
to the United States, unless such broker has documentary evidence in its records that such non-U.S. holder is a non-United States
person and certain other conditions are met, or an exemption is otherwise established.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment may be refunded or
credited against a non-U.S. holder’s United States federal income tax liability, if any, provided that an appropriate claim
is timely filed with the IRS. Non-U.S. holders should consult with tax advisors regarding the application of the information reporting
and backup withholding rules to investment in our common stock, warrants, or Series A Convertible Preferred Stock.
Withholdable
Payments to Foreign Financial Institutions and Other Foreign Entities
The
Foreign Account Tax Compliance Act, or FATCA, imposes a United States federal withholding tax of 30% on certain payments to “foreign
financial institutions” (as specifically defined under these rules) and certain other non-United States persons that fail
to comply with certain information reporting and certification requirements pertaining to their direct and indirect United States
security holders and/or United States account holders. Such payments generally include dividends on our common stock and Series
A Convertible Preferred Stock. While withholding under FATCA would have applied also to payments of gross proceeds from the sale
or other disposition of our stock on or after January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments
of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations
are issued. Under certain circumstances, a non-U.S. holder may be eligible for refunds or credits of such taxes. An intergovernmental
agreement between the United States and an applicable foreign country may modify the requirements described in this paragraph.
Non-U.S. holders should consult with tax advisors regarding the possible implications of this legislation and any applicable intergovernmental
agreements on investment in our common stock, warrants, and Series A Convertible Preferred Stock.
U.S.
Federal Estate Tax
Certain
securities beneficially owned by an individual who is not a citizen or resident of the United States (as defined for United States
federal estate tax purposes) at the time of their death will generally be includable in the decedent’s gross estate for
United States federal estate tax purposes and, therefore, may be subject to United States federal estate tax unless an applicable
estate tax treaty or other treaty provides otherwise. Investors are urged to consult their own tax advisors regarding the United
States federal estate tax consequences of the ownership or disposition of our securities.
THIS
SUMMARY IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE. NON-U.S. HOLDERS ARE URGED TO CONSULT WITH TAX ADVISORS WITH RESPECT
TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATION, AS WELL AS ANY TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK , WARRANTS, AND SERIES A CONVERTIBLE PREFERRED STOCK ARISING UNDER
THE UNITED STATES FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, NON-UNITED STATES OR OTHER TAXING JURISDICTION
OR UNDER ANY APPLICABLE TAX TREATY, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.
UNDERWRITING
Alliance
Global Partners is acting as the sole underwriter in this offering. We have entered into an underwriting agreement dated ,
2019 with the Alliance Global Partners. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell
to each underwriter named below and each underwriter named below has severally and not jointly agreed to purchase from us, at
the public offering price per share less the underwriting discounts and commissions set forth on the cover page of this prospectus,
the number of Units listed next to its name in the following table:
|
Underwriters
|
|
Number
of
Class A Units
|
|
Number
of
Class B Units
|
|
Alliance Global Partners
|
|
|
|
|
The underwriter is committed to purchase all the Units offered by us, if it purchases any Units. The obligations
of the underwriter may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore,
pursuant to the underwriting agreement, the underwriter’s obligations are subject to customary conditions and representations
and warranties contained in the underwriting agreement, such as receipt by the underwriter of officers’ certificates and
legal opinions.
We
have agreed to indemnify the underwriter against specified liabilities, including liabilities under the Securities Act, and to
contribute to payments the underwriter may be required to make in respect thereof.
The
underwriter is offering the Units, subject to prior sale, when, as and if issued to and accepted by them, subject to approval
of legal matters by its counsel and other conditions specified in the underwriting agreement. The underwriter reserves the right
to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
Discounts,
Commissions and Expense Reimbursement
The
following table shows the public offering price, underwriting discount and proceeds, before expenses, to us.
|
|
|
|
Per
Class A Unit
|
|
|
Per Class
B Unit
|
|
|
Total
|
|
|
Public offering price
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
The
underwriter proposes to offer the Units offered by us to the public at the public offering price per respective Unit set forth
on the cover of this prospectus. In addition, the underwriters may offer some of the Units to other securities dealers at such
price less a concession of up to $ per Class A Unit and $
per Class B Unit.
If
all of the Units offered by us are not sold at the respective public offering prices per Unit, the underwriter may change the
offering price per Unit and other selling terms by means of a supplement to this prospectus.
We
have also agreed to reimburse certain of the underwriter’s out of pocket expenses not to exceed $140,000, including the
fees of underwriters’ counsel, which will not exceed $100,000, $20,000 for IPREO software related expenses, $5,000 for background
check expenses, $3,000 for tombstones and up to $12,000 in marketing related expenses including roadshow expenses.
We
estimate that the total expenses of the offering payable by us, excluding the total underwriting discounts, commissions and underwriter
expense reimbursement will be approximately $ million.
Lock-Up
Agreements
We
have agreed with the underwriter not to offer for sale, issue or sell, or register for offer or sale, any of our common stock
or securities convertible into our common stock for a period of three months after the date of this prospectus, subject to certain
exceptions. In addition, all of our directors and executive officers have entered into lock up agreements with the underwriter
prior to the commencement of this offering pursuant to which each of these persons, for a period of three months from the closing
date of this offering, without the prior written consent of the underwriter, agree not to (1) offer, pledge, sell, contract to
sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any of our shares of common stock or any securities
convertible into or exercisable or exchangeable for shares our common stock owned or acquired on or prior to the closing date
of this offering (including any common shares acquired after the closing date of this offering upon the conversion, exercise or
exchange of such securities); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of such securities, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of common shares or such other securities, in cash or otherwise, except for certain exceptions and
limitations; (3) file or caused to be filed any registration statement relating to the offering of any shares of our capital shares;
or (4) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap,
hedge or other arrangement relating to such securities.
Certain investors who purchase a minimum
of $ of securities in the offering will enter into leak-out agreements (the
“Leak-Out Agreements”) with the Company. Pursuant to the Leak-Out Agreements, beginning at such time of both the public
announcement of the final pricing of the offering (the “Pricing Date”) and the Company or the Underwriter notifying
each purchaser that each purchaser of $ or more of securities offered in this offering
has executed a Leak-Out Agreement (the “Effective Time”) and ending on the earlier of 75 days after the Pricing Date and the date at which $9.0 million of shares of the Company’s common stock have traded since the Effective Time
(the “Restricted Period”). If an investor party to a Leak-Out Agreement decides to sell any shares of the Company’s
common stock or shares of common stock underlying any convertible securities or options held by the investor as of the date of
the Leak-Out Agreement or any shares of common stock of the Company issuable upon exercise of the Series A Preferred Shares, Warrants
or Common Warrants, such investor may only be permitted to sell such securities in such amount as shall equal up to such investor’s
pro rata share of 25% in the aggregate of the cumulative percentage of composite trading volume of common stock for such date
(including pre-market volume on such date) as reported by Bloomberg, LP on any given trading day, provided that this restriction
will not apply on any day on which the price of the Company’s common stock trades by % over
the public offering price for the shares of common stock in this offering. These restrictions do not apply to any actual “long”
sales of shares of common stock purchased in open market transactions by the investor or its trading affiliates during the Restricted
Period.
Electronic
Offer, Sale and Distribution of Securities
A
prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters or selling
group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute
prospectuses electronically. The underwriter may agree to allocate a number of either class of Unit to underwriters and selling
group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters
and selling group members that will make internet distributions on the same basis as other allocations. Other than the prospectus
in electronic format, the information on these websites is not part of, nor incorporated by reference into, this prospectus or
the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or any underwriter in
its capacity as underwriter, and should not be relied upon by investors.
The
Nasdaq Global Market Listing
Our
common stock is listed on The Nasdaq Global Market under the symbol “TNXP.”
Stabilization
In
connection with this offering, the underwriter may engage in stabilizing transactions, over-allotment transactions,
syndicate-covering transactions, penalty bids and purchases to cover positions created by short sales. Stabilizing
transactions permit bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum, and are
engaged in for the purpose of preventing or retarding a decline in the market price of the shares while the offering is in
progress.
Over-allotment
transactions involve sales by the underwriter of shares in excess of the number of shares the underwriter is obligated to purchase.
This creates a syndicate short position that may be either a covered short position or a naked short position. In a covered short
position, the number of shares over-allotted by the underwriter is not greater than the number of shares that naked short position,
the number of shares involved is greater than the number of shares in the over-allotment option. The underwriter may close out
any short position by exercising its option to purchase additional shares of common stock and/or warrants to purchase common stock
and/or purchasing shares in the open market.
Syndicate
covering transactions involve purchases of shares in the open market after the distribution has been completed in order to cover
syndicate short positions. In determining the source of shares to close out the short position, the underwriter will consider,
among other things, the price of shares available for purchase in the open market as compared with the price at which they may
purchase shares through exercise of the over-allotment option. If the underwriter sells more shares than could be covered by exercise
of the over-allotment option and, therefore, has a naked short position, the position can be closed out only by buying shares
in the open market. A naked short position is more likely to be created if the underwriter is concerned that after pricing there
could be downward pressure on the price of the shares in the open market that could adversely affect investors who purchase in
the offering.
Penalty
bids permit the underwriter to reclaim a selling concession from a syndicate member when the shares originally sold by that syndicate
member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.
These
stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market
price of our shares or common stock or preventing or retarding a decline in the market price of our shares or common stock. As
a result, the price of our common stock in the open market may be higher than it would otherwise be in the absence of these transactions.
Neither we nor the underwriter make any representation or prediction as to the effect that the transactions described above may
have on the price of our common stock. These transactions may be effected on The Nasdaq Global Market, in the over-the-counter
market or otherwise and, if commenced, may be discontinued at any time.
Passive
Market Making
In
connection with this offering, the underwriter and selling group members may engage in passive market making transactions in our
common stock on The Nasdaq Global Market in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before
the commencement of offers or sales of the shares and extending through the completion of the distribution. A passive market maker
must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids
are lowered below the passive market maker’s bid, then that bid must then be lowered when specified purchase limits are
exceeded.
Certain
Relationships
The
underwriter and its affiliates have provided, or may in the future provide, various investment banking, commercial banking, financial
advisory, brokerage, and other services to us and our affiliates for which services they have received, and may in the future
receive, customary fees and expense reimbursement.
The
underwriters and its affiliates may, from time to time, engage in transactions with and perform services for us in the ordinary
course of their business for which they may receive customary fees and reimbursement of expenses. In the ordinary course of their
various business activities, the underwriter and its affiliates may make or hold a broad array of investments and actively trade
debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own accounts
and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments
of our company. The underwriter and its affiliates may also make investment recommendations and/or publish or express independent
research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire,
long and/or short positions in such securities and instruments.
Offer
Restrictions Outside the United States
Other
than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securities
offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus
may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in
connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances
that will result in compliance with the applicable rules and regulations of that jurisdiction.
LEGAL
MATTERS
The
validity of the issuance of the shares of common stock and preferred stock offered hereby will be passed upon for us by Brownstein
Hyatt Farber Schreck, LLP, Las Vegas, Nevada. Lowenstein Sandler, LLP, New York, New York,
will pass upon certain legal matters relating to the issuance and sale of the securities offered hereby on behalf of Tonix Pharmaceuticals
Holding Corp. Certain legal matters in connection with this offering will be passed upon for the underwriter by Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, New York.
EXPERTS
The
consolidated balance sheets of Tonix Pharmaceuticals Holding Corp. and subsidiaries as of December 31, 2018 and 2017 and the related
consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the years then
ended have been audited by EisnerAmper LLP, independent registered public accounting firm, as stated in their report which is
incorporated herein by reference, which report includes an explanatory paragraph about the existence of substantial doubt concerning
the Company’s ability to continue as a going concern. Such financial statements have been incorporated herein by reference
in reliance on the report of such firm given upon their authority as experts in accounting and auditing.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our
directors and officers are indemnified to the fullest extent permitted under Nevada law. We also maintain insurance which protects
our officers and directors against any liabilities incurred in connection with their service in such a capacity.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the foregoing, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person
of ours in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Where
You Can Find More Information
We
have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered
by this prospectus. This prospectus, which is part of the registration statement, omits certain information, exhibits, schedules
and undertakings set forth in the registration statement. For further information pertaining to us and our common stock, reference
is made to our SEC filings and the registration statement and the exhibits and schedules to the registration statement. Statements
contained in this prospectus as to the contents or provisions of any documents referred to in this prospectus are not necessarily
complete, and in each instance where a copy of the document has been filed as an exhibit to the registration statement, reference
is made to the exhibit for a more complete description of the matters involved.
You
may read and copy all or any portion of the registration statement without charge at the office of the SEC at the Public Reference
Room at Station Place, 100 F Street, N.E., Washington, D.C. 20549. Copies of the registration statement may be obtained from the
SEC at prescribed rates from the Public Reference Section of the SEC at such address. In addition, registration statements and
certain other filings made with the SEC electronically are publicly available through the SEC’s web site at http://www.sec.gov.
The registration statement, including all exhibits and amendments to the registration statement, has been filed electronically
with the SEC.
We
are subject to the information and periodic reporting requirements of the Exchange Act of 1934, as amended (the “Exchange
Act”), and we file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy
statements and other information are available for inspection and copying at the public reference room and website of the SEC
referred to above. We maintain a website at http://www.tonixpharma.com. You may access our annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material
is electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website
is not incorporated by reference in, and is not part of, this prospectus, and any references to this website or any other website
are inactive textual references only. You may also request a copy of these filings, at no cost, by writing us at 509 Madison Avenue,
Suite 1608, New York, New York 10022 or calling us at (212) 980-9155.
Incorporation of Documents by Reference
This
prospectus is part of the registration statement but the registration statement includes and incorporates by reference additional
information and exhibits. The Securities and Exchange Commission permits us to “incorporate by reference” the information
contained in documents we file with the Securities and Exchange Commission (“SEC”), which means that we can disclose
important information to you by referring you to those documents rather than by including them in this prospectus. Information
that is incorporated by reference is considered to be part of this prospectus and you should read it with the same care that you
read this prospectus. Information that we file later with the Securities and Exchange Commission will automatically update and
supersede the information that is either contained, or incorporated by reference, in this prospectus, and will be considered to
be a part of this prospectus from the date those documents are filed. We have filed with the Securities and Exchange Commission,
and incorporate by reference in this prospectus:
|
|
●
|
our
Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on March 18, 2019, as amended on Form
10-K/A on March 18, 2019;
|
|
|
●
|
our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, filed with the SEC on May 13, 2019,
June 30, 2019, filed with the SEC on August 12, 2019, and September 30, 2019, filed with the SEC on November 8, 2019;
|
|
|
●
|
our definitive
Proxy Statement on Schedule 14A, filed on March 18, 2019;
|
|
|
●
|
our Current Reports on Form 8-K, filed on February 20, 2019, March 1, 2019, March 4, 2019, March 5, 2019,
March 11, 2019, March 18, 2019, April 4, 2019, April 19, 2019, April 22, 2019, April 23, 2019, May 8, 2019, May 13, 2019, May 17,
2019, May 23, 2019, May 30, 2019, June 3, 2019, June 13, 2019, July 16, 2019, July 25, 2019, August 2, 2019, August 12, 2019, August
20, 2019, August 21, 2019, August 21, 2019, August 23, 2019, August 30, 2019, September 4, 2019, September 16, 2019, September
16, 2019, October 3, 2019, October 7, 2019, October 16, 2019, October 23, 2019, October 31, 2019, November 1, 2019, November 1,
2019, November 4, 2019, November 4, 2019 and November 8, 2019 (other than any portions thereof deemed furnished and not filed);
and
|
|
|
●
|
the description
of our common stock contained in the Registrant’s registration statement on Form 8-A filed with the SEC on July 23,
2013.
|
In
addition, all documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, as amended, prior to the termination of the offering (excluding any information furnished rather than filed) shall be
deemed to be incorporated by reference into this prospectus.
Notwithstanding
the statements in the preceding paragraphs, no document, report or exhibit (or portion of any of the foregoing) or any other information
that we have “furnished ” to the SEC pursuant to the Securities Exchange Act of 1934, as amended shall be incorporated
by reference into this prospectus.
We
will furnish without charge to you, on written or oral request, a copy of any or all of the documents incorporated by reference
in this prospectus, including exhibits to these documents. You should direct any requests for documents to:
Tonix
Pharmaceuticals Holding Corp.
509
Madison Avenue, Suite 1608
New
York, New York 10022
Attention:
Investor Relations
Telephone
(212) 980-9155
You
also may access these filings on our website at http://www.tonixpharma.com. We do not incorporate the information on our website
into this prospectus or any supplement to this prospectus and you should not consider any information on, or that can be accessed
through, our website as part of this prospectus or any supplement to this prospectus (other than those filings with the SEC that
we specifically incorporate by reference into this prospectus or any supplement to this prospectus).
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed modified,
superseded or replaced for purposes of this prospectus to the extent that a statement contained in this prospectus modifies, supersedes
or replaces such statement.
1,893,939 Class A Units Consisting of
Common Stock, Warrants and Common Warrants
5,000 Class B Units Consisting of Series
A Convertible Preferred Stock, Warrants and Common Warrants
PROSPECTUS
,
2019
A.G.P.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
|
Item 13.
|
Other Expenses of Issuance and Distribution
|
The
following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable by the registrant
in connection with the sale of common stock being registered. All amounts are estimates except for the SEC registration fee, the
Financial Industry Regulatory Authority, or FINRA, filing fee and Nasdaq listing fee.
|
|
|
|
|
|
Item
|
|
Amount
to be paid
|
|
|
SEC
registration fee
|
|
$
|
3,245
|
|
|
FINRA
filing fee
|
|
|
3,088
|
|
|
Printing
and engraving expenses
|
|
|
10,000
|
|
|
Legal
fees and expenses
|
|
|
110,000
|
|
|
Accounting
fees and expenses
|
|
|
40,000
|
|
|
Underwriter’s
expenses
|
|
|
140,000
|
|
|
Miscellaneous
fees and expenses
|
|
|
3,667
|
|
|
Total
|
|
$
|
310,000
|
|
|
Item 14.
|
Indemnification of Directors and Officers
|
Nevada
Revised Statutes (“NRS”) 78.7502 provides that a corporation may indemnify, pursuant to the provisions of that statute,
any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason
of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with the action, suit or proceeding if the person (i) is not liable pursuant to NRS 78.138
or (ii) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was
unlawful. NRS 78.7502 further provides that a corporation may indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually
and reasonably incurred by the person in connection with the defense or settlement of the action or suit if the person (a) is
not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of the corporation. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any such action, suit or proceeding, or in defense of any claim,
issue or matter therein, the corporation shall indemnify him or her against expenses, including attorneys’ fees, actually
and reasonably incurred by him or her in connection with the defense. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that
the person is liable pursuant to NRS 78.138 or did not act in good faith and in a manner which he or she reasonably believed to
be in or not opposed to the best interests of the corporation, or that, with respect to any criminal action or proceeding, he
or she had reasonable cause to believe that the conduct was unlawful. Indemnification pursuant to NRS 78.7502 may not be made
for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion
of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only
to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper.
NRS
78.7502 provides that any discretionary indemnification pursuant to the provisions of that statute (unless ordered by a court
or advanced pursuant to NRS 78.751(2)), may be made by the corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made
(i) by the stockholders; (ii) by the board of directors by majority vote of a quorum consisting of directors who were not parties
to the action, suit or proceeding; (iii) if a majority vote of a quorum consisting of directors who were not parties to the action,
suit or proceeding so orders, by independent legal counsel in a written opinion; or (iv) if a quorum consisting of directors who
were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion. NRS
78.751(2) provides that unless otherwise restricted by the corporation’s articles of incorporation or bylaws, or an agreement
made by the corporation, the corporation may pay the expenses of officers and directors incurred in defending a civil or criminal
action, suit or proceeding as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon
receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court
of competent jurisdiction that the director or officer is not entitled to be indemnified by the corporation.
Our
articles of incorporation provide that our directors or officers shall not be personally liable to us or our stockholders for
monetary damages for breach of such director’s or officer’s fiduciary duty, except for liability (i) for any breach
of the duty of loyalty to our company or our stockholders, (ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, or (iii) for any transaction from which the officer or director derived any improper
personal benefit. Our articles of incorporation and our amended and restated bylaws provide for the indemnification of any of
our directors and officers who was or is a party or is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was
a director or officer of the our company, against expenses (including attorneys’ fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, subject to certain
express limitations and conditions. We believe that these provisions in our articles of incorporation bylaws, as amended, are
necessary to attract and retain qualified persons as directors and officers.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such issue.
|
Item 15.
|
Recent Sales
of Unregistered Securities
|
In
the three years preceding the filing of this registration statement, the Registrant has issued the following securities that were
not registered under the Securities Act:
On
April 10, 2017, we issued 23 shares of common stock to one investor upon the exercise of warrants issued October 26, 2016 for
proceeds of $14,175.
On
May 31, 2017, we issued 8 shares of common stock to a non-employee director in settlement for restricted stock units that vested
in May 2017.
On
June 1, 2017, we issued 8 shares of common stock to a non-employee director in settlement for restricted stock units that vested
in May 2017.
On
June 5, 2017, we issued 12 shares of common stock to a non-employee director in settlement for restricted stock units that vested
in May 2017.
On
June 6, 2017, we issued 8 shares of common stock to a non-employee director in settlement for restricted stock units that vested
in May 2017.
On
June 20, 2017, we issued 8 shares of common stock to a non-employee director in settlement for restricted stock units that vested
in May 2017.
On
July 11, 2017, we issued 8 shares of common stock to a non-employee director in settlement for restricted stock units that vested
in May 2017.
On
September 28, 2017, we issued 731 shares of common stock, at a price per share of $411.00, to Lincoln Park Capital Fund, LLC pursuant
to that certain Purchase Agreement dated September 28, 2017.
On
October 18, 2018, we issued 3,500 commitment shares to Lincoln Park as a fee for its commitment to purchase shares of our common
stock pursuant to that certain Purchase Agreement dated October 18, 2018.
On
August 20, 2019, we issued 35,529 commitment shares to Lincoln Park as a fee for its commitment to purchase shares of our common
stock pursuant to that certain Purchase Agreement dated August 20, 2019.
Unless
otherwise noted, all of the transactions described in Item 15 were exempt from registration under the Securities Act pursuant
to Section 4(a)(2) of the Securities Act in that such sales did not involve a public offering, under Rule 701 promulgated under
the Securities Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written
contract relating to compensation, as provided by Rule 701, or under Rule 506 of Regulation D promulgated under the Securities
Act.
|
Item 16.
|
Exhibits and financial statement schedules
|
The
exhibits to the registration statement are listed in the Exhibit Index to this registration statement and are incorporated herein
by reference.
(a) The undersigned
registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the “Securities Act”);
(ii) To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
Provided,
however, that Paragraphs (a)(1)(i), (ii), and (iii) of this section do not apply if the information required to be included in
a posteffective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser: If the registrant is subject to Rule
430C (§230.430C of this chapter), each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A
(§230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is
first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part
of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first use.
(5)
That, for the purpose of determining liability under the Securities Act to any purchaser in the initial distribution of the securities,
the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424 (§230.424 of this chapter);
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to
by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b)
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c)
The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the
prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus
and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934;
and where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus,
to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that
is specifically incorporated by reference in the prospectus to provide such interim financial information.
(d)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that
in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
(e)
The undersigned Registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona fide offering thereof.
EXHIBIT
INDEX
|
1.01
|
|
Form of Underwriting Agreement, filed herewith.
|
|
|
|
|
|
3.01
|
|
Articles of Incorporation, filed as an exhibit to the Registration Statement on Form S-1, filed with the Securities and Exchange Commission (the “Commission”) on April 9, 2008 and incorporated herein by reference.
|
|
|
|
|
|
3.02
|
|
Articles of Merger between Tamandare Explorations Inc. and Tonix Pharmaceuticals Holding Corp., effective October 11, 2011, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on October 17, 2011 and incorporated herein by reference.
|
|
|
|
|
|
3.03
|
|
Third Amended and Restated Bylaws, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on June 3, 2016 and incorporated herein by reference.
|
|
|
|
|
|
3.04
|
|
Certificate of Change of Tonix Pharmaceuticals Holding Corp., dated March 13, 2017 and effective March 17, 2017, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on March 16, 2017 and incorporated herein by reference.
|
|
|
|
|
|
3.05
|
|
Certificate of Amendment to Articles of Incorporation, effective June 16, 2017, filed as an exhibit to the Current report on Form 8-K, filed with the Commission on June 16, 2017 and incorporated herein by reference.
|
|
|
|
|
|
3.06
|
|
Specimen Common Stock Certificate, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on May 24, 2018 and incorporated herein by reference.
|
|
|
|
|
|
3.07
|
|
Certificate of Amendment to Tonix Pharmaceuticals Holding Corp.’s Articles of Incorporation, as amended,
filed with the Secretary of State of the State of Nevada on May 3, 2019, filed as an exhibit to the Registration Statement on Form
S-1, filed with the Commission on October 18, 2019 and incorporated herein by reference.
|
|
|
|
|
|
3.08
|
|
Form of Certificate of Designation of Series A Convertible Preferred Stock, filed as an exhibit to the Registration
Statement on Form S-1, filed with the Commission on October 18, 2019 and incorporated herein by reference.
|
|
|
|
|
|
3.09
|
|
Certificate of Change to Articles of Incorporation, effective November 1, 2019, filed as an exhibit to the
Current report on Form 8-K, filed with the Commission on October 31, 2019 and incorporated herein by reference.
|
|
|
|
|
|
4.01
|
|
Specimen Common Stock Certificate of the Registrant, filed as an exhibit to the Current Report on Form 8-K, filed with the Commission on May 24, 2018 and incorporated herein by reference.
|
|
|
|
|
|
4.02
|
|
Form of Warrant, filed herewith.
|
|
|
|
|
|
4.03
|
|
Form of Common Stock Purchase Warrant, filed herewith.
|
|
|
|
|
|
4.04
|
|
Form of Warrant Agency Agreement, filed herewith.
|
|
|
|
|
|
4.05
|
|
Form of Warrant Agreement, filed herewith.
|
|
|
|
|
|
5.01
|
|
Opinion of Brownstein Hyatt Farber Schreck, LLP, filed herewith.
|
|
|
|
|
|
5.02
|
|
Opinion of Lowenstein Sandler, LLP, filed herewith.
|
|
|
|
|
|
10.01
|
|
Lease Agreement, dated as of September 28, 2010, by and between 509 Madison Avenue Associates, L.P. and Tonix Pharmaceuticals, Inc., filed as an exhibit to the amended Current Report on Form 8-K/A, filed with the Commission on February 3, 2012 and incorporated herein by reference.
|
|
|
|
|
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10.02
|
|
Tonix Pharmaceuticals Holding Corp. 2012 Amended and Restated Incentive Stock Option Plan, incorporated herein by reference to Appendix B to our Definitive Proxy Statement on Schedule 14A (File No. 000-54879), filed with the Commission on April 3, 2013.
|
|
|
|
|
|
10.03
|
|
Employment Agreement, between Tonix Pharmaceuticals Holding Corp. and Seth Lederman, dated February 11, 2014, filed as an exhibit to the Current Report on Form 8-K filed with the Commission on February 14, 2014 and incorporated herein by reference.*
|
|
|
|
|
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10.04
|
|
Tonix Pharmaceuticals Holding Corp. 2014 Stock Incentive Plan, incorporated herein by reference to Annex A to our Definitive Proxy Statement on Schedule 14A (File No. 001-36019), filed with the Commission on May 2, 2014.
|
|
10.05
|
|
Lease Amendment and Expansion Agreement, dated February 11, 2014, by and between 509 Madison Avenue Associates, L.P. and Tonix Pharmaceuticals, Inc., filed as an exhibit to the Annual Report on Form 10-K filed with the Commission on February 27, 2015 and incorporated herein by reference.
|
|
|
|
|
|
10.06
|
|
Employment Agreement, between Tonix Pharmaceuticals Holding Corp. and Gregory Sullivan, dated June 3, 2014, filed as an exhibit to the Current Report on Form 8-K filed with the Commission on June 3, 2014 and incorporated herein by reference.*
|
|
|
|
|
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10.07
|
|
Tonix Pharmaceuticals Holding Corp. 2016 Stock Incentive Plan, incorporated herein by reference to Annex A to our Definitive Proxy Statement on Schedule 14A (File No. 001-36019), filed with the Commission on March 25, 2016.
|
|
|
|
|
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10.08
|
|
Tonix Pharmaceuticals Holding Corp. 2017 Stock Incentive Plan, incorporated herein by reference to Appendix A to our Definitive Proxy Statement on Schedule 14A (File No. 001-36019), filed with the Commission on May 2, 2017.
|
|
|
|
|
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10.09
|
|
Tonix Pharmaceuticals Holding Corp. 2018 Equity Incentive Plan, incorporated herein by reference to our Definitive Proxy Statement on Schedule 14A (File No. 001-36019), filed with the Commission on April 19, 2018.
|
|
|
|
|
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10.10
|
|
Tonix Pharmaceuticals Holding Corp. 2018 Employee Stock Purchase Plan, incorporated herein by reference to our Definitive Proxy Statement on Schedule 14A (File No. 001-36019), filed with the Commission on April 19, 2018
|
|
|
|
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10.11
|
|
Sales Agreement, dated May 1, 2018, by and between Tonix Pharmaceuticals Holding Corp. and Cowen and Company, LLC, filed with the Commission on May 24, 2018 and incorporated herein by reference.
|
|
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10.12
|
|
Registration Rights Agreement, dated October 18, 2018, between Tonix Pharmaceuticals Holding Corp. and Lincoln Park Capital Fund, LLC, filed as an exhibit to the Current Report on Form 8-K filed with the Commission on October 24, 2018 and incorporated herein by reference.
|
|
|
|
|
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10.13
|
|
Purchase Agreement, dated October 18, 2018, between Tonix Pharmaceuticals Holding Corp. and Lincoln Park Capital Fund, LLC, filed as an exhibit to the Current Report on Form 8-K filed with the Commission on October 24, 2018 and incorporated herein by reference.
|
|
|
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|
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10.14
|
|
Tonix Pharmaceuticals Holding Corp. 2019 Stock Incentive Plan, incorporated herein by reference to Appendix A to our Definitive Proxy Statement on Schedule 14A (File No. 001-36019), filed with the Commission on March 18, 2019.
|
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10.15
|
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Tonix Pharmaceuticals Holding Corp. 2019 Employee Stock Purchase Plan, incorporated herein by reference to Appendix B to our Definitive Proxy Statement on Schedule 14A (File No. 001-36019), filed with the Commission on March 18, 2019.
|
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10.16
|
|
License Agreement, dated May 20, 2019, between Tonix Pharmaceuticals Holding Corp. and The Trustees of Columbia University in the City of New York, filed as an exhibit to the Quarterly Report on Form 10-Q filed with the Commission on August 12, 2019 and incorporated herein by reference.
|
|
|
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|
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10.17
|
|
Registration Rights Agreement, dated August 20, 2019, between Tonix Pharmaceuticals Holding Corp. and Lincoln Park Capital Fund, LLC, filed as an exhibit to the Current Report on Form 8-K filed with the Commission on August 23, 2019 and incorporated herein by reference.
|
|
|
|
|
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10.18
|
|
Purchase Agreement, dated August 20, 2019, between Tonix Pharmaceuticals Holding Corp. and Lincoln Park Capital Fund, LLC, filed as an exhibit to the Current Report on Form 8-K filed with the Commission on August 23, 2019 and incorporated herein by reference.
|
|
|
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|
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10.19
|
|
Asset Purchase Agreement, dated August 19, 2019, between Tonix Pharmaceuticals Holding Corp. and TRImaran
Pharma, Inc., filed as an exhibit to the Quarterly Report on Form 10-Q filed with the Commission on November 8, 2019 and incorporated
herein by reference.
|
|
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10.20
|
|
First Amended and Restated Exclusive License Agreement, dated August 19, 2019, between Tonix Pharmaceuticals
Holding Corp. and Wayne State University, filed as an exhibit to the Quarterly Report on Form 10-Q filed with the Commission on
November 8, 2019 and incorporated herein by reference.
|
|
|
|
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10.21
|
|
Exclusive License Agreement, dated September 16, 2019, between Tonix Pharmaceuticals Holding Corp. and The
Trustees of Columbia University in the City of New York, filed as an exhibit to the Quarterly Report on Form 10-Q filed with the
Commission on November 8, 2019 and incorporated herein by reference.
|
|
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23.01
|
|
Consent of Independent Registered Public Accounting Firm, filed herewith.
|
|
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23.02
|
|
Consent of Brownstein Hyatt Farber Schreck, LLP (included in Exhibit 5.01).
|
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23.03
|
|
Consent of Lowenstein Sandler, LLP (included in Exhibit 5.02).
|
|
|
*
|
Indicates
a management contract or compensatory plan or arrangement.
|
Signatures
Pursuant
to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form
S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on November
14, 2019.
|
|
TONIX PHARMACEUTICALS HOLDING
CORP.
|
|
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|
|
|
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By:
|
/s/ Seth
Lederman
|
|
|
|
Seth Lederman
|
|
|
|
President and Chief Executive Officer
|
Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement on Form S-1 has been signed by the
following persons in the capacities and on the dates indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/
Seth Lederman
|
|
President,
Chief Executive Officer
(Principal
Executive Officer) and Director
|
|
November
14, 2019
|
|
Seth Lederman
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Bradley Saenger
|
|
Chief Financial
Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
November 14,
2019
|
|
Bradley
Saenger
|
|
|
|
|
|
|
|
|
|
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|
*
|
|
Director
|
|
November 14,
2019
|
|
Margaret
Smith Bell
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
November
14, 2019
|
|
Daniel
Goodman
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
November
14, 2019
|
|
David
Grange
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
November
14, 2019
|
|
Adeoye
Olukotun
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
November
14, 2019
|
|
John
Rhodes
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
November 14,
2019
|
|
James Treco
|
|
|
|
|
*
Pursuant to the Power of Attorney contained on the signature page to the Registration Statement, as initially filed on October
18, 2019.
TONIX PHARMACEUTICALS HOLDING CORP. S-1A
Exhibit
1.01
UNDERWRITING
AGREEMENT
between
TONIX
PHARMACEUTICALS HOLDING CORP.
and
A.G.P./ALLIANCE
GLOBAL PARTNERS,
as
Representative of the Several Underwriters
TONIX
PHARMACEUTICALS HOLDING CORP.
UNDERWRITING
AGREEMENT
New
York, New York
[●],
2019
A.G.P./Alliance
Global Partners
As
Representative of the several Underwriters named on Schedule 1 attached hereto
590 Madison Avenue
New
York, NY 10022
Ladies
and Gentlemen:
The
undersigned, Tonix Pharmaceuticals Holding Corp., a corporation formed under the laws of the State of Nevada (collectively with
its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement
(as hereinafter defined) as being subsidiaries or affiliates of Tonix Pharmaceuticals Holding Corp., the “Company”),
hereby confirms its agreement (this “Agreement”) with A.G.P./Alliance Global Partners (hereinafter referred
to as “you” (including its correlatives) or the “Representative”) and with the other underwriters
named on Schedule 1 hereto for which the Representative is acting as representative (the Representative and such other
underwriters being collectively called the “Underwriters” or, individually, an “Underwriter”)
as follows:
1. Purchase
and Sale of Securities.
1.1 Securities.
1.1.1. Nature and Purchase of Securities.
(i) On
the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the several Underwriters, an aggregate of [●] Class A Units (each, a “Class
A Unit” and collectively, the “Class A Units”), each Class A Unit consisting of one share of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), a warrant, in the form filed
as Exhibit 4.[ ] to the Registration Statement (as defined in Section 2.1.1 below), to purchase one share of Common Stock (each,
a “Primary Warrant” and collectively, the “Primary Warrants”) and one warrant, in the form
filed as Exhibit 4.[ ] to the Registration Statement (as defined in Section 2.1.1 below) to purchase one-half of one share of
Common Stock (each, a “Common Warrant” and collectively, the “Common Warrants”, which, together
with the Primary Warrants, we refer to as “Warrants”), and an aggregate of [●] Class B Units (each, a
“Class B Unit” and collectively, the “Class B Units”), each Class B Unit consisting of one
share of Series A Convertible Preferred Stock, par value $0.001 per share (the “Preferred Stock”), each share
of Preferred Stock convertible into [●] shares of Common Stock at a conversion price of [●] per share, subject to
adjustment, Primary Warrants to purchase [●] shares of Common Stock and Common Warrant to purchase [●] shares of Common
Stock. Each Primary Warrant shall be exercisable for a period of five (5) years at an exercise price of $[●] per share,
subject to adjustment as provided in the Primary Warrants. Each Common Warrant will be exercisable for a period of one (1) year
at an exercise price of $[●] per share, subject to adjustment as provided in the Common Warrants. The [●] Class A
Units and the [●] Class B Units are collectively referred to herein as the “Securities.”
(ii) The
Underwriters, severally and not jointly, agree to purchase from the Company the number of Securities set forth opposite their
respective names on Schedule 1 attached hereto and made a part hereof, at a purchase price of [●] per Class
A Unit (93% of the per Class A Unit offering price) and $930.00 per Class B Unit (93% of the per Class B Unit offering price).
The Securities are to be offered initially to the public as units at the respective offering prices set forth on the cover page
of the Prospectus (as defined in Section 2.1.1 hereof).
1.1.2. Securities Payment and Delivery.
(i) Delivery
and payment for the Securities shall be made at 10:00 a.m., Eastern time, on [●], or at such time on such other date, not
later than five (5) Business Days after the date of this Agreement, as shall be agreed upon by the Company and the Representative,
at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., 666 Third Avenue, New York, New York 10017 (“Representative
Counsel”), or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon
by the Representative and the Company. The hour and date of delivery and payment for the Securities is called the “Closing
Date.” The Warrants shall be issued pursuant to, and shall have the rights and privileges set forth in the form of Warrant
and in a warrant agency agreement, dated on or before the Closing Date, between the Company and vStock Transfer, LLC, as warrant
agent (the “Warrant Agreement”). The term “Business Day” means any day other than a Saturday,
a Sunday or a legal holiday or a day on which banking institutions are authorized or obligated by law to close in New York, New
York.
(ii) Payment for the Securities shall be made on the Closing Date by wire transfer in Federal (same day) funds,
payable to the order of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters)
representing the Securities (or through the facilities of the Depository Trust Company (“DTC”)) for the account
of the Underwriters. The Securities shall be registered in such name or names and in such authorized denominations as the Representative
may request prior to the Closing Date. The Company shall not be obligated to sell or deliver the Securities except upon tender
of payment by the Representative for all of the Securities. The Offering and sale of Securities is hereinafter referred to as the
“Offering”.
1.2 [Reserved].
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2.
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Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined below), as of
the Closing Date, as follows
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2.1 Filing
of Registration Statement.
2.1.1. Pursuant
to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”)
a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. 333-234263), including any related prospectus
or prospectuses, for the registration of the Securities, and the shares of Common Stock issuable upon exercise of the Warrants
(the “Warrant Shares”) and the Common Stock issuable upon conversion of the Preferred Stock (the “Preferred
Conversion Shares”) included in the Securities, under the Securities Act of 1933, as amended (the “Securities
Act”). Except as the context may otherwise require, such registration statement, as amended, on file with the Commission
at the time the registration statement became effective (including the Preliminary Prospectus included in the registration statement,
financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information
deemed to be a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the
“Rule 430A Information”)), is referred to herein as the “Registration Statement.” If the
Company files any registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the
term “Registration Statement” shall include such registration statement filed pursuant to Rule 462(b). The Registration
Statement has been declared effective by the Commission.
Each
prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information
that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “Preliminary
Prospectus.” The Preliminary Prospectus, subject to completion, dated [●], that was included in the Registration
Statement immediately prior to the Applicable Time is hereinafter called the “Pricing Prospectus.” The final
prospectus in the form first furnished to the Underwriters for use in the Offering is hereinafter called the “Prospectus.”
Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus
included in the Registration Statement.
“Applicable
Time” means [●], Eastern time, on the date of this Agreement.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act Regulations
(“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule 405
of the Securities Act Regulations) relating to the Securities that is (i) required to be filed with the Commission by the
Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or
not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i)
because it contains a description of the Securities or of the Offering that does not reflect the final terms, in each case in the
form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s
records pursuant to Rule 433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution
to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433), as evidenced
by its being specified in Schedule 2-B hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free
Writing Prospectus.
“Pricing
Disclosure Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time,
the Pricing Prospectus and the information included on Schedule 2-A hereto, all considered together.
2.1.1. Pursuant
to the Exchange Act. The Common Stock is registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). The Company has taken no action designed to, or 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.
2.2 Stock
Exchange Listing. The shares of Common Stock are listed on the Nasdaq Global Market (the “Exchange”), and
the Company has taken no action designed to, or likely to have the effect of, delisting the Common Stock from the Exchange, nor
has the Company received any notification that the Exchange is contemplating terminating such listing except as described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus. The Company has filed an application for the Listing
of Additional Shares with the Exchange to list the shares of Common Stock included in the Securities, the Preferred Conversion
Shares and the Warrant Shares.
2.3
No Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory
authority has issued any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the
Prospectus or has instituted or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such
an order. The Company has complied with each request (if any) from the Commission for additional information.
2.4 Disclosures
in Registration Statement.
2.4.1. Compliance
with Securities Act and 10b-5 Representation.
(i)
Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied
in all material respects with the requirements of the Securities Act and the rules and regulations of the Commission under the
Securities Act (the “Securities Act Regulations”). Each Preliminary Prospectus, including the prospectus filed
as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus,
at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act
and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this
Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Neither the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable
Time or at the Closing Date, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will
omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon and in
conformity with written information furnished to the Company with respect to the Underwriters by the Representative expressly for
use in the Registration Statement, the Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto. The
parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of the following
disclosure contained in the “Underwriting” section of the Prospectus: (i) the table showing the number of securities
to be purchased by each Underwriter and the amount of the selling concession, and (ii) the sections titled [“Electronic Offer,
Sale and Distribution of Securities”, “Stabilization”, “Passive Market Making” and “Offer Restrictions
Outside the United States”] (the “Underwriters’ Information”).
(iii) The Pricing Disclosure Package, as of the Applicable Time and at the Closing Date, did not, does not and will
not include 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; and each Issuer Limited Use Free Writing Prospectus
hereto does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing
Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with
the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon
and in conformity with the Underwriters’ Information.
(iv) Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its
issue date, at the time of any filing with the Commission pursuant to Rule 424(b) or at the Closing Date, included, includes or
will include an untrue statement of a material fact or omitted, omits or will 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; provided, however,
that this representation and warranty shall not apply to the Underwriters’ Information. The documents incorporated by
reference in the Registration Statement, the Pricing Prospectus, the Pricing Disclosure Package and the Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and none of such
documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the Registration Statement, the Pricing Prospectus, the Pricing
Disclosure Package and the Prospectus, when such documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, 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, in the light of the circumstances under
which they were made, not misleading.
2.4.2. Disclosure
of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus conform in all material respects to the descriptions thereof contained or incorporated by reference therein and there
are no agreements or other documents required by the Securities Act and the Securities Act Regulations to be described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits
to the Registration Statement or to be incorporated by reference in the Registration Statement, the Pricing Disclosure Package
or the Prospectus, that have not been so described or filed or incorporated by reference. Each agreement or other instrument (however
characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred
to or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or (ii) is material
to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in
all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto,
in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be
limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor,
to the Company’s knowledge, any other party is in default thereunder and, to the Company’s knowledge, no event has
occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder except for a default
or event which would not reasonably be expected to result in a Material Adverse Change (as such term is defined in Section 2.5.1
below). To the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments
will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses (each, a “Governmental
Entity”), including, without limitation, those relating to environmental laws and regulations.
2.4.3. No
Other Distribution of Offering Materials. The Company has not, directly or indirectly, distributed and will not distribute
any offering material in connection with the Offering other than any Preliminary Prospectus, the Pricing Prospectus, the Pricing
Disclosure Package, the Prospectus and other materials, if any, permitted under the Securities Act and consistent with Section
3.2 below.
2.5
Changes After Dates in Registration Statement.
2.5.1. No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse
change in the financial position or results of operations of the Company, nor any change or development that, singularly or in
the aggregate, would involve a material adverse change in or affecting the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material
transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no officer or director
of the Company has resigned from any position with the Company.
2.5.2. Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities,
other than upon exercise or conversion of outstanding securities described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared
or paid any dividend or made any other distribution on or in respect to its capital stock.
2.6
Independent Accountants. To the knowledge of the Company, EisnerAmper LLP, (the “Auditor”),
whose report is filed with the Commission and included or incorporated by reference in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and
the Securities Act Regulations and the Public Company Accounting Oversight Board. The Auditor has not, during the periods covered
by the financial statements included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
2.7
Disclosures in Commission Filings. Since September 1, 2017, the Company has made all filings with the
Commission required under the Exchange Act and the rules and regulations of the Commission promulgated thereunder (the “Exchange
Act Regulations”).
2.8
Financial Statements, etc. The financial statements, including the notes thereto and supporting schedules
included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly
present in all material respects the financial position and the results of operations of the Company at the dates and for the
periods to which they apply; and such financial statements have been prepared in conformity with U.S. generally accepted accounting
principles (“GAAP”), consistently applied throughout the periods involved (provided that unaudited interim
financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and do not
contain all footnotes required by GAAP); and the supporting schedules included in the Registration Statement, the Pricing Disclosure
Package and the Prospectus present fairly the information required to be stated therein. Except as included or incorporated by
reference therein, no historical or pro forma financial statements are required to be included or incorporated by reference in
the Registration Statement, the Pricing Disclosure Package or the Prospectus under the Securities Act or the Securities Act Regulations.
The pro forma and pro forma as adjusted financial information and the related notes, if any, included or incorporated by reference
in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly compiled and prepared in accordance
with the applicable requirements of the Securities Act and the Securities Act Regulations and present fairly the information shown
therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein. All disclosures contained in the Registration Statement,
the Pricing Disclosure Package or the Prospectus regarding “non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission), if any, comply in all material respects with Regulation G of the Exchange Act
and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Pricing
Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including
contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a
material current or future effect on the Company’s financial condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except
as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) neither the Company
nor any of its direct and indirect subsidiaries, including each entity disclosed or described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus as being a subsidiary of the Company (each, a “Subsidiary”
and, collectively, the “Subsidiaries”), has incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid
any dividends or made any distribution of any kind with respect to its capital stock, (c) there has not been any change in the
capital stock of the Company or any of its Subsidiaries, or, other than in the ordinary course of business or any grants under
any stock compensation plan, and (d) there has not been any Material Adverse Change in the Company’s long-term or short-term
debt.
2.9 Authorized
Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the
adjusted stock capitalization set forth therein. Except as set forth in, described in or contemplated by, the Registration Statement,
the Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date, there
will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued shares of Common
Stock of the Company or any security convertible or exercisable into shares of Common Stock of the Company, or any contracts or
commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.
2.10
Valid Issuance of Securities, etc.
2.10.1. Outstanding
Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement
have been duly authorized and validly issued and are, as applicable, fully paid and non-assessable; the holders thereof have no
rights of rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and none
of such securities were issued in violation of the preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company. The authorized shares of Common Stock conform in all material respects to all statements
relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales
of the outstanding shares of Common Stock were at all relevant times either registered under the Securities Act and the applicable
state securities or “blue sky” laws or, based in part on the representations and warranties of the purchasers of such
shares, exempt from such registration requirements. The description of the Company’s stock option,
stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, accurately and fairly present, in all material respects, the information
required to be shown with respect to such plans, arrangements, options and rights.
2.10.2. Securities
Sold Pursuant to this Agreement. The Securities have been duly authorized for issuance and sale and, when issued and paid for in accordance
with their respective terms, will be validly issued, and, as applicable, fully paid and non-assessable; the holders thereof are
not and will not be subject to personal liability by reason of being such holders; the Securities are not and will not be subject
to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. The
Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the
Pricing Disclosure Package and the Prospectus. The Preferred Conversion Shares and the Warrant Shares have been duly authorized
and reserved for issuance by all necessary corporate action on the part of the Company and when paid for and issued in accordance
with the certificate of designation for the Preferred Stock or the terms of the Warrants and Warrant Agreement, as applicable,
the Preferred Conversion Shares and the Warrant Shares and shares of Common Stock, as applicable, will be validly issued, fully
paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders;
and such shares of Common Stock, Preferred Conversion Shares and Warrant Shares are not and will not be subject to the preemptive
rights of any holders of any security of the Company or similar contractual rights granted by the Company.
2.11
Registration Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into
securities of the Company have the right to require the Company to register any such securities of the Company under the Securities
Act or to include any such securities in a registration statement to be filed by the Company.
2.12
Validity and Binding Effect of Agreements. This Agreement has been duly and validly authorized by the Company and
constitutes the valid and binding agreements of the Company, enforceable against the Company in accordance with its terms, and
the Warrant Agreement and the Warrants have been duly and validly authorized by the Company, and when executed and delivered,
will constitute, the valid and binding agreements of the Company, enforceable against the Company in accordance with their respective
terms, except in each case: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor
may be brought.
2.13
No Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Warrant Agreement,
the Warrants and all ancillary documents related to this Offering, the consummation by the Company of the transactions herein
and therein contemplated and the compliance by the Company with the terms hereof and thereof, do not and will not, with or without
the giving of notice or the lapse of time or both: (i) result in a breach of, or conflict with any of the terms and provisions
of, or constitute a material default under, or result in the creation, modification, termination or imposition of any lien, charge
or encumbrance upon any property or assets of the Company pursuant to the terms of any agreement or instrument to which the Company
is a party; (ii) result in any violation of the provisions of the Company’s Articles of Incorporation (as the same may be
amended or restated from time to time, the “Charter”) or the by laws of the Company; or (iii) result in a 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), except in the case of clauses (i) and (iii) above, for such breaches, conflicts or violations which
would not reasonably be expected to have a Material Adverse Change.
2.14
No Defaults; Violations. No default exists in the due performance and observance of any term, covenant or condition
of any license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or
by which the Company may be bound or to which any of the properties or assets of the Company is subject, except for such defaults
which would not reasonably be expected to have a Material Adverse Change. The Company is not in violation of (i) any term or provision
of its Charter or by laws, or (ii) any franchise, license, permit, applicable law, rule, regulation, judgment or decree of any
Governmental Entity except in the case of clause (ii), for such violations which would not reasonably be expected to have a Material
Adverse Change.
2.15
Corporate Power; Licenses; Consents.
2.15.1. Conduct
of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business
purpose in all material respects as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.15.2. Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement, the Warrant Agreement and
the Warrants and to carry out the provisions and conditions hereof and thereof, and all consents, authorizations, approvals and
orders required in connection therewith have been obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the valid issuance, sale and delivery of the Securities and the consummation of
the transactions and agreements contemplated by this Agreement, the Warrant Agreement and the Warrants and as contemplated by the
Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect to applicable federal and state
securities laws, the Exchange and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
2.16
D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”)
as supplemented by all information concerning the Company’s directors and officers as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined in Section 2.26 below), provided
to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information which
would cause the information disclosed in the Questionnaires to become materially inaccurate and incorrect.
2.17
Litigation; Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation,
litigation or governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company
or, to the Company’s knowledge, any executive officer or director, which has not been disclosed in the Registration Statement,
the Pricing Disclosure Package and the Prospectus which is required to be disclosed.
2.18
Good Standing. The Company has been duly organized and is validly existing as a corporation and
is in good standing under the laws of the State of Nevada as of the date hereof, and is duly qualified to do business and is in
good standing in each other jurisdiction in which its ownership or lease of property or the conduct of business requires such
qualification, except where the failure to qualify, singularly or in the aggregate, would not have or reasonably be expected to
result in a Material Adverse Change.
2.19 Insurance.
The Company carries or is entitled to the benefits of insurance, with reputable insurers, in such amounts and covering such risks
which the Company believes are adequate, and all such insurance is in full force and effect. The Company has no reason to believe
that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change.
2.20 Transactions
Affecting Disclosure to FINRA.
2.20.1. Finder’s
Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there
are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or
origination fee by the Company or any Insider with respect to the sale of the Securities hereunder or any other arrangements, agreements
or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’
compensation, as determined by FINRA.
2.20.2. Payments
Within Twelve (12) Months. Except as described in the Registration Statement, the Pricing Disclosure Package, or the Prospectus
or disclosed to the Representative, the Company has not made any direct or indirect payments (in cash, securities or otherwise)
to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for
the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii)
any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12)
months prior to the date of this Agreement, other than the payment to the Underwriters as provided hereunder in connection with
the Offering.
2.20.3. Use
of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein or disclosed in the Registration Statement, the Pricing Disclosure Package
and the Prospectus.
2.20.4. FINRA
Affiliation. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there is
no (i) officer or director of the Company, or, to the Company’s knowledge, (ii) beneficial owner of 5% or more of any class
of the Company’s securities or (iii) beneficial owner of the Company’s unregistered equity securities that were acquired
during the 180-day period immediately preceding the filing of the Registration Statement that is an affiliate or associated person
of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
2.20.5. Information.
All information provided by the Company in its FINRA questionnaire to Representative Counsel specifically for use by Representative
Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete
in all material respects.
2.21 Foreign
Corrupt Practices Act. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries,
has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate
for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company
(or assist it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty
in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse
Change or (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of the Company.
The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company
to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended.
2.22 Compliance
with OFAC. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”), and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or
lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity,
for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
2.23 Money
Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with
respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
2.24 Regulatory
Matters; Compliance. All preclinical studies and clinical trials conducted by or on behalf of the Company that are material
to the Company and its Subsidiaries, taken as a whole, are or have been adequately described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus in all material respects. The preclinical studies and clinical trials conducted
by or on behalf of the Company and its Subsidiaries that are described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus or the results of which are referred to in the Registration Statement, the Pricing Disclosure Package and the
Prospectus 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 and with all laws and regulations applicable to preclinical studies and
clinical trials from which data will be submitted to support marketing approval. The descriptions in the Registration Statement,
the Pricing Disclosure Package and the Prospectus of the results of such studies are accurate and complete
in all material respects and fairly present the data derived from such studies, and the Company has no knowledge of, or reason
to believe that, any large well-controlled clinical study the aggregate results of which are inconsistent with or otherwise call
into question the results of any clinical study conducted by or on behalf of the Company that are described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus or the results of which are referred to in the Registration Statement,
the Pricing Disclosure Package and the Prospectus. Except as disclosed in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, the Company has not received any written notices or statements 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 for or of any preclinical studies and clinical trials that
are described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or the results of which are referred
to in the Registration Statement, the Pricing Disclosure Package and the Prospectus. Except as disclosed in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, the Company has not received any written notices or statements 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 any potential product of the Company is or has been rejected or placed on clinical hold; 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.
2.25 Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative
Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.26 Lock-Up
Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers and directors, and such
other parties as mutually agreed upon by the Company and the Representative (collectively, the “Lock-Up Parties”).
The Company has caused each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement, in the form
attached hereto as Exhibit A (the “Lock-Up Agreement”), prior to the execution of this Agreement.
2.27 Subsidiaries.
All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization
or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or
the conduct of business requires such qualification, except where the failure to qualify would not have a Material Adverse Change.
2.28 Related
Party Transactions.
2.28.1. Business
Relationships. There are no business relationships or related party transactions involving the Company or any other person
required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described
as required.
2.28.2. No
Unconsolidated Entities. There are no transactions, arrangements or other relationships between and/or among the Company,
or any of its affiliates (as such term is defined in Rule 405 of the Securities Act) and any unconsolidated entity, including,
but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially
affect the Company’s liquidity or the availability of or requirements for its capital resources required to be described
in the Pricing Disclosure Package and the Prospectus or a document incorporated by reference therein which have not been described
as required.
2.28.3. No
Loans or Advances to Affiliates. There are no outstanding loans, advances (except normal advances for business expenses in
the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus.
2.29 Board
of Directors. The qualifications of the persons serving as board members and the overall composition of the board comply with
the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the “Sarbanes-Oxley
Act”) applicable to the Company and the listing rules of the Exchange. At least one member of the Audit Committee of
the Board of Directors of the Company qualifies as an “audit committee financial expert,” as such term is defined
under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the Board
of Directors qualify as “independent,” as defined under the listing rules of the Exchange.
2.30
Sarbanes-Oxley Compliance.
2.30.1. Disclosure
Controls. The Company has developed and currently maintains disclosure controls and procedures that will comply with Rule
13a-15 or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material
information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of
the Company’s Exchange Act filings and other public disclosure documents.
2.30.2. Compliance.
The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley
Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s
future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions
of the Sarbanes-Oxley Act.
2.31
Accounting Controls. The Company maintains systems of “internal control over financial reporting”
(as defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply with the requirements of the Exchange
Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers,
or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, 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. Except as disclosed in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal controls.
The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant
deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are known
to the Company’s management and that have adversely affected or are reasonably likely to adversely affect the Company’
ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company’s management,
whether or not material, that involves management or other employees who have a significant role in the Company’s internal
controls over financial reporting.
2.32 No
Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to
register as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.33 No
Labor Disputes. No labor dispute with the employees of the Company exists or, to the knowledge
of the Company, is imminent. The Company is not aware that any key employee or significant group of employees of the Company plans
to terminate employment with the Company.
2.34
Intellectual Property Rights. To the Company’s knowledge, the Company or its Subsidiaries
owns or possesses or has valid rights to use all patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (“Intellectual
Property Rights”) necessary for the conduct of the business of the Company and its Subsidiaries as currently carried
on and as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. To the knowledge of the
Company, no action or use by the Company necessary for the conduct of its business as currently carried on and as described in
the Registration Statement and the Prospectus will involve or give rise to any infringement of, or license or similar fees for,
any Intellectual Property Rights of others. Neither the Company nor any of its Subsidiaries has received any notice alleging any
such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably be expected
to result, individually or in the aggregate, in a Material Adverse Change (A) to the knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company; (B) there is no
pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of
the Company in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable
basis for any such claim, that would, individually or in the aggregate, together with any other claims in this Section 2.34, reasonably
be expected to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to the knowledge
of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged by a court of competent jurisdiction
invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company
is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together
with any other claims in this Section 2.34, reasonably be expected to result in a Material Adverse Change; (D) there is no pending
or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates
or otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received any
written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim
that would, individually or in the aggregate, together with any other claims in this Section 2.34, reasonably be expected to result
in a Material Adverse Change; and (E) to the Company’s knowledge, no employee of the Company is in or has ever been in violation
in any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition
agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where
the basis of such violation relates to such employee’s employment with the Company, or actions undertaken by the employee
while employed with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse
Change. To the Company’s knowledge, all material technical information developed by and belonging to the Company which has
not been disclosed in a filed patent application has been kept confidential. The Company is not a party to or bound by any options,
licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be
set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and are not described therein. The
Registration Statement, the Pricing Disclosure Package and the Prospectus contain in all material respects the same description
of the matters set forth in the preceding sentence. None of the technology employed by the Company has been obtained or is being
used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s knowledge, any
of its officers, directors or employees, or otherwise in violation of the rights of any persons.
2.35
Taxes. Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required
to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each
of the Company and its Subsidiaries has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and
has paid all taxes imposed on or assessed against the Company or such respective Subsidiary except as would not be reasonably
expected to have a Material Adverse Change. The provisions for taxes payable, if any, shown on the financial statements filed
with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for
all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters,
(i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes
asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns
or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term “taxes”
mean all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together
with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “returns”
means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
2.36
ERISA Compliance. The Company and any “employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively,
“ERISA”)) established or maintained by the Company or its “ERISA Affiliates” (as defined below)
are in compliance in all material respects with ERISA. “ERISA Affiliate” means, with respect to the Company,
any member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company is
a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect
to any “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates. No “employee
benefit plan” established or maintained by the Company or any of its ERISA Affiliates, if such “employee benefit plan”
were terminated, would have any material “amount of unfunded benefit liabilities” (as defined under ERISA). Neither
the Company nor any of its ERISA Affiliates has incurred or reasonably expects to incur any material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412,
4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company or any of its
ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and, to the knowledge of the
Company, nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.
2.37
Licenses or Permits. The Company possesses all licenses, certificates, registrations, authorizations
and permits required by the FDA and other governmental or regulatory authorities performing functions similar to those performed
by the FDA and have made all declarations and filings with, the appropriate local, state, federal or foreign governmental or regulatory
agencies or bodies (including, without limitation, those administered by the FDA or by any foreign, federal, state or local governmental
or regulatory authority performing functions similar to those performed by the FDA) that are necessary for the ownership or lease
of their respective properties or the conduct of their respective businesses as described in the Pricing Disclosure Package and
the Prospectus (collectively, the “Governmental Permits”) except where any failures to possess or make the
same would not, singularly or in the aggregate, have a Material Adverse Change. The Company is in compliance with all such Governmental
Permits, including with all conditions and limitations on the commercial rights granted by such Governmental Permits; all such
Governmental Permits are valid and in full force and effect, except where the validity or failure to be in full force and effect
would not, singularly or in the aggregate, have a Material Adverse Change. The Company has not received notification of any revocation,
modification, suspension, termination or invalidation (or proceedings related thereto) of any such Governmental Permit and the
Company has no reason to believe that any such Governmental Permit will not be renewed.
2.38 Compliance
with Laws. The Company: (A) is and at all times has been in compliance in all material respects with all statutes,
rules, or regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use,
distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product
manufactured or distributed by the Company (“Applicable Laws”), except as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received any warning letter, untitled
letter or other correspondence or notice from any governmental authority alleging or asserting noncompliance with any
Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments
thereto required by any such Applicable Laws (“Authorizations”); (C) possesses all material Authorizations
and such Authorizations are valid and in full force and effect and are not in material violation of any term of any such
Authorizations; (D) has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from any governmental authority or third party alleging that any product operation or activity is
in violation of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority or third
party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received
notice that any governmental authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any
Authorizations and has no knowledge that any such governmental authority is considering such action; and (F) has filed,
obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents,
forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all
material respects on the date filed (or were corrected or supplemented by a subsequent submission).
2.39 Environmental
Laws. The Company and its Subsidiaries are in compliance with all foreign, federal, state and local rules, laws and regulations
relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety
or the environment which are applicable to their businesses (“Environmental Laws”), except where the failure
to comply would not, singularly or in the aggregate, result in a Material Adverse Change. To the Company’s knowledge, there
has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or caused by the Company or any of its Subsidiaries (or, to
the Company’s knowledge, any other entity for whose acts or omissions the Company or any of its Subsidiaries is or may otherwise
be liable) upon any of the property now or previously owned or leased by the Company or any of its Subsidiaries, or upon any other
property, in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under
any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to
any liability, except for any violation or liability which would not have, singularly or in the aggregate with all such violations
and liabilities, a Material Adverse Change; and there has been no disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with
respect to which the Company has knowledge, except for any such disposal, discharge, emission, or other release of any kind which
would not have, singularly or in the aggregate with all such discharges and other releases, a Material Adverse Change. In the
ordinary course of business, the Company and its Subsidiaries conduct periodic reviews of the effect of Environmental Laws on
their business and assets, in the course of which they identify and evaluate associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental
Laws or governmental permits issued thereunder, any related constraints on operating activities and any potential liabilities
to third parties). On the basis of such reviews, the Company and its Subsidiaries have reasonably concluded that such associated
costs and liabilities would not have, singularly or in the aggregate, a Material Adverse Change.
2.40 Real
Property. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company
and each of its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use,
all items of real or personal property which are material to the business of the Company and its Subsidiaries taken as a whole,
in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its Subsidiaries; and all of the leases and subleases material to the business of the
Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties
described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, are in full force and effect, and
neither the Company nor any Subsidiary has received any notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease
or sublease.
2.41 Contracts
Affecting Capital. There are no transactions, arrangements or other relationships between and/or among the Company, any of
its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including,
but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially
affect the Company’s or any of its Subsidiaries’ liquidity or the availability of or requirements for their capital
resources required to be described or incorporated by reference in the Registration Statement, the Pricing Disclosure Package
and the Prospectus which have not been described or incorporated by reference as required.
2.42 Loans
to Directors or Officers. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees or indebtedness by the Company or any of its Subsidiaries to or for the benefit of any of the
officers or directors of the Company or any of its Subsidiaries, or any of their respective family members, except as disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.43 Ineligible
Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness
of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Securities
and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking
account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an
ineligible issuer.
2.44 Smaller
Reporting Company. As of the time of filing of the Registration Statement, the Company was a “smaller reporting company,”
as defined in Rule 12b-2 of the Exchange Act Regulations.
2.45 Industry
Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package
and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and
accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.46 Margin
Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors
of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause
any of the shares of Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X
of the Federal Reserve Board.
2.47 Forward-Looking
Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed by
the Company without a reasonable basis or has been disclosed by the Company other than in good faith.
2.48 Integration.
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 the Offering
to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of
any such securities under the Securities Act.
2.49 Confidentiality
and Non-Competitions. To the Company’s knowledge, no director, officer, key employee or consultant of the Company is
subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer or prior
employer that could reasonably be expected to materially affect his ability to be and act in his respective capacity of the Company
or be expected to result in a Material Adverse Change.
2.50 Minute
Books. The minute books of the Company have been made available to the Underwriters and counsel for the Underwriters, and
such books accurately in all material respects reflect all transactions referred to in such minutes. There are no material transactions,
agreements, dispositions or other actions of the Company that are not properly approved and/or accurately and fairly recorded
in the minute books of the Company, as applicable.
2.51 Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or stockholders (without the consent
of the Representative) has taken, directly or indirectly, any action designed to or that has constituted or that might reasonably
be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Securities.
2.52
IT Systems and Personal Data. The Company and its subsidiaries’ information technology assets and equipment, computers,
systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are
adequate for, and operate and perform in all material respects as required in connection with the operation of the business of
the Company and its subsidiaries as currently conducted, and to the knowledge of the Company are free and clear of all material
bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company and its subsidiaries have implemented
and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their material confidential
information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal,
personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with
their businesses, and there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for
those that have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under
internal review or investigations relating to the same. The Company and its subsidiaries are presently in material compliance
with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental
or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and
Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification,
including the European Union General Data Protection Regulation.
3. Covenants
of the Company. The Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to
the Registration Statement, Preliminary Prospectus, Pricing Disclosure Package or Prospectus proposed to be filed after the Effective
Date and not file any such amendment or supplement to which the Representative shall reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1. Compliance.
The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 430A of the Securities Act
Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment
to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of
the receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of
any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement and (v) if
the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the Offering of
the Securities. The Company shall effect all filings required under Rule 424(b) of the Securities Act Regulations, in the manner
and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing
by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company shall use commercially
reasonable efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain
the lifting thereof at the earliest possible moment.
3.2.2. Continued
Compliance. The Company shall comply in all material respects with the Securities Act, the Securities Act Regulations,
the Exchange Act and the Exchange Act Regulations so as to permit the completion of the distribution of the Securities as contemplated
in this Agreement and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus
relating to the Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule
172”), would be) required by the Securities Act to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for
the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not
misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure
Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in light of the circumstances existing at the time it is
delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or
the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations,
the Company will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as
may be necessary to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or
the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the
Representative with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement;
provided that the Company shall not file or use any such amendment or supplement to which the Representative or counsel for the
Underwriters shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement
as the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant to the
Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative
notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date and will furnish the
Representative with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may
be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall reasonably object.
3.2.3. Free
Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall not make
any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute
a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained
by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General Use Free
Writing Prospectus hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i)
that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such
free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,”
as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto,
including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of
an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include
an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the
Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.
3.3 Delivery
to the Underwriters of Registration Statements. Upon request of the Representative, the Company shall deliver or make available
to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally
filed and each amendment thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein) and signed copies of all consents and certificates
of experts, and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally
filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and
each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.4 Delivery
to the Underwriters of Prospectuses. Upon request of the Representative, the Company will deliver or make available to each Underwriter, without
charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter, without charge,
during the period when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required
to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter
may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
3.5 Effectiveness
and Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement to remain effective with a current
prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative promptly and confirm the
notice in writing: (i) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding
for that purpose; (ii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification
of the Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that
purpose; (iii) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement
or Prospectus; (iv) of the receipt of any comments or request for any additional information from the Commission; and (v) of the
happening of any event during the period described in this Section 3.5 that, in the judgment of the Company, makes any statement
of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue or that requires
the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading, or (b) in the
Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification
at any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.
3.6 Listing.
The Company shall use its commercially reasonable best efforts to maintain the listing of the shares of Common
Stock (including the shares of Common Stock included in the Securities, the Preferred Conversion Shares and the Warrant Shares)
on the Exchange. Nothing in this Section 3.6, however, shall prevent a sale, merger or similar transaction involving the Company.
3.7 Reserved.
3.8 Reports
to the Representative.
3.8.1. Transfer
Agent; Transfer Sheets. The Company shall retain a transfer agent and registrar acceptable to the Representative (the “Transfer
Agent”). vStock Transfer is acceptable to the Representative to act as Transfer Agent.
3.8.2. Warrant
Agent. For so long as the Warrants are outstanding, the Company shall retain a warrant agent for the Warrants reasonably
acceptable to the Representative (the “Warrant Agent”). vStock Transfer is acceptable to the Representative
to act as Warrant Agent for the Warrants.
3.9 Payment
of Expenses.
3.9.1. General
Expenses Related to the Offering. The Company hereby agrees to pay on the Closing Date all expenses incident to the performance of the obligations
of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to
the registration of the Securities to be sold in the Offering with the Commission; (b) all Public Filing System filing fees associated
with the review of the Offering by FINRA; (c) all fees and expenses relating to the listing of the shares of Common Stock included
in the Securities on the Exchange and such other stock exchanges as the Company and the Representative together determine; (d)
all fees, expenses and disbursements relating to the registration, qualification or exemption of the Securities under the securities
laws of such foreign jurisdictions as the Representative may reasonably designate; (e) the costs of all mailing and printing of
the underwriting documents (including, without limitation, the Underwriting Agreement, the Warrant Agreement, the Warrant, any
Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’
Questionnaire and Power of Attorney), Registration Statements, prospectuses and all amendments, supplements and exhibits thereto
and as many preliminary and final prospectuses as the Representative may reasonably deem necessary; (g) the costs of preparing,
printing and delivering certificates representing the Securities; (h) fees and expenses of the transfer agent for the shares of
Common Stock and the Preferred Stock and the Warrant Agent for the Warrants; (i) stock transfer and/or stamp taxes, if any, payable
upon the transfer of securities from the Company to the Underwriters; (j) the fees and expenses of the Company’s accountants;
(k) the fees and expenses of the Company’s legal counsel and other agents and representatives; and (l) up to $140,000 for
the actual reasonable out of pocket expenses incurred by the Representative including $100,000 for legal fees of the Representative,
$20,000 for IPREO software related expenses, $5,000 for background check(s) expenses, $12,000 for marketing expenses and $3,000
for tombstones. The Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date
the expenses set forth herein to be paid by the Company to the Underwriters.
3.10 Application
of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
3.11 Delivery
of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement,
an earnings statement (which need not be certified by an independent registered public accounting firm unless required by the
Securities Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of
the Securities Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.12 Stabilization.
Neither the Company nor, to its knowledge, any of its employees, directors or stockholders (without the consent
of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted or that
might reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of the Securities.
3.13 FINRA.
The Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware that (i)
any officer or director of the Company, (ii) any beneficial owner of 5% or more of any class of the Company’s securities
or (iii) any beneficial owner of the Company’s unregistered equity securities which were acquired during the 180 days immediately
preceding the filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA member participating
in the Offering (as determined in accordance with the rules and regulations of FINRA).
3.14 No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting
in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering
and the other transactions contemplated by this Agreement.
3.15 Company
Lock-Up Agreements.
3.15.1. Restriction
on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that, without the prior written
consent of the Representative, it will not, for a period beginning on the date of this Agreement and ending on the date that is
the 90th day after the date of this Agreement (the “Lock-Up Period”), (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or
any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file or cause
to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (iii) complete any
offering of debt securities of the Company, other than entering into a line of credit with a traditional bank or (iv) enter into
any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of
capital stock of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled
by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise.
The restrictions contained in this Section 3.15.1 (collectively, the “Restrictions”) shall
not apply to (i) the Securities to be sold hereunder (including the Preferred Conversion Shares and the Warrant Shares), (ii) the
issuance by the Company of securities of the Company pursuant to any documents, agreements or securities existing or outstanding
as of the Closing Date, provided that such existing or outstanding documents, agreements or securities have not been amended since
the date of this Agreement to increase the number of securities or to decrease the exercise price, exchange price or conversion
price of securities (other than in connection with stock splits or combinations) or to extend the term of such documents, agreements
or securities, (iii) the issuance by the Company of any securities of the Company under any equity compensation plan of the Company
for services rendered to the Company; or (iv) the issuance of any securities of the Company in connection with a merger, joint
venture, licensing arrangement or any other similar non-capital raising transaction, 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, provided that in each of (ii)
through (iv) above, the securities shall be restricted from sale during the entire Lock-Up Period.
3.15.2. Restriction
on Continuous Offerings. Notwithstanding the restrictions contained in Section 3.15.1, the Company, on behalf of itself and
any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 90 days
after the date of this Agreement, directly or indirectly in any “at the market” or continuous equity transaction,
offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company.
3.16 Blue
Sky Qualifications. The Company shall use its commercially reasonable efforts, in cooperation with the Underwriters, if necessary,
to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete the
distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
3.17 Reporting
Requirements. The Company, during the period when a prospectus relating to the Securities is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations.
3.18 Press
Releases. Prior to the Closing Date the Company shall not issue any press release or other communication directly or
indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings, business
affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and consistent
with the past practices of the Company and of which the Representative is notified), without the prior written consent of the Representative,
which consent shall not be unreasonably withheld, delayed or conditioned, unless in the judgment of the Company and its counsel,
and after notification to the Representative, such press release or communication is required by law.
3.19 IRS
Forms. The Company shall deliver to each Underwriter (or its agent), prior to or at the Closing Date, a properly completed
and executed Internal Revenue Service (“IRS”) Form W-9 or an IRS Form W-8, as appropriate, together with all
required attachments to such form.
4. Conditions
of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Securities, as provided herein, shall be subject
to (i) the continuing accuracy in all material respects of the representations and warranties of the Company as of the date hereof
and as of the Closing Date; (ii) the accuracy of the statements of officers of the Company made pursuant to the provisions hereof;
(iii) the performance by the Company in all material respects of its obligations hereunder; and (iv) the following conditions:
4.1 Regulatory
Matters.
4.1.1. Effectiveness
of Registration Statement; Rule 430A Information. The Registration Statement has become effective prior to the date of this Agreement, and, at the Closing Date
and, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been
issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has
been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge,
contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information.
The Prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time
frame required by Rule 424(b) (without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall
have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.
4.1.2. FINRA
Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the
amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3. Exchange
Stock Market Clearance. On the Closing Date, the shares of Common Stock included in the Securities, the Preferred Conversion Shares
and the Warrant Shares, shall have been approved for listing on the Exchange, subject only to official notice of issuance.
4.2 Company
Counsel Matters.
4.2.1. Closing
Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion and negative assurance
letter of Lowenstein Sandler LLP, counsel to the Company, dated the Closing Date and addressed to the Representative, in form
and substance reasonably satisfactory to the Representative.
4.2.2. Opinion
of Intellectual Property Counsel for the Company. On the Closing Date, the Representative shall have received the opinion
and negative assurance letter of Haley Giuliano LLP, intellectual property counsel for the Company, dated the Closing Date, addressed
to the Representative, in form and substance reasonably satisfactory to the Representative.
4.2.3. Opinion
of Nevada Counsel. On the Closing Date, the Representative shall have received the favorable opinion letter of Brownstein
Hyatt Farber Schreck, LLP, as special Nevada counsel for the Company, dated the Closing Date and addressed to the Representative,
in form and substance reasonably acceptable to the Representative
4.2.4. [Reserved].
4.2.5. Reliance.
In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws of
the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative)
of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact,
to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments
of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to Representative Counsel if requested.
4.2.6. Certificate
of Designation. On or prior to the Closing Date, the Representative shall have received evidence of the filing and acceptance
of the certificate of designation of the Preferred Stock from the Nevada Secretary of State.
4.3 Comfort
Letters.
4.3.1. Cold
Comfort Letter. At the time this Agreement is executed the Representative shall have received a cold comfort letter containing
statements and information of the type customarily included in accountants’ comfort letters with respect to the financial
statements and certain financial information contained or incorporated by reference in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects
to the Representative and to the Auditor, dated as of the date of this Agreement.
4.3.2. Bring-down
Comfort Letter. At the Closing Date, the Representative shall have received from the Auditor a letter, dated as of the Closing
Date, to the effect that the Auditor reaffirms the statements made in the letter furnished pursuant to Section 4.3.1, except that
the specified date referred to shall be a date not more than three (3) business days prior to the Closing Date.
4.4 Officers’
Certificates.
4.4.1. Officers’
Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date, of its Chief
Executive Officer, its President and its Chief Financial Officer stating that (i) such officers have carefully examined the Registration
Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration
Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date did not include any untrue statement
of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date , any Issuer Free
Writing Prospectus as of its date and as of the Closing Date , the Prospectus and each amendment or supplement thereto, as of the
respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to
state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made,
not misleading, (ii) since the effective date of the Registration Statement, no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus, (iii) to their knowledge
after reasonable investigation, as of the Closing Date, the representations and warranties of the Company in this Agreement are
true and correct in all material respects (except for those representations and warranties qualified as to materiality, which shall
be true and correct in all respects and except for those representations and warranties which refer to facts existing at a specific
date, which shall be true and correct as of such date) and the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the Closing Date, and (iv) there has not been, subsequent to
the date of the most recent audited financial statements included or incorporated by reference in the Pricing Disclosure Package,
any Material Adverse Change in the financial position or results of operations of the Company, or any change or development that,
singularly or in the aggregate, would involve a Material Adverse Change in or affecting the condition (financial or otherwise),
results of operations, business, assets or prospects of the Company, except as set forth in the Prospectus.
4.4.2. Secretary’s
Certificate. At the Closing Date, the Representative shall have received a certificate of the Company signed by the Secretary
of the Company, dated the Closing Date, respectively, certifying: (i) that each of the Charter and Bylaws is true and complete,
has not been modified and is in full force and effect; (ii) that the resolutions of the Company’s Board of Directors
relating to the Offering are in full force and effect and have not been modified; (iii) as to the accuracy and completeness of
all correspondence between the Company or its counsel and the Commission; and (iv) as to the incumbency of the officers of
the Company. The documents referred to in such certificate shall be attached to such certificate.
4.5 No
Material Changes. Prior to and on the Closing Date: (i) there shall have been no Material Adverse Change or development
involving a prospective Material Adverse Change in the condition or prospects or the business activities, financial or otherwise,
of the Company from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure
Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened
against the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income
of the Company, except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no
stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened
by the Commission; and (iv) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments
or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities
Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and
the Securities Act Regulations, and neither the Registration Statement, the Pricing Disclosure Package nor the Prospectus nor any
amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not
misleading.
4.6 No
Material Misstatement or Omission. The Underwriters shall not have discovered and disclosed to the Company on or prior to the Closing Date that
the Registration Statement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel for the Underwriters, is material or omits to state any fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements therein not misleading, or that the Registration Statement,
the Pricing Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or any amendment or supplement thereto contains
an untrue statement of fact which, in the opinion of such counsel, is material or omits to state any fact which, in the opinion
of such counsel, is material and is necessary in order to make the statements, in the light of the circumstances under which they
were made, not misleading.
4.7 Corporate
Proceedings. All corporate proceedings and other legal matters incident to the authorization, form and validity of each
of this Agreement, the Securities, the Registration Statement, the Pricing Disclosure Package, each Issuer Free Writing Prospectus,
if any, and the Prospectus and all other legal matters relating to this Agreement and the transactions contemplated hereby and
thereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished
to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.
4.8 Delivery
of Agreements.
4.8.1. Lock-Up
Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies
of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.
4.8.2. Warrant
Agreement. On the Closing Date, the Company shall have delivered to the Representative executed copies of the Warrant Agreement.
4.9 Additional
Documents. At the Closing Date Representative’s Counsel shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling Representative Counsel to deliver an opinion to the Underwriters, or
in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Representative and Representative’s Counsel.
5. Indemnification.
5.1 Indemnification
of the Underwriters.
5.1.1. General.
Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter,
its affiliates and each of its and their respective directors, officers, members, employees, representatives, partners, shareholders,
affiliates, counsel, and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and
each an “Underwriter Indemnified Party”), against any and all loss, liability, claim, damage and expense whatsoever
(including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the
Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise)
to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law
or otherwise or under the laws of foreign countries (a “Claim”), (i) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in (A) the Registration Statement, the Pricing Disclosure Package,
any Preliminary Prospectus, the Prospectus, or in any Issuer Free Writing Prospectus (as from time to time each may be amended
and supplemented); (B) any materials or information provided to investors by, or with the approval of, the Company in connection
with the marketing of the Offering, including any “road show” or investor presentations made to investors by the Company
(whether in person or electronically); or (C) any application or other document or written communication (in this Section 5, collectively
called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction
in order to qualify the Securities, the Preferred Conversion Shares and the Warrant Shares under the securities laws thereof or
filed with the Commission, any state securities commission or agency, the Exchange or any other national securities exchange; or
the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made
in reliance upon, and in conformity with, the Underwriters’ Information or (ii) otherwise arising in connection with or allegedly
in connection with the Offering. The Company also agrees that it will reimburse each Underwriter Indemnified Party for all reasonable
fees and expenses (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between
any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third
party, or otherwise) (collectively, the “Expenses”), and further agrees wherever and whenever possible to advance
payment of Expenses as they are incurred by an Underwriter Indemnified Party in investigating, preparing, pursuing or defending
any Claim.
5.1.2. Procedure.
If any action is brought against an indemnified party in respect of which indemnity may be sought against an indemnifying party
pursuant to Section 5.1.1 or 5.2, such indemnified party shall promptly notify the indemnifying party in writing of the institution
of such action and the indemnifying party shall assume the defense of such action, including the employment and fees of counsel
(subject to the approval of such indemnified party) and payment of actual expenses. Such indemnified party shall have the right
to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (A) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying
party, (B) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available
to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (C) a
conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf
of the indemnified party) or (D) the indemnifying party has not in fact employed counsel to assume the defense of such action
or counsel satisfactory to the indemnified party, in each case, within a reasonable time after receiving notice of the commencement
of the action; in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of
the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction (plus local counsel) at any one time for all such indemnified party
or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly as they are incurred.
An indemnifying party will not, in any event, be liable for any settlement of any action or claim effected without its written
consent. In addition, the indemnifying party shall not, without the prior written consent of the indemnified party, settle, compromise
or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which
advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not such indemnified party is
a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of each indemnified
party, acceptable to such indemnified party, from all liabilities, expenses and claims arising out of such action for which indemnification
or contribution may be sought and (ii) does not include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
5.2 Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the
foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure
Package or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity
with, the Underwriters’ Information. In case any action shall be brought against the Company or any other person so indemnified
based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package or Prospectus or any amendment
or supplement thereto or any application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter
shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights
and duties given to the several Underwriters by the provisions of Section 5.1.2. The Company agrees promptly to notify the Representative
of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection
with the issuance and sale of the Securities or in connection with the Registration Statement, the Pricing Disclosure Package,
the Prospectus, or any Issuer Free Writing Prospectus.
5.3 Contribution.
5.3.1. Contribution
Rights. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand,
and the Underwriters, on the other, from the Offering, or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements
or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other,
with respect to such Offering shall be deemed to be in the same proportion as the total net proceeds from the Offering of the
Securities purchased under this Agreement (before deducting expenses) received by the Company, as set forth in the table on the
cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the Underwriters
in connection with the Offering, as set forth in the table on the cover page of the Prospectus, on the other hand. The relative
fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 5.3.1 were to be
determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this
Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions
of this Section 5.3.1 in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the
total underwriting discounts and commissions received by such Underwriter in connection with the Offering exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
5.3.2. Contribution
Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the
commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made
against another party (“contributing party”), notify the contributing party of the commencement thereof, but
the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other
than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies
a contributing party or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will
be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing
party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected
by such party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking
contribution without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2
are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act
or otherwise available. Each Underwriter’s obligations to contribute pursuant to this Section 5.3 are several and not joint.
6. Default
by an Underwriter.
6.1 Default Not Exceeding 10% of Securities. If any Underwriter or Underwriters shall default in its or their obligations to purchase the Securities, and
if the number of the Securities with respect to which such default relates does not exceed in the aggregate 10% of the number of
Securities that all Underwriters have agreed to purchase hereunder, then such Securities to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
6.2 Default Exceeding 10% of Securities. In the event that the default addressed in Section 6.1 relates to more than 10% of the Securities, you may
in your discretion arrange for yourself or for another party or parties to purchase such Securities to which such default relates
on the terms contained herein. If, within one (1) Business Day after such default relating to more than 10% of the Securities,
you do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of one (1) Business
Day within which to procure another party or parties satisfactory to you to purchase said Securities on such terms. In the event
that neither you nor the Company arrange for the purchase of the Securities to which a default relates as provided in this Section
6, this Agreement will automatically be terminated by you or the Company without liability on the part of the Company (except as
provided in Sections 3.9 and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof);provided, that nothing
herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages
occasioned by its default hereunder.
6.3 Postponement
of Closing Date. In the event that the Securities to which the default relates are to be purchased by the non-defaulting Underwriters,
or are to be purchased by another party or parties as aforesaid, you or the Company shall have the right to postpone the Closing
Date for a reasonable period, but not in any event exceeding five (5) Business Days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment to the Registration Statement, the Pricing Disclosure Package
or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made necessary. The term “Underwriter”
as used in this Agreement shall include any party substituted under this Section 6 with like effect as if it had originally been
a party to this Agreement with respect to such Securities.
7. Effective
Date of this Agreement and Termination Thereof.
7.1 Effective
Date. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered
counterparts of such signatures to the other party.
7.2 Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date,
(i) if any domestic or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange
or the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or
any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war
or an increase in major hostilities which the Representative reasonably believes will result in a Material Adverse Change or would
make it impracticable to proceed with the offering, sale and/or delivery of the Securities or to enforce contracts made by the
Underwriters for the sale of the Securities; or (iv) if a banking moratorium has been declared by a New York State or federal
authority; or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United
States securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in
your opinion, make it inadvisable to proceed with the delivery of the Securities; or (vii) if the Company is in material breach
of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall have become aware
after the date hereof of such a Material Adverse Change in the conditions or prospects of the Company, or such adverse material
change in general market conditions as in the Representative’s reasonable judgment would make it impracticable to proceed
with the offering, sale and/or delivery of the Securities or to enforce contracts made by the Underwriters for the sale of the
Securities.
7.3 Expenses.
Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section
6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein
or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual
and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the reasonable
fees and disbursements of Representative Counsel) up to $140,000 and upon demand the Company shall pay the full amount thereof
to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs the
indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, any advance received by the Representative
will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(f)(2)(C).
7.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect
and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any
part hereof.
7.5 Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates of officers
of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation
made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers
or directors or any person controlling the Company or (ii) delivery of and payment for the Securities.
8. Miscellaneous.
8.1 Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered
or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be
deemed given when so delivered or faxed and confirmed or if mailed, two (2) days after such mailing.
If
to the Representative:
A.G.P./Alliance
Global Partners
590
Madison Avenue
New
York, NY 10022
Attn:
David Bocchi, Head of Investment Banking
with
a copy (which shall not constitute notice) to:
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
666
Third Avenue
New
York, NY 10017
Attn:
Ivan K. Blumenthal, Esq.
Fax
No.: 212-983-3115
If
to the Company:
Tonix
Pharmaceuticals Holding Corp.
509
Madison Avenue
New
York, NY 10022
Attention:
Dr. Seth Lederman
with
a copy (which shall not constitute notice) to:
Lowenstein
Sandler LLP
1251
Avenue of the Americas
New
York, NY 10020
Attention:
Michael J. Lerner, Esq.
8.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
8.3 Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
8.4 Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with
this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof,
and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
8.5 Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors,
legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors
and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
8.6 Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees
that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and
enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of
New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served
upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall
be legal and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in
any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses
relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf
and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.
8.7 Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission
shall constitute valid and sufficient delivery thereof.
8.8 Waiver,
etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be
deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision
hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of
any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in
a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver
of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
8.9 Research
Analyst Independence. The Company acknowledges that each Underwriter’s research analysts and research departments are
required to be independent from its investment banking division and are subject to certain regulations and internal policies,
and that such Underwriter’s research analysts may hold views and make statements or investment recommendations and/or publish
research reports with respect to the Company and/or the offering that differ from the views of their investment banking division.
The Company acknowledges that each Underwriter is a full service securities firm and as such from time to time, subject to applicable
securities laws, rules and regulations, may effect transactions for its own account or the account of its customers and hold long
or short positions in debt or equity securities of the Company; provided, however, that nothing in this Section
8.9 shall relieve the Underwriter of any responsibility or liability it may otherwise bear in connection with activities in violation
of applicable securities laws, rules or regulations
[Signature
Page Follows]
If
the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a binding agreement between us.
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Very truly yours,
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TONIX PHARMACEUTICALS HOLDING CORP.
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Confirmed
as of the date first written above mentioned, on behalf of itself and as Representative of the several Underwriters named
on Schedule 1 hereto:
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A.G.P./ALLIANCE GLOBAL PARTNERS
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By:
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Name:
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Title:
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SCHEDULE
1
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Underwriter
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Number
of Class A Units
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Number
of Class B Units
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A.G.P./Alliance
Global Partners
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[●]
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[●]
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SCHEDULE
2-A
Pricing
Information
Number
of Class A Units: [●]
Number
of Class B Units: [●]
Public
Offering Price per Class A Unit: $[●]
Underwriting
Discount per Class A Unit: $[●]
Public
Offering Price per Class B Unit: $1,000
Underwriting
Discount per Class B Unit: $70
SCHEDULE
2-B
Issuer
General Use Free Writing Prospectuses
[●]
SCHEDULE
3
List
of Lock-Up Parties
EXHIBIT
A
Lock-Up
Agreement
TONIX PHARMACEUTICALS HOLDING CORP. S-1A
Exhibit 4.02
PRIMARY COMMON STOCK PURCHASE WARRANT
TONIX PHARMACEUTICALS HOLDING CORP.
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Warrant Shares: _______
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Issue Date: _________, 2019
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CUSIP:
ISIN:
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received,
_____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise
and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”)
and on or prior to 5:00 p.m. (New York time) on _____________ (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”) (as subject to adjustment
hereunder, the “Warrant Shares”). The purchase price of one share of Common Stock under this Warrant shall be
equal to the Exercise Price, as defined in Section 2(b). This
Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust Company
or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this
sentence shall not apply. This Warrant is a warrant to purchase Common Stock issued pursuant to (i) the Underwriting Agreement,
dated as of ______, 2019, between the Company and A.G.P. (the “Underwriting Agreement”) and (ii) the Company’s
Registration Statement on Form S-1 (File No.: 333-234263). This Warrant is one of a series of warrants containing substantially
identical terms and conditions issued pursuant to the Underwriting Agreement (collectively, the “Warrants”).
Section 1. Definitions. In addition
to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person
that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Business Day” means any day
except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions
in the State of New York are authorized or required by law or other governmental action to close.
“Commission” means the United
States Securities and Exchange Commission.
“Common Stock Equivalents” means
any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time shares of Common
Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Required Holders” means, as of any date, the holders of at least a majority of the Warrant Shares
underlying the Warrants outstanding as of such date.
“Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Trading Day” means a day on
which the principal Trading Market is open for trading.
“Trading Market” means any of
the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB
or OTCQX (or any successors to any of the foregoing).
“Transfer Agent” means vStock
Transfer, LLC, the current transfer agent of the Company, with a mailing address of ___________________ and a facsimile number
of _______________, and any successor transfer agent of the Company.
Section 2. Exercise.
(a) Exercise of Warrant. Exercise of
the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company or Warrant Agent (or such other office or agency
of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the
books of the Company) of a duly executed facsimile copy (or .pdf copy via 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 unpaid portion of 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 or Warrant Agent 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
or Warrant Agent 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
per share of the Common Stock under this Warrant shall be $___, subject to adjustment hereunder (the “Exercise Price”).
(c) Cashless Exercise. If at any time
after the Initial Exercise Date, there is no effective registration statement registering, or no current prospectus available for,
the issuance of the Warrant Shares to the Holder, then this Warrant may only be exercised, in whole or in part, at such time by
means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) 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)(64) of Regulation NMS promulgated
under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day
immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such
Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours
thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to
Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is
a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular
trading hours” on such Trading Day;
(B) = the Exercise Price, 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 L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets”
published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the 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 L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common
Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink
Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in good faith by the Company, the fees and expenses
of which shall be paid by the Company.
Notwithstanding anything herein to the contrary, on the Termination
Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).
(d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise.
The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to
the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate,
registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to
which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the
date that is the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period
after the delivery to the Company or the Warrant Agent 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 fifth Trading
Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant
Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in
the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period
“ means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market
with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing,
with respect to any Notice(s) of Exercise delivered by 12:00 p.m. (New York City time) on the Initial Exercise Date, the Company
agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date.
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 Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect
to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall
provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the
Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant
to the terms hereof.
v. No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction
of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either
pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or
round down to the next whole share.
vi. Charges, Taxes and Expenses.
Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense
in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided , however
, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require,
as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall
pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant
Shares.
vii. Closing of Books. The Company
will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the
terms hereof.
(e) Holder’s Exercise Limitations.
The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth
on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as
a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include
the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common
Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes
of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder
that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules
required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant
is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify
or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission,
as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or
the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder,
the Company shall within one (1) Trading Days 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 [9.99%/4.99%] of the number of shares of Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease
the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of the shares of Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.
Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to
the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain Adjustments.
3.1 Adjustment
Upon Issuance of Common Stock. Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the Initial Exercise Date,
and prior to _______, 2021 (the second anniversary of the Initial Exercise Date), the Company issues or sells, or in accordance
with this Section 3.1 is deemed to have issued or sold, any shares of Common Stock and/or Common Stock Equivalents (including the
issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Exempt Issuance
issued or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”) less
than a price equal to the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance or sale (such
Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then immediately upon such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New
Issuance Price. “Exempt Issuance” means the issuance of (a) Common Stock, options or other equity awards to employees,
officers, consultants, members of its strategic advisory board, or directors of the Company pursuant to any stock or option plan
or employee stock purchase plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the
Company, (b) securities issuable upon the exercise or exchange of or conversion of these Warrants and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock issued, or issuable and outstanding on the date of this Warrant;
provided that such securities have not been amended since the date of this Warrant to increase the number of such securities or
to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits
or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company; provided that such securities are issued as “restricted
securities” (as defined in Rule 144 under the Securities Act) and carry no registration rights that require or permit the
filing of any registration statement in connection therewith within 90 days of the date of this Warrant 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 all purposes
of the foregoing (including, without limitation, determining the adjusted Exercise Price and the New Issuance Price under this
Section 3.1), the following shall be applicable:
(i) Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Options is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Options for such price
per share. For purposes of this Section 3.1(i), the “lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Options” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock upon the granting or sale of the Options, upon exercise of the Options
and upon conversion, exercise or exchange of any Convertible Security (defined below) issuable upon exercise of such Options less
any consideration paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such
Options, upon exercise of such Options and upon conversion exercise or exchange of any Convertible Security issuable upon exercise
of such Options. No further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock
or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock
upon conversion, exercise or exchange of such Convertible Securities.
(ii) Issuance
of Convertible Securities. Issuance of Common Stock Equivalents. If the Company in any manner issues or sells any Common Stock Equivalents
and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange
thereof or otherwise pursuant to the terms thereof is less than the Exercise Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Common Stock Equivalents
for such price per share. For the purposes of this Section 3.1(ii), the “lowest price per share for which one share of Common
Stock is issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be
equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with
respect to one share of Common Stock upon the issuance or sale of the Common Stock Equivalent and upon conversion, exercise or
exchange of such Common Stock Equivalent or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth
in such Common Stock Equivalent for which one share of Common Stock is issuable upon conversion, exercise or exchange thereof or
otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Common Stock Equivalent
(or any other Person) upon the issuance or sale of such Common Stock Equivalent plus the value of any other consideration received
or receivable by, or benefit conferred on, the holder of such Common Stock Equivalent (or any other Person). Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Common Stock Equivalents or otherwise pursuant to the terms thereof, and if any such issuance or sale
of such Common Stock Equivalents is made upon exercise of any Options for which adjustment of the Warrant has been or is to be
made pursuant to other provisions of this Section 3.1, except as contemplated below, no further adjustment of the Exercise Price
shall be made by reason of such issuance or sale. This Section 3.1(ii) shall not apply to any Exempt Issuance.
(iii) Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration, if any, payable
upon the issue, conversion, exercise or exchange of any Common Stock Equivalents, or the rate at which any Common Stock Equivalents
are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than proportional
changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 3.1(i), the Exercise
Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in effect
at such time had such Options or Common Stock Equivalents provided for such increased or decreased purchase price, additional consideration
or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this
Section 3.1(iii), if the terms of any Option or Common Stock Equivalents that was outstanding as of the Initial Exercise Date
are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Common Stock Equivalents
and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued
as of the date of such increase or decrease. No adjustment pursuant to this Section 3.1(iii) shall be made if such adjustment would
result in an increase of the Exercise Price then in effect. This Section 3.1(iii) shall not apply to any Exempt Issuance.
(iv) Calculation
of Consideration Received. If any Option and/or Common Stock Equivalent and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary Security,”
and such Option and/or Common Stock Equivalent and/or Adjustment Right, the “Secondary Securities” and together with
the Primary Security, each a “Unit”), together comprising one integrated transaction, the aggregate consideration per
share of Common Stock with respect to such Primary Security shall be deemed to be the lower of (x) the purchase price of such Unit
and (y) if such Primary Security is an Option and/or Common Stock Equivalent, the lowest price per share for which one share of
Common Stock is at any time issuable upon the exercise or conversion of the Primary Security in accordance with Section 3.1(i)
or Section 3.1(ii) above. If any shares of Common Stock, Options or Common Stock Equivalents are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of consideration received
by the Company therefor. If any shares of Common Stock, Options or Common Stock Equivalents are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will be the fair value of such consideration. If any
shares of Common Stock, Options or Common Stock Equivalents are issued to the owners of the non-surviving entity in connection
with any merger which is not an Exempt Issuance and in which the Company is the surviving entity, the amount of consideration therefor
will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable
to such shares of Common Stock, Options or Common Stock Equivalents (as the case may be). The fair value of any consideration other
than cash or publicly traded securities will be determined jointly by the Company and the Required Holders. If such parties are
unable to reach agreement within ten days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five Trading Days after the tenth day following such Valuation Event
by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination of such appraiser
shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by
the Company. For purposes of hereof, “Adjustment Right” means any right granted with respect to any securities issued
in connection with, or with respect to, any issuance or sale (or deemed issuance or sale in accordance with this Section 3.1) of
shares of Common Stock that could result in a decrease in the net consideration received by the Company in connection with, or
with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(v) No
Modification. So long as any of the Warrants are outstanding, the Company shall not amend, modify or change the terms of
any Options or Convertible Securities (other than Exempt Issuances) (whether issued on, prior or after the Subscription Date) to
lower the exercise price or conversion price thereof.
Notwithstanding the foregoing, and for the avoidance of doubt, no adjustment shall be made under this section
3.1 in respect of any Exempt Issuance. In addition, this Section 3.1 shall expire and be of no further force or effect after _______,
2021 (the second anniversary of the Initial Exercise Date).
3.2 Stock Dividends and Splits.
If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of
this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by
reclassification of shares of Common Stock any shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall
be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or reclassification.
3.3 [RESERVED]
3.4 Subsequent Rights Offerings.
In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company grants, issues or
sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all record holders
of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, 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).
3.5 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, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the
Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, 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).
3.6 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, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of shares of Common Stock are permitted
to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or
more of the outstanding shares of Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the 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 or recapitalization that requires the approval of the stockholders
of the Company, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires
more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other
Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase
agreement or other business combination) (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 shares
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 3.6 pursuant to written agreements
in form and substance reasonably satisfactory to the Required Holders 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 Required Holders. 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.
3.7 Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
3.8 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 shall declare a dividend (or any other distribution in whatever form) on the shares of Common Stock, (B) the
Company shall declare a special nonrecurring cash dividend on or a redemption of the shares of Common Stock, (C) the Company shall
authorize the granting to all holders of the shares of Common Stock rights or warrants to subscribe for or purchase any capital
stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any
reclassification of the shares of Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the shares of Common Stock are
converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by 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 5 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record
is not to be taken, the date as of which the holders of the 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 stock 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 stock 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.
Section 4. Transfer of Warrant.
(a) Transferability. This Warrant and all
rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant
in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which
the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b) New Warrants. If this Warrant is
not held in global form through DTC (or any successor depositary), this Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations
in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a),
as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued
on transfers or exchanges shall be dated the Issue 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 Warrant Agent for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The Company and the Warrant Agent may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
(a) No Rights as Stockholder Until Exercise.
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.
(b) Loss, Theft, Destruction or Mutilation
of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting
of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
(c) Saturdays, Sundays, Holidays, etc.
If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be
a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.
(d) Authorized Shares.
The Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares to provide for
the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that
its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the shares of Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder,
the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek
to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder
as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase
the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be,
necessary to enable the Company to perform its obligations under this Warrant. Before taking any action which would result in an
adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain
all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.
(e) Jurisdiction. All questions concerning
the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees
that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant
(whether brought against a party hereto or their respective affiliates, directors, officers, stockholders, partners, members, employees
or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this 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 this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for
their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.
(f) Restrictions. The Holder acknowledges
that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilize cashless
exercise, will have restrictions upon resale imposed by state and federal securities laws.
(g) Nonwaiver and Expenses. No course
of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right
or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the Holder’s right to
exercise this Warrant terminates on the Termination Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall
be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those
of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of
its rights, powers or remedies hereunder.
(h) Notices. Any notices, consents,
waivers or other document or communications required or permitted to be given or delivered under the terms of this Warrant must
be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party);
(iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the
sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server
that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Trading Day after
deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive
the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:
If to the Company:
Tonix Pharmaceuticals Holding Corp.
509 Madison Avenue - Suite 1608
New York, NY 10022
Attention: Seth Lederman, Chief Executive Officer
Fax No: (212) 923-5700
Email: seth.lederman@tonixpharma.com
With a copy (for informational purposes only) to:
Lowenstein Sandler LLP
1251 Avenue of the Americas
New York, New York 10020
Attention: Michael J. Lerner, Esq.
Fax No: (973) 597-6395
Email: mlerner@lowenstein.com
If to a Holder, to its address, facsimile number or e-mail address
set forth herein or on the books and records of the Company.
(i) Limitation of Liability. No provision
hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration
herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any
shares of Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of
the Company.
(j) Remedies. The Holder, in addition
to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance
of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action
for specific performance that a remedy at law would be adequate.
(k) Successors and Assigns. Subject
to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by
the Holder or holder of Warrant Shares.
(l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company
and the Required Holders.
(m) Severability. Wherever possible,
each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
(n) Headings. The headings used in
this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
(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.
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. S-1A
Exhibit
4.03
TONIX
PHARMACEUTICALS HOLDING CORP.
Warrant
To Purchase Common Stock
Warrant
No.:
Number
of Shares of Common Stock:_____________
Date
of Issuance: , 2019 (“Issuance Date”)
Tonix
Pharmaceuticals Holding Corp., a company organized under the laws of Nevada (the “Company”), hereby certifies
that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
[HOLDER], the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject
to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time
or times on or after , 2019 (the “Initial Exercisability Date”), but not after 11:59 p.m., New York time,
on the Expiration Date, (as defined below), ______________ (_____________) fully paid non-assessable shares of Common Stock (as
defined below), subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined
herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, this “Warrant”), shall have the meanings set forth in Section 17.
This Warrant is one of the Warrants to Purchase Common Stock (the “Warrants”) issued pursuant to (i) that certain
Underwriting Agreement, dated as of November , 2019 (the “Subscription
Date”) by and between the Company and A.G.P., (ii) the Company’s Registration Statement on Form S-1 (File number
333-234263) (the “Registration Statement”). This Warrant shall initially be in certificated form.
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date,
in whole or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form
attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to
exercise this Warrant. Within one (1) Trading Day following the delivery of the Exercise Notice, the Holder shall make
payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the
number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in
cash by wire transfer of immediately available funds or, if the provisions of Section 1(d) are applicable, by notifying the
Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall
not be required to deliver the original Warrant in order to effect an exercise hereunder, nor shall any ink-original
signature or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice be
required. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the
same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares and 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 Exercise Notice is delivered to the Company. On or before the first (1st) Trading Day following
the date on which the Holder has delivered the applicable Exercise Notice, the Company shall transmit by facsimile
or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise
Notice, to the Holder and the Company’s transfer agent (the “Transfer Agent”). So long as the Holder
delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the first (1st) Trading
Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the earlier of (i)
the second (2nd) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in
each case following the date on which the Exercise Notice has been delivered to the Company, or, if the Holder does not
deliver the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the first (1st) Trading Day
following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the first
(1st) Trading Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is
delivered (such earlier date, the “Share Delivery Date”), the Company shall (X) provided that the Transfer
Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program,
credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the
Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y)
if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch
by overnight courier to the address as specified in the Exercise Notice, a certificate, registered 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. If the
Company fails for any reason to deliver to such registered holder or Participant, as the case may be, the Warrant Shares
subject to an exercise notice by the Share Delivery Date, the Company shall pay to the registered 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 Weighted
Average Price of the Common Stock on the date of the applicable exercise notice), $10 per Trading Day (increasing to $20 per
Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Share
Delivery Date until such Warrant Shares are delivered or the registered holder rescinds such exercise. The Company shall be
responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant
Shares via DTC, if any, including without limitation for same day processing. Upon delivery of the Exercise Notice, the
Holder shall be deemed for all corporate purposes to have become the holder of record and beneficial owner of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to
the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may
be. If this Warrant is physically delivered to the Company in connection with any exercise pursuant to this Section 1(a) and
the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares
being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading
Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in
accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to
such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No
fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather 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. . The Company shall pay any and all transfer, stamp, issuance and
similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) which may be
payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company’s
obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are
absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or
any setoff, counterclaim, recoupment, limitation or termination; provided, however, that the Company
shall not be required to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery of the
Aggregate Exercise Price (or notice of a Cashless Exercise) with respect to such exercise.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $
per share, subject to adjustment as provided herein.
(c) Company’s
Failure to Timely Deliver Securities. If either (I) the Company shall fail for any reason or for no reason on or prior
to the applicable Share Delivery Date, (x) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, to issue to the Holder a certificate for the number of shares of Common Stock to which the Holder is
entitled and register such Common Stock on the Company’s share register or (y) if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, to credit the Holder’s balance account with DTC, for such number
of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant or (II) a
registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares that
are the subject of the Exercise Notice (the “Exercise Notice Warrant Shares”) is not available for the
issuance or resale, as applicable, of such Exercise Notice Warrant Shares and (x) the Company fails to promptly, but in no
event later than one (1) Business Day after such registration statement becomes unavailable, to so notify the Holder and (y)
the Company is unable to deliver the Exercise Notice Warrant Shares electronically without any restrictive legend by
crediting such aggregate number of Exercise Notice Warrant Shares to the Holder’s or its designee’s balance
account with DTC through its Deposit / Withdrawal At Custodian system (the event described in the immediately foregoing
clause (II) is hereinafter referred to as a “Notice Failure” and, together with the event described in
clause (I) above, an “Exercise Failure”), then, in addition to all other remedies available to the Holder,
if on or prior to the applicable Share Delivery Date either (I) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate to the Holder and register
such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast
Automated Securities Transfer Program, credit the Holder’s balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Trading Day
the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the
Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a
“Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s request and in
the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased
(the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to
issue such shares of Common Stock) or credit such Holder’s balance account with DTC for such shares of Common Stock
shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing
such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable, and pay cash to the Holder
in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period
beginning on the applicable Exercise Date and ending on the applicable Share Delivery Date. Nothing shall limit the
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 certificates representing Warrant Shares (or to electronically deliver such Warrant Shares) upon the exercise of this
Warrant as required pursuant to the terms hereof. While this Warrant is outstanding, the Company shall cause its transfer
agent to participate in the DTC Fast Automated Securities Transfer Program. In addition to the foregoing rights, (i) if the
Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the
applicable Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain
and/or have the Company return, as the case may be, any portion of this Warrant that has not been exercised pursuant to such
Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s obligation to make any
payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a
registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares that
are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant
Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration
statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without
any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian
system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole
or in part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant
to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s obligation
to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or
(y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary, a Cashless Exercise (as defined below) may occur (i)
in whole or in part for a number of whole Warrant Shares between [___]1 and the Expiration Date, during which
time, in lieu of the formula below, the aggregate number of Warrant Shares issuable in such cashless exercise pursuant to any
given Exercise Notice electing to effect a Cashless Exercise shall equal the product of (x) the aggregate number of Warrant Shares
for which the Warrants are exercised as if such exercise were by means of a cash exercise rather than a Cashless Exercise and
(y) one (1); and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale of
the Exercise Notice Warrant Shares is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant
Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment
otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead
to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula
(a “Cashless Exercise”):
Net
Number = (A x B) - (A x C)
B
For
purposes of the foregoing formula:
1
Enter date that is 30 days after date of issuance
A=
the total number of shares with respect to which this Warrant is then being exercised.
B=
as applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not
a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular
trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading
Day, (ii) at the option of the Holder, either (y) the Weighted Average Price on the Trading Day immediately preceding the date
of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of
the applicable Exercise Notice if such Exercise Notice 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 1(a) hereof or (iii) the Closing Sale Price of the Common Stock on the date of the applicable
Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant
to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.
C=
the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
If
Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9)
of the Securities Act of 1933, as amended, the Warrant Shares shall take on the registered characteristics of the Warrants being
exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares.
The Company agrees not to take any position contrary to this Section 1(d).
(e) Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 11.
(f) Beneficial
Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any
portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the
terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent
that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would
beneficially own in excess of [4.99][9.99]% (the “Maximum Percentage”) of the number of shares of Common
Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number
of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall
exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion
of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of
the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible
notes or convertible preferred stock or warrants, including the other Warrants) beneficially owned by the Holder or any other
Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section
1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”). For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding
the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Reports on Form 8-K or
other public filing with the Securities and Exchange Commission (the “SEC”), as the case may be, (y) a
more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent setting
forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the
Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is
less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of
shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s
beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify
the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by
which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the
Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any
time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in
writing or by electronic mail 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 and any other Attribution Party since the date as of which the Reported
Outstanding Share Number was reported. In the event that the issuance of Common Stock to the Holder upon exercise of this
Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than
the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934
Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate
beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void
and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As
soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall
return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the
Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess
of 9.99% or such higher percentage as specified in such notice; provided that (i) any such increase in the Maximum Percentage
will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any
such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of
Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable
pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the
Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to
exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this
paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary
to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended
beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a
successor holder of this Warrant.
(g) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as
shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding
(without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that
at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(g) be reduced other than in connection
with any exercise of Warrants or such other event covered by Section 2(c) below. The Required Reserve Amount (including,
without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Warrants
based on the number of shares of Common Stock issuable upon exercise of Warrants held by each holder thereof on the Issuance Date
(without regard to any limitations on exercise) (the “Authorized Share Allocation”). In the event that a holder
shall sell or otherwise transfer any of such holder’s Warrants, each transferee shall be allocated a pro rata portion of
such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases
to hold any Warrants shall be allocated to the remaining holders of Warrants, pro rata based on the number of shares of Common
Stock issuable upon exercise of the Warrants then held by such holders thereof (without regard to any limitations on exercise).
(h) Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve
Amount (an “Authorized Share Failure”), then the Company shall promptly take all action reasonably
necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to
reserve the Required Reserve Amount for this Warrant then outstanding. Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than
ninety (90) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the
Company shall provide each stockholder with a proxy statement and shall use its reasonable best efforts to solicit its
stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an
Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and
outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company
may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on
Schedule 14C.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:
(a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification
of shares of Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that
the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
(b) Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant 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.
(c) Adjustment
Upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription Date subdivides (by
any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date
combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased
and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective
at the close of business on the date the subdivision or combination becomes effective.
(d) Other
Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and
the number of Warrant Shares, as mutually determined by the Company’s Board of Directors and the Required Holders, so as
to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(d) will increase
the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if, on or after the
Subscription Date and on or prior to the Expiration Date, 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, stock or other securities, property, options,
evidence of indebtedness or any other assets 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 or restrictions on exercise of this
Warrant, including without limitation, the Maximum Percentage) immediately before the date on 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 and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such
extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution
(and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of
the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions
declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same
extent as if there had been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription Date and on
or prior to the Expiration Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase
stock, 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 or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) 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 Common Stock are to be determined
for the grant, issuance 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 and the other Attribution Parties exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled
to beneficial ownership of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and
such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right
thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times
the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any
subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transaction. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b), including
agreements to 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, including, without limitation, which is exercisable for a corresponding
number of shares of capital stock 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 adjustments
to the 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). Upon the consummation of each Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for the Company (so that from and after the date of the applicable 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 with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation
of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon
exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of
Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above,
which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental
Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder
would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant),
as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(f)
hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit
the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights
hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled
to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise
of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date,
in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior
to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights) (collectively, the “Corporate Event Consideration”) which the Holder would
have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately
prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). The provision
made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Required Holders.
5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance 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, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required
to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase
the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect,
(ii) shall take all such actions 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) shall, so long as any of the
Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of
Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).
6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such
Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the
holder of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of
the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive
dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person
is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be
construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other
information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the
stockholders.
7. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender.
(d) Issuance
of New Warrants. If this Warrant is not held in global form through DTC (or any successor depository), whenever the Company
is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this
Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying
this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated
by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection
with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date,
as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions
as this Warrant.
8. NOTICES.
Whenever notice is required to be given under this Warrant, including, without limitation, an Exercise Notice, unless otherwise
provided herein, such notice shall be given in writing, (i) if delivered (a) from within the domestic United States, by first-class
registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile
or (b) from outside the United States, by International Federal Express, electronic mail or facsimile, and (ii) will be deemed
given (A) if delivered by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered
by nationally recognized overnight carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal Express,
two (2) Business Days after so mailed and (D) at the time of transmission, if delivered by electronic mail to each of the email
addresses specified in this Section 8 prior to 5:00 p.m. (New York time) on a Trading Day, (E) the next Trading Day after the
date of transmission, if delivered by electronic mail to each of the email addresses specified in this Section 8 on a day that
is not a Trading Day or later than 5:00 p.m. (New York time) on any Trading Day and (F) if delivered by facsimile, upon electronic
confirmation of receipt of such facsimile, and will be delivered and addressed as follows:
(i) if
to the Company, to:
Tonix
Pharmaceuticals Holding Corp.
509 Madison Avenue - Suite 1608
New
York, NY 10022
Attention:
Seth Lederman, Chief Executive Officer
Fax
No: (212) 923-5700
Email:
seth.lederman@tonixpharma.com
With
a copy (for informational purposes only) to:
Lowenstein
Sandler LLP
1251
Avenue of the Americas
New
York, New York 10020
Attention:
Michael J. Lerner, Esq.
Fax
No: (973) 597-6395
Email:
mlerner@lowenstein.com
(ii)
if to the Holder, at such address or other contact information delivered by the Holder to Company or as is on the books and records
of the Company.
The
Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable
detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail,
and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with
respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation; provided in each case that such information shall be made known to the public prior
to or in conjunction with such notice being provided to the Holder. It is expressly understood and agreed that the time of exercise
specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9. AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company
may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the Required Holders.
10. GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws
of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State
of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The
City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company 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
to the Company at the address set forth in Section 8(i) above or such other address as the Company subsequently delivers to the
Holder 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. Nothing contained herein
shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other
jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for
such obligations, or to enforce a judgment or other court ruling in favor of the Holder. If either party shall commence an action,
suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be
reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
11. DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic
mail within two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case
may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the
Exercise Price or the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic calculation
being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile or electronic mail
(a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and
approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent,
outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to
perform the determinations or calculations and notify the Company and the Holder of the results no later than ten (10)
Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable
error.
12. REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required. Notwithstanding the foregoing or anything else herein to the contrary,
other than as expressly provided in Section 1(a), Section 1(c) or Section 2(d) hereof, if the Company is for any reason unable
to issue and deliver Warrant Shares upon exercise of this Warrant as required pursuant to the terms hereof, the Company shall
have no obligation to pay to the holder any cash or other consideration or otherwise “net cash settle” this Warrant;
provided that the foregoing shall not limit or supersede the applicability of Section 4(b) hereof.
13. TRANSFER. This
Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company.
14. SEVERABILITY;
CONSTRUCTION; HEADINGS. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s). This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.
15. DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in
good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the
Company or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, nonpublic information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its subsidiaries.
16. [RESERVED].
17. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that “control” of a Person means the
power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(b) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Subscription Date, directly or indirectly managed or advised
by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the
Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder
or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could
be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity,
the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(c)
“Bid Price” means, for any security as of the particular time of determination, the bid price for such security
on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the bid price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing
does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of
such time of determination, the average of the bid prices of any market makers for such security as reported in the “pink
sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be
calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security
as of such time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company
and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance
with the procedures in Section 11. All such determinations shall be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during such period.
(d) “Bloomberg”
means Bloomberg Financial Markets.
(e) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.
(f) “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 11. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
(g) “Common
Stock” means (i) the Company’s Common Stock, par value $0.0001 per share, and (ii) any capital stock
into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.
(h) “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.
(i) “Eligible
Market” means The Nasdaq Capital Market, the NYSE American LLC, The Nasdaq Global Select Market, The Nasdaq Global Market
or The New York Stock Exchange, Inc.
(j) “Expiration
Date” means the date twelve (12) months after the Initial Exercisability Date or, if such date falls on a day other than
a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next day that
is not a Holiday.
(k) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or
otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be
subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender
or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50%
of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or
(z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3
under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least
50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least
50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common Stock, (B) that
the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock not
held by all such Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such Subject
Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory
short form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval
of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(l) “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(m) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(n) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any
other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction.
(o) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.
(p) “Principal
Market” means the principal securities exchange or securities market on which the Common Shares are then traded.
(q) “Required
Holders” means, as of any date, the holders of at least a majority of the Warrant Shares underlying the Warrants outstanding
as of such date.
(r) “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, for the Company’s
primary trading market or quotation system with respect to the Common Stock that is in effect on the date of receipt of an applicable
Exercise Notice.
(s) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(t) “Successor
Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(u) “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded.
(v) “Transaction
Documents” means any agreement entered into by and between the Company and the Holder, as applicable.
(w) “Warrant
Agent Agreement” means that certain Warrant Agent Agreement, dated as of the Initial Exercise Date, between the Company
and the Warrant Agent.
(x) “Warrant
Agent” means vStock Transfer, LLC.
(y) “Weighted
Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC
Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 11 with the term “Weighted Average Price”
being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance
Date set out above.
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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
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE COMMON STOCK
TONIX
PHARMACEUTICALS HOLDING CORP.
The
undersigned holder hereby exercises the right to purchase _________________ shares of Common Stock (“Warrant Shares”)
of Tonix Pharmaceuticals Holding Corp., a company organized under the laws of Delaware (the “Company”),
evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and
not otherwise defined shall have the respective meanings set forth in the Warrant.
1.
Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:
____________
a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
____________
a “Cashless Exercise” with respect to _______________ Warrant Shares.
2.
Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant
Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the
Company in accordance with the terms of the Warrant.
3.
Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of
the Warrant.
Date:
_______________ __, ______
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Name of Registered
Holder
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ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs [TRANSFER AGENT] to issue the above indicated number of shares
of Common Stock on or prior to the applicable Share Delivery Date.
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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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TONIX PHARMACEUTICALS HOLDING CORP. S-1A
Exhibit 4.04
Tonix Pharmaceuticals Holding Corp.
and
VStock Transfer, LLC, as
Warrant Agent
Warrant Agency Agreement
Dated as of _________, 2019
WARRANT AGENCY AGREEMENT
WARRANT AGENCY AGREEMENT, dated as of _________,
2019 (“Agreement”), between Tonix Pharmaceuticals Holding Corp., a Nevada corporation (the “Company”),
and VStock Transfer, LLC, a New York limited liability company (the “Warrant Agent”).
W I T N E S S E T H
WHEREAS, pursuant to a registered offering
by the Company of an aggregate of ___________ Class A Units (each, a “Class A Unit” and collectively, the “Class
A Units”), each Class A Unit consisting of one share of the Company’s common stock, par value $0.001 per share
(the “Common Stock”), and a warrant to purchase ___________ of Common Stock (each, a “Warrant”
and collectively, the “Warrants”), and a common stock purchase warrant to purchase __________ of Common Stock
(each, a “Common Warrant” and collectively with the Warrants, the “Offered Warrants”), and
an aggregate of ___________ Class B Units (each, a “Class B Unit” and collectively, the “Class B Units”),
each Class B Unit consisting of one share of Series A Convertible Preferred Stock, par value $0.001 per share (the “Preferred
Stock”), and Offered Warrants to purchase up to [ ] shares of Common Stock, pursuant to an effective registration statement
on Form S-1 (File No. 333-234263) (the “Registration Statement”), the Company wishes to issue the Warrants in
book entry form entitling the respective holders of the Warrants (the “Holders”, which term shall include a
Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants are held in “street
name,” a Participant (as defined below) or a designee appointed by such Participant) to purchase an aggregate of up to ___________
shares of Common Stock upon the terms and subject to the conditions hereinafter set forth (the “Offering”);
WHEREAS, the shares of Common Stock, Preferred
Stock and Warrants to be issued in connection with the Offering shall be immediately separable and will be issued separately, but
will be purchased together in the Offering; and
WHEREAS, the Company wishes the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration,
transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s
transfer agent, the delivery of the Warrant Shares (as defined below).
NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For
purposes of this Agreement, the following terms have the meanings indicated:
(a) “Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which the
New York Stock Exchange is authorized or required by law or other governmental action to close.
(b) “Close of Business”
on any given date means 5:00 p.m., New York City time, on such date; provided, however, that if such date is not
a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.
(c) “Person” means an individual,
corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization, government
or political subdivision thereof or governmental agency or other entity.
(d) “Warrant Certificate”
means a certificate issued to a Holder, representing such number of Warrant Shares as is indicated therein.
(e) “Warrant Shares” means
the shares of Common Stock underlying the Warrants and issuable upon exercise of the Warrants.
All other capitalized terms used but not otherwise
defined herein shall have the meaning ascribed to such terms in the Warrant.
Section 2. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the terms and conditions hereof,
and the Warrant Agent hereby accepts such appointment. The Company may from time to time appoint a Co-Warrant Agent as it may,
in its sole discretion, deem necessary or desirable. The Warrant Agent shall have no duty to supervise, and will in no event be
liable for the acts or omissions of, any co-Warrant Agent.
Section 3. Global Warrants.
(a) The Warrants shall be issuable in book
entry form (the “Global Warrants”). All of the Warrants shall initially be represented by one or more Global
Warrants deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee of The Depository Trust Company
(the “Depositary”), or as otherwise directed by the Depositary. Ownership of beneficial interests in the Warrants
shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depositary or its
nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary (such institution, with respect to
a Warrant in its account, a “Participant”).
(b) If the Depositary subsequently ceases
to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant Agent regarding other
arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer necessary to have
the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to
the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the Warrant Agent to deliver to each Holder
a Warrant Certificate.
(c) A Holder has the right to elect at any
time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate Request Notice (as defined below).
Upon written notice by a Holder to the Warrant Agent for the exchange of some or all of such Holder’s Global Warrants for
a Warrant Certificate evidencing the same number of Warrants, which request shall be in the form attached hereto as Annex A
(a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate Request Notice
by the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender upon delivery by the Holder
of a number of Global Warrants for the same number of Warrants evidenced by a Warrant Certificate, a “Warrant Exchange”),
the Warrant Agent shall promptly effect the Warrant Exchange and shall promptly issue and deliver to the Holder a Warrant Certificate
for such number of Warrants in the name set forth in the Warrant Certificate Request Notice. Such Warrant Certificate shall be
dated the original issue date of the Warrants and shall be manually executed by an authorized signatory of the Company. In connection
with a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant Agent to deliver, the Warrant Certificate to the
Holder within three (3) Business Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the Warrant
Certificate Request Notice (“Warrant Certificate Delivery Date”). If the Company fails for any reason to deliver
to the Holder the Warrant Certificate subject to the Warrant Certificate Request Notice by the Warrant Certificate Delivery Date,
the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced
by such Warrant Certificate (based on the VWAP (as defined in the Warrant) of the Common Stock on the Warrant Certificate Request
Notice Date), $10 per Business Day (increasing to $20 per Business Day on the fifth Business Day after such liquidated damages
begin to accrue) for each Business Day after such Warrant Certificate Delivery Date until such Warrant Certificate is delivered
or, prior to delivery of such Warrant Certificate, the Holder rescinds such Warrant Exchange. The Company covenants and agrees
that, upon the date of delivery of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder of the Warrant
Certificate and, notwithstanding anything to the contrary set forth herein, the Warrant Certificate shall be deemed for all purposes
to contain all of the terms and conditions of the Warrants evidenced by such Warrant Certificate and the terms of this Agreement,
other than Section 3(c), which shall not apply to the Warrants evidenced by a Warrant Certificate. In the event a beneficial owner
requests a Warrant Exchange, upon issuance of the paper Warrant Certificate, the Company shall act as warrant agent and the terms
of the paper Warrant Certificate so issued shall exclusively govern in respect thereof. For purposes of clarity, if there is a
conflict between the express terms of this Agreement and any Warrant Certificate with respect to the terms of the Warrants, the
terms of such Warrant Certificate shall govern and control.
Section 4. Form of Warrant. The Warrants,
together with the form of election to purchase Common Stock (the “Exercise Notice”) and the form of assignment
to be printed on the reverse thereof, whether a Warrant Certificate or a Global Warrant, shall be substantially in the form of
Exhibit 1 hereto.
Section 5. Countersignature and Registration.
The Warrants shall be executed on behalf of the Company by its Chief Executive Officer or Chief Financial Officer, either manually
or by facsimile signature, and have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Warrants shall be countersigned
by the Warrant Agent either manually or by facsimile signature and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed a Warrant shall cease to be such officer of the Company before countersignature
by the Warrant Agent and issuance and delivery by the Company, such Warrant, nevertheless, may be countersigned by the Warrant
Agent, issued and delivered with the same force and effect as though the person who signed such Warrant had not ceased to be such
officer of the Company; and any Warrant may be signed on behalf of the Company by any person who, at the actual date of the execution
of such Warrant, shall be a proper officer of the Company to sign such Warrant, although at the date of the execution of this Warrant
Agreement any such person was not such an officer.
The Warrant Agent will keep or cause to
be kept, at one of its offices, or at the office of one of its agents, books for registration and transfer of the Warrant Certificates
issued hereunder. Such books shall show the names and addresses of the respective Holders of the Warrant Certificates, the number
of warrants evidenced on the face of each of such Warrant Certificate and the date of each of such Warrant Certificate. The Warrant
Agent will create a special account for the issuance of Warrant Certificates.
Section 6. Transfer, Split Up, Combination
and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. Subject to the provisions
of the Warrant and the last sentence of this first paragraph of Section 6 and subject to applicable law, rules or regulations,
or any “stop transfer” instructions the Company may give to the Warrant Agent, at any time after the closing date of
the Offering, and at or prior to the Close of Business on the Termination Date, any Warrant Certificate or Warrant Certificates
or Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Warrant Certificate or Warrant
Certificates or Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares of Common Stock as
the Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants surrendered then entitled such Holder to purchase.
Any Holder desiring to transfer, split up, combine or exchange any Warrant Certificate or Global Warrant shall make such request
in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant Certificates to be transferred,
split up, combined or exchanged at the principal office of the Warrant Agent, provided that no such surrender is applicable to
the Holder of a Global Warrant. Any requested transfer of Warrants, whether a Global Warrant or a Warrant Certificate, shall be
accompanied by reasonable evidence of authority of the party making such request that may be required by the Warrant Agent. Thereupon
the Warrant Agent shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person
entitled thereto any Warrant Certificate or Global Warrant, as the case may be, as so requested. The Company may require payment
from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Warrants. The Company shall compensate the Warrant Agent per the fee schedule mutually agreed
upon by the parties hereto and provided separately on the date hereof.
Upon receipt by the Warrant Agent of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence shall include
an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of loss,
theft or destruction, of indemnity in customary form and amount, and satisfaction of any other reasonable requirements established
by Section 8-405 of the Uniform Commercial Code as in effect in the State of Nevada, and reimbursement to the Company and the Warrant
Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant Certificate
if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery to the
Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Warrants; Exercise
Price; Termination Date.
(a) The Warrants shall be exercisable commencing
on the Initial Exercise Date. The Warrants shall cease to be exercisable and shall terminate and become void, and all rights thereunder
and under this Agreement shall cease, at or prior to the Close of Business on the Termination Date. Subject to the foregoing and
to Section 7(b) below, the Holder of a Warrant may exercise the Warrant in whole or in part upon providing the items required by
Section 7(c) below to the Warrant Agent at the principal office of the Warrant Agent or to the office of one of its agents as may
be designated by the Warrant Agent from time to time. In the case of the Holder of a Global Warrant, the Holder shall deliver the
executed Exercise Notice and payment of the Exercise Price pursuant to Section 2(a) of the Warrant. Notwithstanding any other provision
in this Agreement, a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant held in book-entry
form through the Depositary (or another established clearing corporation performing similar functions), shall effect exercises
by delivering to the Depositary (or such other clearing corporation, as applicable) the appropriate instruction form for exercise,
complying with the procedures to effect exercise that are required by the Depositary (or such other clearing corporation, as applicable).
The Company acknowledges that the bank accounts maintained by the Warrant Agent in connection with the services provided under
this Agreement will be in its name and that the Warrant Agent may receive investment earnings in connection with the investment
at Warrant Agent risk and for its benefit of funds held in those accounts from time to time. Neither the Company nor the Holders
will receive interest on any deposits or Exercise Price.
(b) Upon receipt of an Exercise Notice for
a cashless exercise pursuant to Section 2(c) of the Warrant (each, a “Cashless Exercise”), the Company will
promptly calculate and transmit to the Warrant Agent the number of Warrant Shares issuable in connection with such Cashless Exercise
and deliver a copy of the Exercise Notice to the Warrant Agent, which shall issue such number of Warrant Shares in connection with
such Cashless Exercise.
(c) Upon the Warrant Agent’s receipt,
at or prior to the Close of Business on the Termination Date set forth in a Warrant, of the executed Exercise Notice, accompanied
by payment of the Exercise Price pursuant to Section 2(a) of the Warrant, the shares to be purchased (other than in the case of
a Cashless Exercise), an amount equal to any applicable tax, governmental charge or expense reimbursement referred to in Section
6 in cash, or by certified check or bank draft payable to the order of the Company and, in the case of an exercise of a Warrant
in the form of a Warrant Certificate for all of the Warrant Shares represented thereby, the Warrant Certificate, the Warrant Agent
shall cause the Warrant Shares underlying such Warrant to be delivered to or upon the order of the Holder of such Warrant, registered
in such name or names as may be designated by such Holder, no later than the Warrant Share Delivery Date. If the Company is then
a participant in the DWAC system of the Depositary and either (A) there is an effective registration statement permitting the issuance
of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) the Warrant is being exercised via Cashless Exercise,
then the certificates for Warrant Shares shall be transmitted by the Warrant Agent to the Holder by crediting the account of the
Holder’s broker with the Depositary through its DWAC system. For the avoidance of doubt, if the Company becomes obligated
to pay any amounts to any Holders pursuant to Section 2(d)(i) or 2(d)(iv) of the Warrant, such obligation shall be solely that
of the Company and not that of the Warrant Agent. Notwithstanding anything else to the contrary in this Agreement, except in the
case of a Cashless Exercise, if any Holder fails to duly deliver payment to the Warrant Agent of an amount equal to the aggregate
Exercise Price of the Warrant Shares to be purchased upon exercise of such Holder’s Warrant as set forth in Section 7(a)
hereof, the Warrant Agent will not obligated to deliver certificates representing any such Warrant Shares (via DWAC or otherwise)
until following receipt of such payment, and the applicable Warrant Share Delivery Date shall be deemed extended by one day for
each day (or part thereof) until such payment is delivered to the Warrant Agent.
(d) The Warrant Agent shall deposit all funds
received by it in payment of the Exercise Price for all Warrants in the account of the Company maintained with the Warrant Agent
for such purpose (or to such other account as directed by the Company in writing) and shall advise the Company via telephone at
the end of each day on which funds for the exercise of any Warrant are received of the amount so deposited to its account. The
Warrant Agent shall promptly confirm such telephonic advice to the Company in writing.
(e) In case the Holder of any Warrant Certificate
exercises fewer than all Warrants evidenced thereby and surrenders such Warrant Certificate in connection with such partial exercise,
a new Warrant Certificate evidencing the number of Warrant Shares equivalent to the number of Warrant Shares remaining unexercised
may be issued by the Warrant Agent to the Holder of such Warrant Certificate or to his duly authorized assigns in accordance with
Section 2(d)(ii) of the Warrant, subject to the provisions of Section 6 hereof.
Section 8. Cancellation and Destruction
of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination
or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for cancellation or
in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificates shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant
Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates
to the Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant
Agent to retain such canceled certificates.
Section 9. Certain Representations; Reservation
and Availability of Shares of Common Stock or Cash.
(a) This Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by the Warrant Agent, constitutes
a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, and the Warrants
have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Warrant Agent pursuant
hereto and payment therefor by the Holders as provided in the Registration Statement, constitute valid and legally binding obligations
of the Company enforceable against the Company in accordance with their terms and entitled to the benefits thereof; in each case
except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to
or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(b) As of the date hereof and prior to the
Offering, the authorized capital stock of the Company consists of (i) 15,000,000 shares of authorized Common Stock, of which 1,575,246
shares of Common Stock are issued and outstanding, and (ii) 5,000,000 shares of authorized preferred stock of which no shares are
issued and outstanding. As of the date hereof there are ___________ shares of Common Stock reserved for issuance upon exercise
of the Warrants inclusive of any Warrants the Underwriter may acquire upon exercise of its over-allotment option described in the
Registration Statement. Except as disclosed in the Registration Statement, there are no other outstanding obligations, warrants,
options or other rights to subscribe for or purchase from the Company any class of capital stock of the Company.
(c) The Company covenants and agrees that
it will cause to be reserved and kept available out of its authorized and unissued shares of Common Stock or its authorized and
issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares of Common Stock that will
be sufficient to permit the exercise in full of all outstanding Warrants.
(d) The Warrant Agent will create a special
account for the issuance of Common Stock upon the exercise of Warrants.
(e) The Company further covenants and agrees
that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect
of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock upon exercise of the Warrants.
The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any transfer
involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for Common Stock in a
name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise or to issue or deliver
any certificate for shares of Common Stock upon the exercise of any Warrants until any such tax or governmental charge shall have
been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of surrender)
or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge is due.
Section 10. Common Stock Record Date.
Each Holder shall be deemed to have become the holder of record for the Warrant Shares pursuant to Section 2(d)(i) of the Warrants.
Section 11. Adjustment of Exercise Price,
Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price, the number of shares covered by each
Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of the Warrant.
In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant, the Holder of any Warrant
thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock,
thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in
Section 3 of the Warrant, and the provisions of Sections 7, 9 and 13 of this Agreement with respect to the shares of Common Stock
shall apply on like terms to any such other shares. All Warrants originally issued by the Company subsequent to any adjustment
made to the Exercise Price pursuant to the Warrant shall evidence the right to purchase, at the adjusted Exercise Price, the number
of shares of Common Stock purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment
as provided herein.
Section 12. Certification of Adjusted
Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of shares of Common Stock issuable
upon the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare a certificate
setting forth the Exercise Price of each Warrant as so adjusted, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate and (c) instruct
the Warrant Agent to send a brief summary thereof to each Holder of a Warrant.
Section 13. Fractional Shares of Common
Stock.
(a) The Company shall not issue fractions
of Warrants or distribute a Global Warrant or Warrant Certificates that evidence fractional Warrants. Whenever any fractional Warrant
would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such fraction
down to the nearest whole Warrant.
(b) The Company shall not issue fractions
of shares of Common Stock upon exercise of Warrants or distribute stock certificates that evidence fractional shares of Common
Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued or distributed, the actual issuance
or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant.
Section 14. Conditions of the Warrant
Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions hereof,
including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to
time of the Warrant shall be subject:
(a) Compensation and Indemnification. The
Company agrees promptly to pay the Warrant Agent the compensation detailed on Exhibit 2 hereto for all services rendered by the
Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred
without gross negligence, bad faith or willful misconduct by the Warrant Agent in connection with the services rendered hereunder
by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability
or expense incurred without gross negligence, bad faith or willful misconduct on the part of the Warrant Agent, arising out of
or in connection with its acting as Warrant Agent hereunder, including the reasonable costs and expenses of defending against any
claim of such liability.
(b) Agent for the Company. In acting under
this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company
and does not assume any obligations or relationship of agency or trust for or with any of the Holders of Warrant Certificates or
beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult
with counsel satisfactory to it, which may include counsel for the Company, and the written advice of such counsel shall be full
and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with the advice of such counsel.
(d) Documents. The Warrant Agent shall be
protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance upon any Warrant Certificate,
notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine
and to have been presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent,
and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights
that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they
may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or
agent for, any committee or body of Holders of Warrant Securities or other obligations of the Company as freely as if it were not
the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as trustee
under any indenture to which the Company is a party.
(f) No Liability for Interest. Unless otherwise
agreed with the Company, the Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant
to any of the provisions of this Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant
Agent shall have no liability with respect to any invalidity of this Agreement or any of the Warrant Certificates (except as to
the Warrant Agent’s countersignature thereon).
(h) No Responsibility for Representations.
The Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant Certificates (except
as to the Warrant Agent’s countersignature thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent
shall be obligated to perform only such duties as are herein and in the Warrants specifically set forth and no implied duties
or obligations shall be read into this Agreement or the Warrants against the Warrant Agent. The Warrant Agent shall not be under
any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within
a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty
or responsibility for the use by the Company of any of the Warrants authenticated by the Warrant Agent and delivered by it to
the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrants. The Warrant Agent
shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained
herein or in the Warrants or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with respect
to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt
to initiate any proceedings at law.
Section 15. Purchase or Consolidation
or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor Warrant Agent may be merged
or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent
or any successor Warrant Agent shall be party, or any corporation succeeding to the corporate trust business of the Warrant Agent
or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Warrant Agent under the provisions of Section 17. In case at the time such successor Warrant Agent shall
succeed to the agency created by this Agreement any of the Warrants shall have been countersigned but not delivered, any such successor
Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrants so countersigned; and in
case at that time any of the Warrants shall not have been countersigned, any successor Warrant Agent may countersign such Warrants
either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrants
shall have the full force provided in the Warrants and in this Agreement.
In case at any time the name of the Warrant
Agent shall be changed and at such time any of the Warrants shall have been countersigned but not delivered, the Warrant Agent
may adopt the countersignature under its prior name and deliver Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, the Warrant Agent may countersign such Warrants either in its prior name or in its
changed name; and in all such cases such Warrants shall have the full force provided in the Warrants and in this Agreement.
Section 16. Duties of Warrant Agent.
The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, all
of which the Company, by its acceptance hereof, shall be bound:
(a) The Warrant Agent may consult with legal
counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chief Executive
Officer or Chief Financial Officer of the Company; and such certificate shall be full authentication to the Warrant Agent for any
action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.
(c) Subject to the limitation set forth in
Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct, or
for a breach by it of this Agreement.
(d) The Warrant Agent shall not be liable
for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrants (except its countersignature
thereof) by the Company or be required to verify the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof
by the Warrant Agent) or in respect of the validity or execution of any Warrant (except its countersignature thereof); nor shall
it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor
shall it be responsible for the adjustment of the Exercise Price or the making of any change in the number of shares of Common
Stock required under the provisions of Section 11 or 13 or responsible for the manner, method or amount of any such change or the
ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise of
Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock
to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock will, when issued, be duly authorized,
validly issued, fully paid and nonassessable.
(f) Each party hereto agrees that it will
perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying out or performing by
any party of the provisions of this Agreement.
(g) The Warrant Agent is hereby authorized
to accept instructions with respect to the performance of its duties hereunder from the Chief Executive Officer or Chief Financial
Officer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not
be liable and shall be indemnified and held harmless for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer, provided Warrant Agent carries out such instructions without gross negligence, bad faith
or willful misconduct.
(h) The Warrant Agent and any shareholder,
director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company
or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude
the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.
(i) The Warrant Agent may execute and exercise
any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorney or agents,
and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorney or
agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
Section 17. Change of Warrant Agent.
The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing sent
to the Company and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. The Company may
remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant Agent or successor
Warrant Agent, as the case may be, and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates.
If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor
to the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after such removal or after
it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the Holder
of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate for inspection by the Company), then the
Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent.
Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of a state thereof, in good standing, which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment
as Warrant Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further
act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time
held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Warrant
Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the Holders of the Warrant Certificates.
However, failure to give any notice provided for in this Section 17, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.
Section 18. Issuance of New Warrants.
Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company may, at its option, issue
a new Global Warrant or Warrant Certificates, if any, evidencing Warrants in such form as may be approved by its Board of Directors
to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other
securities or property purchasable under the Global Warrant or Warrant Certificates, if any, made in accordance with the provisions
of this Agreement.
Section 19. Notices. Notices or demands
authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate to or on
the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant Certificate to or on
the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate, shall be deemed given
(a) on the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal Express
or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth
Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested),
and (d) the time of transmission, if such notice or communication is delivered via facsimile or email attachment at or prior to
5:30 p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment on a day that is not a Business Day or later than 5:30 p.m. (New York
City time) on any Business Day, in each case to the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
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(a)
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If to the Company, to:
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Tonix Pharmaceuticals Holding Corp.
509 Madison Avenue, Suite 306
New York, New York 10022
Attention: Seth Lederman
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(b)
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If to the Warrant Agent, to:
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VStock Transfer, LLC
18 Lafayette Place,
Woodmere, NY 11598
Attention: [Compliance Department]
For any notice delivered by email to be deemed given or made,
such notice must be followed by notice sent by overnight courier service to be delivered on the next business day following such
email, unless the recipient of such email has acknowledged via return email receipt of such email.
(c) If to the Holder of any Warrant Certificate,
to the address of such Holder as shown on the registry books of the Company. Any notice required to be delivered by the Company
to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding any other provision of
this Agreement, where this Agreement provides for notice of any event to a Holder of any Warrant Certificate, for a Global Warrant,
such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures of the Depositary
or its designee.
Section 20. Supplements and Amendments.
(a) The Company and the Warrant Agent may
from time to time supplement or amend this Agreement without the approval of any Holders of Warrant Certificates in order to cure
any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions
herein, or to make any other provisions with regard to matters or questions arising hereunder which the Company and the Warrant
Agent may deem necessary or desirable and which shall not adversely affect the interests of the Holders of the Warrants Certificates
in any material respect.
(b) In addition to the foregoing, with the
consent of a majority of the Holders of Warrants outstanding, the Company and the Warrant Agent may modify this Agreement for the
purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or
modifying in any manner the rights of the Holders of the Warrant Certificates; provided, however, that no modification
of the terms (including but not limited to the adjustments described in Section 11) upon which the Warrants are exercisable or
reducing the percentage required for consent to modification of this Agreement may be made without the consent of the Holder of
each outstanding warrant certificate affected thereby. As a condition precedent to the Warrant Agent’s execution of any amendment,
the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the
proposed amendment complies with the terms of this Section 20.
Section 21. Successors. All covenants
and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 22. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates and
the Warrant Agent any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.
Section 23. Governing Law. This Agreement
and each Warrant issued hereunder shall be governed by, and construed in accordance with, the laws of the State of New York without
giving effect to the conflicts of law principles thereof.
Section 24. Counterparts. This Agreement
may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same instrument.
Section 25. Captions. The captions
of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
Section 26. Information. The Company
agrees to promptly provide to the Holders of the Warrants any information it provides to all holders of the Common Stock, except
to the extent any such information is publicly available on the EDGAR system (or any successor thereof) of the Securities and Exchange
Commission.
Section 27. Force Majeure. Notwithstanding
anything to the contrary contained herein, Warrant Agent shall not be liable for any delays or failures in performance resulting
from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns
or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties
with information storage or retrieval systems, labor difficulties, war, or civil unrest, it being understood that the Warrant Agent
shall use reasonable best efforts which are consistent with accepted practices in the banking industry to resume performance as
soon as practicable under the circumstances.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the day and year first above written.
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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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VSTOCK TRANSFER, LLC
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By:
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Name:
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Title:
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Annex A: Form of Warrant Certificate
Request Notice
WARRANT CERTIFICATE REQUEST NOTICE
To: VStock Transfer, LLC as Warrant Agent for Tonix Pharmaceuticals
Holding Corp. (the “Company”)
The undersigned Holder of Common Stock Warrants (“Warrants”)
in the form of Global Warrants issued by the Company hereby elects to receive a Warrant Certificate evidencing the Warrants held
by the Holder as specified below:
1 Name of Holder of Warrants in form of Global Warrants: _____________________________
2. Name of Holder in Warrant Certificate (if different from
name of Holder of Warrants in form of Global Warrants): ________________________________
3. Number of Warrants in name of Holder in form of Global Warrants:
___________________
4. Number of Warrants for which Warrant Certificate shall be
issued: __________________
5. Number of Warrants in name of Holder in form of Global Warrants
after issuance of Warrant Certificate, if any: ___________
6. Warrant Certificate shall be delivered to the following address:
The undersigned hereby acknowledges and agrees that, in connection
with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have surrendered the number of
Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced by the Warrant Certificate.
[SIGNATURE OF HOLDER]
Name of Investing Entity: ____________________________________________________
Signature of Authorized Signatory of Investing Entity:
______________________________
Name of Authorized Signatory: ________________________________________________
Title of Authorized Signatory: _________________________________________________
Date: _______________________________________________________________
Exhibit 1: Form of Warrant
TONIX PHARMACEUTICALS HOLDING CORP. S-1A
Exhibit 4.05
WARRANT AGREEMENT
THIS WARRANT AGREEMENT made as of November ,
2019 (the “Issuance Date”), between Tonix Pharmaceuticals Holding Corp., a Nevada corporation (the “Company”),
and VStock Transfer, LLC, a New York limited liability company (the “Warrant Agent”).
WHEREAS, the Company has sold an
aggregate of ___________ Class A Units (each, a “Class A Unit” and collectively, the “Class A Units”),
each Class A Unit consisting of one share of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), and a warrant to purchase one of Common Stock (each, an “Offered Warrant”), and a common
stock purchase warrant to purchase one-half of a share of Common Stock (each, a “Warrant Share” and, collectively,
the “Warrant Shares”), subject to adjustment as described herein (each, a “Warrant” and collectively
the “Warrants”), and an aggregate of ___________ Class B Units (each, a “Class B Unit” and
collectively, the “Class B Units”), each Class B Unit consisting of one share of Series A Convertible Preferred
Stock, par value $0.001 per share (the “Preferred Stock”), Offered Warrants to purchase up to ______ shares
of Common Stock, and Warrants to purchase up to ______ shares of Common Stock, pursuant to an Underwriting Agreement, dated ,
2019, between the Company and A.G.P./Alliance Global Partners (“A.G.P.”), as representative of the several underwriters
named therein (the “Underwriting Agreement”);
WHEREAS, the Company has filed with the
Securities and Exchange Commission a Registration Statement, No. 333-234263 on Form S-1 (as the same may be amended from time to
time, the “Registration Statement”) for the registration, under the Securities Act of 1933, as amended (the
“1933 Act”) of the Common Stock, the Warrants and the Warrant Shares, and such Registration Statement was declared
effective on , 2019;
WHEREAS, the Company desires the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration,
transfer, exchange and exercise of the Warrants;
WHEREAS, the Company desires to provide
for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done
and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf
of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution
and delivery of this Warrant Agreement.
NOW, THEREFORE, in consideration of the
mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in accordance with the express terms and conditions set forth
in this Warrant Agreement.
2. Warrants.
2.1 Form
of Warrant. The Warrants shall be registered securities and shall be initially evidenced by a global Warrant certificate
(“Global Certificate”) in the form of Exhibit A to this Warrant Agreement, which shall be deposited
on behalf of the Company with a custodian for The Depository Trust Company (“DTC”) and registered in the name
of Cede & Co., a nominee of DTC. If DTC subsequently ceases to make its settlement system available for the Warrants, the Company
may instruct the Warrant Agent regarding making arrangements for book-entry settlement. In the event that the Warrants are not
eligible for, or it is no longer necessary to have the Warrants available in, registration in the name of Cede & Co., a nominee
of DTC, the Company may instruct the Warrant Agent to provide written instructions to DTC to deliver to the Warrant Agent for cancellation
the Global Certificate, and the Company shall instruct the Warrant Agent to deliver to each Holder (as defined below) separate
certificates evidencing Warrants (“Definitive Certificates” and, together with the Global Certificate, “Warrant
Certificates”), in the form filed as exhibit
4.03 to the Registration Statement. The Warrants represented by the Global Certificate are referred to as “Global Warrants”.
2.2 Registration.
2.2.1 Warrant
Register. The Warrant Agent shall maintain books (“Warrant Register”) for the registration of original issuance
and the registration of transfer of the Warrants. Any Person in whose name ownership of a beneficial interest in the Warrants evidenced
by a Global Certificate is recorded in the records maintained by DTC or its nominee shall be deemed the “beneficial owner”
thereof, provided that all such beneficial interests shall be held through a Participant (as defined below), which shall be the
registered holder of such Warrants.
2.2.2 Issuance
of Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue the Global Certificate and deliver
the Warrants in the DTC settlement system in accordance with written instructions delivered to the Warrant Agent by the Company.
Ownership of beneficial interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through,
records maintained (i) by DTC and (ii) by institutions that have accounts with DTC (each, a “Participant”),
subject to a Holder’s right to elect to receive a Warrant in certificated form in the form filed
as exhibit 4.3 to the Registration Statement. Any Holder desiring to elect to receive a Warrant in certificated form shall make
such request in writing delivered to the Warrant Agent pursuant to Section 2.2.6, and shall surrender to the Warrant Agent the
interest of the Holder on the books of the Participant evidencing the Warrants which are to be represented by a Definitive Certificate
through the DTC settlement system. Thereupon, the Warrant Agent shall countersign and deliver to the person entitled thereto a
Warrant Certificate or Warrant Certificates, as the case may be, as so requested.
2.2.3 Beneficial
Owner; Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may
deem and treat the person in whose name that Warrant shall be registered on the Warrant Register (the “Holder”)
as the absolute owner of such Warrant for purposes of any exercise thereof, and for all other purposes, and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification,
proxy or other authorization furnished by DTC governing the exercise of the rights of a holder of a beneficial interest in any
Warrant. The rights of beneficial owners in a Warrant evidenced by the Global Certificate shall be exercised by the Holder or a
Participant through the DTC system, except to the extent set forth herein or in the Global Certificate.
2.2.4 Execution.
The Warrant Certificates shall be executed on behalf of the Company by any authorized officer of the Company (an “Authorized
Officer”), which need not be the same authorized signatory for all of the Warrant Certificates, either manually or by
facsimile signature. The Warrant Certificates shall be countersigned by an authorized signatory of the Warrant Agent, which need
not be the same signatory for all of the Warrant Certificates, and no Warrant Certificate shall be valid for any purpose unless
so countersigned. In case any Authorized Officer of the Company that signed any of the Warrant Certificates ceases to be an Authorized
Officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates,
nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person
who signed such Warrant Certificates had not ceased to be such officer of the Company; and any Warrant Certificate may be signed
on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be an Authorized
Officer of the Company authorized to sign such Warrant Certificate, although at the date of the execution of this Warrant Agreement
any such person was not such an Authorized Officer.
2.2.5 Proxies.
The Holder of a Warrant may grant proxies or otherwise authorize any person, including the Participants and beneficial holders
that may own interests through the Participants, to take any action that a Holder is entitled to take under this Warrant Agreement
or the Warrants; provided, however, that at all times that Warrants are evidenced by Book Entry Warrant
Certificate, exercise of those Warrants shall be effected on their behalf by Participants through DTC in accordance the procedures
administered by DTC.
2.2.6 Warrant
Certificate Request. A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant
to a Warrant Certificate Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the exchange
of some or all of such Holder’s Warrants for a Definitive Certificate evidencing the same number of Warrants, which request
shall be in the form attached hereto as Exhibit B (a
“Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate Request Notice by
the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender upon delivery by the Holder
of a number of Global Warrants for the same number of Warrants evidenced by a Definitive Certificate, a “Warrant Exchange”),
the Warrant Agent shall, as soon as practicable, effect the Warrant Exchange and shall, as soon as practicable, issue and deliver
to the Holder a Definitive Certificate for such number of Warrants in the name set forth in the Warrant Certificate Request Notice.
Such Definitive Certificate shall be dated the original issue date of the Warrants, shall be manually executed by an authorized
signatory of the Company, shall be in the form filed as Exhibit 4.3 to the Registration Statement, and shall be reasonably acceptable
in all respects to such Holder. In connection with a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant
Agent to deliver, the Definitive Certificate to the Holder within three (3) Business Days of the Warrant Certificate Request Notice
pursuant to the delivery instructions in the Warrant Certificate Request Notice (“Warrant Certificate Delivery Date”).
If the Company or the Warrant Agent fails for any reason to deliver to the Holder the Definitive Certificate subject to the Warrant
Certificate Request Notice by the Warrant Certificate Delivery Date, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Definitive Certificate (based on the Weighted
Average Price (as defined in the Warrants) of the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business
Day for each Business Day after such Warrant Certificate Delivery Date until such Definitive Certificate is delivered or, prior
to delivery of such Warrant Certificate, the Holder rescinds such Warrant Exchange. The Company covenants and agrees that, upon
the date of delivery of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder of the Definitive Certificate
and, notwithstanding anything to the contrary set forth herein, the Definitive Certificate shall be deemed for all purposes to
contain all of the terms and conditions of the Warrants evidenced by such Warrant Certificate and the terms of this Warrant Agreement,
shall not apply to the Warrants evidenced by the Definitive Certificate. The Warrant Agent shall have no responsibility for any
liquidated damages that may be payable or paid to any Person under this paragraph for any failure by the Warrant Agent to deliver
to the Holder the Definitive Certificate, on the Company’s behalf. In addition, the Company shall indemnify and hold harmless
the Warrant Agent against all claims made against the Warrant Agent for any such failure except that the Company shall not be obligated
to provide any such indemnification if it is determined by a final, non-appealable judgment of a court of competent jurisdiction
that such failure is due to the Warrant Agent’s gross negligence, bad faith or willful misconduct.
2.2.7 For purposes of clarity, without limiting the rights and immunities of the Warrant Agent, if there is a conflict
between the express terms of this Warrant Agreement and any Definitive Certificate in the form form
filed as Exhibit 4.3 to the Registration Statement with respect to the terms of the Warrants, the terms of such Definitive Certificate
shall govern and control.
2.3 Detachability
of Warrants. The Common Stock and the Warrants will be issued separately and will be separately transferable immediately upon
issuance.
3. Terms
and Exercise of Warrants.
3.1 Exercise
Price. The exercise price per whole share of the Common Stock under each Warrant shall be $ ,
subject to adjustment hereunder (the “Exercise Price”).
3.2 Duration
of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) commencing on
the Issuance Date and terminating at 5:00 P.M., Eastern time on the date twelve
(12) months after the Issuance Date or, if such date falls on a day other than a Business Day or on which trading does not take
place on the Principal Market (a “Holiday”), the next day that is not a Holiday (the “Expiration Date”).
Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect
thereof under this Warrant Agreement shall cease at the close of business on the Expiration Date.
3.3 Exercise
of Warrants.
3.3.1 Exercise
and Payment. A registered holder may exercise a Warrant by delivering, not later than 5:00 P.M., Eastern time, on any Business
Day during the Exercise Period (the “Exercise Date”) to the Warrant Agent at its offices designated for such
purpose (i) the Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate,
the Warrants to be exercised (the “Book-Entry Warrants”) free on the records of the Depository to an account
of the Warrant Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository from time
to time, and (ii) an election to purchase the Warrant Shares underlying the Warrants to be exercised (the “Election to
Purchase” and together with the Warrant Certificates and the Book-Entry Warrants, the “Warrant Exercise Documents”),
properly completed and duly executed by the registered holder on the reverse of the Warrant Certificate, accompanied by a signature
guarantee and such other documentation as the Warrant Agent may reasonably request, or, in the case of a Book-Entry Warrant Certificate,
properly delivered by the Participant in accordance with the Depository’s procedures. Within one Trading Day after the Exercise
Date, such holder must pay the Warrant Price for each Warrant to be exercised in lawful money of the United States of America by
wire, certified or official bank check, or wire transfer, in immediately available funds unless such holder has elected to make
a cashless exercise pursuant to Section 3.3.8. The term “Warrant Price” as used in this Warrant Agreement
refers to price per share of Common Stock at which shares may be purchased at the time the Warrant is exercised.
If any of (A) the Warrant Certificate or
the Book-Entry Warrants, (B) the Election to Purchase, or (C) the Warrant Price therefor, is received by the Warrant Agent after
5:00 P.M., Eastern time, on the specified Exercise Date, the Warrants will be deemed to be received on the Business Day next succeeding
the Exercise Date. If the date specified as the Exercise Date is not a Business Day, the Warrants will be deemed to be received
on the next succeeding day that is a Business Day. If the Warrants are received or deemed to be received after the Expiration Date,
the exercise thereof will be null and void and any funds delivered to the Warrant Agent will be returned to the registered holder
or Participant, as the case may be, as soon as practicable. In no event will a registered holder or Participant be entitled to
interest accrued on funds deposited with the Warrant Agent in respect of an exercise or attempted exercise of Warrants. The Warrant
Agent shall not have any responsibility or liability relating to the determination as to the validity of any exercise of Warrants
which determination will be made by the Company and the applicable registered holder, and the Warrant Agent may rely upon the instructions
of the Company regarding the validity of any exercise of Warrants. The Warrant Agent shall not have any obligation to inform a
registered holder of the invalidity of any exercise of Warrants. If the Company believes that an exercise by a registered holder
is invalid the Company will promptly notify such registered holder of the such fact and the reasons why it believes the exercise
was invalid and will provide a copy of such notice to the Warrant Agent as soon as practicable.
The Warrant Agent shall forward funds received
for warrant exercises in a given month by the 5th Business Day of the following month by wire transfer to an account designated
by the Company in writing.
All funds received by VStock under this
Warrant Agreement that are to be distributed or applied by VStock in the performance of services (the “Funds”)
shall be held by VStock as agent for the Company and deposited in one or more bank accounts to be maintained by VStock in its name
as agent for the Company. Until paid pursuant to the terms of this Warrant Agreement, VStock will hold the Funds through such accounts
in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade
by Standard and Poor’s Corporation (LT Local Issuer Credit Rating), Moody’s Investors Service, Inc. (Long Term Rating)
and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). VStock shall have no responsibility
or liability for any diminution of the Funds that may result from any deposit made by VStock in accordance with this paragraph,
including any losses resulting from a default by any bank, financial institution or other third party. VStock may from time to
time receive interest, dividends or other earnings in connection with such deposits. VStock shall not be obligated to pay such
interest, dividends or earnings to the Company, any holder or any other Person.
3.3.2 Issuance
of Certificates. The Warrant Agent shall, within a reasonable time, advise the Company and the Company’s transfer agent
and registrar (the “Transfer Agent”) in respect of (a) the Warrant Shares issuable upon such exercise as to
the number of Warrants exercised in accordance with the terms and conditions of this Warrant Agreement, (b) the instructions of
each registered holder or Participant, as the case may be, with respect to delivery of the Warrant Shares issuable upon such exercise,
and the delivery of definitive Warrant Certificates, as appropriate, evidencing the balance, if any, of the Warrants remaining
after such exercise, (c) in case of a Book-Entry Warrant Certificate, the notation that shall be made to the records maintained
by the Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance,
if any, of the Warrants remaining after such exercise and (d) such other information as the Company, the Warrant Agent or such
transfer agent and registrar shall reasonably require. So long as the Holder delivers the Warrant Price (or notice of a Cashless
Exercise) on or prior to the first (1st) Trading Day following the date on which the Warrant Exercise Documents have been delivered
to the Warrant Agent, then on or prior to the earlier of (i) the second (2nd) Trading Day and (ii) the number of Trading Days comprising
the Standard Settlement Period, in each case following the date on which the Warrant Exercise Documents have been delivered to
the Company, or, if the Holder does not deliver the Warrant Price (or notice of a Cashless Exercise) on or prior to the first (1st)
Trading Day following the date on which the Warrant Exercise Documents have been delivered to the Warrant Agent, then on or prior
to the first (1st) Trading Day following the date on which the Warrant Price (or notice of a Cashless Exercise) is delivered (such
earlier date, the “Share Delivery Date”), the Company shall cause the Warrant Agent to (X) provided that the
Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account
with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Warrant Exercise
Documents, a certificate, registered 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.. If the Warrant Agent fails for any reason to deliver to such registered holder or Participant,
as the case may be, the Warrant Shares subject to an exercise notice by the Share Delivery Date, the Company shall pay to the registered
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 Weighted Average Price of the Common Stock on the date of the applicable exercise notice), $10 per Trading Day (increasing
to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such
Share Delivery Date until such Warrant Shares are delivered or the registered holder rescinds such exercise. The Warrant Agent
shall have no responsibility for any liquidated damages that may be payable or paid to any registered holder or Participant under
this paragraph for any failure by the Warrant Agent to execute, issue and deliver, on the Company’s behalf, the Warrant Shares
as required by this paragraph. In addition, the Company shall indemnify and hold harmless the Warrant Agent against all claims
made against the Warrant Agent for any such failure except that the Company shall not be obligated to provide any such indemnification
if it is determined by a final, non-appealable judgment of a court of competent jurisdiction that such failure is due to the Warrant
Agent’s gross negligence, bad faith or willful misconduct.
If the Warrant Agent fails to comply with
the preceding paragraphs in this Section 3.3.2 by the Share Delivery Date, then, without limiting the rights and immunities of
the Warrant Agent hereunder, in addition to other rights it may have hereunder, the registered holder or Participant will have
the right to rescind its exercise.
3.3.3 Valid
Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Warrant Agreement
shall be validly issued, fully paid and nonassessable.
3.3.4 Dividends.
The accrual of dividends, if any, on the Warrant Shares issued hereunder will be governed by the terms generally applicable to
the Common Stock. From and after the issuance of such Warrant Shares, the former holder of the Warrants exercised will be entitled
to the benefits generally available to other holders of Common Stock, including the accrual of dividends, if any, on such Warrant
Shares even prior to exercise of such Warrant Shares, and such former holder’s right to receive payments of dividends and
any other amounts payable in respect of the Warrant Shares shall be governed by, and shall be subject to, the terms and provisions
generally applicable to the Common Stock.
3.3.5 No
Fractional Exercise. A registered holder may exercise a Warrant from time to time only for whole shares of Common Stock. No
fractional shares or scrip representing fractional shares shall be issued upon the exercise of a 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. If fewer than all of the Warrants evidenced by a Warrant Certificate are exercised, a new Warrant
Certificate for the number of unexercised Warrants remaining shall be executed by the Company and countersigned by the Warrant
Agent as provided in Section 2 of this Warrant Agreement, and delivered to the holder of the Warrant Certificate at the address
specified on the books of the Warrant Agent or as otherwise specified in writing by such registered holder. If fewer than all the
Warrants evidenced by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the records maintained by the
Depository, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the
Warrants remaining after such exercise. Whenever a payment for fractional shares is to be made by the Warrant Agent under this
Warrant Agreement, the Company shall promptly prepare and deliver to the Warrant Agent a certificate setting forth in reasonable
detail the facts related to such payments and the prices and formulas utilized in calculating such payments. The Warrant Agent
shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to
have knowledge of, any payment for fractional shares under this Warrant Agreement relating to the payment of fractional shares
unless and until the Warrant Agent shall have received such a certificate and sufficient monies. The Company shall provide an initial
funding of one thousand dollars ($1,000) for the purpose of issuing cash in lieu of fractional shares. From time to time thereafter,
the Warrant Agent may request additional funding to cover payments for fractional Warrant Shares. The Warrant Agent shall have
no obligation to make such payments for fractional Warrant Shares unless the Company shall have provided the necessary funds to
pay in full all amounts due and payable with respect thereto. Upon expiration of the term of all Warrants or the earlier exercise
of all Warrants any balance remaining of such funds shall be paid to the Company.
3.3.6 No
Transfer Taxes. Issuance of Warrant Shares shall be made without charge to a registered 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 registered holder or in such name or names as may be directed
by the registered holder; provided, however, that in the event Warrant Shares are to be issued in a name other than the name of
the registered holder, a Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the registered 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
exercise notice. The Warrant Agent shall not have any duty or obligation to take any action under any section of this Warrant Agreement
that requires the payment of taxes and/or charges unless and until it is satisfied that all such payments have been made.
3.3.7 Date
of Issuance. Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be
deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant
Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment
is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such
shares at the close of business on the next succeeding date on which the stock transfer books are open. Upon receipt by the Company
of a duly executed Notice of Exercise (which may be by facsimile or email), a registered holder shall be deemed to have exercised
its Warrant as specified in the Notice of Exercise for purposes of Regulation SHO promulgated under the Securities Exchange Act
of 1934, as amended (the “1934 Act”). A holder whose interest in a Warrant is a beneficial interest in certificate(s)
representing a Warrant held in book-entry form through DTC shall be deemed to have exercised its interest in a Warrant upon instructing
its broker that is a DTC participant to exercise its interest in a Warrant, for purposes of Regulation SHO promulgated under the
1934 Act.
3.3.8 Optional
Cashless Exercise.
Notwithstanding anything contained herein to the contrary, a Cashless Exercise (as defined below) may occur
(i) in whole or in part for a number of whole Warrant Shares between [___]1 and
the Expiration Date, during which time, in lieu of the formula below, the aggregate number of Warrant Shares issuable in such cashless
exercise pursuant to any given Exercise Notice electing to effect a Cashless Exercise shall equal the product of (x) the aggregate
number of Warrant Shares for which the Warrants are exercised as if such exercise were by means of a cash exercise rather than
a Cashless Exercise and (y) one (1); and (ii) if a registration statement (which may be the Registration Statement) covering the
issuance or resale of the Exercise Notice Warrant Shares is not available for the issuance or resale, as applicable, of such Exercise
Notice Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the
following formula (a “Cashless Exercise”):
Net Number = (A x B) - (A x C)
B
For purposes of the foregoing formula:
A= the total number of shares with respect
to which the Warrants are then being exercised.
B= as applicable: (i) the Closing Sale Price
of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice
is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and
delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined
in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of
the Holder, either (y) the Weighted Average Price on the Trading Day immediately preceding the date of the applicable Notice of
Exercise or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice
if such Exercise Notice 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 1(a) hereof or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the
date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a)
hereof after the close of “regular trading hours” on such Trading Day.
C= the Exercise Price then in effect for
the applicable Warrant Shares at the time of such exercise.
If Warrant Shares are issued in such a cashless
exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of the 1933 Act, the Warrant Shares shall
take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised
may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section
3.3.8.
3.3.9 Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the registered holder the number of Warrant Shares that are not disputed.
FN1 Enter date that is 30 days after date of issuance
3.3.10 Limitations
on Exercise. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion
of a Warrant, and the Holder shall not have the right to exercise any portion of a Warrant, pursuant to the terms and conditions
of the Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect
to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of [4.99][9.99]%
(the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect
to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by
the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other
Attribution Parties plus the number of shares of Common Stock issuable upon exercise of the Warrants with respect to which the
determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon
(A) exercise of the remaining, unexercised portion of the Warrants beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including,
without limitation, any convertible notes or convertible preferred stock or warrants, including the other Warrants) beneficially
owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section 3.3.10. For purposes of this Section 3.3.10, beneficial ownership shall be calculated in accordance with
Section 13(d) of the 1934 Act. For purposes of the Warrants, in determining the number of outstanding shares of Common Stock the
Holder may acquire upon the exercise of the Warrants without exceeding the Maximum Percentage, the Holder may rely on the number
of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly
Report on Form 10-Q and Current Reports on Form 8-K or other public filing with the Securities and Exchange Commission (the “SEC”),
as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”).
If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock
is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares
of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial
ownership, as determined pursuant to this Section 3.3.10, to exceed the Maximum Percentage, the Holder must notify the Company
of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase
is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to
the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral
request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail 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 the Warrants, by the Holder
and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that
the issuance of Common Stock to the Holder upon exercise of the Warrants results in the Holder and the other Attribution Parties
being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common
Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other
Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer
the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the
Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice
to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess
of 9.99% or such higher percentage as specified in such notice; provided that (i) any such increase in the Maximum Percentage will
not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase
or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of Warrants that is not
an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of the Warrants
in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes
of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise the Warrants pursuant to this paragraph shall
have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 3.3.10 to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective
or inconsistent with the intended beneficial ownership limitation contained in this Section 3.3.10 or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived
and shall apply to a successor holder of the Warrants.
3.4 Company’s
Failure to Timely Deliver Securities. If either (I) the Company shall fail for any reason or for no reason on or prior to the
applicable Share Delivery Date, (x) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
to issue to the Holder a certificate for the number of shares of Common Stock to which the Holder is entitled and register such
Common Stock on the Company’s share register or (y) if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, to credit the Holder’s balance account with DTC, for such number of shares of Common Stock to which the
Holder is entitled upon the Holder’s exercise of the Warrants or (II) a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Warrant Shares that are the subject of the Exercise Notice (the “Exercise
Notice Warrant Shares”) is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares
and (x) the Company fails to promptly, but in no event later than one (1) Business Day after such registration statement becomes
unavailable, to so notify the Holder and (y) the Company is unable to deliver the Exercise Notice Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Exercise Notice Warrant Shares to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system (the event described in the immediately
foregoing clause (II) is hereinafter referred to as a “Notice Failure” and, together with the event described
in clause (I) above, an “Exercise Failure”), then, in addition to all other remedies available to the Holder,
if on or prior to the applicable Share Delivery Date either (I) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, the Company shall fail to issue and deliver a certificate to the Holder and register such shares of
Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder
is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below
or (II) a Notice Failure occurs, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise)
Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the
Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Trading
Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver
such certificate (and to issue such shares of Common Stock) or credit such Holder’s balance account with DTC for such shares
of Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing
such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable, and pay cash to the Holder in
an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times
(B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning
on the applicable Exercise Date and ending on the applicable Share Delivery Date. Nothing shall limit the 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 certificates representing Warrant
Shares (or to electronically deliver such Warrant Shares) upon the exercise of the Warrants as required pursuant to the terms hereof.
While the Warrants are outstanding, the Company shall cause its transfer agent to participate in the DTC Fast Automated Securities
Transfer Program. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares
upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right to rescind such
exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of the Warrants that has
not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s
obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 3.4 or otherwise, and
(ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares
that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant
Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration statement
and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive
legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the
option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned,
as the case may be, any portion of the Warrants that has not been exercised pursuant to such Exercise Notice; provided that the
rescission of an Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to
the date of such notice pursuant to this Section 3.4 or otherwise, and/or (y) switch some or all of such Exercise Notice from a
cash exercise to a Cashless Exercise.
3.5 Cost
Basis Information. (1) In the event of a cash exercise, the Company hereby instructs the Warrant Agent to record cost basis
for newly issued shares in a manner to be subsequently communicated by the Company in writing to the Warrant Agent.
(a) In
the event of a cashless exercise, the Company shall provide cost basis for shares issued pursuant to a cashless exercise at the
time the Company confirms the number of Warrant Shares issuable in connection with the cashless exercise to the Warrant Agent pursuant
to Section 3.3.3 hereof.
3.6 Rule
144. (2) If the Warrant Shares are issued in a cashless exercise, the Company and the registered holder undertaking such cashless
exercise acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act, other than a change in law, the Warrant
Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the
1933 Act, as in effect on the Issuance Date, it is intended that the Warrant Shares issued in a cashless exercise shall be deemed
to have been acquired by the holder of the Warrant Shares, and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date the Warrants being exercised were originally issued pursuant to the Underwriting Agreement.
(a) The
Company shall, at all times prior to the earlier to occur of (i) the date of sale or other disposition by the holders of a Warrant
of or all shares of Common Stock issued on exercise of such Warrant or (ii) the expiration or earlier termination of a Warrant
if a Warrant has not been exercised in full or in part on such date, use commercially reasonable efforts to timely file all reports
required under the 1934 Act and otherwise timely take all actions necessary to permit the holder of such Warrant and/or the shares
of Common Stock issued on exercise thereof to sell or otherwise dispose of such Warrant and shares pursuant to Rule 144 promulgated
under the 1933 Act, provided that the foregoing shall not apply in the event of a Merger Event following which the successor or
surviving entity is not subject to the reporting requirements of the 1934 Act. If the holder of a Warrant proposes to sell Common
Stock issuable upon the exercise of such Warrant in compliance with Rule 144, then, upon the holder of the Warrant’s written
request to the Company, the Company shall furnish to the holder of the Warrant, within five (5) Business Days after receipt of
such request, a written statement confirming the Company’s compliance with the filing and other requirements of such Rule
144.
4. Adjustments.
4.1 Adjustment
Upon Issuance of Common Stock. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:
(a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification
of shares of Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
(b) Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant 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.
(c) Other
Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by
such provisions, then the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and the
number of Warrant Shares, as mutually determined by the Company’s Board of Directors and the Required Holders, so as to
protect the rights of the Holder
Notwithstanding the foregoing, and for the
avoidance of doubt, no adjustment shall be made under this section 4.1 in respect of any Exempt Issuance.
4.4 Rights
Upon Distribution of Assets. In addition to any adjustments pursuant to Section 4.1 above, if, on or after the Issuance Date
and on or prior to the Expiration Date, 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, stock or other securities, property, options, evidence of indebtedness or any other assets
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 the Warrants, 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 the Warrants (without regard to any limitations
or restrictions on exercise of the Warrants, including without limitation, the Maximum Percentage) immediately before the date
on 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 and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and
shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership)
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or
times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at
which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution
or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4.5 Fundamental
Transaction. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under the Warrants in accordance with the provisions of this Section 4.5, including
agreements to deliver to the Holder in exchange for the Warrants a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to the Warrants, including, without limitation, which is exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of the Warrants
(without regard to any limitations on the exercise of the Warrants) 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 adjustments
to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of the
Warrants immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for the Company (so that from and after the date of the applicable Fundamental
Transaction, the provisions of the Warrants 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 the Warrants with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation
of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon
exercise of the Warrants at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of
Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 4.3 and 4.4
above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrants prior to the applicable Fundamental
Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder
would have been entitled to receive upon the happening of the applicable Fundamental Transaction had the Warrants been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of the Warrants),
as adjusted in accordance with the provisions of the Warrants. Notwithstanding the foregoing, and without limiting Section 3.3.10
hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4.4 to permit
the Fundamental Transaction without the assumption of the Warrants. In addition to and not in substitution for any other rights
hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled
to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise
of the Warrants at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date,
in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 4.3 and 4.4 above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant
prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights) (collectively, the “Corporate Event Consideration”) which the Holder
would have been entitled to receive upon the happening of the applicable Fundamental Transaction had the Warrants been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of the Warrants).
The provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.
4.6 Voluntary
Adjustment By the Company. The Company may at any time during the term of the Warrants 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.
4.7 Notices.
4.7.1 Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, the Company shall give
prompt written notice thereof to the Warrant Agent, which notice shall set forth the Exercise Price after such adjustment and set
forth a brief statement of the facts requiring such adjustment. The Company agrees that it will provide the Warrant Agent with
any new or amended exercise terms. The Warrant Agent shall have no obligation under any Section of this Warrant Agreement to determine
whether an adjustment made hereunder has occurred or are scheduled or contemplated to occur or to calculate any of the adjustments
set forth in this Warrant Agreement.
4.7.2 Notices
of Certain Events to Allow Exercise. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to each registered
holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled
to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice
provided hereunder 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 registered
holder shall remain entitled to exercise a 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.
4.8 Form
of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued
after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued
pursuant to this Warrant Agreement.
4.9 Calculations.
All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 4, 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.
5. Transfer
and Exchange of Warrants.
5.1 Registration
of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of such Warrant for transfer, duly endorsed with signatures properly guaranteed and accompanied by appropriate
instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued
and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent
to the Company from time to time upon the request and at the expense of the Company.
5.2 Procedure
for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or
transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered
holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise
provided herein or in any Book-Entry Warrant Certificate, each Book-Entry Warrant Certificate may be transferred only in whole
and only to the Depository, to another nominee of the Depository, to a successor depository, or to a nominee of a successor depository;
provided further, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent
shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel
for the Company stating that such transfer may be made and indicating whether the new Warrants or Warrant Shares must also bear
a restrictive legend. Upon any such registration of transfer, the Company shall execute, and the Warrant Agent shall countersign
and deliver, in the name of the designated transferee a new Warrant Certificate or Warrant Certificates of any authorized denomination
evidencing in the aggregate a like number of unexercised Warrants.
A party requesting transfer of Warrants
must provide any evidence of authority that may be required by the Warrant Agent, including but not limited to, a signature guarantee
from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association.
5.3 Fractional
Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the
issuance of a warrant certificate for a fraction of a warrant.
5.4 Service
Charges. A registered holder shall not incur any service charge for any exchange or registration of transfer of Warrants.
5.5 Warrant
Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the
terms of this Warrant Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for
such purpose.
6. Other
Provisions Relating to Rights of Registered Holders of Warrants.
6.1 No
Rights as Stockholder. Except as otherwise specifically provided herein, a registered holder, solely in its capacity as a holder
of a Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant Agreement be construed to confer upon a registered holder, solely in its
capacity as the registered holder of a Warrant, any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to
the issuance to the registered holder of the Warrant Shares which it is then entitled to receive upon the due exercise of a Warrant.
In addition, nothing contained in this Warrant Agreement shall be construed as imposing any liabilities on a registered holder
to purchase any securities (upon exercise of a Warrant or otherwise) or as a stockholder of the Company, whether such liabilities
are asserted by the Company or by creditors of the Company. A Warrant does not entitle the registered holder thereof to any of
the rights of a stockholder.
6.2 Lost,
Stolen or Destroyed Warrants. The Warrant Agent shall issue replacement Warrants in a form mutually agreed to by Warrant Agent
and the Company for those certificates alleged to have been lost, stolen or destroyed, upon receipt by Warrant Agent of an open
penalty surety bond satisfactory to it and holding it and Company harmless and, at the Company’s or the Rights Agent’s
request, reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, absent notice to Warrant
Agent that such certificates have been acquired by a bona fide purchaser. Warrant Agent may, at its option, issue replacement Warrants
for mutilated certificates upon presentation thereof without such indemnity.
6.3 Authorized
Shares. The Company covenants that, during the period the Warrants are outstanding, the Company shall at all times keep reserved
for issuance under the Warrants a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding
(without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at no
time shall the number of shares of Common Stock reserved pursuant to this Section 6.3 be reduced other than in connection with
any exercise of Warrants or such other event covered by Section 4.2. The Required Reserve Amount (including, without limitation,
each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Warrants based on the number
of shares of Common Stock issuable upon exercise of Warrants held by each holder thereof on the Issuance Date (without regard to
any limitations on exercise) (the “Authorized Share Allocation”). In the event that a holder shall sell or otherwise
transfer any of such holder’s Warrants, each transferee shall be allocated a pro rata portion of such holder’s Authorized
Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Warrants shall be allocated
to the remaining holders of Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise of the Warrants
then held by such holders thereof (without regard to any limitations on exercise). If at any time while the Warrants remains outstanding
the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall promptly
take all action reasonably necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for the Warrants then outstanding. Without limiting the generality
of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than ninety (90) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company
shall provide each stockholder with a proxy statement and shall use its reasonable best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders
that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is
able to obtain the written consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve
the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent
and submitting for filing with the SEC an Information Statement on Schedule 14C.
6.4 Noncircumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale
of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the Warrants,
and will at all times in good faith carry out all of the provisions of the Warrants and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value
of any shares of Common Stock receivable upon the exercise of the Warrants above the Exercise Price then in effect, (ii) shall
take all such actions 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 the Warrants, and (iii) shall, so long as any of the Warrants are outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).
7. Concerning
the Warrant Agent and Other Matters.
7.1 Payment
of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the
Warrant Agent in respect of the issuance, transfer or delivery of shares of Common Stock upon the exercise of Warrants, but the
Company or the Warrant Agent shall not be obligated to pay any transfer taxes or charges in respect of the Warrants or such shares
in connection with a transfer to a different holder. The Warrant Agent shall not register any transfer or issue or deliver any
Warrant Certificate(s) unless or until the persons requesting the registration or issuance shall have paid to the Warrant Agent
for the account of the Company the amount of such transfer tax and charges, if any, or shall have established to the reasonable
satisfaction of the Company and the Warrant Agent that such transfer tax and charges, if any, have been paid.
7.2 Resignation,
Consolidation, or Merger of Warrant Agent.
7.2.1 Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving thirty (30) days’ notice in writing to the Company pursuant
to the notice provisions in Section 8.2 hereof. In the event the transfer agency relationship, if any, in effect between the Company
and the Warrant Agent terminates, the Warrant Agent will be deemed to have resigned automatically and be discharged from its duties
under this Warrant Agreement as of the effective date of such termination. If the office of the Warrant Agent becomes vacant by
resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant
Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such
resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant
for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the
County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether
appointed by the Company or by such court, shall be authorized under applicable laws to exercise the powers of a transfer agent
and subject to supervision or examination by federal or state authorities. After appointment, any successor Warrant Agent shall
be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like
effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary
or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring
to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request
of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for
more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities,
duties, and obligations.
7.2.2 Notice
of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof
to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
7.2.3 Merger
or Consolidation of Warrant Agent. Any Person into which the Warrant Agent may be merged or converted or with which it may
be consolidated or any Person resulting from any merger, conversion, or consolidation to which the Warrant Agent shall be a party,
or any Person succeeding to the business of the Warrant Agent, shall be the successor Warrant Agent under this Warrant Agreement
without any further act by the parties.
7.3 Fees
and Expenses of Warrant Agent.
7.3.1 Remuneration.
The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder in accordance
with a fee schedule to be mutually agreed upon and will reimburse the Warrant Agent upon demand for all expenditures (including
the reasonable expenses and fees of counsel) and disbursements that the Warrant Agent may reasonably incur in the incurred in the
preparation, delivery, negotiation, amendment, administration and execution of this Warrant Agreement and the exercise and performance
of its duties hereunder.
7.3.2 Further
Assurances. The Company shall perform, acknowledge and deliver or cause to be performed, acknowledged and delivered all such
further and other acts, documents, instruments and assurances as may be reasonably required by the Warrant Agent for the carrying
out or performing by the Warrant Agent of the provisions of this Warrant Agreement.
7.4 Liability
of Warrant Agent.
7.4.1 Reliance
on Company Statement. Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, President or
Chairman of the Board of Directors of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon, and be held
harmless for such reliance, such statement for any action taken or suffered by it pursuant to the provisions of this Warrant Agreement,
and shall not be held liable in connection with any delay in receiving such statement.
7.4.2 Indemnification.
The Company covenants and agrees to indemnify and to hold the Warrant Agent harmless against any costs, expenses (including reasonable
fees of its legal counsel), losses or damages, which may be paid, incurred or suffered by or to which it may become subject, arising
from or out of, directly or indirectly, any claims or liability resulting from its actions or omissions as Warrant Agent pursuant
hereto; provided, that such covenant and agreement does not extend to, and the Warrant Agent shall not be indemnified with respect
to, such costs, expenses, losses and damages incurred or suffered by the Warrant Agent as a result of, or arising out of, its gross
negligence, bad faith, or willful misconduct (each as determined in a final, non-appealable judgment of a court of competent jurisdiction).
7.4.3 Instructions.
From time to time, the Company may provide the Warrant Agent with instructions concerning the services performed by the Warrant
Agent hereunder. In addition, at any time the Warrant Agent may apply to any officer of the Company for instruction, and may consult
with legal counsel for Warrant Agent or the Company with respect to any matter arising in connection with the services to be performed
by the Warrant Agent under this Warrant Agreement. The Warrant Agent and its agents and subcontractors shall not be liable and
shall be indemnified by the Company for any action taken or omitted by the Warrant Agent in reliance upon any Company instructions
or upon the advice or opinion of such counsel. The Warrant Agent shall not be held to have notice of any change of authority of
any person, until receipt of written notice thereof from the Company.
7.4.4 Exclusions.
The Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity
or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make calculations
under Section 3.3.8 or any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method,
or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall
it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of
Common Stock to be issued pursuant to this Warrant Agreement or any Warrant or as to whether any shares of Common Stock will when
issued be valid and fully paid and nonassessable.
7.4.5 Rights
and Duties of Warrant Agent. The Warrant Agent may consult with legal counsel (who may be legal counsel for the Company), and
the opinion or advice of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action
taken or omitted by it in accordance with such opinion or advice.
(a) The
Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Warrant Agreement
or in the Warrant Certificates (except its countersignature thereof) or be required to verify the same, and all such statements
and recitals are and shall be deemed to have been made by the Company only.
(b) The
Warrant Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any holder of Warrants
with respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.
(c) The
Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants
or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this
Warrant Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any
other legal entity.
(d) The
Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct,
absent gross negligence, bad faith or willful misconduct (each as determined by a final judgment of a court of competent jurisdiction)
in the selection and continued employment thereof.
(e) The
Warrant Agent may rely on and shall be held harmless and protected and shall incur no liability for or in respect of any action
taken, suffered or omitted to be taken by it in reliance upon any certificate, statement, instrument, opinion, notice, letter,
facsimile transmission, telegram or other document, or any security delivered to it, and believed by it to be genuine and to have
been made or signed by the proper party or parties, or upon any written or oral instructions or statements from the Company with
respect to any matter relating to its acting as Warrant Agent hereunder.
(f) The
Warrant Agent shall not be obligated to expend or risk its own funds or to take any action that it believes would expose or subject
it to expense or liability or to a risk of incurring expense or liability, unless it has been furnished with assurances of repayment
or indemnity satisfactory to it.
(g) The
Warrant Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating
to any registration statement filed with the Commission or this Warrant Agreement, including without limitation obligations under
applicable regulation or law.
(h) The
Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any Warrants authenticated
by the Warrant Agent and delivered by it to the Company pursuant to this Warrant Agreement or for the application by the Company
of the proceeds of the issue and sale, or exercise, of the Warrants.
(i) The
Warrant Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the express provisions
hereof (and no duties or obligations shall be inferred or implied). The Warrant Agent shall not assume any obligations or relationship
of agency or trust with any of the owners or holders of the Warrants.
(j) The
Warrant Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature
by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion
Program or other comparable “signature guarantee program” or insurance program in addition to, or in substitution for,
the foregoing; or (b) any law, act, regulation or any interpretation of the same even though such law, act, or regulation may thereafter
have been altered, changed, amended or repealed.
(k) In
the event the Warrant Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request
or other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent, may, in its sole discretion,
refrain from taking any action, and shall be fully protected and shall not be liable in any way to Company, the holder of any Warrant
Certificate or Book-Entry Warrant Certificate or any other person or entity for refraining from taking such action, unless the
Warrant Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction
of Warrant Agent. The foregoing shall not eliminate any liability that the Company may have to any registered holder or holder
of any Warrant Certificate or Book-Entry Warrant Certificate.
7.5 Limitation
on Liability of Warrant Agent. Notwithstanding anything contained herein to the contrary, the Warrant Agent’s aggregate
liability during any term of this Warrant Agreement with respect to, arising from, or arising in connection with this Warrant Agreement,
or from all services provided or omitted to be provided under this Warrant Agreement, whether in contract, or in tort, or otherwise,
is limited to, and shall not exceed, the amounts paid hereunder by the Company to Warrant Agent as fees and charges, but not including
reimbursable expenses, during the twelve (12) months immediately preceding the event for which recovery from Warrant Agent is being
sought. Sections 7.1, 7.3, 7.4, 7.5 and 8.15 shall survive the expiration of the Warrants, the termination of this Warrant Agreement
and the resignation, replacement or removal of the Warrant Agent. The costs and expenses incurred in enforcing this right of indemnification
shall be paid by the Company.
7.6 Acceptance
of Agency. The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same
upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares
of Common Stock through the exercise of Warrants.
7.7 Opinion
of Counsel. The Company shall provide an opinion of counsel prior to the Issuance Date to set up a reserve of Warrants and
related Common Stock. The opinion shall state that all Warrants or Common Stock, as applicable, are:
(1) registered
under the 1933 Act, or are exempt from such registration, and all appropriate state securities law filings have been made with
respect to the warrants or shares; and
(2) validly
issued, fully paid and non-assessable.
8. Miscellaneous
Provisions.
8.1 Successors.
Subject to applicable securities laws, this Warrant Agreement and the Warrants 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 each registered holder. The provisions of this Warrant Agreement are intended to be for the benefit of any holder from
time to time of this Warrant Agreement and shall be enforceable by the holder or holder of Warrant Shares.
8.2 Notices.
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder
of any Warrant to or on the Company shall be in writing and delivered by hand or sent by registered or certified mail or overnight
courier service addressed (until another address is filed in writing by the Company with the Warrant Agent), or by facsimile transmission
(as long as the sender maintains a fax delivery report confirming receipt by the recipient and is considered delivered when sent
or if after normal business hours the next Business Day) or by email (as long as no bounce back is received by the sender), as
follows:
Tonix Pharmaceuticals Holding Corp.
509 Madison Avenue – Suite 1608
New York, NY 10022
Attn: Seth Lederman, Chief Executive Officer
Any notice, statement or demand authorized by this Warrant Agreement
to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be in writing and delivered
by hand or overnight courier service addressed (until another address is filed in writing by the Warrant Agent with the Company)
as follows:
VStock Transfer, LLC
18 Lafayette Place,
Woodmere, NY 11598
Attn: [Compliance Department]
8.3 Jurisdiction.
The validity, interpretation, and performance of this Warrant Agreement and of the Warrants shall be governed in all respects by
the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of
the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Warrant Agreement shall be brought and enforced in the courts of the State of New York or
the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience
forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8.2 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.
8.4 Persons
Having Rights under this Warrant Agreement. Nothing in this Warrant Agreement expressed and nothing that may be implied from
any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than
the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of this Warrant Agreement
or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and
agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors
and assigns and of the registered holders of the Warrants.
8.5 Examination
of the Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the
Warrant Agent, for inspection by the registered holder of any Warrant. The Warrant Agent may require any such holder to submit
his Warrant for inspection by it.
8.6 Counterparts.
This Warrant Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
A signature to this Warrant Agreement transmitted electronically shall have the same authority, effect, and enforceability as an
original signature.
8.7 Effect
of Headings. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not
affect the interpretation thereof.
8.8 Amendments.
All modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require
the written consent of the registered holders of Warrants equal to at least 67% of the Warrant Shares issuable upon exercise of
all then outstanding Warrants. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall
deliver to the Warrant Agent a certificate from an Authorized Officer that states that the proposed amendment is in compliance
with the terms of this Section 8.8. No consideration shall be offered or paid to any person to amend or consent to a waiver or
modification of any provision of this Warrant Agreement unless the same consideration is also offered to all holders of the Warrants.
Notwithstanding anything in this Warrant Agreement to the contrary, the Warrant Agent shall not be required to execute any supplement
or amendment to this Warrant Agreement that it has determined would adversely affect its own rights, duties, obligations or immunities
under this Warrant Agreement. No supplement or amendment to this Warrant Agreement shall be effective unless duly executed by the
Warrant Agent.
8.9 Severability.
Wherever possible, each provision of this Warrant Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant Agreement 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 Agreement; provided, however, that if such prohibited and invalid provision shall adversely
affect the rights, immunities, liabilities, duties or obligations of the Warrant Agent, the Warrant Agent shall be entitled to
resign immediately upon written notice to the Company.
8.10 Restrictions.
Each registered holder acknowledges that the Warrant Shares acquired upon the exercise of a Warrant, if not registered, and the
registered holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities
laws.
8.11 Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of a registered holder
shall operate as a waiver of such right or otherwise prejudice such a registered holder’s rights, powers or remedies. Without
limiting any other provision of this Warrant Agreement or the Underwriting Agreement, if the Company willfully and knowingly fails
to comply with any provision of this Warrant Agreement or the Warrants, which results in any material damages to a registered holder,
the Company shall pay such registered 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 registered holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
8.12 Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the registered holder to exercise a Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of a registered holder, shall give rise to any
liability of each registered holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
8.13 Remedies.
The registered holders, 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 Agreement. 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 Agreement 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.
Notwithstanding the foregoing or anything else herein to the contrary, other than as expressly provided in Section 3.3.2, Section 3.4
or Section 4.5 hereof, if the Company is for any reason unable to issue and deliver Warrant Shares upon exercise of this Warrant
as required pursuant to the terms hereof, the Company shall have no obligation to pay to the holder any cash or other consideration
or otherwise “net cash settle” this Warrant; provided that the foregoing shall not limit or supersede the applicability
of Section 4.5 hereof.
8.14 Confidentiality.
The Warrant Agent and the Company agree that all books, records, information and data pertaining to the business of the other party,
including inter alia, personal, non-public warrant holder information, which are exchanged or received pursuant to the negotiation
or the carrying out of this Warrant Agreement including the fees for services set forth in a mutually agreed upon schedule shall
remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law, including, without
limitation, pursuant to subpoenas from state or federal government authorities (e.g., in divorce and criminal actions).
8.15 Consequential
Damages. Neither party to this Warrant Agreement shall be liable to the other party for any consequential, indirect, special
or incidental damages under any provisions of this Warrant Agreement or for any consequential, indirect, punitive, special or incidental
damages arising out of any act or failure to act hereunder even if that party has been advised of or has foreseen the possibility
of such damages.
8.16 Force
Majeure. Notwithstanding anything to the contrary contained herein, the Warrant Agent will not be liable for any delays or
failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist
acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due
to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.
9. Certain
Definitions. For purposes of this Warrant Agreement, the following terms shall have the following meanings:
9.1 “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person, it being understood for purposes of this definition that “control” of a Person means the
power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
9.2 “Approved
Stock Plan” means any employee benefit plan that has been approved by a majority of the disinterested members of the
Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer or director
for services provided to the Company.
9.3 “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by
the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder
or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any
of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
9.4 “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply,
the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination,
the average of the bid prices of any market makers for such security as reported in the “pink sheets” by OTC Markets
Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for a security as
of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 11.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.
9.6 “Bloomberg”
means Bloomberg Financial Markets.
9.7 “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law or executive order to remain closed.
9.9 “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price
or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 11. All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
9.10 “Common
Stock” means (i) the Company’s shares of Common Stock and (ii) any share capital into which such Common Stock shall
have been changed or any share capital resulting from a reclassification of such Common Stock.
9.11 “Control”
(including the terms “controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
9.12 “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.
9.13 “Eligible
Market” means The Nasdaq Capital Market, the NYSE American LLC, The Nasdaq Global Select Market, The Nasdaq Global Market
or The New York Stock Exchange, Inc.
9.15 “Expiration
Date” means the date that is sixty (60) months after the Issuance Date or, if such date falls on a day other than a Business
Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday,
as the same may be extended pursuant to Section 3.3.7.
9.16 “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or
otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving
corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be
subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender
or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50%
of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or
(z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3
under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least
50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least
50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common Stock, (B) that
the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock not
held by all such Subject Entities as of the Issuance Date calculated as if any shares of Common Stock held by all such Subject
Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory
short form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval
of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
9.17 “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
9.18 “Merger
Event” means any of the following: (i) a sale, lease or other transfer of all or substantially all assets of the Company,
(ii) any merger or consolidation involving the Company in which the Company is not the surviving entity or in which the outstanding
shares of the Company’s capital stock are otherwise converted into or exchanged for shares of capital stock or other securities
or property of another entity, or (iii) any sale by holders of the outstanding voting equity securities of the Company in a single
transaction or series of related transactions of shares constituting a majority of the outstanding combined voting power of the
Company.
9.19 “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
9.20 “Option
Value” means the value of an Option based on the Black-Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of the day of the most recent Closing Sale Price of the Common Stock prior to the public announcement
of the pricing of the applicable Option (or, if the pricing is not publicly announced, on the most recent Closing Sale Price of
the Common Stock prior to the pricing of the applicable Option) and reflecting (i) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the remaining term of the applicable Option as of the applicable date of determination,
(ii) an expected volatility equal to 50%, (iii) an underlying price per share equal to the most recent Closing Sale Price of the
Common Stock prior to the public announcement of the pricing of the applicable Option (or, if the pricing is not publicly announced,
on the most recent Closing Sale Price of the Common Stock prior to the pricing of the applicable Option), (iv) a zero cost of borrow
and (v) a 360-day annualization factor.
9.21 “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any
other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction.
9.22 “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.
9.23 “Principal
Market” means the principal securities exchange or securities market on which the Common Shares are then traded.
9.24 “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.
9.25 “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
9.26 “Successor
Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the
Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
9.27 “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded.
9.28 “Transaction
Documents” means any agreement entered into by and between the Company and the Holder, as applicable.
9.29 “Weighted
Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC
Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 11 with the term “Weighted Average Price”
being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
[Remainder of page intentionally left
blank. Signature page follows.]
IN WITNESS WHEREOF, this Warrant Agreement
has been duly executed by the parties hereto as of the day and year first above written.
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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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VSTOCK TRANSFER, LLC
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By:
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Name:
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Title:
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COMPUTERSHARE TRUST COMPANY, N.A.
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By:
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Name:
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Title:
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[Signature Page to Warrant Agreement]
EXHIBIT A
[FORM OF GLOBAL CERTIFICATE]
TONIX PHARMACEUTICALS HOLDING CORP.
WARRANT CERTIFICATE
THIS CERTIFIES THAT, for value received is the registered holder
of a Warrant or Warrants (the “Warrant”) expiring the date sixty (60) months after the Initial Exercisability
Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market
(a “Holiday”), the next day that is not a Holiday, subject to extension in certain events (“Expiration
Date”), to purchase
fully paid and non-assessable shares (“Shares”) of Common Stock, par value $0.0001 per share (“Common
Stock”), of Tonix Pharmaceuticals Holding Corp., a Nevada corporation (the “Company”). The Warrant
entitles the holder thereof to purchase from the Company such number of shares of Common Stock at the price of $ per share (subject
to adjustment), upon surrender of this Warrant Certificate and payment of the Warrant Price to VStock Transfer, LLC, (the “Warrant
Agent”), at its offices designated for such purpose, but only subject to the conditions set forth herein and in the Warrant
Agreement between the Company and the Warrant Agent (as may be amended from time to time, the “Warrant Agreement”).
The Warrant Agreement provides that upon the occurrence of certain events, the Warrant Price and the number of Shares purchasable
hereunder, set forth on the face hereof, may, subject to certain conditions, be adjusted. The term “Warrant Price”
as used in this Warrant Certificate refers to the price per share of Common Stock at which Shares may be purchased at the time
the Warrant is exercised. Capitalized terms used and not defined herein shall have the meanings set forth in the Warrant Agreement.
No fraction of a Share will be issued upon any exercise of a
Warrant. If the holder of a Warrant would be entitled to receive a fraction of a Share upon any exercise of a Warrant, the Company
shall, at its election, either pay a cash adjustment in respect of such fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up such fraction to the next whole share.
Upon any exercise of the Warrant for less than the total number
of full Shares provided for herein, there shall be issued to the registered holder hereof or the registered holder’s assignee
a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised, provided that such holder
has previously surrendered this Warrant to the Warrant Agent.
Upon surrender of the Warrant Certificate for transfer, properly
endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer, the Warrant Agent shall
register the transfer. A new Warrant Certificate or Warrant Certificates evidencing in the aggregate a like number of Warrants
shall be issued and the old Warrant Certificate shall be canceled.
Warrant Certificates, when surrendered to the Warrant Agent,
may be transferred or exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment
of any service charge, for another Warrant Certificate or Warrant Certificates evidencing in the aggregate a like number of Warrants.
The Company and the Warrant Agent may deem and treat the registered
holder as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made
by anyone), for the purpose of any exercise hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
This Warrant Certificate does not entitle the registered holder
to any of the rights of a stockholder of the Company.
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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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COUNTERSIGNED:
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VSTOCK TRANSFER LLC
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as Warrant Agent
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By:
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Authorized Officer
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[Signature page to Warrant Certificate]
ELECTION TO PURCHASE FORM
(to be executed by the registered holder
in order to exercise Warrants)
The undersigned registered holder irrevocably elects to exercise
Warrants to purchase shares of Common Stock represented by this Warrant
Certificate and to purchase such shares of Common Stock issuable upon the exercise of such Warrants, and requests that such shares
shall be issued in the name of
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(PLEASE TYPE OR PRINT NAME AND ADDRESS)
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(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
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and be delivered to:
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(PLEASE PRINT OR TYPE NAME AND ADDRESS)
and, at the sole election of the registered holder, if such
number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the
balance of such Warrants be registered in the name of, and delivered to, the registered holder at the address stated below:
Dated: ____________________________________________________
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(SIGNATURE)
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(ADDRESS)
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(TAX IDENTIFICATION NUMBER)
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ASSIGNMENT
(to be executed by the registered holder
in order to assign Warrants)
For Value Received,
hereby sells, assigns, and transfers unto
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(PLEASE TYPE OR PRINT NAME AND ADDRESS)
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(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
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and be delivered to:
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(PLEASE PRINT OR TYPE NAME AND ADDRESS)
Warrants to purchase
shares of Common Stock represented by this Warrant Certificate, and hereby irrevocably constitutes and appoints
Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.
Dated: ___________________
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_________________________
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(SIGNATURE)
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The signature to the assignment of the Subscription Form must
correspond to the name written upon the face of this Warrant Certificate in every particular, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a commercial bank or trust company or a member firm of the American Stock Exchange,
New York Stock Exchange, Pacific Stock Exchange or Chicago Stock Exchange.
Exhibit B
[FORM OF CERTIFICATED WARRANT]
Exhibit C
Form of Warrant Certificate Request Notice
WARRANT CERTIFICATE REQUEST NOTICE
To: VStock Transfer, LLC, as
Warrant Agent for Tonix Pharmaceuticals Holding Corp. (the “Company”)
The undersigned Holder of Common
Stock Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive
a Definitive Certificate evidencing the Warrants held by the Holder as specified below:
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Name of Holder of Warrants in form of Global Warrants: _____________________________
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2.
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Name of Holder in Definitive Certificate (if different from name of Holder of Warrants in form of Global Warrants): ________________________________
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3.
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Number of Warrants in name of Holder in form of Global Warrants: ___________________
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4.
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Number of Warrants for which Definitive Certificate shall be issued: __________________
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5.
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Number of Warrants in name of Holder in form of Global Warrants after issuance of Definitive Certificate, if any: ___________
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6.
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Definitive Certificate shall be delivered to the following address:
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The undersigned hereby acknowledges
and agrees that, in connection with this Warrant Exchange and the issuance of the Definitive Certificate, the Holder is deemed
to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants
evidenced by the Definitive Certificate.
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[SIGNATURE OF HOLDER]
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Name of Investing Entity:
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Signature of Authorized Signatory of Investing Entity:
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Name of Authorized Signatory:
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Title of Authorized Signatory:
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Date:
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TONIX PHARMACEUTICALS HOLDING CORP. S-1A
Exhibit 5.01
November 14, 2019
Tonix Pharmaceuticals Holding Corp.
509 Madison Avenue, Suite 1608
New York, New York 10022
Ladies and Gentlemen:
We have acted as local Nevada counsel
to Tonix Pharmaceuticals Holding Corp., a Nevada corporation (the “Company”), in connection with the proposed
issuance and sale by the Company of the following securities (collectively, the “Securities”), as described
in the Company’s Amendment No. 1 to Registration Statement on Form S-1 (as so amended, the “Registration Statement”)
and the Prospectus contained therein (the “Prospectus”), as filed with the Securities and Exchange Commission
(the “Commission”) under the Securities Act of 1933, as amended (the “Act”): (i) Class A
Units (collectively, the “Class A Units”), each consisting of (x) one share (each, a “Common Share”)
of the Company’s common stock, par value $0.001 per share (the “Common Stock”), (y) a warrant (each, a
“Class A Warrant”) to purchase one share of Common Stock (each such share, a “Class A Warrant Share”)
issued pursuant to one or more warrant agreements (each, a “Unit Warrant Agreement”), and (z) a common stock
purchase warrant (each, a “Class A Common Warrant”) to purchase one-half of a share of Common Stock (each such
share, a “Class A Common Warrant Share”) issued pursuant to one or more common warrant agreements (each, an
“Common Warrant Agreement” and together with the Unit Warrant Agreements, the “Warrant Agreements”),
and (ii) Class B Units (collectively, the “Class B Units”), each consisting of (x) one share (each, a “Preferred
Share”) of the Company’s Series A Convertible Preferred Stock, par value $0.001 per share (the “Series
A Preferred Stock”), to be issued pursuant to the then-effective Certificate of Designation (as defined below), which
Preferred Shares are convertible into shares of Common Stock (collectively, the “Conversion Shares”) pursuant
to the terms thereof, (y) a warrant (each, a “Class B Warrant”) to purchase shares of Common Stock (each such
share, a “Class B Warrant Share”) issued pursuant to one or more Unit Warrant Agreements, and (z) a common stock
purchase warrant (together with the Class A Warrants, the Class A Common Warrants and the Class B Warrants, the “Warrants”)
to purchase shares of Common Stock (together with the Class A Warrant Shares, Class A Common Warrant Shares and the Class B Warrant
Shares, the “Warrant Shares”) issued pursuant to one or more Common Warrant Agreements. This opinion letter
is being delivered at your request pursuant to 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, 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 opinion below, we have assumed that all such proceedings have been
or will be timely completed in the manner presently proposed in the Registration Statement and the Prospectus.
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bhfs.com
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100
North City Parkway, Suite 1600
Las
Vegas, NV 89106-4614
main
702.382.2101
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Brownstein Hyatt Farber, LLP
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Tonix Pharmaceuticals Holding Corp.
November 14, 2019
Page 2
For purposes of issuing the opinion hereinafter
expressed, 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, including the Prospectus, (ii)
the Company’s articles of incorporation and bylaws, each as amended to date, (iii) the form of the certificate of designation
relating to the Series A Preferred Stock as filed as an exhibit to the Registration Statement (the “Certificate of Designation”)
and (iv) such other agreements, instruments, corporate records and other documents as we have deemed necessary or appropriate.
We have also obtained from officers, representatives and agents of the Company and from public officials, and have relied upon,
such certificates, representations, assurances and public filings as we have deemed necessary and appropriate for the purpose of
issuing this opinion letter.
Without limiting the generality of the
foregoing, we have, with your permission, assumed without independent verification that (i) each natural person executing any of
the documents we reviewed has sufficient legal capacity to do so; (ii) all documents submitted to us as originals are authentic,
the signatures on all documents we reviewed are genuine, and all documents submitted to us as certified, conformed, photostatic,
electronic or facsimile copies conform to the original document; (iii) all corporate records made available to us by the Company,
and all public records we have reviewed, are accurate and complete; (iv) prior to any issuance of any Preferred Shares or Conversion
Shares, the Certificate of Designation will have been duly authorized and approved by the Company’s board of directors or
a duly authorized and constituted committee thereof, signed by an authorized officer of the Company and properly filed with the
Nevada Secretary of State, and will be effective (collectively, “Corporate Proceedings”); (v) after any issuance
of Common Shares, Warrant Shares or Conversion 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; and (vi) after any issuance of Preferred Shares, the total number of issued and outstanding
shares of Series A Preferred Stock, together with the total number of shares of such series 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
Series A Preferred Stock then designated under the Certificate of Designation.
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 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 on 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
Class A Units, the Common Shares, the Warrants and the Warrant Shares have been duly authorized by the Company.
2. If
and when any Common Shares are issued in accordance with the proceedings described in, and in the manner contemplated by, the Registration
Statement and the Prospectus, such Common Shares will be validly issued, fully paid and nonassessable.
3.
If and when all Corporate Proceedings have been undertaken and completed, the Class B Units, the Preferred Shares and the Conversion
Shares will be duly authorized.
Tonix Pharmaceuticals Holding Corp.
November 14, 2019
Page 3
4. If
and when all Corporate Proceedings have been undertaken and completed and any Preferred Shares are issued in accordance with the
proceedings described in, and in the manner contemplated by, the Registration Statement and the Prospectus, such Preferred Shares
will be validly issued, fully paid and nonassessable.
5. If
and when all Corporate Proceedings have been undertaken and completed and any Conversion Shares are issued in accordance with the
terms of, and in the manner contemplated by, the Certificate of Designation, including the due and proper conversion of such Preferred
Share(s) in accordance with the Certificate of Designation, and in accordance with the proceedings described in, and in the manner
contemplated by, the Registration Statement and the Prospectus, such Conversion Shares will be validly issued, fully paid and nonassessable.
6. If
and when any Warrant Shares are issued in accordance with the terms of, and in the manner contemplated by, the relevant Warrant(s)
and Warrant Agreement(s), including the due and proper exercise of such Warrant(s) in accordance therewith and under the relevant
Warrant Agreement(s) and payment in full to the Company of any and all consideration for the Warrant Shares as required thereunder,
and in accordance with the proceedings described in, and in the manner contemplated by, the Registration Statement and the 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 of this opinion letter. 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 such time as the Registration Statement is declared effective. 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 opinions
set forth herein.
We hereby consent to the filing of this
opinion letter as an exhibit to the Registration Statement and to the reference to our firm in the Prospectus under the heading
“Legal Matters”. In giving this consent, we do not admit that we are within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Brownstein Hyatt Farber Schreck, LLP
TONIX PHARMACEUTICALS HOLDING CORP. S-1A
Exhibit
5.02
November
14, 2019
Board of Directors
Tonix Pharmaceuticals
Holding Corp.
509 Madison
Avenue, Suite 306
New York,
New York 10022
Ladies
and Gentlemen:
We have acted as
counsel to Tonix Pharmaceuticals Holding Corp., a Nevada corporation (the “Company”) in connection with the
proposed issuance and sale by the Company of the following securities (collectively, the “Securities”), having
an aggregate initial offering price of up to $10,000,000, as described in the Company’s Amendment No. 1 to Registration Statement
on Form S-1 (File Number 333-234263) (as so amended, the “Registration Statement”) and the Prospectus contained
therein (the “Prospectus”), as filed with the Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Act”): (i) Class A Units (collectively, the “Class
A Units”), each consisting of (x) one share (each, a “Common Share”) of the Company’s common
stock, par value $0.001 per share (the “Common Stock”), (y) a warrant (each, a “Warrant”)
to purchase one share of Common Stock (each, a “Warrant Share”) issued pursuant to one or more warrant agreements
(each, a “Unit Warrant Agreement”), and (z) a common stock purchase warrant (each, a “Class A Common
Warrant”) to purchase one-half of a share of Common Stock (each such share, a “Class A Common Warrant Share”)
issued pursuant to one or more exchange warrant agreements (each, an “Common Warrant Agreement” and together
with the Unit Warrant Agreements, the “Warrant Agreements”); and (ii) Class B Units (collectively, the “Class
B Units”), each consisting of (x) one share (each, a “Preferred Share”) of the Company’s Series
A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), to be issued pursuant
to the certificate of designation relating to the Series A Preferred Stock, which Preferred Shares are convertible into shares
of Common Stock (collectively, the “Conversion Shares”) pursuant to the terms thereof, (y) a warrant (each,
a “Class B Warrant”) to purchase shares of Common Stock (each such share, a “Class B Warrant Share”)
issued pursuant to one or more Unit Warrant Agreements, and (z) a common stock purchase warrant (together with the Class A Warrants,
the Class A Common Warrants and the Class B Warrants, the “Warrants”) to purchase shares of Common Stock (together
with the Class A Warrant Shares, Class A Common Warrant Shares and the Class B Warrant Shares, the “Warrant Shares”)
issued pursuant to one or more Common Warrant Agreements. This opinion letter is being delivered at your request pursuant to the
requirements of Item 601(b)(5) of Regulation S-K under the Act.
As counsel to the
Company in connection with the proposed potential issuance and sale of the above-referenced Securities, we have reviewed the Registration
Statement, and 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 Securities have been duly authorized and validly issued;
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 in the manner described in the Prospectus, 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 are 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 hereby consent
to the inclusion of this opinion as Exhibit 5.02 to the Registration Statement and to the references to our firm therein and 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,
Lowenstein Sandler LLP
TONIX PHARMACEUTICALS HOLDING CORP. S-1A
Exhibit 23.01
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the incorporation by reference in Amendment No. 1 to this Registration Statement of Tonix Pharmaceuticals Holding Corp.
(the “Company”) on Form S-1 (No. 333-234263) to be filed on or about November 13, 2019 of our report dated March 18,
2019, on our audits of the consolidated financial statements as of December 31, 2018 and 2017 and for each of the years then ended,
which report was included in the Annual Report on Form 10-K filed March 18, 2019. Our report includes an explanatory paragraph
about the existence of substantial doubt concerning the Company's ability to continue as a going concern. We also consent to the
reference to our firm under the caption “Experts” in this Registration Statement.
/s/ EisnerAmper
LLP
EISNERAMPER LLP
Iselin, New Jersey
November 13, 2019