UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): April 2, 2020
Beyond
Air, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-38892
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47-3812456
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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825
East Gate Blvd., Suite 320
Garden
City, NY 11530
(Address
of principal executive offices)
516-665-8200
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Stock, par value $.0001 per share
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XAIR
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The
Nasdaq Stock Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging
growth company [X]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1.01 Entry into a Material Definitive Agreement.
On April 2, 2020,
Beyond Air, Inc. (the “Company”) entered into an At-The-Market Equity Offering Sales Agreement (the “Agreement”)
with SunTrust Robinson Humphrey, Inc. and Oppenheimer & Co. (collectively, the “Agents”) under which the
Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.0001 per share
(the “Common Stock”), having an aggregate offering price of up to $50,000,000 through the Agents as its sales
agent. The issuance and sale, if any, of Common Stock by the Company under the Agreement will be pursuant to the Company’s
Registration Statement on Form S-3 (File No. 333-231416) filed with the Securities and Exchange Commission (the “SEC”)
on May 13, 2019 (the “Registration Statement”) and declared effective by the SEC on July 2, 2019, the prospectus supplement
relating to the Offering filed with the SEC on April 2, 2020, and any applicable additional prospectus supplements related
to the Offering that form a part of the Registration Statement.
Subject to the terms and
conditions of the Agreement, the Agents may sell the Common Stock by any method permitted by law deemed to be an “at the
market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended. The Agents will use commercially
reasonable efforts to sell the Common Stock from time to time, based upon instructions from the Company (including any price,
time or size limits or other customary parameters or conditions the Company may impose). The Company will pay the Agents a commission
equal to up to three percent (3%) of the gross sales proceeds of any Common Stock sold through the Agents under
the Agreement, and also has provided the Agents with certain indemnification rights.
The
Company is not obligated to make any sales of Common Stock under the Agreement. The offering of shares of Common Stock pursuant
to the Agreement will terminate upon the earlier of (i) the sale of all Common Stock subject to the Agreement or (ii) termination
of the Agreement in accordance with its terms.
The
foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the full text of the Agreement,
a copy of which is filed herewith as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated herein by reference.
This
Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the securities discussed
herein, nor shall there be any offer, solicitation, or sale of the securities in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The
opinion of Sichenzia Ross Ference LLP, the Company’s legal counsel, regarding the validity of the Shares is filed as Exhibit
5.1 hereto. This opinion is also filed with reference to, and is hereby incorporated by reference into, the Registration Statement.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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BEYOND
AIR, INC.
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Date:
April 2, 2020
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By:
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/s/
Steven A. Lisi
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Steven
A. Lisi
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Chief
Executive Officer
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Exhibit
1.1
Beyond
Air, Inc.
$50,000,000
COMMON
STOCK
SALES
AGREEMENT
April 2, 2020
SunTrust
Robinson Humphrey, Inc.
3333 Peachtree Road, 11th Floor
Atlanta, Georgia 30326
Oppenheimer
& Co. Inc.
85 Broad Street
New York, New York 10004
Ladies
and Gentlemen:
Beyond
Air, Inc., a Delaware corporation (the “Company”), SunTrust Robinson Humphrey, Inc. (“SunTrust”),
as sales agent, and Oppenheimer & Co. Inc. (“Oppenheimer”, and together with SunTrust, the “Agents”),
as sales agent, confirm their agreement (this “Agreement”) as follows:
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1.
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Issuance
and Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject
to the conditions set forth herein, it may issue and sell through the Agents, each acting as agent and/or principal, shares
(the “Placement Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common
Stock”), having an aggregate offering price of up to $50,000,000. Notwithstanding anything to the contrary
contained herein, the parties hereto agree that compliance with the limitation set forth in this Section 1 on the number
of shares of Common Stock issued and sold under this Agreement shall be the sole responsibility of the Company, and the Agents
shall have no obligation in connection with such compliance. The issuance and sale of Common Stock through the Agents will
be effected pursuant to the Registration Statement (as defined below) filed by the Company and declared effective by the Securities
and Exchange Commission (the “Commission”), although nothing in this Agreement shall be construed
as requiring the Company to use the Registration Statement (as defined below) to issue the Placement Shares.
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The
Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the “Securities Act”), with the Commission a registration statement on
Form S-3, declared effective by the Commission (File No. 333-231416), including a base prospectus, relating to certain securities,
including the Common Stock, to be issued from time to time by the Company, and which incorporates by reference documents that
the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder (collectively, the “Exchange Act”). The Company has prepared
a prospectus supplement specifically relating to the Placement Shares (the “Prospectus Supplement”)
to the base prospectus included as part of such registration statement. The Company has furnished to the Agents, for use by
the Agents, copies of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement,
relating to the Placement Shares. Except where the context otherwise requires, such registration statement, including all
documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus
(as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act or deemed to be
a part of such registration statement pursuant to Rule 430B or 462(b) of the Securities Act, is herein called the “Registration
Statement.” The base prospectus, including all documents incorporated therein by reference, included in the
Registration Statement, as it may be supplemented by the Prospectus Supplement or by any additional prospectus supplement,
in the form in which such prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission
pursuant to Rule 424(b) under the Securities Act, together with any “issuer free writing prospectus,” as defined
in Rule 433 of the Securities Act regulations (“Rule 433”), relating to the Placement Shares that
(i) is required to be filed with the Commission by the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i),
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), is herein called the “Prospectus.” Any reference
herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and
include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment”
or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include
the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein.
For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement
thereto shall be deemed to include any copy filed with the Commission pursuant to the Electronic Data Gathering Analysis and
Retrieval system (“EDGAR”).
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2.
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Placements.
Each time that the Company wishes to issue and sell the Placement Shares hereunder (each, a “Placement”),
it will notify an Agent (the “Designated Agent”) by email notice (or other method mutually agreed
to in writing by the parties) (a “Placement Notice”) containing the parameters in accordance with
which it desires the Placement Shares to be sold, which shall at a minimum include the number of Placement Shares to be issued,
the time period during which sales are requested to be made, any limitation on the number of Placement Shares that may be
sold in any one Trading Day (as defined in Section 3) and any minimum price below which sales may not be made, a form of which
containing such minimum sales parameters necessary is attached hereto as Schedule 1. The Placement Notice shall originate
from any of the individuals from the Company set forth on Schedule 2 (with a copy to each of the other individuals from the
Company listed on such schedule), and shall be addressed to each of the individuals from such Designated Agent set forth on
Schedule 2, as such Schedule 2 may be amended from time to time. The Placement Notice shall be effective upon receipt by such
Designated Agent unless and until (i) in accordance with the notice requirements set forth in Section 4, such Designated Agent
declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement
Shares have been sold, (iii) in accordance with the notice requirements set forth in Section 4, the Company suspends or terminates
the Placement Notice for any reason, in its sole discretion, (iv) the Company issues a subsequent Placement Notice with parameters
superseding those on the earlier dated Placement Notice, or (v) this Agreement has been terminated under the provisions of
Section 11. The amount of any discount, commission or other compensation to be paid by the Company to such Designated Agent
in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule
3. It is expressly acknowledged and agreed that neither the Company nor the Agents will have any obligation whatsoever with
respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to a Designated Agent
and such Designated Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon
the terms specified therein and herein. In the event of a conflict between the terms of this Agreement and the terms of a
Placement Notice, the terms of the Placement Notice will control.
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3.
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Sale
of Placement Shares by the Designated Agent. Subject to the terms and conditions herein set forth, upon the Company’s
delivery of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended,
or otherwise terminated in accordance with the terms of this Agreement, the Designated Agent, for the period specified in
the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices
and applicable state and federal laws, rules and regulations and the rules of the Nasdaq Stock Market, Inc. (“Nasdaq”)
to sell such Placement Shares up to the amount specified in such Placement Notice, and otherwise in accordance with the terms
of such Placement Notice. The Designated Agent will provide written confirmation to the Company and the other Agent (including
by email correspondence to each of the individuals of the Company set forth on Schedule 2, if receipt of such correspondence
is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) no later than the
opening of the Trading Day (as defined below) immediately following the Trading Day on which the Designated Agent has made
sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such day, the volume-weighted average
price of the Placement Shares sold, and the Net Proceeds (as defined below) payable to the Company. The Designated Agent may
sell Placement Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule
415 of the Securities Act, including without limitation, sales made through Nasdaq or on any other existing trading market
for the Common Stock. If expressly authorized by the Company in a Placement Notice, the Designated Agent may also sell Placement
Shares in negotiated transactions. Notwithstanding the provisions of Section 6(hh), the Designated Agent shall not purchase
Placement Shares for its own account as principal unless expressly authorized to do so by the Company in a Placement Notice.
The Company acknowledges and agrees that (i) there can be no assurance that the Designated Agent will be successful in selling
Placement Shares, and (ii) the Designated Agent will incur no liability or obligation to the Company or any other person or
entity if it does not sell Placement Shares for any reason other than a failure by such Designated Agent to use its commercially
reasonable efforts consistent with its normal trading and sales practices to sell such Placement Shares as required under
this Section 3. For the purposes hereof, “Trading Day” means any day on which the Company’s
Common Stock is purchased and sold on the principal market on which the Common Stock is listed or quoted.
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(a)
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The
Company or the Designated Agent may, upon notice to the other party in writing (including by email correspondence to each
of the individuals of the other party set forth on Schedule 2, if receipt of such correspondence is actually acknowledged
by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by
verifiable facsimile transmission or email correspondence to each of the individuals of the other party set forth on Schedule
2), suspend any sale of Placement Shares; provided, however, that such suspension shall not affect or impair either
party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice. Each of
the parties agrees that no such notice under this Section 4 shall be effective against the other unless it is made to one
of the individuals named on Schedule 2 hereto, as such schedule may be amended from time to time.
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(b)
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Notwithstanding any other provision of this Agreement,
during any period in which the Company is in possession of material non-public information, the Company and the Designated
Agent agree that (1) at a time in which a Placement Notice is pending, the Company shall promptly notify the Designated
Agent that the Company is in possession of material non-public information and (2) (i) no sale of Placement Shares
will take place, (ii) the Company shall not request the sale of any Placement Shares, (iii) the Designated Agent
shall not be obligated to sell or offer to sell any Placement Shares and (iv) no Placement Shares shall be sold pursuant to
any outstanding Placement Notice.
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(c)
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If
either the Designated Agent or the Company has reason to believe that the exemptive provisions set forth in Rule 101(c)(1)
of Regulation M under the Exchange Act are not satisfied with respect to the Common Stock, the Designated Agent or the Company
shall promptly notify the other party, and the Designated Agent may, at its sole discretion, suspend sales of the Placement
Shares under this Agreement.
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5.
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Settlement
and Delivery of Placement Shares.
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(a)
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Settlement
of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement
Shares will occur on the second (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following
the date on which such sales are made (each, a “Settlement Date” and the first such settlement date,
the “First Delivery Date”). The amount of proceeds to be delivered to the Company on a Settlement
Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate
gross sales price received by the Designated Agent at which such Placement Shares were sold, after deduction of (i) the Designated
Agent’s commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof,
(ii) any other amounts due and payable by the Company to the Designated Agent hereunder pursuant to Section 7(g) (Expenses)
hereof, and (iii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.
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(b)
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Delivery
of Placement Shares. On or before each Settlement Date, the Company will issue the Placement Shares being sold on such
date and will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by crediting the
Designated Agent’s or its designee’s account (provided the Designated Agent shall have given the Company written
notice of such designee prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at
Custodian System (“DWAC”) or by such other means of delivery as may be mutually agreed upon by the
parties hereto, which in all cases shall be duly authorized, freely tradeable, transferable, registered shares in good deliverable
form. On each Settlement Date, the Designated Agent will deliver the related Net Proceeds in same day funds to an account
designated by the Company on, or prior to, the Settlement Date. The Designated Agent shall be responsible for providing DWAC
instructions or other instructions for delivery by other means with regard to the transfer of the Placement Shares being sold.
In addition to and in no way limiting the rights and obligations set forth in Section 9(a) hereto, the Company agrees that
if the Company or its transfer agent (if applicable), defaults in its obligation to deliver duly authorized, freely tradeable,
transferable, registered Placement Shares in good deliverable form by 2:30 P.M., New York City time, on a Settlement Date
(other than as a result of a failure by the Designated Agent to provide instructions for delivery), the Company will (i) take
all necessary action to cause the full amount of any Net Proceeds that were delivered to the Company’s account with
respect to such settlement, together with any costs incurred by the Designated Agent and/or its clearing firm in connection
with recovering such Net Proceeds, to be immediately returned to the Designated Agent or its clearing firm no later than 5:00
P.M., New York City time, on such Settlement Date, by wire transfer of immediately available funds to an account designated
by the Designated Agent or its clearing firm, (ii) indemnify and hold the Designated Agent and its clearing firm harmless
against any loss, claim, damage, or reasonable and documented expense (including reasonable legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (iii) pay to the
Designated Agent (without duplication) any commission, discount or other compensation to which it would otherwise have been
entitled absent such default. Certificates for the Placement Shares, if any, shall be in such denominations and registered
in such names as the Designated Agent may request in writing one Business Day (as defined below) before the applicable Settlement
Date.
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(c)
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Limitations
on Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares
if, after giving effect to the sale of such Placement Shares, the aggregate number or gross sales proceeds of Placement Shares
sold pursuant to this Agreement would exceed the lesser of: (i) the number or dollar amount of Common Stock registered pursuant
to, and available for offer and sale under, the Registration Statement pursuant to which the offering of Placement Shares
is being made, (ii) the number of authorized but unissued Common Stock of the Company (less Common Stock issuable upon exercise,
conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized
capital stock), (iii) the number or dollar amount of Common Stock permitted to be offered and sold by the Company under Form
S-3 (including General Instruction I.B.6. thereof, if such instruction is applicable), (iv) the number or dollar amount of
Common Stock the Company’s board of directors or a duly authorized committee thereof authorizes the Company to issue
and sell from time to time, or (v) the dollar amount of Common Stock for which the Company has filed the Prospectus Supplement.
Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement
at a price lower than the minimum price authorized from time to time by the Company’s board of directors or a duly authorized
committee thereof. Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge and agree that
compliance with the limitations set forth in this Section 5(c) on the number or dollar amount of Placement Shares that may
be issued and sold under this Agreement from time to time shall be the sole responsibility of the Company, and that the Designated
Agent shall have no obligation in connection with such compliance.
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6.
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Representations
and Warranties of the Company. The Company represents and warrants to, and agrees with, the Agents that, as of the date
of this Agreement, and as of (i) each Representation Date (as defined in Section 7(m)), (ii) each date on which a Placement
Notice is given, (iii) any date on which Placement Shares are sold hereunder and (iv) each Settlement Date:
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(a)
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Compliance
with Registration Requirements. The Registration Statement has been declared effective by the Commission under the Securities
Act. The Company has complied to the Commission’s satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings
for such purpose have been instituted or are pending or, to the best knowledge of the Company, contemplated or threatened
by the Commission. The Company meets the requirements for use of Form S-3 under the Securities Act. The sale of the Placement
Shares hereunder meets the requirements or General Instruction I.B.1 of Form S-3.
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(b)
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No
Misstatement or Omission. The Prospectus, when filed, complied and, as amended or supplemented, if applicable, will comply
in all material respects with the Securities Act. Each of the Registration Statement and the Prospectus and any post-effective
amendments or supplements thereto, at the time it became effective or its date, as applicable, complied and as of each of
the Settlement Dates, if any, complied in all material respects with the Securities Act and did not and, as of each Settlement
Date, if any, did not and will not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as amended or supplemented,
as of its date, did not and, as of each of the Settlement Dates, if any, will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences
do not apply to statements in or omissions from the Registration Statement or the Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with information relating to the Agents furnished to the Company in writing
by the Agents expressly for use therein. There are no contracts or other documents required to be described in the Prospectus
or to be filed as exhibits to the Registration Statement which have not been described or filed as required.
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(c)
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Offering
Materials Furnished to the Agents. The Company has delivered to the Agents one complete copy of the Registration Statement
and a copy of each consent and certificate of experts filed as a part thereof, and conformed copies of the Registration Statement
(without exhibits) and the Prospectus, as amended or supplemented, in such quantities and at such places as the Agents have
reasonably requested.
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(d)
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Emerging
Growth Company. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities
Act. The Company agrees to notify the Agents promptly upon the Company ceasing to be an emerging growth company.
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(e)
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Not
an Ineligible Issuer. The Company currently is not an “ineligible issuer,” as defined in Rule 405 of the rules
and regulation of the Commission. The Company agrees to notify the Agents promptly upon the Company becoming an “ineligible
issuer.”
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(f)
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Distribution
of Offering Material by the Company. The Company has not distributed and will not distribute, prior to the completion
of the Agents’ distribution of the Placement Shares, any offering material in connection with the offering and sale
of the Placement Shares other than the Prospectus or the Registration Statement.
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(g)
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Sales
Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable
law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general equitable principles.
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(h)
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Financial
Statements. The financial statements of the Company, together with the related notes, set forth or incorporated by reference
in the Registration Statement and the Prospectus comply in all material respects with the requirements of the Securities Act
and the Exchange Act and fairly present in all material respects the financial condition of the Company and its consolidated
subsidiaries as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified
in conformity with generally accepted accounting principles in the United States (“GAAP”) consistently
applied throughout the periods involved; the supporting schedules included in the Registration Statement present fairly the
information required to be stated therein; all non-GAAP financial information included in the Registration Statement and the
Prospectus complies in all material respects with the requirements of Regulation G and Item 10 of Regulation S-K under the
Securities Act; and, except as disclosed in the Prospectus, there are no material off-balance sheet arrangements (as defined
in Regulation S-K under the Securities Act, Item 303(a)(4)(ii)) or any other relationships with unconsolidated entities or
other persons, that may have a material current or, to the Company’s knowledge, material future effect on the Company’s
financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of
revenue or expenses. No other financial statements or schedules are required to be included in the Registration Statement
or the Prospectus. To the Company’s knowledge, each of Kost Forer Gabbay & Kasierer, a Member of Ernst & Young
Global, and Friedman LLP, which has expressed its opinion with respect to the financial statements and schedules filed as
a part of the Registration Statement and included in the Registration Statement and the Prospectus, is (x) an independent
public accounting firm within the meaning of the Securities Act and the Rules and Regulations, (y) a registered public accounting
firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”))
and (z) not in violation of the auditor independence requirements of the Sarbanes-Oxley Act.
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(i)
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Organization
and Good Standing. Each of the Company and its subsidiary Beyond Air Ltd. has
been duly organized and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation
(if applicable in such jurisdiction). Each of the Company and its subsidiaries has full corporate power and authority to own
its properties and conduct its business as currently being carried on and as described in the Registration Statement and the
Prospectus, and is duly qualified to do business as a foreign corporation in good standing in each jurisdiction in which it
owns or leases real property or in which the conduct of its business makes such qualification necessary and in which the failure
to so qualify would have a material adverse effect upon the business, prospects, management, properties, operations, condition
(financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole (“Material
Adverse Effect”).
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(j)
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Absence
of Certain Events. Except as contemplated in the Prospectus, subsequent to the respective dates as of which information
is given in the Prospectus, neither the Company nor any of its subsidiaries has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, or declared or paid any dividends or made any distribution
of any kind with respect to its capital stock; and there has not been any change in the capital stock (other than a change
in the number of outstanding shares of Common Stock due to the issuance of shares upon the exercise or settlement (including
any “net” or “cashless” exercises or settlements) of outstanding options or warrants or conversion
of convertible securities), or any material change in the short-term or long-term debt (other than as a result of the conversion
of convertible securities), or any issuance of options, warrants, convertible securities or other rights to purchase the capital
stock, of the Company or any of its subsidiaries, or any material adverse change in the general affairs, condition (financial
or otherwise), business, prospects, management, properties, operations or results of operations of the Company and its subsidiaries,
taken as a whole (“Material Adverse Change”) or any development which could reasonably be expected
to result in any Material Adverse Change.
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(k)
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Absence
of Proceedings. Except as set forth in the Prospectus, there is not pending or, to the knowledge of the Company, threatened
or contemplated, any action, suit or proceeding (a) to which the Company or any of its subsidiaries is a party or (b) which
has as the subject thereof any officer or director of the Company or any subsidiary, any employee benefit plan sponsored by
the Company or any subsidiary or any property or assets owned or leased by the Company or any subsidiary before or by any
court or Governmental Authority, or any arbitrator, which, individually or in the aggregate, would reasonably be expected
to result in any Material Adverse Change, or would reasonably be expected to materially and adversely affect the ability of
the Company to perform its obligations under this Agreement or which are otherwise material in the context of the sale of
the Placement Shares. There are no current or, to the knowledge of the Company, pending, legal, governmental or regulatory
actions, suits or proceedings (x) to which the Company or any of its subsidiaries is subject or (y) which has as the subject
thereof any officer or director of the Company or any subsidiary, any employee plan sponsored by the Company or any subsidiary
or any property or assets owned or leased by the Company or any subsidiary, that are required to be described in the Registration
Statement and Prospectus by the Securities Act or by the Rules and Regulations and that have not been so described.
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(l)
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Disclosure
of Legal Matters. There are no statutes, regulations, contracts or documents that are required to be described in the
Registration Statement and in the Prospectus or required to be filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations that have not been so described or filed.
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(m)
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Authorization;
No Conflicts; Authority. This Agreement has been duly authorized, executed and delivered by the Company, and constitutes
a valid, legal and binding obligation of the Company, enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by federal or state securities laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of
equity. The execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated
will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or any of its subsidiaries is subject, (B) result in any violation of
the provisions of the Company’s charter or by-laws or (C) result in the violation of any law or statute or any judgment,
order, rule, regulation or decree of any court or arbitrator or federal, state, local or foreign governmental agency or regulatory
authority having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets (each, a “Governmental
Authority”), except in the case of clauses (A) or (C) as would not reasonably be expected to result in a Material
Adverse Effect. No consent, approval, authorization or order of, or registration or filing with any Governmental Authority
is required for the execution, delivery and performance of this Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Placement Shares by the Company, except such as may be required under the Securities
Act, the rules of the Financial Industry Regulatory Authority (“FINRA”) or state securities or blue
sky laws; and the Company has full power and authority to enter into this Agreement and to consummate the transactions contemplated
hereby, including the authorization, issuance and sale of the Placement Shares as contemplated by this Agreement.
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(n)
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Capitalization;
the Placement Shares; Registration Rights. All of the issued and outstanding shares of capital stock of the Company, including
the outstanding shares of Common Stock, are duly authorized and validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state and foreign securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities that have not been waived in writing (a copy of which has been
delivered to counsel to the Agents), and the holders thereof are not subject to personal liability by reason of being such
holders; the Placement Shares, when issued and delivered in accordance with the terms of this Agreement, will be validly issued
and will be fully paid and nonassessable, and the holders thereof will not be subject to personal liability by reason of being
such holders; and the capital stock of the Company, including the Common Stock, conforms to the description thereof in the
Registration Statement and in the Prospectus. Except as otherwise stated in the Registration Statement and in the Prospectus,
(A) there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of Common Stock pursuant to the Company’s charter, by-laws or any agreement or other instrument
to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound and
(B) neither the filing of the Registration Statement nor the offering or sale of the Placement Shares as contemplated by this
Agreement gives rise to any rights for or relating to the registration of any shares of Common Stock or other securities of
the Company (collectively “Registration Rights”). All of the issued and outstanding shares of capital
stock of each of the Company’s subsidiaries have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise described in the Registration Statement and in the Prospectus, the Company owns of
record and beneficially, free and clear of any security interests, claims, liens, proxies, equities or other encumbrances,
all of the issued and outstanding shares of such stock. The Company has an authorized and outstanding capitalization as set
forth in the Registration Statemen and in the Prospectus as of their respective dates under the caption “Capitalization.”
The Common Stock (including the Placement Shares) conforms in all material respects to the description thereof contained in
the Prospectus.
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(o)
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Stock
Options. Except as described in the Registration Statement and in the Prospectus, there are no options, warrants, agreements,
contracts or other rights in existence to purchase or acquire from the Company or any subsidiary of the Company any shares
of the capital stock of the Company or any subsidiary of the Company. The description of the Company’s stock option,
stock bonus and other stock plans or arrangements (the “Company Stock Plans”), and the options (the
“Options”) or other rights granted thereunder, set forth in the Prospectus accurately and fairly
presents in all material respects the information required to be shown with respect to such plans, arrangements, options and
rights. Each grant of an Option (A) was duly authorized no later than the date on which the grant of such Option was by its
terms to be effective by all necessary corporate action, including, as applicable, approval by the board of directors of the
Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number
of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each
party thereto and (B) was made in accordance with the terms of the applicable Company Stock Plan, and all applicable laws
and regulatory rules or requirements, including all applicable federal securities laws.
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(p)
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Compliance
with Laws. The Company and each of its subsidiaries holds, and is operating in compliance in all material respects with,
all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders of any Governmental
Authority or self-regulatory body required for the conduct of its business and all such franchises, grants, authorizations,
licenses, permits, easements, consents, certifications and orders are valid and in full force and effect except for the absence
of which would not reasonably be expected to result in a Material Adverse Effect; and except as would not reasonably be expected
to result in a Material Adverse Effect, neither the Company nor any of its subsidiaries has received notice of any revocation
or modification of any such franchise, grant, authorization, license, permit, easement, consent, certification or order or
has reason to believe that any such franchise, grant, authorization, license, permit, easement, consent, certification or
order will not be renewed in the ordinary course; and the Company and each of its subsidiaries is in compliance in all material
respects with all applicable federal, state, local and foreign laws, regulations, orders and decrees.
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(q)
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Ownership
of Assets. The Company and its subsidiaries have good and marketable title to all property (whether real or personal)
described in the Registration Statement and in the Prospectus as being owned by them, in each case free and clear of all liens,
claims, security interests, other encumbrances or defects except such as would not reasonably be expected to have a Material
Adverse Effect or as are described in the Registration Statement and in the Prospectus. The property held under lease by the
Company and its subsidiaries is held by them under valid, subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material respect with the conduct of the business of the Company
or its subsidiaries.
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(r)
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Intellectual
Property. The Company and each of its subsidiaries owns, possesses, has a valid license to use, or can acquire on reasonable
terms, all Intellectual Property set forth in Schedule 4 hereto. Furthermore, (A) to the knowledge of the Company,
there is no infringement, misappropriation or violation by third parties of any Company Intellectual Property , except as
such infringement, misappropriation or violation would not result in a Material Adverse Effect; (B) there is no pending or,
to the knowledge of the Company, threatened, action, suit, proceeding or claim by others challenging the Company’s or
any of its subsidiaries’ rights in or to any such Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (C) the Intellectual Property owned by the Company and its subsidiaries,
and to the knowledge of the Company, the Intellectual Property licensed to the Company and its subsidiaries, has not been
adjudged invalid or unenforceable, in whole or in part, and there is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the validity of any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; (D) there is no pending or, to the knowledge
of the Company, threatened action, suit, proceeding or claim by others that the Company or any of its subsidiaries infringes,
misappropriates or otherwise violates any Intellectual Property or other proprietary rights of others, neither the Company
or any of its subsidiaries has received any written notice of such claim and, with respect to the conduct of the Company’s
and its subsidiaries’ business as now conducted or as described in the Registration Statement and the Prospectus to
be conducted, except where such violation would not reasonably be expected to result in a Material Adverse Effect, the Company
is unaware of any other fact which would form a reasonable basis for any such claim; and (E) to the Company’s knowledge,
no employee of the Company or any of its subsidiaries is in or has ever been in violation 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 any of its subsidiaries or actions undertaken by the employee while employed with the Company
or any of its subsidiaries, except as such violation would not result in a Material Adverse Effect. “Intellectual
Property” shall mean all patents, patent applications, trade and service marks, trade and service mark registrations,
trade names, copyrights, licenses, inventions, trade secrets, domain names, technology, know-how and other intellectual property.
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(s)
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Health
Care Authorizations. The Company has submitted and possesses, or qualifies for applicable exemptions to, such valid and
current registrations, listings, approvals, clearances, licenses, certificates, authorizations or permits and supplements
or amendments thereto issued or required by the appropriate state, federal or foreign regulatory agencies or bodies necessary
to conduct their business, including, without limitation, all such certificates, authorizations and permits required by the
United States Food and Drug Administration (the “FDA”), the United States Department of Health and
Human Services (“HHS”), the United States Centers for Medicare & Medicaid Services (“CMS”),
the European Medicines Agency (“EMEA”), Health Canada or any other state, federal or foreign agencies
or bodies engaged in the regulation of medical devices (including diagnostic products), drugs or biohazardous materials, and
the Company have not received any notice of proceedings relating to the revocation or modification of, or non-compliance with,
any such license, certificate, authorization or permit, except for such registrations, listings, approvals, clearances, licenses,
certificates, authorizations or permits, the lack of which would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
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(t)
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Clinical
Trials. The studies, tests and preclinical and clinical trials conducted by or on behalf of, or sponsored by, the Company,
or in which the Company has participated, that are described in the Registration Statement or the Prospectus, or the results
of which are referred to in the Registration Statement or the Prospectus, were and, if still pending, are being conducted
in all material respects in accordance with protocols, procedures and controls pursuant to, where applicable, accepted professional
and scientific standards for products or product candidates comparable to those being developed by the Company and all applicable
statutes, rules and regulations of the FDA, the EMEA, Health Canada and other comparable drug and medical device (including
diagnostic product) regulatory agencies outside of the United States to which they are subject; the descriptions of the results
of such studies, tests and trials contained in the Registration Statement or the Prospectus do not contain any misstatement
of a material fact or omit a material fact necessary to make such statements not misleading; the Company has no knowledge
of any studies, tests or trials not described in the Prospectus the results of which reasonably call into question in any
material respect the results of the studies, tests and trials described in the Registration Statement or Prospectus; and the
Company has not received any notices or other correspondence from the FDA, EMEA, Health Canada or any other foreign, state
or local governmental body exercising comparable authority or any Institutional Review Board or comparable authority requiring
or threatening the termination, suspension or material modification of any studies, tests or preclinical or clinical trials
conducted by or on behalf of, or sponsored by, the Company or in which the Company has participated, and, to the Company’s
knowledge, there are no reasonable grounds for the same. Except as disclosed in the Registration Statement and the Prospectus,
there has not been any violation of law or regulation by the Company in its respective product development efforts, submissions
or reports to any regulatory authority that would reasonably be expected to require investigation, corrective action or enforcement
action.
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(u)
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Compliance
with Health Care Laws. The Company and, to the Company’s knowledge, its directors, employees and agents (while acting
in such capacity) are in material compliance with, all health care laws applicable to the Company, or any of its products
or activities, including, but not limited to, the federal Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)), the Anti-Inducement
Law (42 U.S.C. Section 1320a-7a(a)(5)), the civil False Claims Act (31 U.S.C. Section 3729 et seq.), the administrative False
Claims Law (42 U.S.C. Section 1320a-7b(a)), the Stark law (42 U.S.C. Section 1395nn), the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.) as amended by the Health Information Technology for Economic
and Clinical Health Act (42 U.S.C. Section 17921 et seq.), the exclusion laws (42 U.S.C. Section 1320a-7), the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. Section 301 et seq.), the Controlled Substances Act (21 U.S.C. Section 801 et seq.), the
Public Health Service Act (42 U.S.C. Section 201 et seq.), the Clinical Laboratory Improvement Amendments of 1988 (42 U.S.C.
Section 263a), Medicare (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security Act), and the
Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010,
the regulations promulgated pursuant to such laws, and any other state, federal or foreign law, accreditation standards, regulation,
memorandum, opinion letter, or other issuance which imposes requirements on the manufacturing, development, testing, labeling,
advertising, marketing or distribution of drugs and medical devices (including diagnostic products), kickbacks, patient or
program charges, recordkeeping, claims process, documentation requirements, medical necessity, referrals, the hiring of employees
or acquisition of services or supplies from those who have been excluded from government health care programs, quality, safety,
privacy, security, licensure, accreditation or any other aspect of providing health care, clinical laboratory or diagnostics
products or services (collectively, “Health Care Laws”). The Company has not received any notification,
correspondence or any other written or oral communication, including notification of any pending or threatened claim, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action from any governmental authority, including, without
limitation, the FDA, the EMEA, Health Canada, the United States Federal Trade Commission, the United States Drug Enforcement
Administration (“DEA”), CMS, HHS’s Office of Inspector General, the United States Department
of Justice and state Attorneys General or similar agencies of potential or actual non-compliance by, or liability of, the
Company under any Health Care Laws, except, with respect to any of the foregoing, such as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. To the Company’s knowledge, there are no facts
or circumstances that would reasonably be expected to give rise to material liability of the Company under any Health Care
Laws. The statements with respect to Health Care Laws and the Company’s compliance therewith included in the Preliminary
Prospectus and in the Prospectus fairly summarize the matters therein described.
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(v)
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Post-Market
Reporting Obligations. The Company is complying in all material respects with all applicable regulatory post-market reporting
obligations, including, without limitation, the FDA’s adverse event reporting requirements at 21 CFR Parts 310, 314,
600, and 803, and, to the extent applicable, the respective counterparts thereof promulgated by governmental authorities in
countries outside the United States.
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(w)
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No
Shutdowns or Prohibitions. The Company has not had any product, clinical laboratory or manufacturing site (whether Company-owned
or that of a third party manufacturer for the Company’s products) subject to a governmental authority (including FDA)
shutdown or import or export prohibition, nor received any FDA Form 483 or other governmental authority notice of inspectional
observations, “warning letters,” “untitled letters,” requests to make changes to the Company’s
products, processes or operations, or similar correspondence or notice from the FDA or other governmental authority alleging
or asserting material noncompliance with any applicable Health Care Laws. To the Company’s knowledge, neither the FDA
nor any other governmental authority is considering such action.
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(x)
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No
Safety Notices. (i) Except as disclosed in the Registration Statement and the Prospectus, there have been no recalls,
field notifications, field corrections, market withdrawals or replacements, warnings, “dear doctor” letters, investigator
notices, safety alerts or other notice of action relating to an alleged lack of safety, efficacy, or regulatory compliance
of the Company’s products (“Safety Notices”) and (ii) to the Company’s knowledge, there
are no facts that would be reasonably likely to result in (x) a Safety Notice with respect to the Company’s products
or services, (y) a change in labeling of any the Company’s respective products or services, or (z) a termination or
suspension of marketing or testing of any the Company’s products or services.
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(y)
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No
Violations or Defaults. Neither the Company nor any of its subsidiaries is (A) in violation of its respective charter,
by-laws or other organizational documents, or (B) in breach of or otherwise in default, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default in the performance of any material obligation, agreement
or condition contained in any bond, debenture, note, indenture, loan agreement or any other material contract, lease or other
instrument to which it is subject or by which any of them may be bound, or to which any of the material property or assets
of the Company or any of its subsidiaries is subject, except in the case of clause (B) as would not reasonably be expected
to have a Material Adverse Effect.
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(z)
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Taxes.
The Company and its subsidiaries have timely filed all material federal, state, local and foreign income and franchise tax
returns required to be filed and are not in default in the payment of any material taxes which were payable pursuant to said
returns or any assessments with respect thereto, other than any which the Company or any of its subsidiaries is contesting
in good faith. There is no pending dispute with any taxing authority relating to any of such returns, and the Company has
no knowledge of any proposed liability for any tax to be imposed upon the properties or assets of the Company for which there
is not an adequate reserve reflected in the Company’s financial statements included in the Registration Statement and
the Prospectus.
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(aa)
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Exchange
Listing and Exchange Act Registration. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and
is included or approved for listing on the NASDAQ Capital Market and 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 or delisting the Common Stock
from the NASDAQ Capital Market nor has the Company received any notification that the Commission or the NASDAQ Capital Market
is contemplating terminating such registration or listing. The Company has complied in all material respects with the applicable
requirements of the NASDAQ Capital Market for maintenance of inclusion of the Common Stock thereon. The Company has filed
an application to include the Placement Shares on the NASDAQ Capital Market. Except as previously disclosed to counsel for
the Agents or as set forth in the Prospectus, to the knowledge of the Company, no beneficial owners of the Company’s
capital stock who, together with their associated persons and affiliates, hold in the aggregate 10% or more of such capital
stock, have any direct or indirect association or affiliate with a FINRA member.
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(bb)
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Ownership
of Other Entities. Other than Beyond Air, Ltd. and Advanced Inhalation Therapies (AIT), Inc., the Company, directly or
indirectly, owns no capital stock or other equity or ownership or proprietary interest in any corporation, partnership, association,
trust or other entity.
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(cc)
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Internal
Controls. The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement and in the
Prospectus, the Company’s internal control over financial reporting is effective and none of the Company, its board
of directors and audit committee is aware of any “significant deficiencies” or “material weaknesses”
(each as defined by the Public Company Accounting Oversight Board) in its internal control over financial reporting, or any
fraud, whether or not material, that involves management or other employees of the Company and its subsidiaries who have a
significant role in the Company’s internal controls; and since the end of the latest audited fiscal year, there has
been no change in the Company’s internal control over financial reporting (whether or not remediated) that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The
Company’s board of directors has, subject to the exceptions, cure periods and the phase in periods specified in the
applicable stock exchange rules (“Exchange Rules”), validly appointed an audit committee to oversee
internal accounting controls whose composition satisfies the applicable requirements of the Exchange Rules and the Company’s
board of directors and/or the audit committee has adopted a charter that satisfies the requirements of the Exchange Rules.
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(dd)
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No
Brokers or Finders. Other than as contemplated by this Agreement, the Company has not incurred any liability for any finder’s
or broker’s fee or agent’s commission in connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
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(ee)
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Insurance.
The Company and each of its subsidiaries carries, or is covered by, insurance from reputable insurers in such amounts and
covering such risks as the Company reasonably believes is adequate for the conduct of its business and the value of its properties
and the properties of its subsidiaries and as is customary for companies engaged in similar businesses in similar industries;
all policies of insurance and any fidelity or surety bonds insuring the Company or any of its subsidiaries or its business,
assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance
with the terms of such policies and instruments in all material respects; there are no claims by the Company or any of its
subsidiaries under any such policy or instrument as to which any insurance company, to the Company’s knowledge, is denying
liability or defending under a reservation of rights clause; neither the Company nor any of its subsidiaries has been refused
any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries has reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
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(ff)
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Investment
Company Act. The Company is not and, after giving effect to the offering and sale of the Placement Shares, will not be
an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.
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(gg)
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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 under the Exchange Act.
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(hh)
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Incorporated
Documents. The documents incorporated by reference in the Registration Statement or in 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 were filed on a timely basis with the Commission and none of such
documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; any further documents so filed and
incorporated by reference in the Registration Statement or in the Prospectus, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of
a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
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(ii)
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Sarbanes-Oxley
Act. The Company is in compliance with all applicable provisions of the Sarbanes-Oxley Act and the rules and regulations
of the Commission thereunder.
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(jj)
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Disclosure
Controls. The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-14 and
15d-14 under the Exchange Act) and such controls and procedures are effective in ensuring that material information relating
to the Company, including its subsidiaries, is made known to the principal executive officer and the principal financial officer.
The Company has utilized such controls and procedures in preparing and evaluating the disclosures in the Registration Statement
and in the Prospectus.
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(kk)
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Anti-Bribery
and Anti-Money Laundering Laws. Each of the Company, its subsidiaries, and, to the Company’s knowledge, its affiliates,
any of their respective officers, directors, supervisors, managers, employees, or, the knowledge of the Company, agents, has
not violated, its participation in the offering will not violate, and the Company and each of its subsidiaries has instituted
and maintains policies and procedures designed to ensure continued compliance with, each of the following laws: anti-bribery
laws, including but not limited to, any applicable law, rule, or regulation of any locality, including but not limited to
any law, rule, or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials
in International Business Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of 1977,
as amended, the U.K. Bribery Act 2010, or any other law, rule or regulation of similar purposes and scope, or anti-money laundering
laws, including but not limited to, applicable federal, state, international, foreign or other laws, regulations or government
guidance regarding anti-money laundering, including, without limitation, Title 18 U.S. Code Section 1956 and 1957, the Patriot
Act, the Bank Secrecy Act, and international anti-money laundering principles or procedures by an intergovernmental group
or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with
which designation the United States representative to the group or organization continues to concur, all as amended, and any
Executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued
thereunder.
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(A)
Neither the Company nor any of its subsidiaries, nor, to the Company’s knowledge, any of their respective directors, officers
or employees, nor, to the Company’s knowledge, any agent, affiliate or representative of the Company or its subsidiaries
is an individual or entity that is, or is owned or controlled by an individual or entity that is:
(1)
the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control,
the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively,
“Sanctions”), nor
(2)
located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Cuba,
Crimea, Iran, North Korea and Syria).
(B)
Neither the Company nor any of its subsidiaries will, directly or indirectly, use the proceeds of the offering of the Placement
Shares, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other individual
or entity:
(1) to fund or facilitate any activities or business of or with any individual or entity or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or
(2)
in any other manner that will result in a violation of Sanctions by any individual or entity (including any individual or entity
participating in the offering, whether as underwriter, advisor, investor or otherwise).
(C) For the past five years, neither the Company nor any of its subsidiaries has knowingly engaged in, and is not now knowingly engaged in, any dealings or transactions with any individual or entity, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
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(mm)
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Compliance
with Environmental Laws. Except as disclosed in the Registration Statement and the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any statute, any rule, regulation, decision or order of any Governmental Authority
or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental
Laws”), owns or operates any real property contaminated with any substance that is subject to any Environmental
Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claim
relating to any Environmental Laws, which violation, contamination, liability or claim would, individually or in the aggregate
have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim.
Neither the Company nor any of its subsidiaries anticipates incurring any material capital expenditures relating to compliance
with Environmental Laws.
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(nn)
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Compliance
with Occupational Laws. The Company and each of its subsidiaries (A) is in compliance, in all material respects, with
any and all applicable foreign, federal, state and local laws, rules, regulations, treaties, statutes and codes promulgated
by any and all Governmental Authorities (including pursuant to the Occupational Health and Safety Act) relating to the protection
of human health and safety in the workplace (“Occupational Laws”); (B) has received all material
permits, licenses or other approvals required of it under applicable Occupational Laws to conduct its business as currently
conducted; and (C) is in compliance, in all material respects, with all terms and conditions of such permit, license or approval.
No action, proceeding, revocation proceeding, writ, injunction or claim is pending or, to the Company’s knowledge, threatened
against the Company or any of its subsidiaries relating to Occupational Laws, and the Company does not have knowledge of any
facts, circumstances or developments relating to its operations or cost accounting practices that could reasonably be expected
to form the basis for or give rise to such actions, suits, investigations or proceedings.
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(oo)
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ERISA
and Employee Benefits Matters. (A) To the knowledge of the Company, no “prohibited transaction” as defined
under Section 406 of ERISA or Section 4975 of the Code and not exempt under ERISA Section 408 and the regulations and published
interpretations thereunder has occurred with respect to any Employee Benefit Plan. At no time has the Company or any ERISA
Affiliate maintained, sponsored, participated in, contributed to or has or had any liability or obligation in respect of any
Employee Benefit Plan subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA, or Section 412 of the Code or
any “multiemployer plan” as defined in Section 3(37) of ERISA or any multiple employer plan for which the Company
or any ERISA Affiliate has incurred or could incur liability under Section 4063 or 4064 of ERISA. No Employee Benefit Plan
provides or promises, or at any time provided or promised, retiree health, life insurance, or other retiree welfare benefits
except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or similar state law.
Each Employee Benefit Plan is and has been operated in material compliance with its terms and all applicable laws, including
but not limited to ERISA and the Code and, to the knowledge of the Company, no event has occurred (including a “reportable
event” as such term is defined in Section 4043 of ERISA) and no condition exists that would subject the Company or any
ERISA Affiliate to any material tax, fine, lien, penalty or liability imposed by ERISA, the Code or other applicable law.
Each Employee Benefit Plan intended to be qualified under Code Section 401(a) is so qualified and has a favorable determination
or opinion letter from the IRS upon which it can rely, and any such determination or opinion letter remains in effect and
has not been revoked; to the knowledge of the Company, nothing has occurred since the date of any such determination or opinion
letter that is reasonably likely to adversely affect such qualification; (B) with respect to each Foreign Benefit Plan, such
Foreign Benefit Plan (1) if intended to qualify for special tax treatment, meets, in all material respects, the requirements
for such treatment, and (2) if required to be funded, is funded to the extent required by applicable law, and with respect
to all other Foreign Benefit Plans, adequate reserves therefor have been established on the accounting statements of the applicable
Company or subsidiary; (C) the Company does not have any obligations under any collective bargaining agreement with any union
and no organization efforts are underway with respect to Company employees. As used in this Agreement, “Code”
means the Internal Revenue Code of 1986, as amended; “Employee Benefit Plan” means any “employee
benefit plan” within the meaning of Section 3(3) of ERISA, including, without limitation, all stock purchase, stock
option, stock-based severance, employment, change-in-control, medical, disability, fringe benefit, bonus, incentive, deferred
compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements, whether
or not subject to ERISA, under which (1) any current or former employee, director or independent contractor of the Company
or its subsidiaries has any present or future right to benefits and which are contributed to, sponsored by or maintained by
the Company or any of its respective subsidiaries or (2) the Company or any of its subsidiaries has had or has any present
or future obligation or liability; “ERISA” means the Employee Retirement Income Security Act of
1974, as amended; “ERISA Affiliate” means any member of the Company’s controlled group as
defined in Code Section 414(b), (c), (m) or (o); and “Foreign Benefit Plan” means any Employee Benefit
Plan established, maintained or contributed to outside of the United States of America or which covers any employee working
or residing outside of the United States.
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(pp)
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Policies
and Procedures. Each of the Company and its subsidiaries has instituted and maintains policies and procedures designed
to ensure continued compliance with applicable federal and state laws and any regulations applicable to the business conducted
by the Company and its subsidiaries.
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(qq)
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Trading
Policies. The Company has implemented policies and procedures, taking into consideration the nature of its business, reasonably
designed to ensure that the Chief Executive Officer of the Company is made aware of any material nonpublic information
held by the Company. The Chief Executive Officer of the Company, or others under his supervision, regularly prepare
and maintain a schedule of any “blackout” periods, during which time the directors, officers and designated employees
of the Company cannot trade in the Company’s common stock.
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(rr)
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Business
Arrangements. Except in the ordinary course of business or as disclosed in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has granted rights to develop, manufacture, produce, assemble, distribute,
license, market or sell its products to any other person and is not bound by any agreement that affects the exclusive right
of the Company or such subsidiary to develop, manufacture, produce, assemble, distribute, license, market or sell its products.
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(ss)
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Labor
Matters. No labor problem or dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge
of the Company, is threatened or imminent, and the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or its subsidiaries’ principal suppliers, contractors or customers that would reasonably be
expected to have a Material Adverse Effect.
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(tt)
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Restrictions
on Subsidiary Payments to the Company. No subsidiary of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying
to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s
property or assets to the Company or any other subsidiary of the Company, except as may be restricted by applicable state
law governing corporations or limited liability companies or as described in or contemplated by the Prospectus.
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(uu)
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Statistical
Information. Any third-party statistical and market-related data included in the Registration Statement and the Prospectus
are based on or derived from sources that the Company believes to be reliable and accurate in all material respects.
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(vv)
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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 or the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
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(ww)
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No
Reliance. The Company has not relied upon the Agents or legal counsel for the Agents for any legal, tax or accounting
advice in connection with the offering and sale of the Placement Shares.
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(xx)
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The
Agents’ Purchases. The Company acknowledges and agrees that the Agents have informed the Company that the Agents
may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell shares of Common Stock for their
own account while this Agreement is in effect, provided, that (i) no such purchase or sales shall take place while a Placement
Notice is in effect (except to the extent the Agents may engage in sales of Placement Shares purchased or deemed purchased
from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company shall not be deemed
to have authorized or consented to any such purchases or sales by the Agents.
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Any
certificate signed by an officer of the Company and delivered to the Agents or to counsel for the Agents in connection with this
Agreement shall be deemed to be a representation and warranty by the Company to the Agents as to the matters set forth therein.
The
Company acknowledges that the Agents and, for purposes of the opinions to be delivered pursuant to Section 7 hereof, counsel
to the Company and counsel to the Agents, will rely upon the accuracy and truthfulness of the foregoing representations and hereby
consents to such reliance.
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7.
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Covenants
of the Company. The Company covenants and agrees with the Agents that:
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(a)
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Registration
Statement Amendments. After the date of execution of this Agreement and during any period in which a Prospectus relating
to any Placement Shares is required to be delivered by the Agents under the Securities Act (including in circumstances where
such requirement may be satisfied pursuant to Rule 172 under the Securities Act), (i) the Company will notify the Agents promptly
of the time when any subsequent amendment to the Registration Statement, other than documents incorporated by reference, has
been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed and
of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus or for additional
information (in each case, insofar as it relates to the transactions contemplated hereby), (ii) the Company will prepare and
file with the Commission, promptly upon the Agents’ reasonable request, any amendments or supplements to the Registration
Statement or Prospectus that, in the Agents’ reasonable opinion, may be necessary or advisable in connection with the
distribution of the Placement Shares by the Agents (provided, however, that the failure of the Agents to make such request
shall not relieve the Company of any obligation or liability hereunder, or affect the Agents’ right to rely on the representations
and warranties made by the Company in this Agreement); (iii) the Company will not file any amendment or supplement to the
Registration Statement or Prospectus, other than documents incorporated by reference, relating to the Placement Shares or
a security convertible into or exchangeable or exercisable for the Placement Shares unless a copy thereof has been submitted
to the Agents within a reasonable period of time before the filing and the Agents have not reasonably objected thereto (provided,
however, that (A) the failure of the Agents to make such objection shall not relieve the Company of any obligation or liability
hereunder, or affect the Agents’ right to rely on the representations and warranties made by the Company in this Agreement,
and (B) the Company has no obligation to provide the Agents any advance copy of such filing or to provide the Agents an opportunity
to object to such filing if the filing does not name the Agents and does not relate to the transaction herein provided) and
the Company will furnish to the Agents at the time of filing thereof a copy of any document that upon filing is deemed to
be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR;
and (iv) the Company will cause each amendment or supplement to the Prospectus, other than documents incorporated by reference,
to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act, or
in the case of any document to be incorporated therein by reference, to be filed with the Commission as required pursuant
to the Exchange Act, within the time period prescribed (the determination to file or not file any amendment or supplement
with the Commission under this Section 7(a), based on the Company’s reasonable opinion or reasonable objections, shall
be made exclusively by the Company).
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(b)
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Notice
of Commission Stop Orders. The Company will advise the Agents promptly after it receives (i) notice or obtains knowledge
thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration
Statement, (ii) of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, (iii)
of the initiation or threatening of any proceeding for any such purpose or (iv) of any request by the Commission for any amendments
to the Registration Statement or any amendment or supplements to the Prospectus or for additional information related to the
offering of the Placement Shares or for additional information related to the Registration Statement or the Prospectus; and
it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal
if such a stop order should be issued.
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(c)
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Delivery
of Prospectus; Subsequent Changes. During any period in which the Prospectus relating to the Placement Shares is required
to be delivered by the Agents under the Securities Act with respect to the offer and sale of the Placement Shares, (including
in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will
comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and to file on or before
their respective due dates (taking into account any extensions available) all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other
provision of or under the Exchange Act. If during such period any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances then existing, not misleading, or if during such period it is necessary
to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly
notify the Designated Agent to suspend the offering of Placement Shares during such period and the Company will promptly amend
or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or
omission or effect such compliance; provided, however, that the Company may delay any such amendment or supplement
if, as a result of a pending transaction or other development with respect to the Company in the reasonable judgment of the
Company, it is in the best interest of the Company to do so, provided that no Placement Notice is in effect during such time.
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(d)
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Listing
of Placement Shares. During any period in which the Prospectus relating to the Placement Shares is required to be delivered
by the Agents under the Securities Act with respect to the offer and sale of the Placement Shares (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially
reasonable efforts to cause the Placement Shares to be listed on Nasdaq and to qualify the Placement Shares for sale under
the securities laws of such jurisdictions as the Agents reasonably designate and to continue such qualifications in effect
so long as required for the distribution of the Placement Shares; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation or dealer in securities or file a general consent
to service of process in any jurisdiction.
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(e)
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Delivery
of Registration Statement and Prospectus. The Company will furnish to the Agents and their counsel (at the expense of
the Company) copies of the Registration Statement, the Prospectus (including all documents incorporated by reference therein)
and all amendments and supplements to the Registration Statement or Prospectus that are filed with the Commission during any
period in which the Prospectus relating to the Placement Shares is required to be delivered under the Securities Act (including
all documents filed with the Commission during such period that are deemed to be incorporated by reference therein), in each
case as soon as reasonably practicable and in such quantities as the Agents may from time to time reasonably request and,
at the Agents request, will also furnish copies of the Prospectus to each exchange or market on which sales of the Placement
Shares may be made; provided, however, that the Company shall not be required to furnish any document (other than the
Prospectus) to the Agents or their counsel to the extent such document is available on EDGAR.
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(f)
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Earnings
Statement. The Company will make generally available to its security holders as soon as practicable, but in any event
not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement covering a 12-month
period that satisfies the provisions of Section 11(a) and Rule 158 of the Securities Act.
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(g)
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Expenses.
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, in accordance
with the provisions of Section 11 hereunder, will pay all expenses incident to the performance of its obligations hereunder,
including, but not limited to, expenses relating to (i) the preparation, printing and filing of the Registration Statement
and each amendment and supplement thereto, of each Prospectus and of each amendment and supplement thereto, (ii) the preparation,
issuance and delivery of the Placement Shares, (iii) the qualification of the Placement Shares under securities laws in accordance
with the provisions of Section 7(d) of this Agreement, including filing fees (provided, however, that any fees or disbursements
of counsel for the Agents in connection therewith shall be paid by the Agents except as set forth in (viii) below),
(iv) the printing and delivery to the Agents of copies of the Prospectus and any amendments or supplements thereto, and of
this Agreement, (v) the fees and expenses incurred in connection with the listing or qualification of the Placement Shares
for trading on Nasdaq, (vi) the filing fees and expenses, if any, of the Commission, (vii) the filing fees and associated
legal expenses of the Agents’ outside counsel for filings with the FINRA Corporate Financing Department, such legal
expense reimbursement not to exceed $10,000 (in addition to the fees and disbursements referred to in clause (viii) below)
and, (viii) the reasonable fees and disbursements of the Agents’ counsel in an amount not to exceed $50,000 (in
addition to the fees and associated expenses referred to in clause (vii) above).
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(h)
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Use
of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of
Proceeds.”
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(i)
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Notice
of Other Sales. During the pendency of any Placement Notice given hereunder, and for five (5) trading days following the
termination of any Placement Notice given hereunder, the Company shall provide the Agents notice as promptly as reasonably
possible before it offers to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any shares
of Common Stock (other than Placement Shares offered pursuant to the provisions of this Agreement) or securities convertible
into or exchangeable for Common Stock, warrants or any rights to purchase or acquire Common Stock; provided, that such
notice shall not be required in connection with the (i) issuance, grant or sale of Common Stock, options or warrants to purchase
shares of Common Stock, restricted shares of Common Stock, restricted stock units or other equity awards, or Common Stock
issuable upon the exercise of options or other equity awards pursuant to the any stock option, stock bonus or other stock
plan or arrangement described in the Prospectus, (ii) the issuance of securities in connection with an acquisition, merger
or sale or purchase of assets, (iii) the issuance or sale of Common Stock pursuant to any dividend reinvestment plan that
the Company may adopt from time to time provided the implementation of such is disclosed to the Agents in advance, or (iv)
any shares of Common Stock issuable upon the exchange, conversion or redemption of securities or the exercise of warrants,
options or other rights in effect or outstanding. Notwithstanding the foregoing provisions, nothing herein shall be construed
to restrict the Company’s ability, or require the Company to provide notice to the Agents, to file a registration statement
under the Securities Act.
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(j)
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Change
of Circumstances. The Company will, at any time during a fiscal quarter in which the Company intends to tender a Placement
Notice or sell Placement Shares, advise the Agents promptly after it shall have received notice or obtained knowledge thereof,
of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document
provided or required to be provided to the Agents pursuant to this Agreement.
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(k)
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Due
Diligence Cooperation. During the term of this Agreement, the Company will cooperate with any reasonable due diligence
review conducted by the Agents, their affiliates, agents and counsel from time to time in connection with the transactions
contemplated hereby, including, without limitation, providing information and making available documents and senior corporate
officers, during regular business hours and at the Company’s principal offices, as the Agents may reasonably request.
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(l)
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Required
Filings Relating to Placement of Placement Shares. The Company agrees that on such dates as the Securities Act shall require
with respect to the Placement Shares, the Company will (i) file a prospectus supplement with the Commission under the applicable
paragraph of Rule 424(b) under the Securities Act (each and every filing under Rule 424(b), a “Filing Date”),
which prospectus supplement will set forth, within the relevant period, the amount of Placement Shares sold through the Agents,
the Net Proceeds to the Company and the compensation payable by the Company to the Agents with respect to such Placement Shares,
and (ii) deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were
effected as may be required by the rules or regulations of such exchange or market.
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(m)
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Representation
Dates; Certificate. On or prior to the First Delivery Date and thereafter, during the term of this Agreement, and each
time the Company (i) files the Prospectus relating to the Placement Shares or amends or supplements the Registration Statement
or the Prospectus relating to the Placement Shares (other than a prospectus supplement filed in accordance with Section
7(l) of this Agreement) by means of a post-effective amendment, sticker, or supplement but not by means of incorporation
of document(s) by reference to the Registration Statement or the Prospectus relating to the Placement Shares; (ii) files an
annual report on Form 10-K under the Exchange Act; (iii) files its quarterly reports on Form 10-Q under the Exchange Act;
or (iv) files a report on Form 8-K containing amended financial information (other than an earnings release or other information
“furnished” pursuant to Items 2.02 or 7.01 of Form 8-K) under the Exchange Act (each date of filing of one or
more of the documents referred to in clauses (i) through (iv) shall be a “Representation Date”);
the Company shall furnish the Agents (but in the case of clause (iv) above only if (1) a Placement Notice is pending, (2)
the Agents reasonably determine that the information contained in such Form 8-K is material to a holder of Common Stock and
(3) the Agents request such certificate within two (2) Trading Days after the filing of such Form 8-K with the Commission)
with a certificate, in the form attached hereto as Exhibit 7(m) (modified, as necessary, to relate to the Registration
Statement and the Prospectus as then amended or supplemented), within two (2) Trading Days of any Representation Date. The
requirement to provide a certificate under this Section 7(m) shall be automatically waived for any Representation Date
occurring at a time at which no Placement Notice is pending, which waiver shall continue until the earlier to occur of (i)
the date the Company delivers a Placement Notice hereunder (which for such calendar quarter shall be considered a Representation
Date) and (ii) the next occurring Representation Date; provided, however, that such waiver shall not apply for
any Representation Date on which the Company files its annual report on Form 10-K. Notwithstanding the foregoing, if the Company
subsequently decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and did
not provide the Agents with a certificate under this Section 7(m), then before the Company delivers the Placement Notice
or the Agents sells any Placement Shares, the Company shall provide the Agents with a certificate, in the form attached hereto
as Exhibit 7(m), dated the date of the Placement Notice.
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(n)
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Legal
Opinion. On or prior to the First Delivery Date, the Company shall cause to be furnished to the Agents a written opinion
and negative assurance letter of Sichenzia Ross Ference LLP (“Company Counsel”), or other counsel
reasonably satisfactory to the Agents, in form and substance reasonably satisfactory to the Agents, respectively, in each
case dated the date that the same is required to be delivered, modified, as necessary, to relate to the Registration Statement
and the Prospectus as then amended or supplemented. On or prior to the First Delivery Date, the Company shall cause to be
furnished to the Agents a written opinion DTKGC-SRF, special Israeli counsel for the Company and Beyond Air, Ltd. (“Israeli
Counsel”), or other counsel reasonably satisfactory to the Agents, in form and substance reasonably satisfactory
to the Agents, respectively, in each case dated the date that the same is required to be delivered, modified, as necessary,
to relate to the Registration Statement and the Prospectus as then amended or supplemented. On or prior to the First Delivery
Date, the Company shall cause to be furnished to the Agents a written opinion Elmore Patent Law Group, PC., intellectual property
counsel for the Company (“IP Counsel”), or other counsel reasonably satisfactory to the Agents,
in form and substance reasonably satisfactory to the Agents, respectively, in each case dated the date that the same is required
to be delivered, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented.
Thereafter, during the term of this Agreement, within two (2) Trading Days of each Representation Date with respect to which
the Company is obligated to deliver a certificate in the form attached hereto as Exhibit 7(m) for which no waiver is
applicable, the Company shall cause to be furnished to the Agents a written letter of Company Counsel, or other counsel reasonably
satisfactory to the Agents, in form and substance reasonably satisfactory to the Agents, dated the date that the same is required
to be delivered, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented.
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(o)
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Comfort
Letter. On or prior to the First Delivery Date and thereafter, during the term of this Agreement, within two (2) Trading
Days of each Representation Date with respect to which the Company is obligated to deliver a certificate in the form attached
hereto as Exhibit 7(m) for which no waiver is applicable, the Company shall cause its independent accountants to furnish
the Agents letters (the “Comfort Letters”), dated the date the applicable Comfort Letter is delivered,
in form and substance reasonably satisfactory to the Agents, (i) confirming that they are an independent registered public
accounting firm within the meaning of the Securities Act and the Public Company Accounting Oversight Board, (ii) stating,
as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily
covered by accountants’ “comfort letters” to the Agents in connection with registered public offerings (the
first such letter delivered on the date hereof, the “Initial Comfort Letter”) and (iii) updating
the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given
on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented
to the date of such letter.
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(p)
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Market
Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that
constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Placement Shares or (ii) sell, bid for, or purchase the Common Stock
to be issued and sold pursuant to this Agreement, or pay anyone any compensation for soliciting purchases of the Placement
Shares other than the Agents; provided, however, that the Company may bid for and purchase shares of its Common Stock in accordance
with Rule 10b-18 under the Exchange Act.
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(q)
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Insurance.
The Company shall maintain, or cause to be maintained, insurance in such amounts and covering such risks as is reasonable
and customary for the business for which it is engaged.
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(r)
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Compliance
with Laws. The Company and each of its subsidiaries shall use commercially reasonable efforts to maintain, or cause to
be maintained, all material environmental permits, licenses and other authorizations required by federal, state and local
law in order to conduct their businesses as described in the Prospectus, and the Company and each of its subsidiaries shall
conduct their businesses, or cause their businesses to be conducted, in substantial compliance with such permits, licenses
and authorizations and with applicable environmental laws, except where the failure to maintain or be in compliance with such
permits, licenses and authorizations could not reasonably be expected to result in a Material Adverse Change.
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(s)
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Investment
Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor its
subsidiaries will be or become, at any time prior to the termination of this Agreement, an “investment company,”
as such term is defined in the Investment Company Act, assuming no change in the Commission’s current interpretation
as to entities that are not considered an investment company.
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(t)
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Securities
Act and Exchange Act. The Company will use its best efforts to comply with all requirements imposed upon it by the Securities
Act and the Exchange Act as from time to time in force, so far as necessary to permit the continuance of sales of, or dealings
in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.
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(u)
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No
Offer to Sell. Other than a free writing prospectus (as defined in Rule 405 under the Securities Act) approved in advance
by the Company and the Agents, each Agent in its capacity as principal or agent hereunder, neither the Agents nor the Company
(including its agents and representatives, other than the Agents in their capacity as such) will make, use, prepare, authorize,
approve or refer to any written communication (as defined in Rule 405 under the Securities Act), required to be filed with
the Commission, that constitutes an offer to sell or solicitation of an offer to buy Common Stock hereunder.
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(v)
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Sarbanes-Oxley
Act. The Company and its subsidiaries will use commercially reasonable efforts to comply in all material respects with
all effective applicable provisions of the Sarbanes-Oxley Act.
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8.
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Conditions
to the Agents’ Obligations. The obligations of the Agents hereunder with respect to a Placement will be subject
to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the due performance
by the Company of its obligations hereunder, to the completion by the Agents of a due diligence review satisfactory to the
Agents in their reasonable judgment, and to the continuing satisfaction (or waiver by the Agents in their sole discretion)
of the following additional conditions:
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(a)
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Registration
Statement Effective. The Registration Statement shall be effective and shall be available for (i) all sales of Placement
Shares issued pursuant to all prior Placement Notices and (ii) the sale of all Placement Shares contemplated to be issued
by any Placement Notice.
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(b)
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Prospectus
Supplement. The Company shall have filed with the Commission the Prospectus Supplement pursuant to Rule 424(b) under the
Securities Act not later than the Commission’s close of business on the second Business Day following the date of this
Agreement.
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(c)
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No
Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company or any
of its subsidiaries of any request for additional information from the Commission or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective
amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose; or (iv) the occurrence of any event that makes any material statement made
in the Registration Statement or the Prospectus or any material document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related
Prospectus or such documents so that, in the case of the Registration Statement, it will not contain any materially untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein not misleading and, that in the case of the Prospectus, it will not contain any materially 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.
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(d)
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No
Misstatement or Material Omission. the Agents shall not have advised the Company that the Registration Statement or Prospectus,
or any amendment or supplement thereto, contains an untrue statement of fact that in the Agents’ reasonable opinion
is material, or omits to state a fact that in the Agents’ reasonable opinion is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
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(e)
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Material
Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission,
there shall not have been any material adverse change, on a consolidated basis, in the authorized capital stock of the Company
or any Material Adverse Change or any development that could reasonably be expected to result in a Material Adverse Change,
or any downgrading in or withdrawal of the rating assigned to any of the Company’s securities (other than asset-backed
securities) by any rating organization or a public announcement by any rating organization that it has under surveillance
or review its rating of any of the Company’s securities (other than asset-backed securities), the effect of which, in
the case of any such action by a rating organization described above, in the reasonable judgment of the Agents (without relieving
the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable
to proceed with the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus.
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(f)
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Company
Counsel Legal Opinion. The Agents shall have received the opinions and negative assurance letters, as applicable, of Company
Counsel, Israeli Counsel and IP Counsel, required to be delivered pursuant to Section 7(n) on or before the date on which
such delivery of such opinion is required pursuant to Section 7(n).
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(g)
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The
Agents Counsel Legal Opinion. The Agents shall have received from Goodwin Procter LLP, counsel for the Agents, such opinion
or opinions, on or before the date on which the delivery of the Company Counsel legal opinion is required pursuant to Section
7(n), with respect to such matters as the Agents may reasonably require, and the Company shall have furnished to such counsel
such documents as they request for enabling them to pass upon such matters.
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(h)
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Comfort
Letter. The Agents shall have received the Comfort Letter required to be delivered pursuant to Section 7(o) on or before
the date on which such delivery of such Comfort Letter is required pursuant to Section 7(o).
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(i)
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Representation
Certificate. The Agents shall have received the certificate required to be delivered pursuant to Section 7(m) on or before
the date on which delivery of such certificate is required pursuant to Section 7(m).
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(j)
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Secretary’s
Certificate. On or prior to the First Delivery Date, the Agents shall have received a certificate, signed on behalf of
the Company by its corporate Secretary, in form and substance satisfactory to the Agents and their counsel.
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(k)
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No
Suspension. Trading in the Common Stock shall not have been suspended on Nasdaq.
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(l)
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Other
Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(m), the Company
shall have furnished to the Agents such appropriate further information, certificates and documents as the Agents may have
reasonably requested. All such opinions, certificates, letters and other documents shall have been in compliance with the
provisions hereof. The Company will furnish the Agents with such conformed copies of such opinions, certificates, letters
and other documents as the Agents shall have reasonably requested.
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(m)
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Securities
Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act with respect to the Placement
Shares to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable
time period prescribed for such filing by Rule 424.
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(n)
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Approval
for Listing. The Placement Shares shall either have been (i) approved for listing on Nasdaq, subject only to notice of
issuance, or (ii) the Company shall have filed an application for listing of the Placement Shares on Nasdaq at, or prior to,
the issuance of any Placement Notice and Nasdaq shall not have provided any objections thereto.
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(o)
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No
Termination Event. There shall not have occurred any event that would permit the Agents to terminate this Agreement pursuant
to Section 11(a).
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(p)
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FINRA.
FINRA shall have raised no objection to the terms of this offering and the amount of compensation allowable or payable to
the Agents as described in the Prospectus.
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9.
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Indemnification
and Contribution.
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(a)
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Company
Indemnification. The Company agrees to indemnify and hold harmless the Agents, their affiliates and their respective members,
directors, officers, partners, employees and agents, and each person, if any, who (i) controls the Agents within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, or (ii) is controlled by or is under common control
with the Agents, in each case from and against any and all losses, claims, liabilities, expenses and damages (including, but
not limited to, any and all investigative, legal and other expenses reasonably incurred in connection with, and any and all
amounts paid in settlement (in accordance with this Section 9) of, any action, suit, investigation or proceeding between any
of the indemnified parties and any indemnifying parties or between any indemnified party and any third party (including, without
limitation, any governmental or self-regulatory authority, or otherwise, or any claim asserted or threatened), as and when
incurred, to which the Agents, or any such other person, may become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based, directly or indirectly, on (x) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or the Prospectus (or any amendment or supplement to the Registration
Statement or the Prospectus) or in any free writing prospectus or in any application or other document executed by or on behalf
of the Company or based on written information furnished by or on behalf of the Company filed in any jurisdiction in order
to qualify the Common Stock under the securities laws thereof or filed with the Commission, (y) the omission or alleged omission
to state in any such document a material fact required to be stated therein or necessary to make the statements therein (solely
with respect to the Prospectus, in light of the circumstances under which they were made) not misleading or (z) any breach
by any of the indemnifying parties of any of their respective representations, warranties or agreements contained in this
Agreement; provided, however, that this indemnity agreement shall not apply to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Placement Shares pursuant to this Agreement and is caused directly or indirectly
by an untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with the
Agents’ Information (as defined in Section 20(a)). This indemnity agreement will be in addition to any liability that
the Company might otherwise have.
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(b)
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The
Agents Indemnification. The Agents agree to indemnify and hold harmless the Company and its directors and each officer
of the Company that signed the Registration Statement, and each person, if any, who (i) controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control
with the Company against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section
9(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendments thereto), the Prospectus (or any amendment or supplement thereto) or in any
free writing prospectus in reliance upon and in conformity with the Agents’ Information.
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(c)
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Procedure.
Any party that proposes to assert the right to be indemnified under this Section 9 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or
parties under this Section 9, notify each such indemnifying party of the commencement of such action, enclosing a copy of
all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i)
any liability that it might have to any indemnified party otherwise than under this Section 9 and (ii) any liability that
it may have to any indemnified party under the foregoing provision of this Section 9 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying
party will not be liable to the indemnified party for any other legal expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified
party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized
in writing by the indemnifying party, (2) 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, (3) 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 (4) the indemnifying party has not in fact employed
counsel reasonably satisfactory to the indemnified party to assume the defense of such action 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 (plus one local counsel) admitted to practice in such
jurisdiction 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 after the indemnifying party receives a written invoice relating to such
fees, disbursements and other charges in reasonable detail. An indemnifying party will not, in any event, be liable for any
settlement of any action or claim effected without its written consent. No indemnifying party shall, without the prior written
consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section 9 (whether or not any indemnified party is
a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release of each indemnified
party, in form and substance reasonably satisfactory to such indemnified party, from all liability arising out of such claim,
action or proceeding and (2) 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.
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(d)
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Contribution.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 9 is applicable in accordance with its terms but for any reason is held to be unavailable
or insufficient from the Company or the Agents, the Company and the Agents will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any
amount paid in settlement of, any action, suit, investigation or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the Agents, such as persons who control the Company within the
meaning of the Securities Act, officers of the Company who signed the Registration Statement and directors of the Company,
who also may be liable for contribution) to which the Company and the Agents may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one hand and the Agents on the other hand. The
relative benefits received by the Company on the one hand and the Agents on the other hand shall be deemed to be in the same
proportion as the total Net Proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company
bear to the total compensation received by the Agents from the sale of Placement Shares on behalf of the Company. If, but
only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing
sentence but also the relative fault of the Company, on the one hand, and the Agents, on the other, with respect to the statements
or omission that resulted in such loss, claim, liability, expense or damage, or action, suit, investigation or proceeding
in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to, among other things, 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 Agents, 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 Agents agree that it would not be just and equitable if contributions pursuant to this Section
9(d) were to be determined by pro rata allocation 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,
liability, expense, or damage, or action, suit, investigation or proceeding in respect thereof, referred to above in this
Section 9(d) shall be deemed to include, for the purpose of this Section 9(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such action, suit, investigation, proceeding or
claim to the extent consistent with Section 9(c) hereof. Notwithstanding the foregoing provisions of this Section 9(d), the
Agents shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and
no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section
9(d), any person who controls a party to this Agreement within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, any affiliates of the Agents, any members, directors, partners, officers, employees or agents of the
Agents and each person that is controlled by or under common control with either Agent, will have the same rights to contribution
as that party, and each director and officer of the Company who signed the Registration Statement will have the same rights
to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may
be made under this Section 9(d), will notify any such party or parties from whom contribution may be sought, but the omission
to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they
may have under this Section 9(d) except to the extent that the failure to so notify such other party materially prejudiced
the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant
to the last sentence of Section 9(c) hereof, no party will be liable for contribution with respect to any action or claim
settled without its written consent if such consent is required pursuant to Section 9(c) hereof or pursuant to Section 9(e)
hereof.
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(e)
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Settlement
Without Consent if Failure to Reimburse. If an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for reasonable fees and expenses of counsel for which it is entitled to be reimbursed under this Section
9, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 9(a) effected
without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least
30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
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10.
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Representations
and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 9 of this Agreement
and all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as
of their respective dates, regardless of (i) any investigation made by or on behalf of the Agents, any controlling persons,
or the Company (or any of their respective officers, directors, employees or controlling persons), (ii) delivery and acceptance
of the Placement Shares and payment therefor or (iii) any termination of this Agreement.
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(a)
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The
Agents shall have the right by giving notice as hereinafter specified at any time to terminate this Agreement if (i) any Material
Adverse Change, or any development that could reasonably be expected to result in a Material Adverse Change has occurred that,
in the reasonable judgment of the Agents, may materially impair the ability of the Agents to sell the Placement Shares hereunder,
(ii) the Company shall have failed, refused or been unable to perform any agreement on its part to be performed hereunder;
provided, however, in the case of any failure of the Company to deliver (or cause another person to deliver) any certification,
opinion, or letter required under Sections 7(m), 7(n), or 7(o), the Agents’ right to terminate
shall not arise unless such failure to deliver (or cause to be delivered) continues for more than fifteen (15) calendar days
from the date such delivery was required; (iii) any other condition of the Agents’ obligations hereunder is not fulfilled;
(iv) any suspension or limitation of trading in the Placement Shares or in securities generally on Nasdaq shall have occurred;
(v) a general banking moratorium shall have been declared by any of United States federal or New York authorities; or (vi)
there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or
any change in the United States or international financial markets, or any substantial change or development involving a prospective
substantial change in United States or international political, financial or economic conditions that, in the judgment of
the Agents, may materially impair the ability of the Agents to sell the Placement Shares hereunder or to enforce contracts
for the sale of securities. Any such termination shall be without liability of any party to any other party except that the
provisions of Section 7(g) (Expenses), Section 9 (Indemnification and Contribution), Section 10 (Representations
and Agreements to Survive Delivery), Section 16 (Applicable Law; Consent to Jurisdiction) and Section 17 (Waiver
of Jury Trial) hereof shall remain in full force and effect notwithstanding such termination. If the Agents elects to terminate
this Agreement as provided in this Section 11(a), the Agents shall provide the required notice as specified in Section
12 (Notices).
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(b)
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The
Company shall have the right, by giving two (2) days’ prior notice as hereinafter specified to terminate this
Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability
of any party to any other party except that the provisions of Section 7(g), Section 9, Section 10, Section
11(f), Section 16 and Section 17 hereof shall remain in full force and effect notwithstanding such termination.
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(c)
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The
Agents shall have the right, by giving ten (10) days’ prior notice as hereinafter specified to terminate this Agreement
in their sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of
any party to any other party except that the provisions of Section 7(g), Section 9, Section 10, Section
11(f), Section 16 and Section 17 hereof shall remain in full force and effect notwithstanding such termination.
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(d)
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Unless
earlier terminated pursuant to this Section 11, this Agreement shall automatically terminate upon the issuance and
sale of all of the Placement Shares through the Agents on the terms and subject to the conditions set forth herein; provided
that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16
and Section 17 hereof shall remain in full force and effect notwithstanding such termination.
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(e)
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This
Agreement shall remain in full force and effect unless terminated pursuant to Sections 11(a), (b), (c), or
(d) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual
agreement shall in all cases be deemed to provide that Section 7(g), Section 9, Section 10, Section
11(f), Section 16 and Section 17 shall remain in full force and effect.
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(f)
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Any
termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however,
that such termination shall not be effective until the close of business on the date of receipt of such notice by the
Agents or the Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement
Shares, such Placement Shares shall settle in accordance with the provisions of this Agreement.
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(g)
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Subject
to the additional limitations set forth in Section 7 of this Agreement and notwithstanding anything herein to the contrary,
in the event of termination of this Agreement prior to the sale of any Placement Shares, the Agents will only be entitled
to reimbursement of its out of pocket expenses actually incurred.
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12.
|
Notices.
All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms
of this Agreement shall be in writing, unless otherwise specified in this Agreement, and, other than with respect to Placement
Notices delivered pursuant to Section 2 hereof, if sent to the Agents, shall be delivered to the Agents at SunTrust Robinson
Humphrey, Inc., 3333 Peachtree Road, 11th Floor, Atlanta, Georgia 30326, Attention: Equity Syndicate and Oppenheimer
& Co. Inc., 85 Broad Street, New York, New York 10004, Attention: General Counsel; and if to the Company, shall be mailed
or delivered to it at Beyond Air, Inc., 825 East Gate Boulevard, Suite 320, Garden City, New York 11530, Attention: Chief
Executive Officer. Each party to this Agreement may change such address for notices by sending to the parties to this
Agreement written notice of a new address for such purpose. Each such notice or other communication shall be deemed given
(i) when delivered personally or by verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m.,
New York City time, on a Business Day (as defined below), or, if such day is not a Business Day on the next succeeding Business
Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier, (iii) on the Business
Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid)
and (iv) when delivered by electronic communication (“Electronic Notice”), at the time the party
sending Electronic Notice receives verification of receipt by the receiving party, other than via auto-reply. For purposes
of this Agreement, “Business Day” shall mean any day on which the Nasdaq and commercial banks in
the City of New York are open for business.
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13.
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Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and the Agents and their respective
successors and the affiliates, controlling persons, officers and directors referred to in Section 9 hereof. References to
any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party.
Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their
respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement without
the prior written consent of the other party; provided, however, that each Agent may assign its rights and obligations hereunder
to an affiliate of each Agent without obtaining the Company’s consent so long as such affiliate is a registered broker
dealer.
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14.
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Adjustments
for Share Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be
adjusted to take into account any share split, share dividend or similar event effected with respect to the Common Stock.
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15.
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Entire
Agreement; Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement
Notices issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements
and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended except pursuant to a written instrument executed by the Company and the Agents. In the
event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and
effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions
herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only
to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance
with the intent of the parties as reflected in this Agreement.
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16.
|
Applicable
Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal laws
of the State of New York without regard to the principles of conflicts of laws. Each party hereby irrevocably submits to the
non-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 with any transaction contemplated hereby, 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. 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 (certified or registered mail, return receipt
requested) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law.
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17.
|
Waiver
of Jury Trial. The Company and each of the Agents each hereby irrevocably waives any right it may have to a trial by jury
in respect of any claim based upon or arising out of this Agreement or any transaction contemplated hereby.
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18.
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Absence
of Fiduciary Relationship. The Company acknowledges and agrees that:
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(a)
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the
Agents have been retained solely to act as sales agent in connection with the sale of the Common Stock and that no fiduciary,
advisory or agency relationship between the Company and the Agents have been created in respect of any of the transactions
contemplated by this Agreement, irrespective of whether the Agents have advised or is advising the Company on other matters;
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(b)
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the
Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement;
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(c)
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the
Company has been advised that the Agents and their affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and that the Agents have no obligation to disclose such interests and transactions
to the Company by virtue of any fiduciary, advisory or agency relationship; and
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(d)
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the
Company waives, to the fullest extent permitted by law, any claims it may have against the Agents, for breach of fiduciary
duty or alleged breach of fiduciary duty in connection with the sale of the Placement Shares under this Agreement and agrees
that the Agents shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary claim or
to any person asserting a fiduciary duty claim on behalf of or in right of the Company, including stockholders, partners,
employees or creditors of the Company.
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19.
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Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile
or other electronic transmission.
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20.
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Definitions.
As used in this Agreement, the following term has the meaning set forth below:
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(a)
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“Agents’
Information” means solely the following information in the prospectus supplement,
dated April 2, 2020: the last sentence of the seventh paragraph under the
caption “Plan of Distribution” relating to stabilization.
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If
the foregoing correctly sets forth the understanding among the Company, SunTrust and Oppenheimer please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company, SunTrust and Oppenheimer.
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Very
truly yours,
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BEYOND
AIR, INC.
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By
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Name:
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Title:
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Confirmed as of the date first above mentioned:
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SUNTRUST
ROBINSON HUMPHREY, INC.
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By
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Name:
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Title:
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OPPENHEIMER
& CO. INC.
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By
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Name:
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Title:
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SCHEDULE
1
FORM
OF PLACEMENT NOTICE
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From:
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[●]
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Cc:
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[●]
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To:
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[●]
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Date:
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[●]
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Subject:
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At
the Market Offering—Placement Notice
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Ladies
and Gentlemen:
Pursuant to the terms and subject to the
conditions contained in the Sales Agreement among Beyond Air, Inc. (the “Company”), SunTrust Robinson Humphrey,
Inc. (“SunTrust”) and Oppenheimer & Co. Inc. (“Oppenheimer” and together with SunTrust,
the “Agents”) dated April 2, 2020 (the “Agreement”), I hereby request on behalf of
the Company that the Designated Agent sell up to [●] shares of the Company’s common stock, par value $0.0001 per share,
at a minimum market price of $[●] per share. Sales should begin on the date of this Notice and shall continue until [DATE]
[all shares are sold].
SCHEDULE
2
The
Company
Steve Lisi
slisi@beyondair.net
SunTrust
Robinson Humphrey, Inc.
Keith
Carpenter
keith.carpenter@suntrust.com
Geoff
Fennel
geoff.fennel@suntrust.com
Oppenheimer
& Co. Inc.
DL-EquityATMOffering@opco.com
Michael
Margolis
Michaela.Margolis@opco.com
Jack
Terranova
Jack.Terranova@opco.com
Nicholas
Beyar
Nicholas.Beyar@opco.com
SCHEDULE
3
Compensation
The
Designated Agent shall be paid compensation equal to 3.0% of the gross proceeds from the sales of Common Stock
pursuant to the terms of this Agreement.
SCHEDULE
4
Intellectual
Property
See
attached.
Exhibit
7(m)
OFFICER
CERTIFICATE
The
undersigned, the duly qualified and elected ,
of Beyond Air, Inc., a Delaware corporation (“Company”), does hereby certify in such capacity and
on behalf of the Company, pursuant to Section 7(m) of the Sales Agreement dated April 2, 2020 (the
“Sales Agreement”) among the Company and SunTrust Robinson Humphrey, Inc. and Oppenheimer & Co.
Inc., that to the best of the knowledge of the undersigned.
(i)
The representations and warranties of the Company in Section 6 of the Sales Agreement (A) to the extent such representations
and warranties are subject to qualifications and exceptions contained therein relating to materiality or Material Adverse Change,
are true and correct on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof,
except for those representations and warranties that speak solely as of a specific date and which were true and correct as of
such date, and (B) to the extent such representations and warranties are not subject to any qualifications or exceptions, are
true and correct in all material respects as of the date hereof as if made on and as of the date hereof with the same force and
effect as if expressly made on and as of the date hereof except for those representations and warranties that speak solely as
of a specific date and which were true and correct as of such date; and
(ii)
The Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied pursuant to
the Sales Agreement at or prior to the date hereof.
Exhibit
5.1
April
2, 2020
Beyond
Air, Inc.
825
East Gate Blvd., Suite 320
Garden
City, NY 11530
Ladies
and Gentlemen:
You
have requested our opinion with respect to certain matters in connection with the proposed offer and sale by Beyond Air, Inc.,
a Delaware corporation (the “Company”), of up to an aggregate of $50,000,000 of shares of the Company’s
common stock, par value $0.0001 per share (the “Shares”), pursuant to a Registration Statement on Form S-3 (File No.
333-231416) (the “Registration Statement”), which was filed under the Securities Act of 1933, as amended (the “Securities
Act”), with the Securities and Exchange Commission (the “SEC”) on May 13, 2019, and declared effective by the
SEC on July 2, 2019, the base prospectus dated May 13, 2019 contained in the Registration Statement (the “Base Prospectus”),
and the prospectus supplement relating to the proposed offer and sale of the Shares filed with the SEC on April 2, 2020
pursuant to Rule 424(b) of the rules and regulations under the Securities Act (the “Prospectus Supplement”, and together
with the Base Prospectus, the “Prospectus”). We understand that the Shares are proposed to be offered and sold by
the Company through SunTrust Robinson Humphrey, Inc. and Oppenheimer & Co. Inc., as sales agents (the “Agents”),
pursuant to that certain At-The-Market Equity Offering Sales Agreement, dated as of April 2, 2020, by and between the Company
and the Agents (the “Sales Agreement”).
In
connection with the preparation of this opinion, we have examined the Registration Statement and the Prospectus and such documents
and considered such questions of law as we have deemed necessary or appropriate. We have assumed the authenticity of all documents
submitted to us as originals, the conformity to originals of all documents submitted to us as copies thereof and the genuineness
of all signatures. As to questions of fact material to our opinions, we have relied upon the certificates of certain officers
of the Company without independent investigation or verification.
Based
on the foregoing, we are of the opinion that the Shares have been duly authorized and, when issued and sold in the manner described
in the Sales Agreement and in accordance with the Registration Statement and the Prospectus, will be validly issued, fully paid
and non-assessable.
We
are members of the bar of the State of New York. We express no opinion as to the laws of any jurisdiction other than the laws
of the State of New York, the corporation laws of the State of Delaware and the federal laws of the United States of America.
Insofar as the matters covered by this opinion may be governed by the laws of other states or the corporate laws of the State
of Delaware, we have assumed that such laws are identical in all respects to the laws of the State of New York.
We
hereby consent to the use of this opinion as Exhibit 5.1 to the Company’s Current Report on Form 8-K filed with the SEC
on the date hereof, which is incorporated by reference into the Registration Statement. In giving such consent, we do not hereby
admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules
and regulations thereunder.
This
opinion is intended solely for use in connection with the offer and sale of the Shares pursuant to the Sales Agreement and is
not to be relied upon for any other purpose or delivered to or relied upon by any other person without our prior written consent.
This opinion is rendered as of the date hereof and based solely on our understanding of facts in existence as of such date after
the examination described in this opinion. We assume no obligation to advise you of any fact, circumstance, event or change in
the law or the facts that may hereafter be brought to our attention whether or not such occurrence would affect or modify the
opinions expressed herein.
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Very
truly yours,
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/s/
Sichenzia Ross Ference LLP
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1185
Avenue of the Americas │ 37th Floor │ New York, NY │10036
T
(212) 930 9700 │ F (212) 930 9725 │ WWW.SRF.LAW