As
filed with the Securities and Exchange Commission on August 16, 2021
Registration
No. 333-258092
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
AMENDMENT NO. 2
TO
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
(State
or other jurisdiction of
incorporation or organization)
|
|
2834
(Primary
Standard Industrial
Classification
Code Number)
|
|
20-2932652
(I.R.S.
Employer
Identification
No.)
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100
Overlook Center, Suite 102
Princeton,
New Jersey 08540
Telephone:
609-375-2227
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Pankaj
Mohan, Ph.D.
CEO
and Chairman
Sonnet
BioTherapeutics Holdings, Inc.
100
Overlook Center, Suite 102
Princeton,
New Jersey 08540
Tel:
(609) 375-2227
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
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Please
send copies of all communications to:
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Steven
M. Skolnick, Esq.
Alexander
E. Dinur, Esq.
Lowenstein Sandler LLP
1251 Avenue of the Americas
New York, NY 10020
Telephone: (212) 262-6700
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Michael
D. Maline, Esq.
Anna
K. Spence, Esq.
DLA Piper LLP (US)
1251 Avenue of the Americas
New York, NY 10020
Telephone: (212) 335-4500
|
Approximate
date of commencement of proposed sale to the public:
As
soon as practicable after the effective date of this registration statement.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box: [X]
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering: [ ]
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ]
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer [ ]
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Accelerated
filer [ ]
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Non-accelerated
filer [X]
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Smaller
reporting company [X]
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|
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Emerging
growth company [ ]
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]
CALCULATION
OF REGISTRATION FEE
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Title of each class of Securities to be Registered
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Proposed Maximum
Aggregate Offering
Price (1)
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Amount of
Registration Fee(6)
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Common stock, par value $0.0001 per share (2)(3)(4)
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$
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34,500,000
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$
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3,763.95
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Pre-funded warrants to purchase shares of common stock and common stock issuable upon exercise thereof (2)(3)(4)
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30,000,000
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-
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Common warrants to purchase shares of common stock and
common stock issuable upon exercise thereof(3)
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34,500,000
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3,763.95
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Underwriter warrants to purchase shares of common stock and common stock issuable upon exercise thereof(3)(5)
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750,000
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81.83
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Total
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$
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69,750,000
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$
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7,609.73
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(1)
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Estimated
solely for the purpose of calculating the amount of the registration fee in accordance with
Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”).
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(2)
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Includes
the offering price of the shares of common stock (or, if applicable, pre-funded warrants).
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(3)
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Includes
the aggregate offering price of the additional securities that the underwriters have
the option to purchase. Pursuant to Rule 416 under the Securities Act, the securities being
registered hereunder include such indeterminate number of additional securities as may be
issuable to prevent dilution resulting from stock splits, dividends or similar transactions.
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(4)
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The
proposed maximum aggregate offering price of the common stock proposed to be sold in the
offering will be reduced on a dollar-for-dollar basis based on the aggregate offering price
of the pre-funded warrants offered and sold in the offering (plus the aggregate exercise
price of the common stock issuable upon exercise of the pre-funded warrants), and as such
the proposed aggregate maximum offering price of the common stock and pre-funded warrants
(including the common stock issuable upon exercise of the pre-funded warrants), if any, is
$34,500,000 (including the underwriters’ option to purchase additional shares
of common stock).
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(5)
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Represents
warrants to purchase a number of shares of common stock equal to 2.0% of the number of shares
of common stock sold in this offering (including the number of shares of common stock underlying
the pre-funded warrants, but excluding the underwriters’ option to purchase additional
shares of common stock) at an exercise price equal to % of the offering price per share of
common stock.
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(6)
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$3,845.78
of the filing fee was previously paid.
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The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date
as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The
information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities
and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED AUGUST 16, 2021
PROSPECTUS
Up
to 29,702,970 Shares of Common Stock
Pre-Funded Warrants to Purchase up to 29,702,970
Shares of Common Stock
Common Warrants to Purchase
up to 29,702,970 Shares of Common Stock
Shares of Common Stock underlying
the Pre-Funded Warrants and Common Warrants
We are offering up to 29,702,970 shares of
our common stock and common warrants to purchase an aggregate of 29,702,970 shares of our common stock (and the shares of common stock
that are issuable from time to time upon exercise of the common warrants). We are also offering to certain purchasers whose purchase
of shares of common stock in this offering would otherwise result in the purchaser, together with its affiliates and certain related
parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock immediately
following the consummation of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants to purchase
shares of our common stock, in lieu of shares of common stock that would otherwise result in such purchaser’s beneficial ownership
exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock. Each pre-funded warrant will be exercisable
for one share of our common stock. The purchase price of each pre-funded warrant and accompanying common warrant will be equal
to the price at which a share of common stock and accompanying common warrant are sold to the public in this offering, minus $0.0001,
and the exercise price of each pre-funded warrant will be $0.0001 per share. The pre-funded warrants will be immediately exercisable
and may be exercised at any time until all of the pre-funded warrants are exercised in full. This offering also relates to the shares
of common stock issuable upon exercise of any pre-funded warrants sold in this offering. Each share of common stock and pre-funded
warrant is being sold together with a common warrant to purchase one share of our common stock at an exercise price of $ per share (representing
100% of the price at which a share of common stock and accompanying common warrant are sold to the public in this offering). The common
warrants will be exercisable immediately and will expire five years from the date of issuance. For each pre-funded warrant we sell,
the number of shares of common stock we are offering will be decreased on a one-for-one basis. Because we will issue a common warrant
for each share of our common stock and for each pre-funded warrant to purchase one share of our common stock sold in this offering, the
number of common warrants sold in this offering will not change as a result of a change in the mix of the shares of our common stock
and pre-funded warrants sold. The shares of common stock and pre-funded warrants, and the accompanying common warrants, can only be purchased
together in this offering but will be issued separately and will be immediately separable upon issuance.
Our
common stock is listed on The Nasdaq Capital Market under the symbol “SONN.” On August 12, 2021, the last reported
sale price of our common stock on The Nasdaq Capital Market was $1.01 per share.
The public offering price per share of common stock
and accompanying common warrant and any pre-funded warrant and accompanying common warrant, as the case may be, will be
determined by us at the time of pricing, may be at a discount to the current market price, and the recent market price used throughout
this prospectus may not be indicative of the final offering price. There is no established public trading market for the pre-funded warrants
or common warrants, and we do not expect a market to develop. In addition, we do not intend to apply for a listing of the pre-funded
warrants or common warrants on any national securities exchange. Without an active trading market, the liquidity of the pre-funded
warrants and common warrants will be limited.
You
should read this prospectus, together with additional information described under the headings “Information Incorporated by Reference”
and “Where You Can Find More Information,” carefully before you invest in any of our securities.
Investing
in our securities involves a high degree of risk. See the section entitled “Risk Factors” beginning on page 8 of this prospectus
and in the documents incorporated by reference into this prospectus for a discussion of risks that should be considered in connection
with an investment in our securities.
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Per Share
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Per Pre-Funded Warrant
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Per Common Warrant
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Total
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Public offering price
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$
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$
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$
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$
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Underwriting discounts and commissions (1)
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$
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$
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$
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$
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Proceeds to us, before expenses
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$
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$
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$
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$
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(1)
See “Underwriting” for additional information regarding underwriting compensation.
We have granted the underwriters an option for a
period of 30 days from the date of this prospectus to purchase up to an additional shares
of common stock and/or additional common warrants to purchase up to shares
of common stock from us, in any combination thereof, at the public offering price per share and public offering price per warrant,
respectively, less the underwriting discounts and commissions.
The
delivery of the shares of common stock and any pre-funded warrants and common warrants to purchasers is expected to be made on
or about , 2021.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Sole
Book-Running Manager
BTIG
Lead Manager
Chardan
The
date of this prospectus is , 2021.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
We
incorporate by reference important information into this prospectus. You may obtain the information incorporated by reference without
charge by following the instructions under “Where You Can Find More Information.” You should carefully read this prospectus
as well as additional information described under “Information Incorporated by Reference,” before deciding to invest in our
securities.
Neither
we nor the underwriters have authorized anyone to provide you with additional information or information different from that contained
or incorporated by reference in this prospectus filed with the Securities and Exchange Commission (the “SEC”). We take no
responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The underwriters
are offering to sell, and seeking offers to buy, our securities only in jurisdictions where offers and sales are permitted. The information
contained in this prospectus, or any document incorporated by reference in this prospectus, is accurate only as of the date of those
respective documents, regardless of the time of delivery of this prospectus or any sale of our securities. Our business, financial condition,
results of operations and prospects may have changed since that date.
The
information incorporated by reference or provided in this prospectus contains statistical data and estimates, including those relating
to market size and competitive position of the markets in which we participate, that we obtained from our own internal estimates and
research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Industry publications,
studies and surveys generally state that they have been obtained from sources believed to be reliable. While we believe our internal
company research is reliable and the definitions of our market and industry are appropriate, neither this research nor these definitions
have been verified by any independent source.
For
investors outside the United States (“U.S.”): We and the underwriters have not done anything that would permit this
offering or the possession or distribution of this prospectus in any jurisdiction where action for those purposes is required, other
than in the U.S. Persons outside the U.S. who come into possession of this prospectus must inform themselves about, and observe any restrictions
relating to, the offering of the securities and the distribution of this prospectus outside of the U.S.
CAUTIONARY
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements that involve substantial risks and uncertainties for purposes of the safe harbor provided
by the Private Securities Litigation Reform Act of 1995. All statements contained in this prospectus other than statements of historical
fact, including statements regarding our strategy, future operations, future financial position, liquidity, future revenue, projected
expenses, results of operations, expectations concerning the timing and our ability to commence and subsequently report data from planned
non-clinical studies and clinical trials, prospects, plans and objectives of management are forward-looking statements. The words “believe,”
“may,” “will,” “estimate,” “continue,” “anticipate,” “intend,”
“plan,” “expect,” “predict,” “potential,” “opportunity,” “goals,”
or “should,” and similar expressions are intended to identify forward-looking statements. Such statements are based on management’s
current expectations and involve risks and uncertainties. Actual results and performance could differ materially from those projected
in the forward-looking statements as a result of many factors.
We
based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe
may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives,
and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those
described in “Risk Factors” in this prospectus, and under a similar heading in any other annual, periodic or current report
incorporated by reference into this prospectus or that we may file with the SEC in the future. Moreover, we operate in a very competitive
and rapidly changing environment. New risks emerge quickly and from time to time. It is not possible for our management to predict all
risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks,
uncertainties and assumptions, the future events and trends discussed in this prospectus, may not occur and actual results could differ
materially and adversely from those anticipated or implied in the forward-looking statements. We undertake no obligation to revise or
publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties,
readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are qualified in
their entirety by this cautionary statement.
You
should also read carefully the factors described in the “Risk Factors” section of this prospectus, and under a similar heading
in any other annual, periodic or current report incorporated by reference into this prospectus, to better understand the risks and uncertainties
inherent in our business and underlying any forward-looking statements. You are advised to consult any further disclosures we make on
related subjects in our future public filings.
PROSPECTUS
SUMMARY
This
summary highlights information about our company, this offering and information contained in greater detail in other parts of this prospectus
or incorporated by reference into this prospectus from our filings with the SEC listed in the section entitled “Information Incorporated
by Reference.” Because it is only a summary, it does not contain all of the information that you should consider before purchasing
our securities in this offering and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information
appearing elsewhere or incorporated by reference into this prospectus. You should read the entire prospectus, the registration statement
of which this prospectus is a part, and the information incorporated by reference into this prospectus in their entirety, including the
“Risk Factors” and our financial statements and the related notes incorporated by reference into this prospectus, before
purchasing our securities in this offering.
Except
as otherwise indicated herein or as the context otherwise requires, references in this prospectus to “Sonnet Holdings,” “the
Company,” “we,” “us” and “our” refer to Sonnet BioTherapeutics Holdings, Inc. and our consolidated
subsidiaries.
Overview
Sonnet
BioTherapeutics Holdings, Inc., is a clinical stage, oncology-focused biotechnology company with a proprietary platform for innovating
biologic medicines of single- or bi-specific action. Known as FHAB™ (Fully Human Albumin Binding), the technology utilizes
a fully human single chain antibody fragment that binds to and “hitch-hikes” on human serum albumin for transport to target
tissues. We designed the construct to improve drug accumulation in specific tissues, as well as to extend the duration of activity in
the body. FHAB development candidates are produced in a mammalian cell culture, which enables glycosylation, thereby reducing
the risk of immunogenicity. We believe our FHAB technology, for which we received a U.S. patent in June 2021, is a distinguishing
feature of our biopharmaceutical platform that is well suited for future drug development across a range of human disease areas,
including in oncology, autoimmune, pathogenic, inflammatory, and hematological conditions.
Our
current internal pipeline development activities are focused on cytokines, a class of cell signaling peptides that, among other important
functions, serve as potent immunomodulatory agents. Working both independently and synergistically, specific cytokines have shown the
ability to modulate the activation and maturation of immune cells that fight cancer and pathogens. However, because they do not preferentially
accumulate in specific tissues and are quickly eliminated from the body, the conventional approach to achieving a treatment effect with
cytokine therapy typically requires the administration of high and frequent doses. This can result in a reduced treatment effect accompanied
by the potential for systemic toxicity, which poses challenges to the therapeutic application of this class of drugs.
Our
lead proprietary asset, SON-1010, is a fully human version of Interleukin 12 (“IL-12”), covalently linked to the FHAB
construct, for which we intend to pursue clinical development in solid tumor indications, including non-small cell lung cancer and head
and neck cancer. Sonnet has completed a nonhuman primate (“NHP”) GLP toxicity study with SON-1010 and is preparing an Investigational
New Drug (“IND”) application for submission to the FDA with the goal of initiating a Phase 1 clinical trial during the second
half of 2021 and having initial top line clinical safety data available during the first half of 2022. The Company acquired the
global development rights to our most advanced compound, a fully human version of Interleukin 6 (“IL-6”), in April 2020.
Going forward, we will exclusively refer to this candidate as SON-080, for its target indications of Chemotherapy-Induced Peripheral
Neuropathy (“CIPN”) and Diabetic Peripheral Neuropathy (“DPN”), the latter of which had previously been known
as the SON-081 program. Sonnet intends to file an IND for a U.S. Phase 1b/2a pilot-scale efficacy study with SON-080 in CIPN during the
second half of 2021 that could yield initial top line clinical safety data during the first half of 2022. Pursuant to a license
agreement the Company entered with New Life in May 2021, we and New Life will be jointly responsible for leading the development program
for SON-080 in DPN with the objective of initiating an ex-US Phase 1b/2a pilot-scale efficacy study during the second half of 2021 or
first half of 2022 that could yield initial top line clinical safety data as early as the first half of 2022. Regarding our lead bispecific
candidate, SON-1210, which combines Interleukins 12 and 15 (“IL-15”) covalently linked to the FHAB construct,
we intend to file an IND to begin human clinic testing during the first half of 2022.
Recent
Developments
ATM
Program
On
February 5, 2021, we entered into an at-the-market (“ATM”) sales agreement with BTIG, LLC (“BTIG”), acting in
its capacity as the sales agent (the “Sales Agreement”). On June 14, 2021, we completed the issuance of shares available
under the Sales Agreement, pursuant to which we had the ability to offer and sell, from time-to-time, through BTIG, shares of our common
stock having an aggregate offering price of up to $15,875,000. From February 5, 2021 through June 14, 2021, we sold an aggregate of 7,454,238
Shares for aggregate gross proceeds of $15,874,999 and paid BTIG an aggregate of $476,250 in commissions.
Patent
Issuance
On
June 8, 2021, we announced that the United States Patent and Trademark Office has issued U.S. Patent No. 11,028,166 entitled, “Albumin
Domain Fusion Proteins”. The patent covers our FHAB technology and includes therapeutic fusion proteins that utilize
FHAB for tumor targeting and retention and provide extended pharmacokinetics (“PK”). The patent carries a term
effective until March 2039, inclusive of the 399-day Patent Term Extension.
SON-1010
Non-Human Primate Toxicology Study
On
May 10, 2021, we announced that we completed a successful preclinical nonhuman primate (“NHP”) GLP repeat-dose study of SON-1010,
a proprietary version of Interleukin 12 (“IL-12”) configured using our FHAB platform. The objectives of the study
were to evaluate the toxicity of SON-1010 in NHP using a subcutaneous, repeat-dose regimen at three different dose levels versus untreated
controls and to evaluate the potential reversibility of any adverse findings.
Study
results included:
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●
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The
No Observed Adverse Event Level following repeated administration was more than 50 times
the anticipated equivalent human clinical dose in NHP with no evidence of cytokine release
syndrome.
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●
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PK
analysis of serum samples confirmed an enhanced profile of IL12-FHAB over recombinant
human IL-12, with a half-life around 40 hours in NHPs.
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●
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A
significant increase in Interferon-γ, a key pleiotropic cytokine associated with anti-tumor
mechanisms, was observed following dosing with IL12-FHAB.
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●
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SON-1010
related changes in clinical observations, body weight, clinical pathology, cytokines, and
immunophenotyping were seen, all of which were consistent with on-target effects previously
observed in nonhuman primates.
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●
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By
day 38 all study subjects recovered to baseline (pre-study) values.
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●
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Repeat
dosing administration was tolerated at all dose levels examined.
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Out-Licensing
Agreement with New Life Therapeutics
On
May 2, 2021, we entered into a License Agreement (the “Agreement”) with New Life Therapeutics PTE, LTD. (“New Life”).
Pursuant to the Agreement, we granted New Life an exclusive license (with the right to sublicense) to develop and commercialize pharmaceutical
preparations containing a specific recombinant human interleukin-6 (or any derivatives, fragments or conjugates thereof) (the “Compound”)
(such preparations, the “Products”) for the prevention, treatment or palliation of diabetic peripheral neuropathy in humans
(the “DPN Field”) in Malaysia, Singapore, Indonesia, Thailand, Philippines, Vietnam, Brunei, Myanmar, Lao PDR and Cambodia
(the “Exclusive Territory”). New Life may exercise the option to expand (1) the field of the exclusive license to include
the prevention, treatment or palliation of chemotherapy-induced peripheral neuropathy in humans (the “CIPN Field”), which
option is non-exclusive and will expire on December 31, 2021; and/or (2) the territorial scope of the license to include the People’s
Republic of China, Hong Kong and/or India (the “Expanded Territory”), which option is exclusive and will also expire on December
31, 2021. We are excluded from developing, using, selling or otherwise commercializing any Compounds or Products for use in the DPN Field
in the Exclusive Territory during the term of the Agreement.
We
retained all global rights to manufacture Compounds and Products. We and New Life shall enter into a follow-on development supply agreement
and subsequent commercial supply agreement pursuant to which we shall supply to New Life Products for development and commercialization
thereof in the DPN Field (and the CIPN Field, if applicable) in the Exclusive Territory (and the Expanded Territory, as applicable) on
terms to be negotiated by the parties.
Pursuant
to the terms of the Agreement, New Life will bear the cost of, and be responsible for, among other things, all costs associated with
conducting clinical studies and additional non-clinical studies (if any, subject to both parties’ approval), preparing and filing
applications for regulatory approval and undertaking other developmental and regulatory activities for and commercializing Products in
the DPN Field (and the CIPN Field, if applicable) in the Exclusive Territory (and the Expanded Territory, as applicable). We and New
Life will co-own the clinical data resulting from the Phase 1b/2a study, and New Life will own and maintain all regulatory filings and
approvals for Products in the Exclusive Territory (and the Expanded Territory, as applicable).
In
consideration of the license and other rights granted by us, New Life paid us a $500,000 upfront cash payment and is obligated to pay
a deferred license fee of an additional $1,000,000 at the time of the satisfaction of certain milestones as well as potential additional
milestone payments to us totaling up to $19,000,000 subject to the achievement of certain development and commercialization milestones.
In addition, during the Royalty Term (as defined below), New Life is obligated to pay us double digit tiered royalties ranging from 12%
to 30% based on annual net sales of Products in the Territory. The “Royalty Term” means, on a Product-by-Product and a country-by-country
basis in the Exclusive Territory, the period commencing on the date of the first commercial sale (subject to certain conditions) of such
Product in such country in the Exclusive Territory (and the Expanded Territory, as applicable) and continuing until New Life ceases commercialization
of such Product in the DPN Field (or CIPN Field, if applicable). In the event New Life (i) files for an initial public offering or (ii)
is subject to a Change of Control, the royalty obligations may be converted to equity subject to mutual agreement of the parties.
In
addition, New Life shall pay to us a percentage, in the double digits, of all revenue received through sub-licensing of each Product,
subject to certain exclusions.
We
retained the sole responsibility to pay our third-party licensors to the extent such obligations are applicable to the rights granted
to New Life with respect to the Products and shall remain liable for all obligations under the license related to the Compounds and Products
between us and ARES Trading SA.
The
Agreement will remain in effect on a Product-by-Product, country-by-country basis and will expire upon the expiration of the Royalty
Term for the last-to-expire Product in the last-to-expire country, subject to (i) each party’s early termination rights including
for material breach or insolvency or bankruptcy of the other party and (ii) our Buy Back Right and New Life’s Give Back Right (as
defined below).
In
addition, New Life granted to us an exclusive option to buy back the rights granted by us to New Life and we granted New Life the right
to give back the rights with respect to Products in the DPN Field and/or the CIPN Field (if applicable) in one or more countries in the
Exclusive Territory (and the Expanded Territory, as applicable) on terms to be agreed upon, which options will expire upon the initiation
of a Phase III Trial for the applicable Product.
Corporate
Information
We
were organized on October 21, 1999, under the name Tulvine Systems, Inc., under the laws of the State of Delaware. On April 25, 2005,
Tulvine Systems, Inc. formed a wholly owned subsidiary, Chanticleer Holdings, Inc., and on May 2, 2005, Tulvine Systems, Inc. merged
with, and changed its name to, Chanticleer Holdings, Inc. On April 1, 2020, we completed our business combination with Sonnet BioTherapeutics,
Inc. (“Sonnet”), in accordance with the terms of the Agreement and Plan of Merger, dated as of October 10, 2019, as amended,
by and among us, Sonnet and Biosub Inc., a wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which Merger
Sub merged with and into Sonnet, with Sonnet surviving as a wholly owned subsidiary of us (the “Merger”). In connection with,
and immediately prior to the completion of the Merger, we effected a reverse stock split of our common stock, at a ratio of 1-for-26.
In connection with the Merger, we changed our name from “Chanticleer Holdings, Inc.” to “Sonnet BioTherapeutics Holdings,
Inc.,” and the business conducted by us became the business conducted by Sonnet.
Our
principal executive offices are located at 100 Overlook Center, Suite 102, Princeton, New Jersey 08540, and our telephone number is (609)
375-2227. Our website is www.sonnetbio.com. Our website and the information contained on, or that can be accessed through, our website
shall not be deemed to be incorporated by reference in, and are not considered part of, this prospectus. You should not rely on any such
information in making your decision whether to purchase our common stock.
This
prospectus and the information incorporated by reference into this prospectus contain references to our trademarks and to trademarks
belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus and the information incorporated
by reference into this prospectus, including logos, artwork, and other visual displays, may appear without the ® or TM symbols, but
such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights
or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’
trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other company.
THE
OFFERING
|
Common Stock to be
Offered
|
29,702,970
Shares (or 34,158,415 shares if the underwriters’
option to purchase additional shares is exercised in full), based on the sale of our common stock at an assumed combined public
offering price of $1.01 per share of common stock and accompanying common warrant, which is the last reported sale
price of our common stock on August 12, 2021, and no sale of any pre-funded warrants.
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Pre-funded Warrants
to be Offered
|
We
are also offering to certain purchasers whose purchase of shares of common stock in this
offering would otherwise result in the purchaser, together with its affiliates and certain
related parties, beneficially owning more than 4.99% (or, at the election of the purchaser,
9.99%) of our outstanding common stock immediately following the consummation of this offering,
the opportunity to purchase, if such purchasers so choose, pre-funded warrants to purchase
shares of common stock, in lieu of shares of common stock that would otherwise result in
any such purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the
purchaser, 9.99%) of our outstanding common stock. Each pre-funded warrant will be exercisable
for one share of our common stock. The purchase price of each pre-funded warrant and accompanying
common warrant will equal the price at which the share of common stock and accompanying
common warrant are being sold to the public in this offering, minus $0.0001, and the
exercise price of each pre-funded warrant will be $0.0001 per share. The pre-funded warrants
will be exercisable immediately and may be exercised at any time until all of the pre-funded
warrants are exercised in full. This offering also relates to the shares of common stock
issuable upon exercise of any pre-funded warrants sold in this offering. For each pre-funded
warrant we sell, the number of shares of common stock we are offering will be decreased on
a one-for-one basis. Because we will issue a common warrant for each share of our common
stock and for each pre-funded warrant to purchase one share of our common stock sold in this
offering, the number of common warrants sold in this offering will not change as a result
of a change in the mix of the shares of our common stock and pre-funded warrants sold.
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|
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Common Warrants to be Offered
|
Common warrants to purchase an aggregate of 29,702,970
shares of our common stock (or 34,158,415 shares if the underwriters’ option to purchase additional common warrants is exercised
in full), based on the sale of our common stock at an assumed combined public offering price of $1.01 per share of common stock and
accompanying common warrant, which is the last reported sale price of our common stock on August 12, 2021. Each share of our common
stock and each pre-funded warrant to purchase one share of our common stock is being sold together with a common warrant to purchase
one share of our common stock. Each common warrant will have an exercise price of $ _ per share (representing 100% of the price at
which a share of common stock and accompanying common warrant are sold to the public in this offering), will be immediately exercisable
and will expire on the fifth anniversary of the original issuance date. The shares of common stock and pre-funded warrants, and the
accompanying common warrants, as the case may be, can only be purchased together in this offering but will be issued separately and
will be immediately separable upon issuance. This prospectus also relates to the offering of the shares of common stock issuable
upon exercise of the common warrants.
|
|
|
|
|
Common Stock to be
Outstanding Immediately After this Offering (1)
|
54,659,857
shares (or 59,115,302 shares if the underwriters’
option to purchase additional shares is exercised in full), assuming in each case none of the common warrants issued in this offering
are exercised, and based on the sale of our common stock at an assumed combined public offering price of $1.01 per share
of common stock, which is the last reported sale price of our common stock on August 12, 2021, and no sale of any pre-funded
warrants.
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Option
to Purchase Additional Securities
|
We
have granted the underwriters an option, exercisable within 30 days after the closing of this offering, to acquire up to an additional
shares of common stock and/or additional common warrants to purchase up to shares of common stock from us, in any combination
thereof, at the public offering price per share and public offering price per warrant, respectively, less underwriting discounts
and commissions on the same terms as set forth in this prospectus.
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Use of Proceeds
|
We
estimate that the net proceeds from this offering will be approximately $27.4 million, or
$31.6 million if the underwriters exercise their option to purchase additional securities
in full, based on an assumed combined public offering price of $1.01 per
share of common stock and accompanying common warrant, which was the last reported
sales price of our common stock on The Nasdaq Capital Market on August 12, 2021, and
assuming no sale of any pre-funded warrants, after deducting estimated underwriting discounts
and commissions and estimated offering expenses payable by us, and excluding the proceeds,
if any, from the exercise of the common warrants in this offering.
We
currently intend to use the net proceeds from this offering for research and development, including clinical trials, working capital and
general corporate purposes. See “Use of Proceeds” for additional information.
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|
Risk Factors
|
An
investment in our securities involves a high degree of risk. See “Risk Factors” beginning on page 8 of this prospectus
and the other information included and incorporated by reference in this prospectus for a discussion of the risk factors you should
carefully consider before deciding to invest in our securities.
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National Securities
Exchange Listing
|
Our
common stock is listed on The Nasdaq Capital Market under the symbol “SONN.” Additionally, there is no established public
trading market for the pre-funded warrants or common warrants, and we do not expect a market to develop. In addition, we do
not intend to apply to list the pre-funded warrants or common warrants on any national securities exchange or other nationally
recognized trading system. Without an active trading market, the liquidity of the pre-funded warrants and common warrants
will be limited.
|
(1) The number of shares of our common stock that
will be outstanding immediately after this offering is based on 24,956,887 shares of common stock outstanding as of August
10, 2021, and assumes the sale and issuance by us of 29,702,970 shares of common stock (or 34,158,415 shares if the underwriters’
option to purchase additional shares is exercised in full) and no sale of any pre-funded warrants in this offering and excludes:
●
363,268 shares of common stock underlying unvested restricted stock units outstanding as of August 10, 2021;
●
640,029 shares of common stock reserved for future issuance under the 2020 Omnibus Equity Incentive Plan as of August 10,
2021;
●
11,495,408 shares of common stock issuable upon the exercise of warrants outstanding as of August 10, 2021, with a weighted average
exercise price of $3.55 per share;
● up to 29,702,970 shares of common
stock issuable upon the exercise of the pre-funded warrants issued in this offering;
●
up to 29,702,970 shares (or 34,158,415 shares if the underwriters’ option to purchase additional common warrants is exercised in
full) of common stock issuable upon the exercise of the common warrants issued in this offering; and
●
up to 594,059 shares of common stock issuable upon the exercise of the underwriter warrants issued in this offering.
Unless otherwise indicated, this prospectus reflects
and assumes no issuances or exercises of any other outstanding shares, options or warrants after August 10, 2021 and no exercise
by the underwriters of their option to purchase additional shares.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. We urge you to carefully consider all of the information contained in this prospectus
and other information which may be incorporated by reference in this prospectus as provided under “Information Incorporated by
Reference.” In particular, you should consider the risk factors below, together with those under the heading “Risk Factors”
in our most recent Annual Report on Form 10-K, which is incorporated by reference into this prospectus, as those risk factors are amended
or supplemented by our subsequent filings with the SEC. These risks and uncertainties are not the only risks and uncertainties we face.
Additional risks and uncertainties not currently known to us, or that we currently view as immaterial, may also impair our business.
If any of the risks or uncertainties described below or in our SEC filings or any additional risks and uncertainties actually occur,
our business, financial condition, results of operations and cash flow could be materially and adversely affected. As a result, you could
lose all or part of your investment.
RISKS
RELATED TO THIS OFFERING
If
you purchase shares of common stock in this offering, you will experience immediate and substantial dilution in your investment. You
will experience further dilution if we issue additional equity or equity-linked securities in the future.
Because
the price per share of our common stock being offered is substantially higher than the as adjusted net tangible book value per share
of our common stock, you will suffer immediate and substantial dilution with respect to the net tangible book value of the common stock
you purchase in this offering. Based on an assumed combined public offering price of $1.01 per share of common stock and
accompanying common warrant being sold in this offering, and our net tangible book value as of June 30, 2021, if you purchase
shares of common stock in this offering, you will suffer immediate and substantial dilution of $0.48 per share with respect to
the as adjusted net tangible book value of the common stock. See the section entitled “Dilution” for a more detailed
discussion of the dilution you will incur if you purchase common stock in this offering.
If
we issue additional shares of common stock, or securities convertible into or exchangeable or exercisable for shares of common stock,
our stockholders, including investors who purchase shares of common stock and/or pre-funded warrants and accompanying warrants
in this offering, will experience additional dilution, and any such issuances may result in downward pressure on the price of our common
stock. We also cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that
is equal to or greater than the price per share paid by investors in this offering, and investors purchasing shares or other securities
in the future could have rights superior to existing stockholders.
Future
sales of substantial amounts of our common stock or securities convertible into or exchangeable or exercisable for shares of common stock,
either by us or by our existing stockholders, or the possibility that such sales could occur, could adversely affect the market price
of our common stock.
Future
sales in the public market of shares of our common stock or securities convertible into or exchangeable or exercisable for shares of
common stock, including shares referred to in the foregoing risk factor, shares held by our existing stockholders or shares issued upon
exercise of our outstanding stock options or warrants, or the perception by the market that these sales could occur, could lower the
market price of our common stock or make it difficult for us to raise additional capital.
There
is no public market for the pre-funded warrants or common warrants being offered in this offering.
There
is no established public trading market for the pre-funded warrants or common warrants being offered in this offering, and we
do not expect a market to develop. In addition, we do not intend to apply to list the pre-funded warrants or common warrants on
any securities exchange or nationally recognized trading system, including The Nasdaq Capital Market. Without an active market, the liquidity
of the pre-funded warrants and common warrants will be limited.
Holders
of pre-funded warrants and common warrants purchased in this offering will have no rights as common stockholders until such holders
exercise such warrants and acquire our common stock.
Until
holders of pre-funded warrants or common warrants acquire shares of our common stock upon exercise of such warrants, holders of
pre-funded warrants or common warrants will have no rights with respect to the shares of our common stock underlying such warrants.
Upon exercise of the pre-funded warrants or common warrants, the holders will be entitled to exercise the rights of a common stockholder
only as to matters for which the record date occurs after the exercise date.
We
will have broad discretion in the use of our existing cash and cash equivalents, including the proceeds from this offering, and may invest
or spend our cash in ways with which you do not agree and in ways that may not increase the value of your investment.
We
will have broad discretion over the use of our cash and cash equivalents, including the proceeds from this offering. You may not agree
with our decisions, and our use of cash may not yield any return on your investment. We intend to use the net proceeds from this offering
for working capital and general corporate purposes. Our failure to apply the net proceeds from this offering effectively could compromise
our ability to pursue our growth strategy and we might not be able to yield a significant return, if any, on our investment of these
net proceeds. You will not have the opportunity to influence our decisions on how to use our net proceeds from this offering.
USE
OF PROCEEDS
We estimate that we will receive net proceeds of
approximately $27.4 million from the sale of the securities offered by us in this offering, or approximately $31.6 million if the underwriters
exercise their option to purchase additional shares in full, based on an assumed combined public offering price of $1.01
per share and accompanying common warrant, which was the last reported sales price of our common stock on The Nasdaq Capital Market
on August 12, 2021, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable
by us, excluding the proceeds, if any, from the exercise of the common warrants issued in this offering.
The
foregoing discussion assumes no sale of pre-funded warrants, which if sold, would reduce the number of shares of common stock that we
are offering on a one-for-one basis.
We
currently intend to use the net proceeds from this offering for research and development, including clinical trials, working capital
and general corporate purposes. See “Risk Factors” for a discussion of certain risks that may affect our intended use of
the net proceeds from this offering.
Our
expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition.
As of the date of this prospectus, we cannot currently allocate specific percentages of the net proceeds that we may use for the purposes
specified above, and we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion
of this offering, or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual use of
the net proceeds will vary depending on numerous factors, including our ability to obtain additional financing, the progress, cost and
results of our preclinical and clinical development programs, and whether we are able to enter into future licensing or collaboration
arrangements.
Pending
the use of the net proceeds from this offering, we intend to invest the net proceeds in investment-grade, interest-bearing instruments,
certificates of deposit or direct or guaranteed obligations of the U.S.
A $0.10 increase or decrease in the assumed combined
public offering price of $1.01 per share and accompanying common warrant would increase or decrease the net proceeds
to us from this offering by approximately $2.8 million, assuming that the number of shares offered by us, as set forth on the
cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated
offering expenses payable by us.
Similarly, a 1.0 million share increase or decrease
in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase or decrease the net proceeds
to us by approximately $0.9 million, based on the assumed combined public offering price of $1.01 per share and
accompanying common warrant remaining the same, and after deducting estimated underwriting discounts and commissions and estimated
offering expenses payable by us.
DILUTION
If
you invest in our securities, your ownership interest will be diluted to the extent of the difference between the public offering price
per share of our common stock and the as adjusted net tangible book value per share of our common stock immediately
after the closing of this offering.
Our
historical net tangible book value as of June 30, 2021 was $1.4 million, or $0.06 per share of common stock. Our
historical net tangible book value is the amount of our total tangible assets less our liabilities. Historical net tangible book value
per common share is our historical net tangible book value divided by the number of shares of common stock outstanding as of June
30, 2021.
After giving effect to the sale of shares of common
stock and the accompanying common warrants in this offering at an assumed combined public offering price of $1.01
per share and accompanying common warrant, which was the last reported sale price of our common stock on The Nasdaq Capital Market
on August 12, 2021, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable
by us, excluding the proceeds, if any, from the exercise of the common warrants issued in this offering, and assuming no sale
of pre-funded warrants in this offering, our as adjusted net tangible book value as of June 30, 2021 would be $28.8 million,
or $0.53 per share of common stock. This amount represents an immediate increase in net tangible book value of $0.47 per
share to our existing stockholders and an immediate dilution of $0.48 per share to investors participating in this offering. We
determine dilution per share to investors participating in this offering by subtracting as adjusted net tangible book value per share
after this offering from the assumed combined public offering price per share paid by investors participating in this offering.
The
following table illustrates this dilution on a per share basis to new investors:
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Assumed combined public offering price per share and accompanying common warrant
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|
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$
|
1.01
|
|
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Historical net tangible book value per share as of June 30, 2021
|
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$
|
0.06
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|
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|
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Increase in net tangible book value per share attributable to this offering
|
|
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0.47
|
|
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|
|
|
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As adjusted net tangible book value per share after giving effect to this
offering
|
|
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|
|
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0.53
|
|
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Dilution per share to new investors in this offering
|
|
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$
|
0.48
|
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Each $0.10 increase or decrease in the assumed combined
public offering price of $1.01 per share and accompanying common warrant, which was the last reported sale price of
our common stock on The Nasdaq Capital Market on August 12, 2021, would increase or decrease the as adjusted net tangible book
value per share by $0.05 per share and the dilution per share to investors participating in this offering by $0.05 per share, assuming
that the number of shares and accompanying common warrants offered by us, as set forth on the cover page of this prospectus, remains
the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and excluding
the proceeds, if any, from the exercise of the common warrants issued in this offering.
We may also increase or decrease the number of shares
we are offering. A 1.0 million share increase in the number of shares and accompanying common warrants offered by us, as set forth
on the cover page of this prospectus, would increase the as adjusted net tangible book value per share by approximately $0.01 and decrease
the dilution per share to new investors participating in this offering by approximately $0.01, based on an assumed combined public
offering price of $1.01 per share and accompanying common warrant, which was the last reported sale price of our common
stock on The Nasdaq Capital Market on August 12, 2021, remaining the same and after deducting estimated underwriting discounts
and commissions and estimated offering expenses payable by us, and excluding the proceeds, if any, from the exercise of the common
warrants issued in this offering. A 1.0 million share decrease in the number of shares and accompanying common warrants offered
by us, as set forth on the cover page of this prospectus, would decrease the as adjusted net tangible book value per share after this
offering by approximately $0.01 and increase the dilution per share to new investors participating in this offering by approximately
$0.01, based on an assumed combined public offering price of $1.01 per share and accompanying common warrant,
which was the last reported sale price of our common stock on The Nasdaq Capital Market on August 12, 2021, remaining the
same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and excluding
the proceeds, if any, from the exercise of the common warrants issued in this offering.
If the underwriters exercise their option to purchase
additional shares in full, the as adjusted net tangible book value per share after giving effect to this offering would be $0.56
per share, which amount represents an immediate increase in the net tangible book value of $0.50 per share of our common stock
to existing stockholders and an immediate dilution in net tangible book value of $0.45 per share of our common stock to new investors
purchasing shares and accompanying common warrants in this offering.
The table and discussion above is based on 24,757,847
shares of common stock outstanding as of June 30, 2021 and excludes:
● 562,308 shares of common stock underlying
unvested restricted stock units outstanding as of June 30, 2021;
● 640,029 shares of common stock reserved
for future issuance under the 2020 Omnibus Equity Incentive Plan as of June 30, 2021; and
● 11,495,408 shares of common stock issuable
upon the exercise of warrants outstanding as of June 30, 2021, with a weighted average exercise price of $3.55 per share.
The information discussed above is illustrative only
and will adjust based on the actual public offering price, the actual number of shares and common warrants that we offer in this
offering, and other terms of this offering determined at pricing. Except as indicated otherwise, the discussion and table above assume
(i) no sale of pre-funded warrants, which, if sold, would reduce the number of shares of common stock that we are offering on a one-for-one
basis, (ii) no exercise of the underwriters’ option to purchase additional securities and (iii) no exercise of common
warrants accompanying the shares of common stock sold in this offering.
DESCRIPTION
OF CAPITAL STOCK
Our
authorized capital stock consists of:
●
125,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”); and
●
5,000,000 shares of preferred stock, par value $0.0001 per share, of which, as of the date of this prospectus, none of which shares have
been designated.
As
of close of business on August 10, 2021, 24,956,887 shares of Common Stock were issued and outstanding and no shares of
preferred stock were issued and outstanding.
The
additional shares of our authorized stock available for issuance may be issued at times and under circumstances so as to have a dilutive
effect on earnings per share and on the equity ownership of the holders of our Common Stock. The ability of our board of directors to
issue additional shares of stock could enhance the board’s ability to negotiate on behalf of the stockholders in a takeover situation
but could also be used by the board to make a change-in-control more difficult, thereby denying stockholders the potential to sell their
shares at a premium and entrenching current management. The following description is a summary of the material provisions of our capital
stock. You should refer to our certificate of incorporation, as amended and bylaws, both of which are on file with the SEC as exhibits
to previous SEC filings, for additional information. The summary below is qualified by provisions of applicable law.
Common
Stock
Holders
of our Common Stock are each entitled to cast one vote for each share held of record on all matters presented to stockholders. Cumulative
voting is not allowed; the holders of a majority of our outstanding shares of Common Stock may elect all directors. Holders of our Common
Stock are entitled to receive such dividends as may be declared by our board out of funds legally available and, in the event of liquidation,
to share pro rata in any distribution of our assets after payment of liabilities. Our directors are not obligated to declare a dividend.
It is not anticipated that we will pau dividends in the foreseeable future. Holders of our do not have preemptive rights to subscribe
to any additional shares we may issue in the future. There are no conversion, redemption, sinking fund or similar provisions regarding
the Common Stock. All outstanding shares of Common Stock are fully paid and nonassessable.
The
rights, preferences and privileges of holders of Common Stock are subject to the rights of the holders of any outstanding shares of preferred
stock.
Preferred
Stock
We
are authorized to issue up to 5,000,000 shares of preferred stock, all of which are undesignated. Our board of directors has the authority
to issue preferred stock in one or more classes or series and to fix the designations, powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, including dividend rights, conversion right, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any class or series, without further vote or action by the stockholders. Although we have no present
plans to issue any other shares of preferred stock, the issuance of shares of preferred stock, or the issuance of rights to purchase
such shares, could decrease the amount of earnings and assets available for distribution to the holders of common stock, could adversely
affect the rights and powers, including voting rights, of the common stock, and could have the effect of delaying, deterring or preventing
a change of control of us or an unsolicited acquisition proposal. The preferred stock may provide for an adjustment of the conversion
price in the event of an issuance or deemed issuance at a price less than the applicable conversion price, subject to certain exceptions.
If
we offer a specific series of preferred stock under this prospectus, we will describe the terms of the preferred stock in the prospectus
supplement for such offering and will file a copy of the certificate establishing the terms of the preferred stock with the SEC. To the
extent required, this description will include:
●
the title and stated value;
●
the number of shares offered, the liquidation preference per share and the purchase price;
●
the dividend rate(s), period(s) and/or payment date(s), or method(s) of calculation for such dividends;
●
whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
●
the procedures for any auction and remarketing, if any;
●
the provisions for a sinking fund, if any;
●
the provisions for redemption, if applicable;
●
any listing of the preferred stock on any securities exchange or market;
●
whether the preferred stock will be convertible into our common stock, and, if applicable, the conversion price (or how it will be calculated)
and conversion period;
●
whether the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price (or how it will be calculated)
and exchange period;
●
voting rights, if any, of the preferred stock;
●
a discussion of any material and/or special U.S. federal income tax considerations applicable to the preferred stock;
●
the relative ranking and preferences of the preferred stock as to dividend rights and rights upon liquidation, dissolution or winding
up of our affairs; and
●
any material limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred
stock as to dividend rights and rights upon liquidation, dissolution or winding up of our affairs.
Anti-takeover
Effects of Delaware Law and our Certificate of Incorporation and Bylaws
Our
Certificate of Incorporation, as amended, and Bylaws, as amended contain provisions that could have the effect of discouraging potential
acquisition proposals or tender offers or delaying or preventing a change of control. These provisions are as follows:
●
they provide that special meetings of stockholders may be called by the President, the board of directors or at the request by stockholders
of record owning at least thirty-three and one-third (33 1/3%) percent of the issued and outstanding voting shares of our common stock;
●
they do not include a provision for cumulative voting in the election of directors. Under cumulative voting, a minority stockholder holding
a sufficient number of shares may be able to ensure the election of one or more directors. The absence of cumulative voting may have
the effect of limiting the ability of minority stockholders to effect changes in our board of directors; and
●
they allow us to issue, without stockholder approval, up to 5,000,000 shares of preferred stock that could adversely affect the rights
and powers of the holders of our common stock.
We
are subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law. Subject to certain exceptions,
the statute prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested
stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder
unless:
●
prior to such date, the board of directors of the corporation approved either the business combination or the transaction which resulted
in the stockholder becoming an interested stockholder;
●
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least eighty-five percent 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding those shares owned (1) by persons who are directors and also officers and
(2) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject
to the plan will be tendered in a tender or exchange offer; or
●
on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting
of stockholders, and not by written consent, by the affirmative vote of at least sixty-six and two-thirds percent 66 2/3% of the outstanding
voting stock that is not owned by the interested stockholder.
Generally,
for purposes of Section 203, a “business combination” includes a merger, asset or stock sale, or other transaction resulting
in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates
and associates, owns or, within three (3) years prior to the determination of interested stockholder status, owned fifteen percent (15%)
or more of a corporation’s outstanding voting securities.
Potential
Effects of Authorized but Unissued Stock
We
have shares of common stock and preferred stock available for future issuance without stockholder approval. We may utilize these additional
shares for a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate corporate acquisitions
or payment as a dividend on the capital stock.
The
existence of unissued and unreserved common stock and preferred stock may enable our board of directors to issue shares to persons friendly
to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to
obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our management.
In addition, the board of directors has the discretion to determine designations, rights, preferences, privileges and restrictions, including
voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock,
all to the fullest extent permissible under the DGCL and subject to any limitations set forth in our Certificate of Incorporation. The
purpose of authorizing the board of directors to issue preferred stock and to determine the rights and preferences applicable to such
preferred stock is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while
providing desirable flexibility in connection with possible financings, acquisitions and other corporate purposes, could have the effect
of making it more difficult for a third-party to acquire, or could discourage a third-party from acquiring, a majority of our outstanding
voting stock.
Transfer
Agent and Registrar
The
transfer agent and registrar for our Common Stock is Securities Transfer Corporation. The transfer agent address is Securities Transfer
Corporation, 2901 N Dallas Parkway, Suite 380, Plano, TX 75093, (469) 633-0101.
DESCRIPTION
OF SECURITIES WE ARE OFFERING
We are offering (i) 29,702,970 shares of our common
stock or pre-funded warrants to purchase shares of our common stock and (ii) common warrants to purchase up to an aggregate of 29,702,970
shares of our common stock. Each share of common stock or pre-funded warrant is being sold together with a common warrant to purchase
one share of our common stock. The shares of common stock or pre-funded warrants and accompanying common warrants will be issued separately.
We are also registering the shares of common stock issuable from time to time upon exercise of the pre-funded warrants and common warrants
offered hereby.
Common
Stock
The
material terms and provisions of our common stock are described under the caption “Description of Capital Stock” in this
prospectus.
Pre-Funded
Warrants
The
following summary of certain terms and provisions of pre-funded warrants that are being offered hereby is not complete and is subject
to, and qualified in its entirety by, the provisions of the pre-funded warrant, the form of which is filed as an exhibit to the registration
statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the form of
pre-funded warrant for a complete description of the terms and conditions of the pre-funded warrants.
Duration
and Exercise Price. Each pre-funded warrant offered hereby will have an initial exercise price per share equal to $0.0001. The pre-funded
warrants will be immediately exercisable and may be exercised at any time until the pre-funded warrants are exercised in full. The exercise
price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends,
stock splits, reorganizations or similar events affecting our common stock and the exercise price. The pre-funded warrants will be
issued separately from the accompanying common warrants and may be transferred separately immediately thereafter.
Exercisability.
The pre-funded warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed
exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except in the
case of a cashless exercise as discussed below). Purchasers of the pre-funded warrants in this offering may elect to deliver their exercise
notice following the pricing of the offering and prior to the issuance of the pre-funded warrants at closing to have their pre-funded
warrants exercised immediately upon issuance and receive shares of common stock underlying the pre-funded warrants upon closing of this
offering. A holder (together with its affiliates) may not exercise any portion of the pre-funded warrant to the extent that the holder
would own more than 4.99% of the outstanding common stock immediately after exercise, except that upon at least 61 days’ prior
notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s
pre-funded warrants up to 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise,
as such percentage ownership is determined in accordance with the terms of the pre-funded warrants. Purchasers of pre-funded warrants
in this offering may also elect prior to the issuance of the pre-funded warrants to have the initial exercise limitation set at 9.99%
of our outstanding common stock. No fractional shares of common stock will be issued in connection with the exercise of a pre-funded
warrant. In lieu of fractional shares, we will round down to the next whole share.
Cashless
Exercise. If, at the time a holder exercises its pre-funded warrants, a registration statement registering the issuance of the shares
of common stock underlying the pre-funded warrants under the Securities Act is not then effective or available, then in lieu of making
the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may
elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according
to a formula set forth in the pre-funded warrants.
Transferability.
Subject to applicable laws, a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded
warrant to us together with the appropriate instruments of transfer.
Exchange
Listing. There is no trading market available for the pre-funded warrants on any securities exchange or nationally recognized trading
system. We do not intend to list the pre-funded warrants on any securities exchange or nationally recognized trading system.
Right
as a Stockholder. Except as otherwise provided in the pre-funded warrants or by virtue of such holder’s ownership of shares
of our common stock, the holders of the pre-funded warrants do not have the rights or privileges of holders of our common stock, including
any voting rights, until they exercise their pre-funded warrants.
Fundamental
Transaction. In the event of a fundamental transaction, as described in the pre-funded warrants and generally including any reorganization,
recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our
properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common
stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock, the
holders of the pre-funded warrants will be entitled to receive upon exercise of the pre-funded warrants the kind and amount of securities,
cash or other property that the holders would have received had they exercised the pre-funded warrants immediately prior to such fundamental
transaction.
Common Warrants
The following summary of certain terms and
provisions of common warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by, the
provisions of the common warrants, the form of which is filed as an exhibit to the registration statement of which this prospectus forms
a part. Prospective investors should carefully review the terms and provisions of the form of common warrants for a complete description
of the terms and conditions of the common warrants.
Duration and Exercise Price. Each
common warrant offered hereby will have an initial exercise price per share equal to $ . The common warrants will be immediately exercisable
and will expire on the fifth anniversary of the original issuance date. The exercise price and number of shares of common stock issuable
upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting
our common stock and the exercise price. The common warrants will be issued separately from the common stock (or pre-funded warrants)
and may be transferred separately immediately thereafter. A common warrant to purchase one share of our common stock will be issued for
every share of common stock (or pre-funded warrant to purchase a share of common stock) purchased in this offering.
Exercisability. The common warrants will
be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by
payment in full for the number of shares of our common stock purchased upon such exercise (except in the case of a cashless exercise
as discussed below). A holder (together with its affiliates) may not exercise any portion of the common warrant to the extent that the
holder would own more than 4.99% of the outstanding common stock immediately after exercise, except that upon at least 61 days’
prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s
common warrants up to 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise,
as such percentage ownership is determined in accordance with the terms of the common warrants. No fractional shares of common stock
will be issued in connection with the exercise of a common warrant. In lieu of fractional shares, we will round down to the next whole
share.
Cashless Exercise. If, at the time a holder
exercises its common warrants, a registration statement registering the issuance of the shares of common stock underlying the common
warrants under the Securities Act is not then effective or available and an exemption from registration under the Securities
Act is not available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made
to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either
in whole or in part) the net number of shares of common stock determined according to a formula set forth in the common warrants.
Transferability. Subject to applicable
laws, a common warrant may be transferred at the option of the holder upon surrender of the common warrant to us together with the appropriate
instruments of transfer.
Exchange Listing. There is no established
public trading market for the common warrants, and we do not expect a market to develop. In addition, we do not intend to list the common
warrants on any securities exchange or nationally recognized trading system. Without an active trading market, the liquidity of the common
warrants will be limited.
Right as a Stockholder. Except as otherwise
provided in the common warrants or by virtue of such holder’s ownership of shares of our common stock, the holders of the common
warrants do not have the rights or privileges of holders of our common stock, including any voting rights, until they exercise their
common warrants.
Fundamental Transaction. In the event
of a fundamental transaction, as described in the form of common warrant, and generally including any reorganization, recapitalization
or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets,
our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common stock, or any person
or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock, the holders of the common
warrants will be entitled to receive upon exercise of the common warrants the kind and amount of securities, cash or other property that
the holders would have received had they exercised the common warrants immediately prior to such fundamental transaction. In the event of a Change of Control (as defined in each common warrant) approved by our Board of Directors, the holders
of the common warrants have the right to require us or a successor entity to redeem the common warrants for cash in the amount of the
Black-Scholes Value (as defined in each common warrant) of the unexercised portion of the common warrants on the date of the consummation
of the Change of Control. In the event of a Change of Control which is not approved by our Board of Directors, the holders of the common
warrants have the right to require us or a successor entity to redeem the common warrants for the consideration paid in the Change of
Control in the amount of the Black-Scholes Value of the unexercised portion of the common warrants on the date of the consummation of
the Change of Control payable at our option in either shares of our common stock (or, in certain cases, in the securities of the successor
entity) or cash.
UNDERWRITING
We
entered into an underwriting agreement with the underwriters named below on ,
2021. BTIG, LLC (“BTIG” or the “representative”) is acting as the sole book-running manager and representative
of the underwriters. The underwriting agreement provides for the purchase of a specific number of shares of common stock and pre-funded
warrants and accompanying common warrants to purchase shares of common stock by the underwriters. Subject to the terms and conditions
of the underwriting agreement, each underwriter has agreed to purchase the number of shares, pre-funded warrants and common
warrants set forth opposite its name below:
|
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Number of Shares of
Common Stock
|
|
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Number of Pre-Funded
Warrants
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|
Number of Common
Warrants
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|
BTIG, LLC
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|
|
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Chardan Capital Markets, LLC
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|
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|
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|
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Total
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The underwriters have agreed
to purchase all of the shares of common stock and/or pre-funded warrants and accompanying common warrants offered by this prospectus,
if any are purchased. We have also granted the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase
up to an aggregate of
additional shares of common stock and/or additional common warrants to purchase up to shares
of common stock from us, in any combination thereof, at the public offering price per share and public offering price per warrant, respectively,
less the underwriting discounts and commissions.
The underwriters are offering
the shares of common stock and/or pre-funded warrants and accompanying common warrants subject to various conditions and may reject
all or part of any order. The representative has advised us that it proposes initially to offer the shares of common stock and/or pre-funded
warrants and accompanying common warrants to purchase shares of common stock to the public at the public offering price set forth
on the cover page of this prospectus and to dealers at a price less a concession not in excess of $
per share and accompanying common warrant or $ per pre-funded warrant
and accompanying common warrant, based on the combined public offering price per share and accompanying common warrant
or pre-funded warrant and accompanying common warrant. After the shares of common stock and/or pre-funded warrants and
accompanying common warrants are released for sale to the public, the representative may change the offering price, the concession,
and other selling terms at various times.
The
following table provides information regarding the amount of the discounts and commissions to be paid to the underwriters by us,
before expenses:
|
|
|
Per Share and Accompanying Common
Warrant
|
|
|
Per
Pre-Funded
Warrant
and Accompanying Common Warrant
|
|
|
Total Without Exercise of Option
|
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Total With Full Exercise of Option
|
|
Public offering price
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Underwriting discounts and commissions (1)
|
|
$
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$
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$
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|
|
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|
Proceeds to us, before expenses
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
(1)
We have agreed to pay the underwriters a commission of 6% of the gross proceeds of this offering.
We
estimate that our total expenses of the offering, excluding the estimated underwriting discounts and commissions, the non-accountable
expense allowance described below and the financial advisory fee described below, will be approximately $500,000, which includes
the fees and expenses for which we have agreed to reimburse the underwriters, in an aggregate amount not to exceed $100,000. In addition,
we have agreed (i) to pay the representative a non-accountable expense allowance equal to 1% of the gross proceeds of the offering (excluding
the proceeds from the underwriters’ exercise of their option to purchase additional securities, if any) and (ii) to
reimburse the representative for expenses related to background checks up to an aggregate of $15,000.
We have also agreed to issue to the representative
warrants (the “underwriter warrants”) to purchase up to shares of common stock (representing 2% of the aggregate number of
shares sold in this offering, including the number of shares of common stock underlying the pre-funded warrants, but excluding the underwriters’
option to purchase additional shares of common stock), at an exercise price of $ per share (representing 125% of the public offering
price for a share to be sold in this offering). The underwriter warrants will be exercisable immediately and for five years from the
date of commencement of sales in this offering. The issuance of the underwriter warrants and the shares issuable upon exercise of the
underwriter warrants are registered on the registration statement of which this prospectus forms a part.
In addition, we have agreed to pay Chardan Capital
Markets, LLC, one of the underwriters in the offering, a financial advisory fee of $250,000.
We
have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act.
We,
our officers and directors have agreed to a 90-day “lock-up” with respect to shares of our common stock and other of our
securities that they beneficially own, including securities that are convertible into shares of common stock and securities that are
exchangeable or exercisable for shares of common stock. This means that, subject to certain exceptions, for a period of 90 days following
the date of this prospectus, we and such persons may not offer, sell, pledge or otherwise dispose of these securities without the prior
written consent of the representative.
Rules
of the SEC may limit the ability of the underwriters to bid for or purchase shares before the distribution of the shares is completed.
However, the underwriters may engage in the following activities in accordance with the rules:
●
Stabilizing transactions - the representative may make bids or purchases for the purpose of pegging, fixing or maintaining the
price of the shares, so long as stabilizing bids do not exceed a specified maximum.
●
Penalty bids - if the representative purchases shares in the open market in a stabilizing transaction or syndicate covering transaction,
it may reclaim a selling concession from the underwriters and selling group members who sold those shares as part of this offering.
●
Passive market making - market makers in the shares who are underwriters or prospective underwriters may make bids for or purchases of
shares, subject to limitations, until the time, if ever, at which a stabilizing bid is made.
Similar
to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales or to stabilize the market
price of our common stock may have the effect of raising or maintaining the market price of our common stock or preventing or mitigating
a decline in the market price of our common stock. As a result, the price of the shares of our common stock may be higher than the price
that might otherwise exist in the open market. The imposition of a penalty bid might also have an effect on the price of the shares if
it discourages resales of the shares.
Neither
we nor the underwriters makes any representation or prediction as to the effect that the transactions described above may have
on the price of the shares. These transactions may occur on The Nasdaq Capital Market or otherwise. If such transactions are commenced,
they may be discontinued without notice at any time.
A
prospectus in electronic format may be delivered to potential investors by the underwriters. The prospectus in electronic format
will be identical to the paper version of such prospectus. Other than the prospectus in electronic format, the information on any
underwriter’s website and any information contained in any other website maintained by an underwriter is not part of this prospectus
or the registration statement of which this prospectus forms a part.
The
underwriters and their affiliates have provided, or may in the
future, from time to time, engage in transactions with and perform services for us in the ordinary course of their business for which
they may receive customary fees and reimbursement of expenses. In the ordinary course of their various business activities, the underwriters
and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related
derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their
customers, and such investment and securities activities may involve securities and/or instruments of our Company. The underwriters
and their affiliates may also make investment recommendations and/or publish or express independent research views in respect
of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in
such securities and instruments.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC allows us to “incorporate by reference” information into this document, which means that we can disclose important information
to you by referring you to another document filed separately with the SEC. The information incorporated by reference is an important
part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information.
We
incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d)
of the Exchange Act made after the date of the initial registration statement of which this prospectus forms a part and prior to effectiveness
of the registration statement and subsequent to the date of this prospectus until the termination of the offering of the securities
described in this prospectus (other than information in such filings that was “furnished,” under applicable SEC rules, rather
than “filed”). We incorporate by reference the following documents or information that we have filed with the SEC:
●
our Annual Report on Form 10-K for the year ended September 30, 2020, filed with the SEC on December 17, 2020;
●
our Quarterly Reports on Form 10-Q for the quarters ended December 31, 2020, March 31, 2021 and June 30, 2021, filed with
the SEC on February 16, 2021, May 17, 2021 and August 16, 2021, respectively;
●
our Current Reports on Form 8-K filed with the SEC on April 3, 2020 (as amended by Form 8-K/A on June 26, 2020), May 18, 2020, February
5, 2021, March 30, 2021, April 1, 2021, May 3, 2021 (as amended by Form 8-K/A on May 3, 2021), May 21, 2021, June 8, 2021, June 14, 2021
and July 15, 2021 (other than any portions thereof deemed furnished and not filed);
●
our definitive proxy statement on Schedule 14A filed with the SEC on May 25, 2021; and
●
the description of our Common Stock contained in the prospectus, constituting part of our Registration Statement on Form S-1 (File No.
333-230857) filed with the SEC on April 15, 2019, and subsequently amended on May 28, 2019 and June 7, 2019.
Any
statement contained in this prospectus or contained in a document incorporated or deemed to be incorporated by reference into this prospectus
will be deemed to be modified or superseded to the extent that a statement contained in this prospectus or any subsequently filed supplement
to this prospectus, or document deemed to be incorporated by reference into this prospectus, modifies or supersedes such statement. Any
statements so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You
may request a copy of these filings at no cost, by writing or telephoning us at the following address:
Sonnet
BioTherapeutics Holdings, Inc.
Attn:
Pankaj Mohan, Ph.D., CEO and Chairman
100
Overlook Center, Suite 102
Princeton,
New Jersey 08540
(609)
375-2227
You
may also access these filings on our website at www.sonnetbio.com. You should rely only on the information incorporated by reference
or provided in this prospectus. We have not authorized anyone else to provide different or additional information on our behalf. An offer
of these securities is not being made in any jurisdiction where the offer or sale is not permitted. You should not assume that the information
in this prospectus is accurate as of any date other than the date of those respective documents.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement we filed with the SEC. This prospectus does not contain all of the information set forth
in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities
we are offering under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the
registration statement. You should rely only on the information contained in this prospectus or incorporated by reference into this prospectus.
We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any jurisdiction
where the offer is not permitted. You should assume that the information contained in this prospectus, or any document incorporated by
reference in this prospectus, is accurate only as of the date of those respective documents, regardless of the time of delivery of this
prospectus or any sale of our securities.
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the
public from commercial document retrieval services and over the Internet at the SEC’s website at http://www.sec.gov.
We
maintain a website at www.sonnetbio.com. You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free
of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.
The information contained in, or that can be accessed through, our website is not incorporated by reference into, and is not part of,
this prospectus.
LEGAL
MATTERS
The
validity of the common stock and certain other legal matters will be passed upon for us by Lowenstein Sandler LLP, New York, New York.
DLA Piper LLP (US), New York, New York, has acted as counsel to the underwriters in connection with this offering.
EXPERTS
The
consolidated financial statements of Sonnet BioTherapeutics Holdings, Inc. as of September 30, 2020 and 2019 and for the years then ended
have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated
by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the September
30, 2020 consolidated financial statements contains an explanatory paragraph that states that Sonnet BioTherapeutics Holdings, Inc. has
incurred recurring losses and negative cash flows from operations since inception and will require substantial additional financing to
continue to fund its research and development activities that raise substantial doubt about its ability to continue as a going concern.
The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
The
financial statements of Relief Therapeutics SA as of and for the years ended December 31, 2019 and 2018 incorporated herein have been
audited by Mazars SA, an independent public accounting firm, as stated in its report dated March 20, 2020, incorporated by reference
herein, and have been so included in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.
The report on the financial statements of Relief Therapeutics SA includes an explanatory paragraph about the existence of substantial
doubt concerning its ability to continue as a going concern.
Up to 29,702,970 Shares of Common Stock
Pre-Funded Warrants to Purchase up to 29,702,970
Shares of Common Stock
Common Warrants to Purchase up to 29,702,970
Shares of Common Stock
Shares of Common Stock
underlying the Pre-Funded Warrants and Common Warrants
PROSPECTUS
Sole Book-Running Manager
BTIG
Lead Manager
Chardan
The
date of this prospectus is , 2021.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
The
following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable by us in connection with
the sale and distribution of the securities being registered. All of the amounts shown are estimates, except for the SEC registration
fee and the FINRA filing fee:
|
|
|
Amount to
be paid
|
|
|
SEC registration fee
|
|
$
|
7,610
|
|
|
FINRA filing fee
|
|
|
10,963
|
|
|
Legal fees and expenses
|
|
|
350,000
|
|
|
Accounting fees and expenses
|
|
|
115,000
|
|
|
Miscellaneous
|
|
|
16,427
|
|
|
Total expenses
|
|
$
|
500,000
|
|
Item
14. Indemnification of Directors and Officers.
Section
145 of the Delaware General Corporation Law (the “DGCL”) provides, in general, that a corporation incorporated under the
laws of the State of Delaware, as we are, may indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding (other than a derivative action by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding
if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was
unlawful. In the case of a derivative action, a Delaware corporation may indemnify any such person against expenses (including attorneys’
fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation,
except that no indemnification will be made in respect of any claim, issue or matter as to which such person will have been adjudged
to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or any other court
in which such action was brought determines such person is fairly and reasonably entitled to indemnity for such expenses.
Article
X of our certificate of incorporation, as amended, states that to the fullest extent permitted by the DGCL, a director of the corporation
shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.
Under
Article XI of our bylaws, any person who was or is made a party or is threatened to be made a party to or is in any way involved in any
threatened, pending or completed action suit or proceeding, whether civil, criminal, administrative or investigative, including any appeal
therefrom, by reason of the fact that he is or was a director or officer of ours or was serving at our request as a director or officer
of another entity or enterprise (including any subsidiary), may be indemnified and held harmless by us, and we may advance all expenses
incurred by such person in defense of any such proceeding prior to its final determination, if this person acted in good faith and in
a manner reasonably believed to be in and not opposed to our best interest, and, with respect to any criminal action or proceeding, the
indemnified party had no reason to believe his or her conduct was unlawful. The indemnification provided in our bylaws is not exclusive
of any other rights to which those seeking indemnification may otherwise be entitled.
We
maintain a general liability insurance policy that covers certain liabilities of directors and officers of our corporation arising out
of claims based on acts or omissions in their capacities as directors or officers.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore, unenforceable.
Item
15. Recent Sales of Unregistered Securities.
Pursuant
to a Securities Purchase Agreement (the “Securities Purchase Agreement”) dated February 7, 2020, by and among the Company,
Sonnet BioTherapeutics, Inc. (“Sonnet Sub”) and certain investors, for an aggregate purchase price of approximately $19.0
million (comprised of (I) a $4 million credit from Sonnet Sub and the Company to Chardan Capital Markets, LLC (“Chardan”),
in lieu of certain transaction fees otherwise owed to Chardan, and (II) $15 million in cash from the other Investors (the “Purchase
Price”), (i) Sonnet Sub issued and sold to the investors shares of Sonnet Sub’s common stock (the “Initial Shares”)
which converted in the merger among the Company and Sonnet Sub on April 1, 2020 into an aggregate of approximately 2,152,000 shares of
the Company’s common stock, (ii) the Company issued to the investors Series A Warrants (the “Series A Warrants”) to
purchase an aggregate of 3,300,066 shares of common stock at an exercise price of $5.3976 per share and (iii) the Company issued to the
investors Series B Warrants (the “Series B Warrants”) to purchase an aggregate of 2,247,726 shares of common stock at an
exercise price of $0.0001 per share. The Company issued the warrants to the investors in reliance on the exemption from registration
provided for under Section 4(a)(2) of the Securities Act. The Company relied on this exemption from registration for private placements
based in part on the representations made by the investors, including the representations with respect to each investor’s status
as an “accredited investor,” as such term is defined in Rule 501(a) of the Securities Act, and the Investors’ investment
intent.
On
August 3, 2020, the Company entered into Warrant Exercise and Omnibus Amendment Agreements (the “Exercise Agreements”) with
the holders of the Series A Warrants and Series B Warrants (the “Holders”). Pursuant to the Exercise Agreements, in order
to induce the Holders to exercise the Series A Warrants for cash, pursuant to the terms of the Series A Warrants, the Company agreed
to reduce the exercise price of the Series A Warrants from $5.3976 to $3.19 per share. The Holders and the Company agreed that the Holders
would exercise all of their Series A Warrants for gross proceeds before expenses of approximately $10.5 million. In addition, the Exercise
Agreements also provide for the issuance to the Holders, Series C Warrants (the “Series C Warrants”) to purchase 3.4331 shares
of Common Stock (the “Series C Warrant Shares”) for each share of Common Stock issued upon such exercise of the Series A
Warrants pursuant to the Exercise Agreements or an aggregate of 11,329,436 Series C Warrants. The terms of the Series C Warrants are
substantially similar to those of the Series A Warrants, except that the Series C Warrants have an exercise price of $3.19, do not contain
subsequent issuance price protection, were not exercisable until the date that was six months from the date of issuance of each Series
C Warrant and will expire on October 16, 2025. The Exercise Agreements provided for the amendment to each Holder’s Series B Warrants
to (i) remove the provisions providing for the reset of the number of shares of Common Stock underlying the Series B Warrants and (ii)
set the aggregate number of shares of Common Stock underlying all of the Series B Warrants at 4,532,526, which results from an increase
of 2,284,800 shares pursuant to the terms of the Exercise Agreements. The Company issued the Series B Warrants, the Series C Warrants
and the shares of Common Stock underlying the Series A Warrants, the Series B Warrants and the Series C Warrants to the Holders in reliance
on the exemption from registration provided for under Section 4(a)(2) of the Securities Act. The Company relied on this exemption from
registration for private placements based in part on the representations made by the Holders, including the representations with respect
to each Holder’s status as an “accredited investor,” as such term is defined in Rule 501(a) of the Securities Act,
and each Holder’s investment intent.
On
April 1, 2020, the Company issued a warrant (the “Spin-Off Entity Warrant”) to purchase 186,161 shares of common stock at
an exercise price of $0.01 per share to Amergent Hospitality Group, Inc. pursuant to the Agreement and Plan of Merger, dated as of October
10, 2019, by and among the Company, Sonnet BioTherapeutics, Inc. and Biosub, Inc., as amended by Amendment No. 1 thereto made and entered
into as of February 7, 2020. The Spin-Off Entity Warrant was issued pursuant to the exemption provided in Section 4(a)(2) under the Securities
Act and Rule 506(b) promulgated thereunder.
During
the three months ended March 31, 2020, the Company lowered the exercise price of an aggregate of approximately 92,847 warrants to purchase
common stock from several classes of warrants to $13.00 in order to induce the exercise thereof and raise capital for the Company. As
of March 31, 2020, all such warrants were exercised. The transactions discussed in this paragraph are exempt from registration pursuant
to Section 4(a)(2) of the Securities Act, and corresponding provisions of state securities laws or, alternatively, Section 3(a)(9) of
the Securities Act and corresponding provisions of state securities laws, on the basis that (i) offers were made to a limited number
of existing warrant holders, (ii) each offer was made through direct communication with the offerees by the Company, (iii) the sophistication
of the offerees and financial ability to bear risks, (iv) the extensive disclosure provided by the Company to the offerees and (v) no
general solicitation and no commission or remuneration was paid for solicitation.
The
Company entered into a Securities Purchase Agreement on February 7, 2020 for the sale of up to 1,500 shares of a new series of convertible
preferred stock of the Company (the “Series 2 Preferred Stock”) with an institutional investor for gross proceeds to the
Company of up to $1,500,000. On February 11, 2020, the first closing of this transaction occurred. The Company sold 1,000 shares of Series
2 Preferred Stock for gross proceeds to the Company of $1,000,000. On March 6, 2020, the Company sold and issued the remaining 500 shares
of Series 2 Preferred Stock. The transaction is exempt from registration pursuant to Section 4(a)(2) of the Securities Act and/or Rule
506 promulgated under Regulation D of the Securities Act and corresponding provisions of state securities laws on the basis that (i)
the offering was made through direct communication and did not include any general advertising or general solicitation (ii) the sophistication
of the offeree and financial ability to bear risks (iii) the extensive disclosure provided by Chanticleer to the offeree.
On
December 31, 2018, the Company entered into an amendment to its 8% debentures with the debenture holders, extending the maturity date
of the debentures. As part of the transaction, each holder received new warrants to purchase that number of shares of common stock equal
to 20% of the principal amount of such holder’s debenture (for an aggregate of warrants to issue an additional 46,154 shares of
common stock). The new warrants have an exercise price of $58.50, were not exercisable for a period of six months and are otherwise substantially
identical to the warrants issued to the debenture holders on May 4, 2017. The issuance of the warrants was exempt from registration provisions
of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2).
Pursuant
to a Securities Purchase Agreement dated May 3, 2018, the Company accepted subscriptions to purchase 15,508 shares of common stock (the
“Shares”) at a purchase price of $91.00 per Share, for a total gross purchase price of approximately $1,411,001 in a registered
direct offering. The company also agreed to issue unregistered 5 ½ year warrants to purchase up to 15,508 shares of common stock
(“Warrants”) to the investors in a concurrent private placement at an exercise price of $117.00 per share. The company agreed
to register the resale of the common shares underlying the Warrants. The Warrants are exercisable for cash in full commencing six months
after the issuance date. If a registration statement covering the shares underlying the warrants is not available at the time of exercise,
the warrants may be exercised on a cashless basis. The Warrants were not registered under the Securities Act of 1933, as amended (the
“Securities Act”), but qualified for exemption under Rule 506(b), promulgated under Regulation D of the Securities Act. The
Warrants are exempt from registration because their issuance did not involve a “public offering,” as defined in Section 4(a)(2)
of the Securities Act, due to the insubstantial number of persons involved in the transaction, size of the offering, manner of the offering
and number of securities offered.
Item
16. Exhibits.
The
list of exhibits following the signature page of this registration statement is incorporated by reference herein.
Item
17. Undertakings.
|
(1)
|
The
undersigned registrant hereby undertakes:
|
|
|
(a)
|
To
file, during any period in which offers or sales are being made, a post-effective amendment
to this registration statement:
|
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities Act;
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than 20 percent change
in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
|
|
|
(iii)
|
To
include any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such information in the
registration statement;
|
|
|
(b)
|
That,
for the purpose of determining any liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
|
|
|
(c)
|
To
remove from registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
|
|
|
(d)
|
That,
for the purpose of determining liability of the registrant under the Securities Act to any
purchaser in the initial distribution of the securities, the undersigned registrant hereby
undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such purchaser by means of any
of the following communications, the undersigned registrant will be a seller to the purchaser
and will be considered to offer or sell such securities to such purchaser:
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|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering
required to be filed pursuant to Rule 424 (§ 230.424 of this chapter);
|
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned
registrant or used or referred to by the undersigned registrant;
|
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering containing material
information about the undersigned registrant or its securities provided by or on behalf of
the undersigned registrant; and
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|
|
(iv)
|
Any
other communication that is an offer in the offering made by the undersigned registrant to
the purchaser.
|
|
(2)
|
The
undersigned registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act, each filing of the registrant’s annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of
an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
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|
(3)
|
The
undersigned registrant hereby undertakes that:
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|
|
(a)
|
For
purposes of determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of this registration statement in reliance on Rule 430A
and contained in a form of prospectus filed by the undersigned registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective; and
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|
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(b)
|
For
the purpose of determining any liability under the Securities Act, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
|
|
(4)
|
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or controlling person
of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
|
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Princeton, State of New Jersey, on August 16, 2021.
|
|
SONNET BIOTHERAPEUTICS HOLDINGS, INC.
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|
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By:
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/s/
Pankaj Mohan
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|
|
|
Pankaj
Mohan
Chief
Executive Officer
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons on August 16,
2021, in the capacities indicated.
|
Signature
|
|
Title
|
|
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|
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/s/
Pankaj Mohan
|
|
Chief
Executive Officer and
Chairman
(Principal Executive Officer)
|
|
Pankaj
Mohan
|
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*
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Chief
Financial Officer
(Principal
Financial Officer and Principal Accounting Officer)
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|
Jay
Cross
|
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*
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Director
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|
Nailesh
Bhatt
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|
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*
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Director
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Albert
Dyrness
|
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|
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*
|
|
Director
|
|
Donald
Griffith
|
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*
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Director
|
|
Raghu
Rao
|
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*By:
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/s/ Pankaj Mohan, Attorney-in-Fact
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|
EXHIBIT
INDEX
|
Exhibit
No.
|
|
Description
|
|
|
|
|
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1.1*
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|
Form of Underwriting Agreement
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2.1
|
|
Agreement and Plan of Merger, dated October 10, 2019, by and among the Company, Sonnet Sub. and Merger Sub (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K as filed on October 11, 2019, and incorporated herein by reference).#
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|
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2.2
|
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Amendment No. 1 to Agreement and Plan of Merger, dated February 7, 2020, by and among the Company, Sonnet Sub and Merger Sub (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K as filed on February 7, 2020, and incorporated herein by reference).
|
|
|
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2.3
|
|
Share Exchange Agreement, between Sonnet BioTherapeutics, Inc. and Relief Therapeutics Holding SA, dated August 9, 2019 (incorporated by reference to Exhibit 2.10 to the Company’s Registration Statement on Form S-4 filed with the SEC on November 27, 2019).#
|
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3.1
|
|
Certificate of Incorporation, as amended, of Sonnet BioTherapeutics Holdings, Inc. (incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K, filed with the SEC on December 17, 2020).
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3.2
|
|
Bylaws of Sonnet BioTherapeutics Holdings, Inc. (incorporated by reference to Exhibit 3.2 to our Registration Statement on Form S-4/A (Registration No. 333-235301), filed with the SEC on February 7, 2020).
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4.1
|
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Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-1 (Registration No. 333-178307), filed with the SEC on December 2, 2011).
|
|
|
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4.2
|
|
Form of Warrant dated May 4, 2017 (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K, filed with the SEC on May 5, 2017).
|
|
|
|
|
|
4.3
|
|
Spin-Off Entity Warrant, dated April 1, 2020 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 3, 2020).
|
|
|
|
|
|
4.4
|
|
Form of Sonnet BioTherapeutics, Inc. Converted Warrant (incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2020).
|
|
|
|
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4.5
|
|
Form of Series A/B Warrants (incorporated by reference to Exhibit 4.16 to the Company’s Registration Statement on Form S-4/A filed with the SEC on February 7, 2020).
|
|
|
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|
4.6
|
|
Form of Series C Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on August 4, 2020).
|
|
|
|
|
|
4.7
|
|
Registration Rights Agreement, dated February 7, 2020, by and between the Company and certain investors named therein (incorporated by reference to Exhibit 4.17 to the Company’s Registration Statement on Form S-4/A filed with the SEC on February 7, 2020).
|
|
|
|
|
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4.8*
|
|
Form of Pre-Funded Warrant.
|
|
|
|
|
|
4.9*
|
|
Form of Underwriter Warrant.
|
|
|
|
|
|
4.10*
|
|
Form of Common Warrant.
|
|
|
|
|
|
5.1*
|
|
Opinion of Lowenstein Sandler LLP.
|
|
10.1
|
|
Common Stock Purchase Agreement, between GEM Global Yield Fund LLC SCS and Sonnet BioTherapeutics, Inc., dated August 6, 2019 (incorporated by reference to Exhibit 10.54 to the Company’s Registration Statement on Form S-4 filed with the SEC on November 27, 2019).
|
|
|
|
|
|
10.2
|
|
Amendment to Common Stock Purchase Agreement, between GEM Global Yield Fund LLC SCS and Sonnet BioTherapeutics, Inc., dated September 25, 2019 (incorporated by reference to Exhibit 10.55 to the Company’s Registration Statement on Form S-4 filed with the SEC on November 27, 2019).
|
|
|
|
|
|
10.3
|
|
Side Letter and Amendment No. 2 to Common Stock Purchase Agreement, between GEM Global Yield Fund LLC SCS, Sonnet BioTherapeutics, Inc. and Chanticleer Holdings, Inc., dated February 7, 2020 (incorporated by reference to Exhibit 10.60 to the Company’s Registration Statement on Form S-4 filed with the SEC on February 7, 2020).
|
|
|
|
|
|
10.4
|
|
Employment Agreement, between Pankaj Mohan and Sonnet BioTherapeutics, Inc., dated December 31, 2018 (incorporated by reference to Exhibit 10.56 to the Company’s Registration Statement on Form S-4 filed with the SEC on February 7, 2020). †
|
|
|
|
|
|
10.5
|
|
Employment Agreement, between John Cini and Sonnet BioTherapeutics, Inc., dated January 10, 2020 (incorporated by reference to Exhibit 10.58 to the Company’s Registration Statement on Form S-4 filed with the SEC on February 7, 2020). †
|
|
|
|
|
|
10.6
|
|
Employment Agreement, between Jay Cross and Sonnet BioTherapeutics, Inc., dated January 10, 2020 (incorporated by reference to Exhibit 10.57 to the Company’s Registration Statement on Form S-4 filed with the SEC on February 7, 2020). †
|
|
|
|
|
|
10.7
|
|
Employment Agreement, between Susan Dexter and the Company, dated April 1, 2020 (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on April 3, 2020). †
|
|
|
|
|
|
10.8
|
|
Offer Letter, between Donald Griffith and Sonnet BioTherapeutics, Inc., dated January 1, 2019 (incorporated by reference to Exhibit 10.59 to the Company’s Registration Statement on Form S-4 filed with the SEC on February 7, 2020). †
|
|
|
|
|
|
10.9
|
|
Sonnet BioTherapeutics Holdings, Inc. 2020 Omnibus Equity Incentive Plan (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 filed with the SEC on May 20, 2020). †
|
|
|
|
|
|
10.10
|
|
Form of Restricted Stock Unit Award (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K (file No. 001-35570), filed with the SEC on July 9, 2020). †
|
|
|
|
|
|
10.11
|
|
License Agreement, between Ares Trading SA and Relief Therapeutics SA, dated August 28, 2015 (incorporated by reference to Exhibit 10.51 to the Company’s Registration Statement on Form S-4 filed with the SEC on February 7, 2020).***
|
|
|
|
|
|
10.12
|
|
Discovery Collaboration Agreement, between XOMA (US) LLC and Oncobiologics, Inc., dated July 23, 2012 (incorporated by reference to Exhibit 10.52 to the Company’s Registration Statement on Form S-4 filed with the SEC on February 7, 2020).***
|
|
|
|
|
|
10.13
|
|
Amendment of Discovery Collaboration Agreement, between XOMA (US) LLC and Sonnet BioTherapeutics, Inc., dated May 7, 2019 (incorporated by reference to Exhibit 10.53 to the Company’s Registration Statement on Form S-4 filed with the SEC on February 7, 2020).***
|
|
10.14
|
|
Securities Purchase Agreement, dated as of February 7, 2020, by and among Chanticleer Holdings, Inc., Sonnet BioTherapeutics, Inc. and the investors party thereto (incorporated by reference to Exhibit 10.64 to the Company’s Registration Statement on Form S-4 filed with the SEC on February 7, 2020).
|
|
|
|
|
|
10.15
|
|
Form of Warrant Exercise and Omnibus Amendment Agreement, dated as of August 3, 2020, by and between Sonnet BioTherapeutics Holdings, Inc. and the Holders (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K (File No. 001-35570), filed with the SEC on August 4, 2020).
|
|
|
|
|
|
10.16
|
|
Assignment and Assumption Employment Agreements by Sonnet BioTherapeutics Holdings, Inc., effective April 1, 2020 (incorporated by reference to Exhibit 10.16 to our Annual Report on Form 10-K, filed with the SEC on December 17, 2020).
|
|
|
|
|
|
10.17
|
|
Amendment No. 1 to Executive Employment Agreement, between Pankaj Mohan and the Company, dated November 23, 2020 (incorporated by reference to Exhibit 10.17 to our Annual Report on Form 10-K, filed with the SEC on December 17, 2020).
|
|
|
|
|
|
10.18
|
|
Amendment No. 1 to Executive Employment Agreement, between John Cini and the Company, dated November 23, 2020 (incorporated by reference to Exhibit 10.18 to our Annual Report on Form 10-K, filed with the SEC on December 17, 2020).
|
|
|
|
|
|
10.19
|
|
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.19 to our Annual Report on Form 10-K, filed with the SEC on December 17, 2020).
|
|
|
|
|
|
21.1
|
|
Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to our Annual Report on Form 10-K, filed with the SEC on December 17, 2020).
|
|
|
|
|
|
23.1*
|
|
Consent of KPMG LLP
|
|
|
|
|
|
23.2*
|
|
Consent of Mazars SA
|
|
|
|
|
|
23.3*
|
|
Consent of Lowenstein Sandler LLP (included as part of Exhibit 5.1).
|
|
|
|
|
|
24.1
|
|
Power
of attorney (included in the signature page to the Company’s registration statement
on Form S-1 filed with the Commission on July 22, 2021)**
|
|
*
|
Filed
herewith.
|
|
**
|
Previously
filed.
|
|
***
|
Filed
herewith; portions of the exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K. A copy of any omitted portions
will be furnished to the Securities and Exchange Commission upon request.
|
|
#
|
The schedules
and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or
exhibit will be furnished to the Securities and Exchange Commission upon request.
|
Exhibit
1.1
[•]
Shares of Common Stock (or Pre-Funded Warrants to Purchase Shares of Common
Stock in Lieu Thereof)
Warrants
to Purchase [●] Shares of Common Stock
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
UNDERWRITING
AGREEMENT
August
[__], 2021
BTIG,
LLC
as
Representative of the several
Underwriters
named on Schedule I hereto
600
Montgomery Street
San
Francisco, California 94111
Ladies
and Gentlemen:
Sonnet
BioTherapeutics Holdings, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions
stated herein, to issue and sell to BTIG, LLC, as representative (the “Representative”) of the several underwriters
named on Schedule I hereto (each, an “Underwriter” and collectively, the “Underwriters”),
(i) an aggregate of [•] authorized but unissued shares (the “Firm Shares”) of common stock, par value $0.01 per
share, of the Company (the “Common Stock”) or pre-funded warrants (the “Pre-Funded Warrants”) to
purchase Common Stock in lieu thereof at an exercise price of $0.0001 per share (the “Pre-Funded Warrant Shares”),
and (ii) warrants (the “Firm Warrants”) to purchase up to an aggregate of [●] shares of Common Stock (the “Firm
Warrant Shares”). The Company also proposes to sell to the Underwriters, upon the terms and conditions set forth herein,
up to an additional [●] shares of Common Stock (the “Option Shares” and, together with the Firm Shares, the
“Shares”) and/or Warrants (the “Option Warrants” and, together with the Firm Warrants, the “Warrants”)
to purchase up to an additional [●] shares of Common Stock (the “Option Warrant Shares” and, together with the
Firm Warrant Shares, the “Warrant Shares”). The Shares, the Underwriter Warrants (as defined below), the Underwriter
Warrant Shares (as defined below), the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Warrants and the Warrant Shares are collectively
referred to as the “Securities.”
The
Shares and/or Pre-Funded Warrants and Warrants shall be issued separately and shall be immediately separable and transferable upon issuance.
The terms of the Pre-Funded Warrants are set forth in the form of Pre-Funded Warrant attached hereto as Exhibit A.
The terms of the Warrants are set forth in the form of Warrant attached hereto as Exhibit B.
The
Company and the Underwriters hereby confirm their agreement as follows:
1.
Registration Statement and Prospectus. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-1 (File No. 333- [•]), including the related preliminary prospectus or prospectuses, covering
the registration of the sale of the Securities under the Securities Act of 1933, as amended (the “Securities Act”),
and the rules and regulations of the Commission thereunder (the “Rules and Regulations”). Promptly after execution
and delivery of this Underwriting Agreement (this “Agreement”), the Company will prepare and file a prospectus in
accordance with the provisions of Rule 430A (“Rule 430A”) of the Rules and Regulations and Rule 424(b) (“Rule
424(b)”) of the Rules and Regulations. The information included in such prospectus that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective
pursuant to Rule 430A(b) is herein called the “Rule 430A Information.” Such registration statement, including the
amendments thereto, the exhibits thereto and any schedules thereto, at the time it became effective, and including the Rule 430A Information,
is herein called the “Registration Statement.” Any registration statement filed pursuant to Rule 462(b) of the Rules
and Regulations is herein called the “Rule 462(b) Registration Statement” and, after such filing, the term “Registration
Statement” shall include the Rule 462(b) Registration Statement. Each prospectus used prior to the effectiveness of the Registration
Statement (such time, the “Effective Time”), and each prospectus that omitted the Rule 430A Information that was used
after such effectiveness and prior to the execution and delivery of this Agreement is herein called a “preliminary prospectus.”
The final prospectus relating to the Securities that is first filed pursuant to Rule 424(b), in the form first furnished to the Underwriters
for use in connection with the offering of the Securities, is herein called the “Prospectus.” For purposes of this
Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval system or any successor system (“EDGAR”).
All
references in this Agreement to financial statements and schedules and other information which is “described,” “contained,”
“included” or “stated” in the Registration Statement or the Prospectus (or other references of like import) shall
be deemed to mean and include all such financial statements, pro forma financial information and schedules and other information which
is incorporated by reference in or otherwise deemed by the Rules and Regulations to be a part of or included in the Registration Statement
or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement
or the Prospectus shall be deemed to mean and include the subsequent filing of any document under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), that is deemed to be incorporated therein by reference or otherwise deemed by the
Rules and Regulations to be a part thereof.
2.
Representations and Warranties of the Company Regarding the Offering.
(a)
The Company represents and warrants to, and agrees with, the Underwriters, as of the date hereof and as of the Closing Date (as defined
in Section 4(c) below) or any applicable Option Closing Date (as defined in Section 4(a) below) as follows:
(i)
No Material Misstatements or Omissions. At the Effective Time, at the date hereof and, at the Closing Date, the Registration Statement
and any post-effective amendment, at the time of filing thereof, conformed or will conform in all material respects with the requirements
of the Securities Act and the Rules and Regulations and did not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not misleading. The Time of Sale Disclosure Package (as
defined below), as of [•] [a.m.] [p.m.] (Eastern time) on the date hereof (the “Applicable Time”), on the
Closing Date, if any, and the Prospectus, as amended or supplemented, as of its date, at the time of filing pursuant to Rule 424(b) under
the Securities Act and at the Closing Date, when considered together with the Time of Sale Disclosure Package, did not or 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, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in
the two immediately preceding sentences shall not apply to statements in or omissions from the Registration Statement, the Time of Sale
Disclosure Package, or any Prospectus in reliance upon, and in conformity with, the written information furnished by any Underwriter,
which the Company acknowledges is limited to the information contained in the third and ninth paragraphs under the caption “Underwriting”
in each of the preliminary prospectus and the Prospectus related to the compensation of the Underwriters and the stabilization activities
of the Underwriters (collectively, the “Underwriters’ Information”). No order preventing or suspending the effectiveness
or use of the Registration Statement or any Prospectus is in effect and no proceedings for such purpose have been instituted or are pending,
or, to the knowledge of the Company, are contemplated or threatened by the Commission.
(ii)
Marketing Materials. The Company has not distributed any prospectus or other offering material in connection with the offering
and sale of the Securities other than the Time of Sale Disclosure Package and the roadshow or investor presentations delivered to and
approved by the Underwriters for use in connection with the marketing of the offering of the Securities (the “Marketing Materials”).
(iii)
Accurate Disclosure. (A) The Company has provided a copy to the Underwriters of each Issuer Free Writing Prospectus (as defined
below) used in the sale of the Securities, if any. The Company has filed all Issuer Free Writing Prospectuses required to be so filed
with the Commission, and no order preventing or suspending the effectiveness or use of any Issuer Free Writing Prospectus is in effect
and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened
by the Commission. When taken together with the rest of the Time of Sale Disclosure Package or the Prospectus, no Issuer Free Writing
Prospectus, as of the Closing Date or any Option Closing Date, does or will include (1) any untrue statement of a material fact or omission
to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading, or (2) information that conflicted with the information contained in the Registration Statement or the Prospectus.
The representations and warranties set forth in the immediately preceding sentence shall not apply to statements in or omissions from
the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus in reliance upon, and in conformity with, the
Underwriters’ Information. As used in this paragraph and elsewhere in this Agreement:
A.
“Time of Sale Disclosure Package” means the most recent preliminary prospectus that is distributed to investors prior
to the time of effectiveness, each Issuer Free Writing Prospectus, and the description of the transaction provided by the Underwriters
included on Schedule II hereto.
B.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule
433 under the Securities Act, relating to the Securities that (A) is required to be filed with the Commission by the Company, or (B)
is exempt from filing pursuant to Rule 433(d)(5)(i) or (d)(8) under the Securities Act, 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)
under the Securities Act. For the avoidance of doubt, the term “Issuer Free Writing Prospectus” shall not include any “free
writing prospectus” (as defined in Rule 405 under the Securities Act) that was prepared by any Underwriter or provided to any person
by any Underwriter without the knowledge and consent of the Company.
(B)
At the time of filing of the Registration Statement and at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 under the Securities Act or an “excluded issuer” as defined in Rule 164 under
the Securities Act.
(C)
Each Issuer Free Writing Prospectus listed on Schedule III hereto satisfied, as of its issue date and at all subsequent times through
the Prospectus Delivery Period (as defined below), all other conditions as may be applicable to its use as set forth in Rules 164 and
433 under the Securities Act, including any legend, record-keeping or other requirements.
(iv)
Financial Statements. The financial statements included or incorporated by reference in the Registration Statement, Time of Sale
Disclosure Package and the Prospectus, together with the related notes and schedules, present fairly the consolidated financial position
of the Company and the Subsidiaries as of the dates indicated and the consolidated results of operations and cash flows of the Company
and the Subsidiaries for the periods specified and have been prepared in compliance with the requirements of the Securities Act and Exchange
Act and in conformity with United States generally accepted accounting principles (“GAAP”) applied on a consistent
basis during the periods involved. The selected financial data and the summary financial information included in the Registration Statement
and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the financial
statements included or incorporated by reference in the Registration Statement and the Prospectus, as of and at the dates indicated.
Any pro forma financial statements or data included or incorporated by reference in the Registration Statement, Time of Sale Disclosure
Package and the Prospectus comply with the requirements of Regulation S-X of the Securities Act, including, without limitation, Article
11 thereof, and the assumptions used in the preparation of such pro forma financial statements and data are reasonable, the pro forma
adjustments used therein are appropriate to give effect to the circumstances referred to therein and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of those statements and data. The other financial data set forth or incorporated
by reference in the Registration Statement, Time of Sale Disclosure Package and the Prospectus is accurately presented and prepared on
a basis consistent with the financial statements and books and records of the Company. The Company and the Subsidiaries do not have any
material liabilities or obligations, direct or contingent (including any off-balance sheet obligations or any “variable interest
entities” as that term is used in Accounting Standards Codification Paragraph 810-10-25-20), not disclosed in the Registration
Statement, Time of Sale Disclosure Package and the Prospectus. All disclosures contained in the Registration Statement, Time of Sale
Disclosure Package or the Prospectus, including the Incorporated Documents, that contain “non-GAAP financial measures” (as
such term is defined by the rules and regulations of the Commission) comply, in all material respects, with Regulation G under the Exchange
Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable.
(v)
Independent Accountants. KPMG LLP, whose report on the consolidated financial statements of the Company and the Subsidiaries is
incorporated by reference in the Registration Statement, Time of Sale Disclosure Package and the Prospectus, is an independent registered
public accounting firm with respect to the Company as required by the Securities Act, the Exchange Act and the Public Company Accounting
Oversight Board (United States). KPMG LLP has not been engaged by the Company to perform any “prohibited activities” (as
defined in Section 10A of the Exchange Act).
(vi)
Statistical and Marketing-Related Data. Nothing has come to the attention of the Company that has caused the Company to believe
that the statistical or market-related data included in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus,
or included in the Marketing Materials, are not based on or derived from sources that the Company reasonably believes to be reliable
and accurate in all material respects, and, to the extent required, the Company has obtained the written consent to the use of such data
from such sources, other than such consents the failure of which to obtain is not reasonably likely to result in a Material Adverse Effect.
(vii) Trading
Market. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is approved for listing on The Nasdaq
Capital Market (“Nasdaq”). As of the Closing Date, the Shares, the Warrant Shares and the Pre-Funded Warrant Shares will have been
duly authorized for listing on Nasdaq.
(viii)
Absence of Manipulation. Neither the Company, nor any of its Subsidiaries, nor any of its or their respective directors, officers
or, to the knowledge of the Company, controlling persons has taken, directly or indirectly, any action designed to stabilize or manipulate,
or which has constituted or might reasonably be expected to cause or result in, the stabilization or manipulation of, the price of any
security of the Company to facilitate the sale or resale of the Securities.
(ix)
Lock-Up Agreements. Schedule IV hereto contains a complete and accurate list of the Company’s officers and directors
and each beneficial owner of the Company’s outstanding shares of Common Stock (or securities convertible or exercisable into shares
of Common Stock) that the Company has caused to deliver to the Representative an executed Lock-Up Agreement (collectively, the “Lock-Up
Parties”), in the form attached hereto as Schedule III (the “Lock-Up Agreement”), prior to the execution
of this Agreement.
(x)
Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other
documents required by the Securities Act and the Rules and Regulations to be described in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been
so described or filed. Each agreement or other instrument (however characterized or described) to which the Company or any of its subsidiaries
is a party or by which it is or may be bound or affected and that is referred to in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus has been duly authorized and validly executed by the Company or its subsidiaries and is in full force and
effect in all material respects and is enforceable against the Company or its subsidiaries and, to the Company’s knowledge, the
other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor
may be brought. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus or as is not
reasonably likely to result in a Material Adverse Effect, none of such agreements or instruments has been assigned by the Company or
its subsidiaries, and neither the Company, its subsidiaries nor, to the Company’s knowledge, any other party is in default thereunder
and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute
a default thereunder. To the best of the Company’s knowledge, performance by the Company or its subsidiaries of the material provisions
of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or
decree of any governmental authority, agency or court, domestic or foreign, having jurisdiction over the Company or its subsidiaries
or any of its assets or businesses, including, without limitation, those relating to Environmental Laws (as defined below).
(b)
Any certificate from any officer of the Company and delivered to the Representative or to the Underwriters’ counsel shall be deemed
a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
3.
Representations and Warranties of the Company Regarding the Company.
(a)
The Company represents and warrants to, and agrees with, the Underwriter, as of the date hereof and as of the Closing Date or any applicable
Option Closing Date, as follows:
(i)
Good Standing. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws
of the State of Delaware, with the corporate power and authority to acquire, own, lease and operate its properties, and to lease the
same to others, and to conduct its business as described in the Registration Statement and the Prospectus, to execute and deliver this
Agreement and each Terms Agreement and to issue and sell the Securities as contemplated herein and therein; and the Company is in compliance
in all respects with the laws, orders, rules, regulations and directives issued or administered by such jurisdictions, except where the
failure to be in compliance would not, individually or in the aggregate, have a Material Adverse Effect (as defined below).
(ii)
Foreign Qualification of the Company. The Company is duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification, except
where the failure to be so qualified and in good standing would not, individually or in the aggregate, either (i) have or reasonably
be expected to have a material adverse effect on the business, operations, properties, financial condition, results of operations or
prospects of the Company and its Subsidiaries (as defined below), taken as a whole, or (ii) prevent, materially interfere with or materially
delay consummation of the transactions contemplated hereby or in any Terms Agreement (the effects described in the foregoing clauses
(i) and (ii) being herein referred to as a “Material Adverse Effect”).
(iii)
Subsidiaries. Each subsidiary of the Company (each a “Subsidiary” and collectively, the “Subsidiaries”)
that is a significant subsidiary, as defined in Rule 1-02(w) of Regulation S-X of the Exchange Act (each a “Significant Subsidiary”
and collectively, the “Significant Subsidiaries”), has been duly incorporated or organized and is validly existing
as a corporation, limited liability company or limited partnership, as the case may be, in good standing under the laws of the jurisdiction
of its incorporation or organization, has corporate power and authority to own, lease and operate its properties and conduct its business
as described in the Prospectus and is duly qualified as a foreign corporation, limited liability company or limited partnership, as the
case may be, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material
Adverse Effect. All of the issued and outstanding capital stock of, or other ownership interests in, each such Significant Subsidiary
has been duly authorized and validly issued, is fully paid and non-assessable and, except for directors’ qualifying shares, is
owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; and attached hereto as Schedule V is an accurate and complete list of the Significant Subsidiaries. At the date
of filing with the Commission, the Company did not have any Significant Subsidiary not listed on Exhibit 21 to the Company’s most
recent Annual Report on Form 10-K which was required to be so listed.
(iv)
Authorization. The Company has the power and authority to enter into this Agreement and execute the Pre-Funded Warrants, the Warrants and the
Underwriter Warrants and to authorize, issue and sell the Securities as contemplated by this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company, and together with the Pre-Funded Warrants, the Warrants and the Underwriter Warrants, when executed
and delivered by the Company, will constitute the valid, legal and binding obligations of the Company, enforceable against the Company
in accordance with their respective 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.
(v)
Contracts. There are no contracts, agreements, instruments or other documents that are required to be described in the Registration
Statement, the Time of Sale Disclosure Package or the Prospectus or any documents incorporated therein by reference or to be filed as
exhibits thereto which have not been so described in all material respects and filed as required by Item 601(b) of Regulation S-K under
the Securities Act. The copies of all contracts, agreements, instruments and other documents (including governmental licenses, authorizations,
permits, consents and approvals and all amendments or waivers relating to any of the foregoing) that have been furnished to the Underwriters or their counsel are complete and genuine and include all material collateral and supplemental agreements thereto. All contracts and agreements
between the Company and third parties expressly referenced in the Registration Statement, the Time of Sale Disclosure Package or the
Prospectus are legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors’ rights generally and by general principles of equity.
(vi)
Absence of Defaults and Conflicts Neither the Company nor any Significant Subsidiary is (i) in breach or violation of its certificate
or articles of incorporation, charter, bylaws, limited liability company agreement, certificate or agreement of limited or general partnership,
memorandum and articles of association, or other similar organizational documents, as the case may be, of such entity, (ii) in breach
of or in default (or, with the giving of notice or lapse of time or both, would be in default) (“Default”) under any
indenture, mortgage, loan or credit agreement, deed of trust, note, contract, franchise, lease or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its Significant Subsidiaries is a party or by which it or any of them may be bound
or to which any of the property or assets of the Company or any of its Significant Subsidiaries is subject (each, an “Existing
Instrument”), or (iii) in violation of any statute, law, rule, regulation, judgment, order or decree of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its Significant
Subsidiaries or any of their properties, as applicable, except, with respect to clauses (ii) and (iii) only, for such breaches, violations
or Defaults that would not, individually or in the aggregate, have a Material Adverse Effect. The Company’s execution, delivery
and performance of this Agreement and each Terms Agreement and consummation of the transactions contemplated hereby or thereby or by
the Registration Statement and the Prospectus (including the issuance and sale of the Securities and the use of the proceeds from the sale
of the Securities as described in the Prospectus under the caption “Use of Proceeds”) (i) have been duly authorized by all necessary
corporate action, and will not result in any breach or violation of the certificate or articles of incorporation, charter, bylaws, limited
liability company agreement, certificate or agreement of limited or general partnership, memorandum and articles of association, or other
similar organizational documents, as the case may be, of the Company or any of its Significant Subsidiaries, (ii) will not conflict with
or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or assets of the Company or any of its Significant Subsidiaries pursuant
to, or require the consent of any other party to, any Existing Instrument, and (iii) will not result in any violation of any statute,
law, rule, regulation, judgment, order or decree applicable to the Company or any of its Significant Subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its Significant
Subsidiaries or any of its or their properties, as applicable, except, with respect to clauses (ii) and (iii) only, for such conflicts,
breaches, Defaults, Debt Repayment Triggering Events or violations that would not, individually or in the aggregate, have a Material
Adverse Effect. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the
giving of notice or lapse of time or both would give, the holder of any note, debenture or other evidence of indebtedness (or any person
acting on such holder’s behalf), issued by the Company, the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any of its Significant Subsidiaries.
(vii) Consents.
No consents, approvals, orders, authorizations or filings are required on the part of the Company in connection with the execution,
delivery or performance of this Agreement or the issue and sale of the Securities, except (A) the registration under the Securities
Act of the Securities, which has been effected, (B) the necessary filings and approvals from Nasdaq to list the Shares, the Warrant
Shares, the Pre-Funded Warrant Shares and the Underwriter Warrant Shares, (C) such consents, approvals, authorizations,
registrations or qualifications as may be required under state or foreign securities or Blue Sky laws and the rules of the Financial
Industry Regulatory Authority, Inc. (“FINRA”) in connection with the purchase of the Shares and/or Pre-Funded
Warrants and Warrants and distribution of the Securities by the several Underwriters, (D) such consents and approvals as have been
obtained and are in full force and effect, and (E) such consents, approvals, orders, authorizations and filings the failure of which
to make or obtain is not reasonably likely to result in a Material Adverse Effect.
(viii)
SEC Reports. The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13
or Section 15(d) of the Exchange Act, and has timely filed all reports required to be filed pursuant to Sections 13(a), 13(e), 14 and
15(d) of the Exchange Act during the preceding twelve (12) months (the “SEC Reports”).
(ix) Capitalization.
The Company has an authorized and outstanding capitalization as set forth
in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus (subject, in each case, to the issuance of the Shares
and/or Pre-Funded Warrants, Warrants and Underwriter Warrants under this Agreement, the grant of options under existing stock option plans
described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus and the issuance of Common Stock pursuant
to the Company’s stock purchase agreements as described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus). All of the issued and outstanding shares of capital stock of the Company are duly authorized and validly issued, fully paid
and nonassessable, have been issued in compliance in all material respects with all applicable securities laws and conform in all material
respects to the description thereof in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus. All of the
issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and
non-assessable and, except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, are owned
directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims, except to the extent that such liens,
encumbrances, equities or claims would not reasonably be expected to have a Material Adverse Effect. Except for the issuances of options
or restricted stock units pursuant to an equity incentive plan, since the respective dates as of which information is provided in the
Registration Statement, the Time of Sale Disclosure Package or the Prospectus, the Company has not entered into or granted any convertible
or exchangeable securities, options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company
any shares of the capital stock of the Company. The Shares, the Pre-Funded Warrants and the Warrants, when issued and paid for as provided
herein, will be duly authorized and validly issued, fully paid and nonassessable, will be issued in compliance with all applicable securities
laws, and will be free of preemptive, registration or similar rights and will conform in all material respects to the description of the
capital stock of the Company contained in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus. The
Pre-Funded Warrant Shares and the Warrant Shares, when issued, paid for and delivered upon due exercise of the Pre-Funded Warrants and
the Warrants, as applicable, will be duly authorized and validly issued, fully paid and nonassessable, will be issued in compliance with
all applicable securities laws and will be free of preemptive, registration or similar rights. The Underwriter Warrant Shares, when issued,
paid for and delivered upon due exercise of the Underwriter Warrants, will be duly authorized and validly issued, fully paid and nonassessable,
will be issued in compliance with all applicable securities laws and will be free of preemptive, registration or similar rights.
(x) No
Registration Rights. Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus,
there are no contracts, agreements or understandings between the Company and any person granting such person the right (other than
rights which have been waived in writing or otherwise satisfied) to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to
include such securities with the Shares, the Pre-Funded Warrant Shares and the Warrant Shares registered pursuant to the
Registration Statement or with any securities being registered pursuant to any other registration statement filed by the Company
under the Securities Act.
(xi)
No Preemptive Rights. Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure Package and in
the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, or any restrictions upon the voting or
transfer of, any shares of Common Stock pursuant to the Company’s certificate of incorporation, 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.
(xiii)
Taxes. All tax returns of the Company and its Subsidiaries required by law to be filed have been timely filed and all taxes shown
by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been
or will be promptly taken and as to which adequate reserves have been provided. The charges, accruals and reserves on the books of the
Company in respect of any income and corporation tax liability for any years not finally determined are adequate to meet any assessments
or re-assessments for additional income tax for any years not finally determined, except to the extent of any inadequacy that would not
result in a Material Adverse Effect.
(xiv)
Material Change. Since the respective dates as of which information is given in the Registration Statement, the Time of Sale Disclosure
Package or the Prospectus, (A) neither the Company nor any of its subsidiaries has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions other than in the ordinary course of business, (B) the Company has not
declared or paid any dividends or made any distribution of any kind with respect to its capital stock; (C) there has not been any change
in the capital stock of the Company or any of its subsidiaries (other than a change in the number of outstanding shares of Common Stock
due to the issuance of shares upon the exercise of outstanding options or warrants, upon the conversion of outstanding shares of preferred
stock or other convertible securities or upon the vesting of outstanding restricted stock units; (D) there has not been any material
change in the Company’s long-term or short-term debt, and (E) there has not been the occurrence of any Material Adverse Effect.
(xv)
Ownership Interest. Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure Package, the Preliminary
Prospectus and the Prospectus, the Company does not own, directly or indirectly, any capital stock or other ownership interest in any
partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated
association, joint venture or other entity.
(xvi)
Absence of Proceedings. Other than as set forth in the Registration Statement, the Time of Sale Disclosure Package, the Preliminary
Prospectus and the Prospectus, there is no pending or, to the knowledge of the Company, threatened action, suit or proceeding to which
the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its Subsidiaries is the
subject before or by any court or governmental agency, authority or body, or any arbitrator or mediator, which, if determined adversely
to the Company or its subsidiaries, would individually or in the aggregate, reasonably be likely to result in a Material Adverse Effect.
The aggregate of all pending legal or governmental proceedings to which the Company or any Subsidiary is a party or of which any of their
respective properties or assets is the subject which are not described in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, including ordinary routine litigation incidental to the business of the Company, would not, individually or in the
aggregate, result in a Material Adverse Effect.
(xvii)
Possession of Licenses and Permits. Each of the Company and its Significant Subsidiaries has all necessary licenses, authorizations,
consents and approvals (including, without limitation, those administered by the United States Food and Drug Administration of the U.S.
Department of Health and Human Services (the “FDA”) or by any foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the FDA) and has made all necessary filings required under any federal,
state, local or foreign law, regulation or rule, and has obtained all necessary licenses, certificates, authorizations, orders, permits,
consents and approvals from other persons, in order to acquire and own, lease or sublease, lease to others and conduct its respective
business as described in the Registration Statement, Time of Sale Disclosure Package or Prospectus, except where the failure to have
or obtain such licenses, permits, authorizations, consents and approvals and to make such filings would not, individually or in the aggregate,
have a Material Adverse Effect. All of such license, permit, authorization, consent or approval are valid and in full force and effect,
except where the invalidity of such license, permit, authorization, consent or approval to be in full force and effect would not have
a Material Adverse Effect. Neither the Company nor any of its Significant Subsidiaries is in violation of, or in default under, or has
received notice of any proceedings relating to revocation or modification of, any such license, permit, authorization, consent or approval
(or has any reason to believe that any such license, permit, authorization, consent or approval will not be renewed in the ordinary course)
or any federal, state, local or foreign law, regulation or rule or any decree, order or judgment applicable to the Company or any of
its Significant Subsidiaries, except where such violation, default, revocation or modification.
(xviii)
Clinical Studies. Except set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, there
is no legal or governmental proceeding to which the Company or any of its Subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject, including any proceeding before the FDA or comparable federal, state, local
or foreign governmental bodies (it being understood that the interactions between the Company and the FDA and such comparable governmental
bodies relating to the testing, clinical development, manufacture and product approval process for its products shall not be deemed proceedings
for purposes of this representation), which is required to be described in the Registration Statement or the Prospectus or a document
incorporated by reference therein and is not described therein, or which, singularly or in the aggregate, if determined adversely to
the Company or its Subsidiaries, would reasonably be expected to have a Material Adverse Effect; and to the Company’s knowledge,
no such proceedings are threatened or contemplated by governmental authorities or threatened by others. The Company is in compliance
with all applicable federal, state, local and foreign laws, regulations, orders and decrees governing its business as currently conducted,
or any other federal, state or foreign agencies or bodies engaged in the regulation of medical devices, except where noncompliance would
not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. All preclinical and clinical studies conducted
by or on behalf of the Company and submitted to regulatory authorities to support approval for commercialization of the Company’s
products have been conducted by the Company, or to the Company’s knowledge by third parties, in compliance with all applicable
federal, state or foreign laws, rules, orders and regulations, except for such failure or failures to be in compliance as would not reasonably
be expected to have, singly or in the aggregate, a Material Adverse Effect..
(xix)
Property. Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, the Company
and each of its Significant Subsidiaries have good and marketable title to all of the properties and assets reflected as owned in the
financial statements referred to in Section 2(iv) above (or elsewhere in the Registration Statement and the Prospectus), in each case
free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and other defects, except such as do not materially
and adversely affect the value of such property or assets and do not materially interfere with the use made or proposed to be made of
such property by the Company or any Significant Subsidiary. The material real property, improvements, equipment and personal property
held under lease by the Company or any of its Significant Subsidiaries are held under valid and enforceable leases, with such exceptions
as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment
or personal property by the Company or such Significant Subsidiary. The Company and each of its Subsidiaries have such consents, easements,
rights-of-way or licenses from any person (“rights-of-way”) as are necessary to enable the Company and each of its
Subsidiaries to conduct its business in the manner described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, and except for such rights-of-way the lack of which would not have, individually or in the aggregate, a Material Adverse
Effect.
(xx)
Intellectual Property. Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus,
the Company and its Subsidiaries own or possess the right to use, or has a reasonable basis to believe that it can acquire on reasonable
terms the right to use, all (i) patents, trademarks, service marks, service mark registrations, Internet domain name registrations, copyrights,
licenses, trade secret rights (“Intellectual Property Rights”) and (ii) inventions, software, works of authorships,
trademarks, service marks, trade names, databases, formulae, know how, Internet domain names and other intellectual property (including
trade secrets and other unpatented and/or unpatentable proprietary confidential information, systems, or procedures) (collectively, “Intellectual
Property Assets”) necessary to conduct its businesses as currently conducted and described in the Registration Statement and
the Prospectus, and which the failure to own or have such rights would, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received any opinion from its legal counsel concluding
that any activities of their respective businesses infringe, misappropriate, or otherwise violate, valid and enforceable Intellectual
Property Rights of any other person, and except as described in the Registration Statement and the Prospectus, have not received written
notice of any challenge, which is to their knowledge still pending, by any other person to the rights of the Company and its Subsidiaries
with respect to any Intellectual Property Rights or Intellectual Property Assets owned or used by the Company and its Subsidiaries, which
if determined adversely against the Company would, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect. Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, to the knowledge of
the Company, the business of the Company and its subsidiaries as now conducted does not give rise to any infringement of, any misappropriation
of, or other violation of, any valid and enforceable Intellectual Property Rights of any other person. To the knowledge of the Company,
all licenses for the use of the Intellectual Property Rights described in the Registration Statement and the Prospectus are valid, binding
upon, and enforceable by or against the parties thereto in accordance to its terms. The Company and its subsidiaries have complied in
all material respects with, and are not in breach nor have received any written notice of any asserted or threatened claim of breach
of any Intellectual Property license, and the Company has no knowledge of any breach by any other person to any Intellectual Property
license. Except as described in the Registration Statement, no claim has been made against the Company nor its Subsidiaries alleging
the infringement by the Company or its Subsidiaries of any patent, trademark, service mark, trade name, copyright, trade secret, license
in or other intellectual property right or franchise right of any person, except as would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect. The Company and its Subsidiaries have taken reasonable steps to protect, maintain
and safeguard its Intellectual Property Rights, including the execution of appropriate nondisclosure and confidentiality agreements.
The consummation of the transactions contemplated herein will not result in the loss or impairment of or payment of any additional amounts
with respect to, nor require any further consent of any other person in respect of, the right of the Company and its Subsidiaries to
own, use, or hold for use any of the Intellectual Property Rights as owned, used or held for use in the conduct of the business as currently
conducted. The Company and its Subsidiaries have taken reasonable actions to obtain ownership of works of authorship and inventions made
by its employees, consultants and contractors during the time they were employed by or under contract with the Company and its Subsidiaries
and which relate to the business of the Company, or licenses to use such works of authorship or inventions.
(xxi)
Labor Disputes. No labor disturbance by or dispute with employees of the Company or any of its Subsidiaries exists or, to the
knowledge of the Company, is threatened which would reasonably be expected to result in a Material Adverse Effect. None of the employees
of the Company or any of its Subsidiaries is represented by a union and, to the knowledge of the Company, no union organizing activities
are taking place. Neither the Company nor any of its Subsidiaries has violated any federal, state or local law or foreign law relating
to the discrimination in hiring, promotion or pay of employees, nor any applicable wage or hour laws, or the rules and regulations thereunder,
or analogous foreign laws and regulations, which might, individually or in the aggregate, result in a Material Adverse Effect.
(xxii)
ERISA Compliance. (i) The Company and its Significant Subsidiaries and any “employee benefit plan” (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder
(collectively, “ERISA”)) established or maintained by the Company, its Significant Subsidiaries or their ERISA Affiliates
(as defined below) are in compliance in all material respects with ERISA and the Code; (ii) no “reportable event” (as defined
under ERISA), other than an event for which the reporting requirement has been waived under regulations issued by the Pension Benefit
Guaranty Corporation, has occurred with respect to any pension plan subject to Title IV of ERISA that is established or maintained by
the Company, its Significant Subsidiaries or any of their ERISA Affiliates (“Pension Plan”); (iii) no Pension Plan’s
benefit liabilities under Section 4001(a)(16) of ERISA exceed the current value of that Pension Plan’s assets, all as determined
as of the most recent valuation date for the Pension Plan in accordance with the assumptions used for funding the Pension Plan pursuant
to Section 412 of ERISA; (iv) none of the Company, its Significant Subsidiaries or any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (A) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit
plan,” (B) Sections 4971 or 4975 of the Code, (C) Section 412 of the Code as a result of a failure to satisfy the minimum funding
standard, or (D) Section 4980B of the Code with respect to the excise tax imposed thereunder; and (v) each “employee benefit plan”
established or maintained by the Company, its Significant Subsidiaries or any of their ERISA Affiliates that is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service and nothing has occurred,
whether by action or failure to act, which is reasonably likely to cause disqualification of any such employee benefit plan under Section
401(a) of the Code, except in the case of each of clauses (i) through (v), which would not have a Material Adverse Effect. “ERISA
Affiliate” means, with respect to the Company or a Significant Subsidiary, any member of any group of organizations described
in Section 414(b), (c), (m) or (o) of the Code, of which the Company or such Significant Subsidiary is a member.
(xxiii)
Environmental Matters. Except as otherwise disclosed in the Registration Statement, the Time of Sale Disclosure Package and Prospectus,
neither the Company nor any of its Subsidiaries has been in material violation of, in connection with the ownership, use, maintenance
or operation of its properties and assets, any applicable federal, state, municipal, local or foreign laws, rules, regulations, decisions,
orders, policies, permits, licenses, certificates or approvals having force of law, domestic or foreign, relating to environmental, health,
or safety matters or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”).
Without limiting the generality of the foregoing and except as otherwise described in the Registration Statement and Prospectus: (i)
the Company and each of its Subsidiaries has occupied its properties and has received, handled, used, stored, treated, shipped and disposed
of all pollutants, contaminants, hazardous or toxic materials, controlled or dangerous substances or wastes in compliance with all applicable
Environmental Laws to conduct their respective businesses; (ii) neither the Company nor any of its Subsidiaries is aware of any unlawful
spills, releases, discharges or disposal of any pollutants, contaminants, hazardous or toxic materials, controlled or dangerous substances
or wastes that have occurred or are presently occurring on or from its properties as a result of any construction on or operation and
use of its properties, (iii) there are no orders, rulings or directives issued against the Company or any of its Subsidiaries, and there
are no orders, rulings or directives pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries
under or pursuant to any Environmental Laws requiring any work, repairs, construction or capital expenditures with respect to any properties
or assets of the Company or any of its Subsidiaries; and (iv) no notice with respect to any of the matters referred to in this Section
3(xxiii), including any alleged violations by the Company or any of the Subsidiaries with respect thereto has been received by the Company
or any of its Subsidiaries, and no writ, injunction, order or judgment is outstanding, and no legal proceeding under or pursuant to any
Environmental Laws or relating to the ownership, use, maintenance or operation of the properties and assets of the Company or any of
its Subsidiaries is in progress, pending or threatened, which could reasonably be expected to have a Material Adverse Effect, and to
the knowledge of the Company, there are no grounds or conditions which exist, on or under any property now or previously owned, operated
or leased by the Company or any of its Subsidiaries, on which any such legal proceeding might be commenced with any reasonable likelihood
of success or with the passage of time, or the giving of notice or both, would give rise thereto.
(xxiv)
SOX Compliance. There is and has been no failure on the part of the Company or any of the Company’s directors or officers,
in their capacities as such, to comply in all material respects with any applicable provision of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related
to loans and Sections 302 and 906 related to certifications.
(xxv)
Accounting Controls and Disclosure Controls. The Company and each of 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) receipts and expenditures are being made only in accordance with management’s
general or specific authorization; (iv) access to assets is permitted only in accordance with management’s general or specific
authorization; and (v) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. Except as described in the Registration Statement and the Prospectus, since the end
of the Company’s most recent audited fiscal year, there has been (A) no material weakness in the Company’s internal control
over financial reporting (whether or not remediated) and (B) no change in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company and its Subsidiaries, considered as one enterprise, have established and currently maintain disclosure controls and procedures
that comply with Rule 13a-15 under the Exchange Act, and the Company has determined that such disclosure controls and procedures are
effective in compliance with Rule 13a-15 under the Exchange Act.
(xxvi)
Money Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company
or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(xxvii)
Foreign Corrupt Practices Act. None of the Company, any Subsidiary or, to the knowledge of the Company, any director, officer,
agent, employee, affiliate or other person acting on behalf of the Company or any of its Subsidiaries, is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (collectively, the “FCPA”), including, without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA. The Company and the Subsidiaries have conducted their respective businesses in compliance
with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.
(xxviii)
OFAC. None of the Company, any Subsidiary or, to the knowledge of the Company, any director, officer, agent, employee, affiliate
or person acting on behalf of the Company or any of its Subsidiaries is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered
by OFAC.
(xxix) Cybersecurity.
With such exceptions as would not, individually or in the aggregate, have a Material Adverse Effect: (A) there has been no security breach
or incident, unauthorized access or disclosure, or other compromise of or relating to the Company’s or any of its subsidiaries’
information technology and computer systems, networks, hardware, software, data and databases (including the data and information of
their respective tenants, customers, employees, suppliers, vendors and any third party data maintained, processed or stored by the Company
or any of its subsidiaries, and any such data processed or stored by third parties on behalf of the Company or any of its subsidiaries),
equipment or technology (collectively, “IT Systems and Data”); (B) neither the Company nor any of its subsidiaries
has been notified of, and have no knowledge of any event or condition that would result in, any security breach or incident, unauthorized
access or disclosure or other compromise to their IT Systems and Data; and (C) the Company and its subsidiaries have implemented reasonably
appropriate controls, policies, procedures and technological safeguards to maintain and protect the integrity, continuous operation,
redundancy and security of their IT Systems and Data reasonably consistent with industry standards and practices, or as required by applicable
regulatory standards. The Company and its subsidiaries are presently in material compliance with all applicable laws and statutes and
all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and
contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data
from unauthorized use, access, misappropriation or modification.
(xxxi)
Director Independence. Each of the independent directors (or independent director nominees, once appointed, if applicable) named
in the Registration Statement and Prospectus satisfies the independence standards established by the Exchange and, with respect to members
of the Company’s audit committee, the enhanced independence standards contained in Rule 10A-3(b)(1) promulgated by the Commission
under the Exchange Act.
(xxxii)
Related Party Transactions. No relationship, direct or indirect, exists between or among the Company or any of its Subsidiaries
on the one hand, and the directors, officers, trustees, managers, stockholders, partners, customers or suppliers of the Company or any
of the Subsidiaries on the other hand, which would be required by the Securities Act to be disclosed in the Registration Statement and
the Prospectus, which is not so disclosed.
(xxxiii)
Insurance. The Company and its Subsidiaries carry or are entitled to the benefits of insurance in such amounts and covering such
risks as the Company reasonably deems adequate, and all such insurance is in full force and effect. The Company has no reason to believe
that it or any Subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost
that would not result in a Material Adverse Effect. Neither the Company nor any Subsidiary has been denied any material insurance coverage
which it has sought or for which it has applied.
(xxxiv)
Transactions Affecting Disclosure to FINRA. The Company is not required to register as a “broker” or “dealer”
in accordance with the provisions of the Exchange Act and does not, directly or indirectly through one or more intermediaries, control
or have any other association with (within the meaning of Article I of the By-laws of FINRA) any member firm of FINRA. No relationship,
direct or indirect, exists between or among the Company, on the one hand, and the directors, officers or stockholders of the Company,
on the other hand, which is required by the rules of FINRA to be described in the Registration Statement, and the Prospectus, which is
not so described.
(xxxv)
No Financial Advisor. Other than the Underwriters, no person has the right to act as an underwriter or as a financial advisor
to the Company in connection with the transactions contemplated hereby.
(xxxvi)
Investment Company. The Company is not, and, after giving effect to the offering and sale of the Securities and the application
of the net proceeds thereof, including the proceeds received upon exercise of the Pre-Funded Warrants, the Warrants and/or the Underwriter Warrants,
will not be required to register as an “investment company,” as such term is defined in the Investment Company Act of 1940,
as amended.
(xxxvii)
Public Filings. The Registration Statement (and any further documents to be filed with the Commission in connection with the offering)
contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment
thereto, if any, at the time it became effective, complied in all material respects with the Securities Act and the applicable rules
and regulations under the Securities Act and did not and, as amended or supplemented, if applicable, 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 complies in all material respects with the Securities Act and the applicable rules and regulations. The Prospectus, as
amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
The SEC Reports, when they respectively were filed with the Commission, conformed in all material respects to the requirements of the
Securities Act and the Exchange Act, as applicable, and the applicable rules and regulations, and none of such documents, when they respectively
were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make
the statements therein (with respect to the SEC Reports incorporated by reference in the Prospectus), in light of the circumstances under
which they were made not misleading; and any further documents so filed and incorporated by reference 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 the applicable rules
and regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they were made not misleading. No post-effective amendment
to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate,
a fundamental change in the information set forth therein is required to be filed with the Commission. There are no documents required
to be filed with the Commission in connection with the transaction contemplated hereby that (A) have not been filed as required pursuant
to the Securities Act or (B) will not be filed within the requisite time period. There are no contracts or other documents required to
be described in the Prospectus, or to be filed as exhibits or schedules to the Registration Statement, which have not been described
or filed as required.
(xxxix)
No Off-Balance Sheet Arrangements. Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, there are no material off-balance sheet arrangements (as defined in Item 303 of Regulation S-K) that have or are reasonably
likely to have a material current or future effect on the Company’s financial condition, revenues or expenses, changes in financial
condition, results of operations, liquidity, capital expenditures or capital resources.
(xxxx)
Certain Statements. The statements set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus
under the caption “Description of Capital Stock,” insofar as they purport to constitute a summary of (A) the terms of the
Company’s outstanding securities, (B) the terms of the Securities, and (C) the terms of the documents referred to therein, are
accurate and fair in all material respects.
4.
Purchase, Sale and Delivery of Securities.
(a)
On the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, (i) the Company agrees to issue and sell the Firm Shares and/or Pre-Funded Warrants
and Firm Warrants to the Underwriters, and the Underwriters, severally and not jointly, agree to purchase the Firm Shares and/or Pre-Funded
Warrants and the Firm Warrants as set forth opposite the name of such Underwriter on Schedule I hereto; and (ii) in the event and
to the extent the Underwriters shall exercise the option to purchase the Option Shares and/or Option Warrants as provided below, the Company
agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from
the Company, at the purchase price described in this Section 4(a), that portion of the number of Option Shares and/or Option Warrants
as to which such option shall have been exercised (to be adjusted as to eliminate fractional shares) determined by multiplying such number
of Option Shares and/or Option Warrants by a fraction, the numerator of which is the maximum number of Option Shares or Option Warrants
which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Option Shares or Option Warrants, as applicable, that all of the Underwriters are entitled
to purchase hereunder. The purchase price for one share of Common Stock shall be $[●] (the “Share Purchase Price”);
the purchase price for one Pre-Funded Warrant shall be $[●] (the “Pre-Funded Warrant Purchase Price”); and the
purchase price for one Warrant to purchase one share of Common Stock shall be $[●] (the “Warrant Purchase Price”).
As
referenced in Section 4(a)(ii) above, the Company hereby grants to the several Underwriters the option to purchase from the Company
the Option Shares and/or the Option Warrants. This option may be exercised by the Representative on behalf of the Underwriters at
any time and from time to time on or before that date that is thirty (30) days following the Closing Date, by written notice to the
Company. Such notice shall set forth the aggregate number of Option Shares and/or Option Warrants as to which the option is being
exercised, and the date and time when the Option Shares and/or Option Warrants are to be delivered (such date and time being herein
referred to as an “Option Closing Date”); provided, however, that no Option Closing Date shall be earlier than
the Closing Date nor later than one business day after the date on which the option shall have been exercised unless the Company and
the Underwriters otherwise agree.
Payment
of the purchase price and delivery for the Option Shares and/or Option Warrants shall be made at the Option Closing Date in the same manner
and at the same office as the payment for the Firm Shares and/or Pre-Funded Warrants and Firm Warrants as set forth in Section 4(c) below.
(b)
Prior to the Closing Date, the Representative shall provide the Company
with a list of investors to which the Underwriters allocated Pre-Funded Warrants and Warrants, as applicable (the “Investor List”).
The Investor List shall specify the name, address and number of Pre-Funded Warrants and Warrants to be sold to each such investor.
Prior to the Closing Date, the Company shall provide a draft of the Pre-Funded Warrants and Warrants, as applicable, to the Underwriters
for review. On the Closing Date, the Company shall deliver the Pre-Funded Warrants and Warrants, by mailing such instruments to each investor
in accordance with the Investor List through a U.S. nationally recognized overnight courier service. If the Company, upon the instruction
of the Representative, registers any Pre-Funded Warrant or Warrant in the name of any person or entity to which any Underwriter intends
to sell such Pre-Funded Warrant or Warrant, then such Underwriter shall have the right to thereafter, but prior to the Closing Date, request
the re-registration of such Pre-Funded Warrant or Warrant (and the Company shall be required to re-register such Pre-Funded Warrant or
Warrant) in the name of any other person or entity (it being understood that such re-registration is intended to permit an Underwriter
to resell such Pre-Funded Warrant or Warrant in the event that the person or entity to which such Underwriter originally intended to sell
such Pre-Funded Warrant or Warrant shall fail to pay the purchase price of such Pre-Funded Warrant).
(c)
The Shares and/or Pre-Funded Warrants and Warrants will be delivered by the Company to the Underwriters (or as otherwise provided
for in Section 4(b) above) against payment of the Share Purchase Price, the Pre-Funded Warrant Purchase Price and the Warrant
Purchase Price, as applicable, by wire transfer of same day funds payable to the order of the Company at the offices of BTIG, LLC,
600 Montgomery Street, 6th Floor, San Francisco, California 94111, or such other location as may be mutually acceptable,
at 10:00 a.m. Eastern Time, on the second (or if the Shares and/or Pre-Funded Warrants and Warrants are priced, as contemplated by
Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the third) full business day following the date hereof, or at
such other time and date as the Representative and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act.
The time and date of delivery of the Shares and/or Pre-Funded Warrants and Warrants is referred to herein as the “Closing
Date.” Delivery of the Shares shall be made through the facilities of the Depository Trust Company designated by the
Representative. Delivery of the Pre-Funded Warrants and Warrants shall be made by physical delivery to be received or directed
by the Underwriters (or by an applicable investor purchasing Pre-Funded Warrants and Warrants) no later than one (1) business day
following the Closing Date. In the event that an investor purchasing Pre-Funded Warrants or Warrants delivers an Exercise Notice (as
defined in the Pre-Funded Warrants and Warrants) prior to the Closing Date, to exercise any Pre-Funded Warrants or Warrants between
the date hereof and the Closing Date, the Company shall deliver the Pre-Funded Warrant Shares or Warrant Shares, as applicable, with
respect to any exercise to such investor on the Closing Date as specified in such Exercise Notice.
(d)
The Company shall issue to the Representative or its designees on each of the Closing Date and each Option Closing Date, warrants (the
“Underwriter Warrants”) to purchase that number of shares of Common Stock (the “Underwriter Warrant Shares”)
equal to 2.0% of the aggregate number of Shares that may be issued on each of the Closing Date and each Option Closing Date, as applicable.
The Underwriter Warrants shall be in a customary form reasonably acceptable to the Representative, expiring on the five-year anniversary
of the date of their issuance at an initial exercise price of $[•], which is equal to [•] of the public offering price of the
Shares.
5.
Covenants.
(a)
The Company covenants and agrees with the Representative as follows:
(i)
The Company shall prepare the Prospectus in a form approved by the Underwriters and file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission’s close of business on the second (2nd) business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be required by the Rules and Regulations of the Commission.
(ii)
During the period beginning on the date hereof and ending on the earlier of (A) such date as determined by the Representative that the
Prospectus is no longer required by law to be delivered in connection with sales by an underwriter or dealer or (B) the completion of
the distribution of the Securities by the Underwriters (the “Prospectus Delivery Period”), prior to amending or supplementing
the Registration Statement, including any Rule 462(b) Registration Statement, the Time of Sale Disclosure Package or the Prospectus,
the Company shall furnish to the Representative for review and comment a copy of each such proposed amendment or supplement, and the
Company shall not file any such proposed amendment or supplement to which the Representative reasonably objects.
(iii)
From the date of this Agreement until the end of the Prospectus Delivery Period, the Company shall promptly advise the Representative
in writing (A) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (B) of
the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to the Time
of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, (C) of the time and date that any post-effective amendment
to the Registration Statement becomes effective and (D) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending its use or the use of the Time of Sale Disclosure Package, the
Prospectus or any Issuer Free Writing Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the
Common Stock from any securities exchange upon which it is listed for trading or included or designated for quotation, or of the threatening
or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time during the Prospectus
Delivery Period, the Company will use its reasonable efforts to obtain the lifting of such order at the earliest possible moment. Additionally,
the Company agrees during the Prospectus Delivery Period that it shall comply with the provisions of Rules 424(b), 430A and 430B, as
applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings made by the Company under Rule 424(b)
or Rule 433 were received in a timely manner by the Commission (without reliance on Rule 424(b)(8) or 164(b) of the Securities Act).
(iv)
(A) During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as now
and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act, as now and hereafter
amended, so far as necessary to permit the continuance of sales of or dealings in the Securities as contemplated by the provisions hereof,
the Time of Sale Disclosure Package, the Registration Statement and the Prospectus. If during the Prospectus Delivery Period any event
occurs as the result of which would cause the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time
of Sale Disclosure Package) to include 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 such statement was made, not misleading, or if during such period it
is necessary or appropriate in the opinion of the Company or its counsel or the Underwriters or their counsel to amend the Registration
Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure
Package) to comply with the Securities Act or to file under the Exchange Act any document that would be deemed to be incorporated by
reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, the Company will promptly notify the Underwriters,
allow the Underwriters the opportunity to provide reasonable comments on such amendment, Prospectus or document, and will amend the Registration
Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure
Package) or file such document (at the expense of the Company) so as to correct such statement or omission or effect such compliance.
(B)
During the Prospectus Delivery Period, if at any time following the issuance of an Issuer Free Writing Prospectus there occurred or occurs
an event or development the result of which is that such Issuer Free Writing Prospectus conflicted or would conflict with the information
contained in the Registration Statement or any Prospectus or included or would include, when taken together with the Time of Sale Disclosure
Package, an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has promptly notified or promptly
will notify the Underwriters and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission.
(v)
The Company shall take or cause to be taken all necessary action to qualify the Securities for sale under the securities laws of such
jurisdictions as the Underwriters reasonably designate and to continue such qualifications in effect so long as required for the distribution
of the Securities, except that the Company shall not be required in connection therewith to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified, to execute a general consent to service of process in any state
or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject.
(vi)
The Company shall deliver to the Underwriters and counsel for the Underwriters copies, without charge, of the Registration Statement,
the Prospectus, any Issuer Free Writing Prospectus, and all amendments and supplements to such documents, and signed copies of all consents
and certificates of experts, in each case as soon as available and in such quantities as the Underwriters may from time to time reasonably
request.
(vii)
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 (which need not be audited) covering a 12-month period that
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(viii)
The Company shall use commercially reasonable efforts to maintain the listing of the shares of Common Stock on Nasdaq or a comparable
exchange for at least two (2) years from the date of this Agreement unless the Company is acquired, merged out of existence or goes private
under Exchange Act Rule 13e-3 during such time.
(ix)
For a period of two (2) years from the Closing Date, the Company shall use its commercially reasonable efforts to maintain the
registration of the Shares and, when issued, the Pre-Funded Warrant Shares and Warrant Shares under the Exchange Act unless the
Company is acquired, merged out of existence or goes private under Exchange Act Rule 13e-3 during such time.
(x)
For so long as any Pre-Funded Warrants or Warrants remain outstanding,
the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of authorized shares
of Common Stock for the purpose of enabling the Company to effect the issuance of the Pre-Funded Warrant Shares and Warrant Shares, as
applicable.
(xi)
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or
cause to be paid (A) all expenses incurred in connection with the delivery to the Underwriters of the Securities (including transfer
taxes allocated to the respective transferees, all fees and expenses of the registrar and transfer agent of the Securities (if other
than the Company) and the cost of preparing and printing warrant certificates), (B) all expenses and fees (including, without
limitation, fees and expenses of the Company’s counsel) in connection with the preparation, printing, filing, delivery, and
shipping of the Registration Statement (including the financial statements therein and all amendments, schedules, and exhibits
thereto), the Securities, the Time of Sale Disclosure Package, any Prospectus, any Issuer Free Writing Prospectus and any amendment
thereof or supplement thereto, (C) all reasonable filing fees and reasonable fees and disbursements of the Representative’s
counsel incurred in connection with the qualification of the Securities for offering and sale by the Underwriters or by dealers
under the securities or blue sky laws of the states and other jurisdictions that the Underwriters shall designate, (D) the fees and
expenses of any transfer agent or registrar (E) the reasonable filing fees incident to any required review and approval by FINRA, of
the terms of the sale of the Securities, (F) all fees and expenses relating to the listing of the Securities on Nasdaq, (G) the fees
and expenses of the Company’s accountants, (H) the costs and expenses of the Company relating to investor presentations on any
“road show” undertaken in connection with the marketing of the Securities, including, without limitation,
expenses associated with the production of road show slides and graphics, fees and expenses of any consultants (not including the
Underwriters and their representatives) engaged in connection with the road show presentations, and travel and lodging expenses of
the representatives and officers of the Company and any such consultants (not including the Underwriters and their representatives), and
(I) all other costs and expenses incident to the performance of its obligations hereunder that are not otherwise specifically
provided for herein. The Company will reimburse the Representative for its reasonable and documented out-of-pocket expenses
incurred in connection with the offer and sale of the Securities contemplated hereby, including the fees and disbursements of its
counsel, in an aggregate amount not to exceed $100,000 without the Company’s prior approval. At the Closing Date, the Company
shall pay the Representative 1.0% of the aggregate gross proceeds received by the Company from the sale of the Firm Shares,
Pre-Funded Warrants and Firm Warrants, as applicable, for non-accountable expenses.
(xii)
The Company intends to apply the net proceeds from the sale of the Securities to be sold by it hereunder for the purposes set forth in
the Time of Sale Disclosure Package and in the Prospectus.
(xiii)
The Company has not taken and will not take, directly or indirectly, during the Prospectus Delivery Period, any action designed to or
which might reasonably be expected to cause or result in, or that has constituted, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Securities.
(xiv)
The Company represents and agrees that, unless it obtains the prior written consent of the Representative, and the Representative represents
and agrees that, unless it obtains the prior written consent of the Company, it has not made and will not make any offer relating to
the Securities that would constitute an Issuer Free Writing Prospectus; provided that the prior written consent of the parties hereto
shall be deemed to have been given in respect of the free writing prospectuses included in Schedule II. Any such free writing
prospectus set forth on Schedule II and consented to by the Company and the Representative is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company represents that it has treated, or agrees that it will treat, each Permitted Free Writing
Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied or will comply with the requirements
of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record-keeping.
(xv)
The Company hereby agrees that, without the prior written consent of the Representative, it will not, during the period ending 90 days
after the date hereof (“Lock-Up Period”), (A) sell, offer to sell, contract or agree to sell, hypothecate, pledge,
grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or file (or participate in the filing
of) a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any Common Stock or any other securities
of the Company that are substantially similar to Common Stock, or any securities convertible into or exchangeable or exercisable for,
or any warrants or other rights to purchase, the foregoing, (B) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of Common Stock or any other securities of the Company that are substantially
similar to Common Stock, or any securities convertible into or exchangeable or exercisable for, or any warrants or other rights to purchase,
the foregoing, whether any such transaction is to be settled by delivery of Common Stock or such other securities, in cash or otherwise
or (C) publicly announce an intention to effect any transaction specified in clause (A) or (B). The restrictions contained in the preceding
sentence shall not apply to (V) the Securities to be sold hereunder, (W) the issuance of Common Stock upon the exercise of options or
warrants disclosed as outstanding in the Registration Statement (excluding exhibits thereto), the Time of Sale Disclosure Package or
the Prospectus provided that such options or warrants have not been amended since the date of this Agreement to increase the number of
such options or warrants or to decrease the exercise price, exchange price or conversion price of such options or warrants (other than
in connection with stock splits or combinations) or to extend the term of such securities, (X) the issuance of employee stock options
not exercisable during the Lock-Up Period and the grant of restricted stock awards or restricted stock units pursuant to equity incentive
plans described in the Registration Statement (excluding exhibits thereto) and the Prospectus or (Y) the filing of registration statements
on Form S-8 with respect to the shares of Common Stock reserved for issuance under the Company’s equity incentive plans as in effect
from time to time.
(xvi)
Prior to the Closing Date, the Company will issue no press release or other communications directly or indirectly and hold no press conference
with respect to the Company, the condition, financial or otherwise, or the earnings, business affairs or business prospects of any of
them, or the offering of the Securities without the prior written consent of the Representative unless in the judgment of the Company
and its counsel, and after notification to the Representative, such press release or communication is required by law.
(xvii)
The Company hereby agrees to engage and maintain, at its expense, a registrar and transfer agent for the Securities.
6.
Conditions of the Underwriters’ Obligations. The obligations of each Underwriter hereunder to purchase the Securities are
subject to the accuracy, as of the date hereof and at the Closing Date or any applicable Option Closing Date (as if made at the Closing
Date or Option Closing Date), of and compliance with all representations, warranties and agreements of the Company contained herein,
the performance by the Company of its obligations hereunder and the following additional conditions:
(a)
If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, is required under the Securities
Act or the Rules and Regulations, the Company shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free Writing
Prospectus with the Commission in the manner and within the time period so required (without reliance on Rule 424(b)(8) or 164(b) under
the Securities Act); the Registration Statement shall remain effective; no stop order suspending the effectiveness of the Registration
Statement or any part thereof, any Rule 462(b) Registration Statement, or any amendment thereof, nor suspending or preventing the use
of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall have been issued; no proceedings for
the issuance of such an order shall have been initiated or threatened by the Commission; any request of the Commission or the Representative
for additional information (to be included in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any Issuer
Free Writing Prospectus or otherwise) shall have been complied with to the Underwriters’ satisfaction.
(b)
The Shares, the Pre-Funded Warrant Shares and the Warrant Shares shall be qualified and approved for listing on Nasdaq.
(c)
FINRA shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.
(d)
The Representative shall not have reasonably determined, and advised the Company, that the Registration Statement, the Time of Sale Disclosure
Package or the Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus, contains an untrue
statement of fact which, in the Representative’s reasonable opinion, is material, or omits to state a fact which, in the Representative’s
reasonable opinion, is material and is required to be stated therein or necessary to make the statements therein not misleading
(e)
Between the date hereof and the Closing Date (A) no downgrading shall have occurred in the rating accorded any of the Company’s
securities by any “nationally recognized statistical rating organization,” as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act, and (B) no such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the Company’s securities.
(f)
On the Closing Date and any Option Closing Date, there shall have been furnished to the Representative the opinion and negative assurance
letter of Lowenstein Sandler LLP, corporate counsel for the Company, dated as of the Closing Date and addressed to the Representative,
in form and substance reasonably satisfactory to the Representative.
(h)
On the Closing Date and any Option Closing Date, there shall have been furnished to the Representative the opinion and negative assurance
letter from DLA Piper LLP (US), counsel to the Underwriters, dated as of the Closing Date and addressed to the Representative, in form
and substance reasonably satisfactory to the Representative.
(i)
The Representative shall have received a letter of KMPG LLP, on the date hereof and on the Closing Date and any Option Closing Date,
addressed to the Representative, confirming that they are independent public accountants within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the qualifications of accountants under Rule 2-01 of Regulation S-X of
the Commission, and confirming, as of the date of each such letter (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given in the Time of Sale Disclosure Package, as of a date not prior
to the date hereof or more than five days prior to the date of such letter), the conclusions and findings of said firm, of the type ordinarily
included in accountants’ “comfort letters” to underwriters, with respect to the financial information, including any
financial information contained in the SEC Reports filed by the Company or incorporated by reference in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus, and other matters required by the Representative.
(j)
On the Closing Date and any Option Closing Date (if applicable), there shall have been furnished to the Representative a certificate,
dated the Closing Date and addressed to the Representative, signed by the chief executive officer and the chief financial officer of
the Company, in their capacity as officers of the Company, to the effect that:
(i)
The representations and warranties of the Company in this Agreement that are qualified by materiality or by reference to any Material
Adverse Effect are true and correct in all respects, and all other representations and warranties of the Company in this Agreement are
true and correct, in all material respects, as if made at and as of the Closing Date or such Option Closing Date (as applicable), and
the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior
to the Closing Date or such Option Closing Date (as applicable);
(ii)
No stop order or other order (A) suspending the effectiveness of the Registration Statement or any part thereof or any amendment thereof,
(B) suspending the qualification of the Securities for offering or sale, or (C) suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued, and no proceeding for that purpose has been
instituted or, to their knowledge, is contemplated by the Commission or any state or regulatory body; and
(iii)
There has been no occurrence of any event resulting or reasonably likely to result in a Material Adverse Effect during the period from
and after the date of this Agreement and prior to the Closing Date or any Option Closing Date (as applicable).
(k)
On or before the date hereof, the Representative shall have received duly executed “lock-up” agreements, in the form attached
hereto as Schedule III, between the Representative and each of the parties set forth on Schedule IV hereto.
(l)
The Representative shall have received electronic copies of the Pre-Funded Warrants and Warrants executed by the Company.
(m)
The Common Stock shall be registered under the Exchange Act and shall be listed on Nasdaq, and the Company shall not have taken any action
designed to terminate, or likely to have the effect of terminating, the registration of the Common Stock under the Exchange Act or delisting
or suspending from trading the Common Stock from Nasdaq, nor shall the Company have received any information suggesting that the Commission
is contemplated terminating such registration or listing.
(n)
The Company shall have furnished to the Representative and its counsel such additional documents, certificates and evidence as the Representative
or its counsel may have reasonably requested.
(o)
On the Closing Date or any Option Closing Date (as applicable), the Firm Shares and the Option Shares shall have been delivered via
the Depository Trust Company system to the accounts of the Underwriters.
If
any condition specified in this Section 6 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representative by notice to the Company at any time at or prior to the Closing Date and such termination shall be without liability
of any party to any other party, except that Section 5(a)(xi), Section 7 and Section 8 shall survive any such termination and remain
in full force and effect.
7.
Indemnification and Contribution.
(a)
The Company agrees to indemnify, defend and hold harmless the Underwriters, their affiliates, directors and officers and employees, and
each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any losses, claims, damages or liabilities to which the Underwriters or such person may become subject, under the
Securities Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) an
untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including the information deemed
to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of
the Rules and Regulations, or arise out of or are based upon the omission from the Registration Statement, or alleged omission to state
therein, a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) an untrue statement
or alleged untrue statement of a material fact contained in the Time of Sale Disclosure Package, the Prospectus, or any amendment or
supplement thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Registration
Statement or the Prospectus), or any Issuer Free Writing Prospectus or the Marketing Materials, or arising out of or based upon the omission
or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, (iii) in whole or in part, any inaccuracy in the representations and
warranties of the Company contained herein, or (iv) in whole or in part, any failure of the Company to perform its obligations hereunder
or under law, and will reimburse the Underwriters for any legal or other expenses reasonably incurred by it in connection with evaluating,
investigating or defending against such loss, claim, damage, liability or action (or any legal or other expense reasonably incurred in
connection with the evaluation, investigation or defense thereof); provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Time of Sale Disclosure Package,
the Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, in reliance upon and in conformity with
written information furnished to the Company by the Representative specifically for use in the preparation thereof, which written information
is described in Section 7(f).
(b)
The Underwriters will indemnify, defend and hold harmless the Company, its affiliates, directors, officers and employees, and each person,
if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against
any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or otherwise (including
in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or any amendment or
supplement thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant
to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Time
of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus or any “issuer
information” filed or required to be filed pursuant to Rule 433(d) under the Act in reliance upon and in conformity with written
information furnished to the Company by the Underwriters by or behalf of any Underwriters specifically for use in the preparation thereof,
and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with defending against
any such loss, claim, damage, liability or action.
(c)
Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party
from any liability that it may have to any indemnified party except to the extent such indemnifying party has been materially prejudiced
by such failure. In case any such action shall be brought against any indemnified party, it shall notify the indemnifying party of the
commencement thereof, and the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of the indemnifying party’s election so to assume
the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the defense thereof; provided, however, that
if (i) 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, (ii) 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 (iii)
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, the indemnified party shall have the right
to employ a single counsel to represent it in any claim in respect of which indemnity may be sought under subsection (a) or (b) of this
Section 7, in which event the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or parties
and reimbursed to the indemnified party as incurred.
The
indemnifying party under this Section 7 shall not be liable for any settlement of any proceeding effected without its written consent,
but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending
or threatened action, suit or proceeding in respect of which any indemnified party is a party or could be named and indemnity was or
would be sought hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes an unconditional release
of such indemnified party from all liability for claims that are the subject matter of such action, suit or proceeding and (b) 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.
(d)
If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of
the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering and sale of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied
by the Company or the Underwriters and the parties’ relevant intent, knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of this subsection (d). The amount paid by an indemnified party
as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against
any action or claim that is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), the Underwriters
shall not be required to contribute any amount in excess of the amount of the Underwriters’ discounts commissions set forth in
the table on the cover of the Prospectus. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(e)
The obligations of the Company under this Section 7 shall be in addition to any liability that the Company may otherwise have and the
benefits of such obligations shall extend, upon the same terms and conditions, to each person, if any, who controls the Underwriters
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the obligations of the Underwriters under
this Section 7 shall be in addition to any liability that the Underwriters may otherwise have and the benefits of such obligations shall
extend, upon the same terms and conditions, to the Company, and officers, directors and each person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
(f)
For purposes of this Agreement, the Underwriters confirm, and the Company acknowledges, that there is no information concerning any Underwriter
furnished in writing to the Company by the Underwriters specifically for preparation of or inclusion in the Registration Statement, the
Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, other than the statements set forth in the statements
set forth in the “Underwriting” section of the Prospectus and Time of Sale Disclosure Package, only insofar as such statements
relate to the amount of selling concession and re-allowance and related activities that may be undertaken by the Underwriters or the
Underwriters’ Information.
8.
Substitution of Underwriters. If any Underwriter shall default in its obligation to purchase on any Closing Date the Securities
agreed to be purchased hereunder on such Closing Date, the Representative shall have the right, within 36 hours thereafter, to make arrangements
for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase such Securities on the terms contained herein.
If, however, the Representative shall not have completed such arrangements within such 36-hour period, then the Company shall be entitled
to a further period of 36 hours within which to procure another party or other parties satisfactory to the Underwriters to purchase such
Securities on such terms. If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter
or Underwriters by the Representative and the Company as provided above, the aggregate number of Securities which remains unpurchased
on such Closing Date does not exceed one-eleventh of the aggregate number of all the Securities that all the Underwriters are obligated
to purchase on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of
Securities which such Underwriter agreed to purchase hereunder at such date and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Securities which such Underwriter agreed to purchase hereunder) of the Securities
of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default. In any such case, either the Representative or the Company shall have the right to postpone
the applicable Closing Date for a period of not more than seven days in order to effect any necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or Prospectus or any other documents), and the Company agrees to
file promptly any amendments to the Registration Statement or the Prospectus which in the opinion of the Company and the Underwriters
and their counsel may thereby be made necessary.
If,
after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the Representative
and the Company as provided above, the aggregate number of such Securities which remains unpurchased exceeds 10% of the aggregate number
of all the Securities to be purchased at such date, then this Agreement shall terminate, without liability on the part of any non-defaulting
Underwriter to the Company, and without liability on the part of the Company, except that the provisions of Sections 5(a)(xi), 7 and
10 shall at all times be effective and shall survive termination. The provisions of this Section 8 shall not in any way affect the liability
of any defaulting Underwriter to the Company or the nondefaulting Underwriters arising out of such default. The term “Underwriter”
as used in this Agreement shall include any person substituted under this Section 8 with like effect as if such person had originally
been a party to this Agreement with respect to such Securities. If this Agreement is terminated by the Representative pursuant to this
Section 8, the Company will have no obligation to reimburse any defaulting Underwriter.
9.
Representations and Agreements to Survive Delivery. All representations, warranties, and agreements of the Company herein or
in certificates delivered pursuant hereto, including, but not limited to, the agreements of the Underwriters and the Company contained
in Section 5(a)(xi) and Section 7 hereof, shall remain operative and in full force and effect regardless of any investigation made by
or on behalf of the Underwriters or any controlling person thereof, or the Company or any of its officers, directors, or controlling
persons, and shall survive delivery of, and payment for, the Securities to and by the Underwriters hereunder.
10.
Termination of this Agreement.
(a)
The Representative shall have the right to terminate this Agreement by giving notice to the Company as hereinafter specified at any time
at or prior to the Closing Date, if in the discretion of the Representative, (i) there has occurred any material adverse change in the
securities markets or any event, act or occurrence that has materially disrupted, or in the opinion of the Representative, will in the
future materially disrupt, the securities markets or there shall be such a material adverse change in general financial, political or
economic conditions or the effect of international conditions on the financial markets in the United States is such as to make it, in
the judgment of the Representative, inadvisable or impracticable to market the Shares or enforce contracts for the sale of the Shares
(ii) trading in the Company’s Common Stock shall have been suspended by the Commission or Nasdaq or trading in securities generally
on Nasdaq, the NYSE or NYSE American shall have been suspended, (iii) minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on Nasdaq, the NYSE or NYSE American, by such exchange or by order
of the Commission or any other governmental authority having jurisdiction, (iv) a banking moratorium shall have been declared by federal
or state authorities, (v) there shall have occurred any attack on, outbreak or escalation of hostilities or act of terrorism involving
the United States, any declaration by the United States of a national emergency or war, any substantial change or development involving
a prospective substantial change in United States or international political, financial or economic conditions or any other calamity
or crisis, (vi) the Company suffers any loss by strike, fire, flood, earthquake, accident or other calamity, whether or not covered by
insurance, or (vii) in the reasonable judgment of the Representative, there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus, any material adverse change in the assets, properties,
condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company and its subsidiaries
considered as a whole, whether or not arising in the ordinary course of business. Any such termination shall be without liability of
any party to any other party except that the provisions of Section 5(a)(xi) and Section 7 hereof shall at all times be effective and
shall survive such termination.
(b)
If the Representative elects to terminate this Agreement as provided in this Section, the Company shall be notified promptly by the Representative
by telephone, confirmed by letter.
11.
Notices. Except as otherwise provided herein, all communications hereunder shall be in writing and, if to the Representative,
shall be mailed, delivered or telecopied to BTIG, LLC, 600 Montgomery Street, 6th Floor, San Francisco, California 94111,
Attention: General Counsel and Chief Compliance Officer, with a copy to DLA Piper LLP (US), 1251 Avenue of the Americas, New York, NY
10020, Attention: Michael D. Maline, Esq.; and if to the Company, shall be mailed, delivered or telecopied to it at 100 Overlook Center,
Princeton, NJ 08540, Email: jcross@sonnetbio.com, Attention: Jay Cross, with a copy to Lowenstein Sandler LLP, One Lowenstein Drive,
Roseland, NJ 07068, Email: sskolnick@lowenstein.com, Attention: Steve Skolnick; or in each case to such other address as the person to
be notified may have requested in writing. Any 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.
12.
Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns and the controlling persons, officers and directors referred to in Section 7. Nothing in
this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The term “successors and assigns” as herein used
shall not include any purchaser, as such purchaser, of any of the Securities from the Underwriter.
13.
Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the Underwriters have been retained solely to
act as underwriter in connection with the sale of the Securities and that no fiduciary, advisory or agency relationship between the Company
and the Underwriters have been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether
the Underwriters have advised or are advising the Company on other matters; (b) the price and other terms of the Securities set forth
in this Agreement were established by the Company following discussions and arms-length negotiations with the Underwriters and the Company
is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated
by this Agreement; (c) it has been advised that the Underwriters and their affiliates are engaged in a broad range of transactions that
may involve interests that differ from those of the Company and that the Underwriters have no obligation to disclose such interest and
transactions to the Company by virtue of any fiduciary, advisory or agency relationship; (d) it has been advised that the Underwriters
are acting, in respect of the transactions contemplated by this Agreement, solely for the benefit of the Underwriters, and not on behalf
of the Company.
14.
Entire Agreement. This Agreement represents the entire agreement of the parties and supersedes all prior or contemporaneous written
or oral agreements between them concerning the offer and sale of the Securities.
15.
Amendments and Waivers. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by
the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such
right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (regardless of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless
otherwise expressly provided.
16.
Partial Unenforceability. The invalidity or unenforceability of any section, paragraph, clause or provision of this Agreement
shall not affect the validity or enforceability of any other section, paragraph, clause or provision.
17.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
18.
Submission to Jurisdiction. The Company irrevocably (a) submits to the jurisdiction of any court of the State of New York for
the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated
by this Agreement, the Registration Statement and the Prospectus (each a “Proceeding”), (b) agrees that all claims
in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest extent permitted by law, any immunity
from jurisdiction of any such court or from any legal process therein, (d) agrees not to commence any Proceeding other than in such courts,
and (e) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. THE COMPANY
(ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, AND THE PROSPECTUS.
19.
Counterparts. This Agreement may be executed and delivered (including by facsimile transmission and electronic mail attaching
a portable document file (.pdf)) in one or more counterparts and, if executed in more than one counterpart, the executed counterparts
shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.
[Signature
Page Follows]
Please
sign and return to the Company the enclosed duplicates of this Agreement whereupon this Agreement will become a binding agreement between
the Company and the Representative in accordance with its terms.
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Very
truly yours,
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SONNET BIOTHERAPEUTICS HOLDINGS, INC.
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By:
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Name:
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Pankaj Mohan
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Title:
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President
and CEO
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Confirmed
as of the date first above-mentioned by the Representative.
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BTIG,
LLC
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as
the representative of the several
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Underwriters
listed on Schedule I
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By:
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Name:
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KC
Stone
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Title:
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Managing
Director
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SCHEDULE
I
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Number of
Firm Shares
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Number
of Pre-Funded Warrants
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Number
of Firm Warrants
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Number
of Option Shares
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Number
of Option Warrants
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BTIG,
LLC
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Chardan
Capital Markets, LLC
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Total:
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SCHEDULE
II
Free
Writing Prospectus
SCHEDULE
III
Form
of Lock-Up Agreement
July
___, 2021
BTIG,
LLC
As
Representative of the several Underwriters
600
Montgomery Street
San Francisco, California 94111
Re:
Sonnet BioTherapeutics Holdings, Inc.
Dear
Ladies and Gentlemen:
This
lock-up agreement (the “Agreement”) is being delivered to you in connection with the proposed Underwriting
Agreement (the “Underwriting Agreement”) between Sonnet BioTherapeutics Holdings, Inc., a Delaware corporation
(the “Company”), and BTIG, LLC, as representative of a group of underwriters (collectively, the
“Underwriters”) to be named therein, relating to the proposed public offering (the “Offering”)
of shares of common stock, par value $0.0001 per share (the “Common Stock”), pre-funded warrants (the
“Pre Funded Warrants”) to purchase Common Stock in lieu thereof (the “Pre-Funded Warrant
Shares”) and warrants (the “Warrants”) to purchase Common Stock (the “Warrant
Shares”) of the Company. The Common Stock, Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Warrants and the
Warrant Shares are collectively referred to herein as the “Securities.”
In
order to induce you to enter into the Underwriting Agreement, and in light of the benefits that the Offering of the Common Stock will
confer upon the undersigned in his or her capacity as a security holder and/or an officer, director or employee of the Company, and for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each Underwriter
that, during the period beginning on and including the date of the Underwriting Agreement through and including the date that is the
90th day after the date of the Underwriting Agreement (the “Lock-Up Period”), the undersigned will not, without the
prior written consent of BTIG, directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose
of, or announce the intention to otherwise dispose of, any Common Stock (including, without limitation, Common Stock which may be deemed
to be beneficially owned by the undersigned in accordance with the rules and regulations promulgated under the Securities Act of 1933,
as amended (the “Securities Act”) (such shares, the “Beneficially Owned Shares”)) or securities
convertible into or exercisable or exchangeable for Common Stock; (ii) enter into any swap, hedge or similar agreement or arrangement
that transfers in whole or in part, the economic risk of ownership of the Beneficially Owned Shares or securities convertible into or
exercisable or exchangeable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or (iii) engage in any short selling of the Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock.
The
restrictions set forth in the immediately preceding paragraph shall not apply to any transfers made by the undersigned (i) as a bona
fide gift to any member of the immediate family (as defined below) of the undersigned or to a trust the beneficiaries of which are exclusively
the undersigned or members of the undersigned’s immediate family, (ii) by will or intestate succession upon the death of the undersigned,
(iii) as forfeitures of Common Stock to satisfy tax withholding obligations of the undersigned in connection with the vesting or exercise
of equity awards by the undersigned pursuant to the Company’s equity plans, (iv) pursuant to a net exercise or cashless exercise
by the undersigned of outstanding equity awards pursuant to the Company’s equity plans, provided that that any Common Stock acquired
upon the net exercise or cashless exercise of equity awards described in this clause (iv) above shall be subject to the restrictions
set forth in the immediately preceding paragraph, (v) pursuant to the conversion or sale of, or an offer to purchase, all or substantially
all of the outstanding Common Stock, whether pursuant to a merger, tender offer or otherwise, or (vi) as a bona fide gift to a charity
or educational institution; provided, however, that in the case of any transfer described in clauses (i) and (ii) above, it shall be
a condition to the transfer that (x) the transferee executes and delivers to BTIG, not later than one business day prior to such transfer,
a written agreement, in substantially the form of this Agreement (it being understood that any references to “immediate family”
in the agreement executed by such transferee shall expressly refer only to the immediate family of the undersigned and not to the immediate
family of the transferee) and otherwise reasonably satisfactory in form and substance to BTIG, and (y) if the undersigned is required
to file a report under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) reporting
a reduction in beneficial ownership of Common Stock or Beneficially Owned Shares or any securities convertible into or exercisable or
exchangeable for Common Stock or Beneficially Owned Shares during the Lock-Up Period (as the same may be extended as described above),
the undersigned shall include a statement in such report to the effect that such transfer is being made as a gift or by will or intestate
succession, as applicable. In addition, in the case of any transfer described in clauses (iii) and (iv) above, it shall be a condition
to the transfer that if the undersigned is required to file a report under Section 16(a) of the Exchange Act reporting a reduction in
beneficial ownership of Common Stock or Beneficially Owned Shares or any securities convertible into or exercisable or exchangeable for
Common Stock or Beneficially Owned Shares during the Lock-Up Period (as the same may be extended as described above), the undersigned
shall include a statement in such report to the effect that such transfer is being made for tax withholding obligations or for net exercise
or cashless exercise purposes, as applicable. For purposes of this paragraph, “immediate family” shall mean a spouse, child,
grandchild or other lineal descendant (including by adoption), father, father-in-law, mother, mother-in-law, brother or sister of the
undersigned.
Any
Securities or Beneficially Owned Shares acquired by the undersigned in the open market after the date of this Agreement will not be subject
to the restrictions set forth in this Agreement. After the date of this Agreement, the undersigned may at any time enter into a written
plan meeting the requirements of Rule 10b5-1 under the Exchange Act relating to the sale of Securities or Beneficially Owned Shares,
if then permitted by the Company, provided that the shares subject to such plan shall be subject to the restrictions set forth in this
Agreement during the Lock-Up Period.
In
order to enable this covenant to be enforced, the undersigned hereby consents to the placing of legends or stop transfer instructions
with the Company’s transfer agent with respect to any Common Stock or securities convertible into or exercisable or exchangeable
for Common Stock.
The
undersigned further agrees that (i) it will not, during the Lock-Up Period (as the same may be extended as described above), make any
demand or request for or exercise any right with respect to the registration under the Securities Act of any Common Stock or other Beneficially
Owned Shares or any securities convertible into or exercisable or exchangeable for Common Stock or other Beneficially Owned Shares, and
(ii) the Company may, with respect to any Common Stock or other Beneficially Owned Shares or any securities convertible into or exercisable
or exchangeable for Common Stock or other Beneficially Owned Shares owned or held (of record or beneficially) by the undersigned, cause
the transfer agent or other registrar to enter stop transfer instructions and implement stop transfer procedures with respect to such
securities during the Lock-Up Period (as the same may be extended as described above).
The
undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and that this
Agreement has been duly executed and delivered by the undersigned and is a valid and binding Agreement of the undersigned. This Agreement
and all authority herein conferred are irrevocable and shall survive the death or incapacity of the undersigned and shall be binding
upon the undersigned and upon the heirs, personal representatives, successors and assigns of the undersigned.
The
undersigned acknowledges and agrees that whether or not any public offering of Securities actually occurs depends on a number of factors,
including market conditions. It is understood and agreed that if (i) the Underwriting Agreement is not executed by August 31, 2021, (ii)
the Company notifies you in writing that it does not intend to proceed with the Offering, (iii) the undersigned ceases to serve as an
officer or director of the Company, or (iv) the Underwriting Agreement shall be terminated (other than the provisions that survive termination
thereof) prior to payment for and delivery of the securities to be sold pursuant thereto, the undersigned shall be released from his
or her obligations under the provisions of this Agreement.
This
Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
[Signature
Page Follows]
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Very
truly yours,
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(Name
of Stockholder – Please Print)
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(Signature)
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Address:
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SCHEDULE
IV
List
of Lock-Up Parties
[Lowenstein
to populate]
SCHEDULE
V
Significant
Subsidiaries
1.
Sonnet BioTherapeutics, Inc.
2.
Sonnet BioTherapeutics, CH SA
Exhibit
A
FORM
OF WARRANT
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
PRE-FUNDED
WARRANT TO PURCHASE COMMON STOCK
Warrant
No.: [ ]
Number
of Shares of Common Stock: [ ]
Date
of Issuance: [ ] (“Issuance Date”)
Sonnet
BioTherapeutics Holdings, Inc., a company organized under the laws of Delaware (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [ ], the registered holder hereof
or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company,
at the Exercise Price (as defined below) then in effect, at any time or times on or after [ ] (the “Initial Exercisability Date”),
until exercised in full (the “Termination Date”), [ ] ([ ]) fully paid non-assessable shares of Common Stock (as defined
below), subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined herein, capitalized
terms in this Warrant to Purchase Common Stock (including any Pre-Funded Warrants to Purchase Common Stock issued in exchange, transfer
or replacement hereof, this “Warrant”), shall have the meanings set forth in Section 16. This Warrant is one of the
Pre-Funded Warrants to Purchase Common Stock (the “Warrants”) issued pursuant to (i) that certain Underwriting Agreement,
dated as of July [•], 2021 (the “Subscription Date”) by and between the Company and BTIG, LLC, as representative
of the several underwriters named therein, (ii) the Company’s Registration Statement on Form S-1 (File number 333-[•]) (the
“Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”) and
(iii) the Company’s prospectus dated as of July [•], 2021.
1.
EXERCISE OF WARRANT.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole
or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto as Annex
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day
following the delivery of the Exercise Notice, the Holder shall make payment to the Company of an amount equal to the Exercise Price
in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash by wire transfer of immediately available funds or, if the provisions of Section 1(d) are applicable,
by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original Warrant in order to effect an exercise hereunder, nor shall any ink-original signature
or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice be required. Execution and delivery
of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares and the Holder shall not
be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder
and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within
three (3) Trading Days of the date on which the final Exercise Notice is delivered to the Company. On or before the first (1st) Trading
Day following the date on which the Holder has delivered the applicable Exercise Notice, the Company shall transmit by facsimile or electronic
mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise Notice, to the Holder
and the Company’s transfer agent (the “Transfer Agent”). So long as the Holder delivers the Aggregate Exercise
Price (or notice of a Cashless Exercise, if applicable) on or prior to the first (1st) Trading Day following the date on which the Exercise
Notice has been delivered to the Company, then on or prior to the earlier of (i) the second (2nd) Trading Day and (ii) the number of
Trading Days comprising the Standard Settlement Period, in each case following the date on which the Exercise Notice has been delivered
to the Company, or, if the Holder does not deliver the Aggregate Exercise Price (or notice of a Cashless Exercise, if applicable) on
or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or
prior to the first (1st) Trading Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered
(such earlier date, or if later, the earliest day on which the Company is required to deliver Warrant Shares pursuant to this Section
1(a), the “Share Delivery Date”), the Company shall (X) provided that the Transfer Agent is participating in The Depository
Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to
which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through
its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program (“FAST”), issue and dispatch by overnight courier to the physical address or email address as specified
in the Exercise Notice, a certificate or evidence of a credit of book-entry shares, registered in the name of the Holder or its designee,
for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible for all
fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including
without limitation for same day processing. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes
to have become the holder of record and beneficial owner of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates
evidencing such Warrant Shares, as the case may be. If this Warrant is physically delivered to the Company in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the
number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three
(3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to
be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded down to the nearest
whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation,
fees and expenses of the Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise
of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the
conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver
or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or
any setoff, counterclaim, recoupment, limitation or termination; provided, however, that the Company shall not be required
to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise Price (or notice
of a Cashless Exercise) with respect to such exercise.
(b)
Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share,
was pre-funded to the Company on or prior to the Initial Exercisability Date and, consequently, no additional consideration (other than
the nominal exercise price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise
of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate Exercise
Price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to
the Termination Date. The exercise price per share of Common Stock under this Warrant shall be $0.0001, subject to adjustment hereunder
(the “Exercise Price”).
(c)
Company’s Failure to Timely Deliver Securities. If either (I) the Company shall fail for any reason or for no reason to
issue to the Holder on or prior to the applicable Share Delivery Date, if (x) the Transfer Agent is not participating in FAST, a certificate
or evidence of a book-entry credit for the number of shares of Common Stock to which the Holder is entitled and register such Common
Stock on the Company’s share register or (y) the Transfer Agent is participating in FAST, to credit the Holder’s balance
account with DTC, for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this
Warrant or (II) a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares
that are the subject of the Exercise Notice (the “Exercise Notice Warrant Shares”) is not available for the issuance
or resale, as applicable, of such Exercise Notice Warrant Shares and (x) the Company fails to promptly, but in no event later than one
(1) Business Day after such registration statement becomes unavailable, to so notify the Holder and (y) the Company is unable to deliver
the Exercise Notice Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Exercise Notice
Warrant Shares to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system
(the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and together
with the event described in clause (I) above, an “Exercise Failure”), then, in addition to all other remedies available
to the Holder, if on or prior to the applicable Share Delivery Date either (I) if the Transfer Agent is not participating in FAST, the
Company shall fail to issue and deliver a certificate or evidence of a book-entry credit to the Holder and register such shares of Common
Stock on the Company’s share register or, if the Transfer Agent is participating in FAST, credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant
to the Company’s obligation pursuant to clause (ii) below or (II) if a Notice Failure occurs, and if after such date the Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which
(x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares
of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. The Company’s current transfer agent participates
in FAST. In the event that the Company changes transfer agents while this Warrant is outstanding, the Company shall use commercially
reasonable efforts to select a transfer agent that participates in FAST. While this Warrant is outstanding, the Company shall request
its transfer agent to participate in FAST with respect to this Warrant. In addition to the foregoing rights, (i) if the Company fails
to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then
the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may
be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise
shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this
Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale
of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Exercise
Notice Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration
statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive
legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option,
by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case
may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an
Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice
pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless
Exercise. In addition to the foregoing, if the Company fails for any reason to deliver to the Holder the Warrant Shares subject to an
Exercise Notice by the second Trading Day following the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the Weighted Average Price of the
Common Stock on the date of the applicable Exercise Notice), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading
Day after such liquidated damages begin to accrue) for each Trading Day after the second Trading Day following such Share Delivery Date
until such Warrant Shares are delivered or Holder rescinds such exercise.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary, if a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Exercise Notice Warrant Shares is not available for the issuance or resale, as applicable,
of such Exercise Notice Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu
of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following
formula (a “Cashless Exercise”):
|
Net Number = (A x B) - (A x C)
|
|
|
B
|
For
purposes of the foregoing formula:
A=
the total number of shares with respect to which this Warrant is then being exercised.
B=
as applicable: (i) the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii)
at the option of the Holder, either (y) the Weighted Average Price on the Trading Day immediately preceding the date of the applicable
Exercise Notice or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice
if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours
thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section
1(a) hereof or (iii) the Weighted Average Price of the Common Stock on the date of the applicable Exercise Notice if the date of such
Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close
of “regular trading hours” on such Trading Day.
C=
$0.0001, as adjusted hereunder.
If
Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of
the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding
period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any
position contrary to this Section 1(d). Without limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,”
and to receive the cash payments contemplated pursuant to Sections 1(c) and 4(b), in no event will the Company be required to net cash
settle a Warrant exercise.
(e)
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in
accordance with Section 11.
(f)
Beneficial Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of
any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and
conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving
effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of [4.99/9.99]%
(the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to
such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder
and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties
plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible
preferred stock or warrants, including the other Warrants) beneficially owned by the Holder or any other Attribution Party subject to
a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). For purposes of this Warrant, in determining the number of outstanding shares of Common Stock the Holder may acquire
upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current
Reports on Form 8-K or other public filing with the Securities and Exchange Commission (the “SEC”), as the case may
be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent setting
forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives
an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding
Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the
extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section
1(f), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant
to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”) and (ii)
as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares.
For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally
and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number
was reported. In the event that the issuance of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the
other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding
shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s
and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess
Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return
to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder
may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such
notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such
notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties
and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common
Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned
by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to
exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with
respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to correct this paragraph or any portion
of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section
1(f) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in
this paragraph may not be waived and shall apply to a successor holder of this Warrant.
(g)
Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall
be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding (without regard
to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the number
of shares of Common Stock reserved pursuant to this Section 1(g) be reduced other than in connection with any exercise of Warrants or
such other event covered by Section 2(c) below. The Required Reserve Amount (including, without limitation, each increase in the number
of shares so reserved) shall be allocated pro rata among the holders of the Warrants based on the number of shares of Common Stock issuable
upon exercise of Warrants held by each holder thereof on the Issuance Date (without regard to any limitations on exercise) (the “Authorized
Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Warrants, each transferee
shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated
to any Person which ceases to hold any Warrants shall be allocated to the remaining holders of Warrants, pro rata based on the number
of shares of Common Stock issuable upon exercise of the Warrants then held by such holders thereof (without regard to any limitations
on exercise).
(h)
Insufficient Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount (an
“Authorized Share Failure”), then the Company shall promptly take all action reasonably necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount
for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of
the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized Share
Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable
best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board
of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing, if at any such time of
an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding
shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation
by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C.
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted
from time to time as follows:
(a)
Intentionally omitted.
(b)
Intentionally omitted.
(c)
Adjustment Upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into
a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the
number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by
combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant
Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the
date the subdivision or combination becomes effective.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if, on or after the Subscription
Date and on or prior to the Termination Date, the Company shall declare or make any dividend or other distribution of its assets (or
rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, that to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Distribution to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of
such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding
the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made
on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no
such limitation).
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription Date
and on or prior to the Termination Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issuance or sale of such Purchase
Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would
result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such Common Stock as a result of such Purchase
Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of
the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the
Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on
such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had
been no such limitation).
(b)
Fundamental Transaction. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b), including
agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital
stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation
of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for the Company (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant
and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as
if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity
shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property
(except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the
exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without
limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section
4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled
to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of
this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Termination Date, in lieu
of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections
3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or
subscription rights) (collectively, the “Corporate Event Consideration”) which the Holder would have been entitled
to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). The provision made pursuant to the preceding
sentence shall be in a form and substance reasonably satisfactory to the Requisite Holders. The provisions of this Section 4(b) shall
apply similarly and equally to successive Fundamental Transactions and Corporate Events.
5.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation
or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or
sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions
as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common
Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take all action necessary to
reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise
of the Warrants, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the Warrants
then outstanding (without regard to any limitations on exercise).
6.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock of
the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s
capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of
the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant
or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
7.
REISSUANCE OF WARRANTS.
(a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the
Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as
the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b)
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender
and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then underlying this Warrant.
(c)
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of
such Warrant Shares as is designated by the Holder at the time of such surrender.
(d)
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such
new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right
to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or
Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii)
shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have
the same rights and conditions as this Warrant.
8.
NOTICES. Whenever notice is required to be given under this Warrant, including, without limitation, an Exercise Notice, unless
otherwise provided herein, such notice shall be given in writing, (i) if delivered (a) from within the domestic United States, by first-class
registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile
or (b) from outside the United States, by International Federal Express, electronic mail or facsimile, and (ii) will be deemed given
(A) if delivered by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally
recognized overnight carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal Express, two (2) Business
Days after so mailed and (D) at the time of transmission, if delivered by electronic mail to each of the email addresses specified in
this Section 8 prior to 5:00 p.m. (New York time) on a Trading Day, (E) the next Trading Day after the date of transmission, if delivered
by electronic mail to each of the email addresses specified in this Section 8 on a day that is not a Trading Day or later than 5:00 p.m.
(New York time) on any Trading Day and (F) if delivered by facsimile, upon electronic confirmation of delivery of such facsimile, and
will be delivered and addressed as follows:
(i)
if to the Company, to:
Sonnet
BioTherapeutics Holdings, Inc.
100
Overlook Center
Princeton,
NJ 08540
Attention:
Jay Cross, Chief Financial Officer
Email:
jcross@sonnetbio.com
(ii)
if to the Holder, at such address or other contact information delivered by the Holder to the Company or as is on the books and records
of the Company.
The
Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail
a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written
notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or
sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares
of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to
the Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be
definitive and may not be disputed or challenged by the Company.
9.
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company
may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Holder.
10.
GOVERNING LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New
York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New
York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set
forth in Section 8(i) above or such other address as the Company subsequently delivers to the Holder and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling
in favor of the Holder. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
11.
DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within
two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the Holder.
If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares
within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company
shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation
of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank
or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results
no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s
or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
12.
REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in
addition to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages
for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required.
13.
TRANSFER. This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent
of the Company.
14.
SEVERABILITY; CONSTRUCTION; HEADINGS. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). This Warrant shall be
deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings
of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
15.
DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company
has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the
Company or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic
information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic
information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery
of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice
do not constitute material, nonpublic information relating to the Company or its subsidiaries.
16.
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(b)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Subscription Date, directly or indirectly managed
or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of
the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(c)
“Bid Price” means, for any security as of the particular time of determination, the bid price for such security on
the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the
bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg
as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the
average of the bid prices of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets
Group Inc. as of such time of determination. If the Bid Price cannot be calculated for a security as of the particular time of determination
on any of the foregoing bases, the Bid Price of such security as of such time of determination shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security,
then such dispute shall be resolved in accordance with the procedures in Section 11. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.
(d)
“Bloomberg” means Bloomberg Financial Markets.
(e)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed.
(f)
“Closing Bid Price” means, for any security as of any date, the last closing bid price and last closing trade price,
respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price
or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal
Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported
by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively,
of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. If the Closing
Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 11. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction
during the applicable calculation period.
(g)
“Common Stock” means (i) the Company’s Common Stock, par value $0.01 per share, and (ii) any capital stock into
which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.
(h)
“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into
or exercisable or exchangeable for shares of Common Stock.
(i)
“Eligible Market” means The Nasdaq Capital Market, the NYSE American LLC, The Nasdaq Global Select Market, The Nasdaq
Global Market or The New York Stock Exchange, Inc.
(j)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer
that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares
of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding
shares of Common Stock, or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the
outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or
Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding;
or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in
Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify
its shares of Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock not held by all such Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such
Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short
form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval of the
stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related
transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that
circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than
in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition
which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(k)
“Group” means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule
13d-5 thereunder.
(l)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(m)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including
such entity whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder,
any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization as
of the date of consummation of the Fundamental Transaction.
(n)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity and a government or any department or agency thereof.
(o)
“Principal Market” means The Nasdaq Capital Market.
(p)
“Requisite Holders” means the holders of the Warrants representing a majority of the shares of Common Stock underlying
the Warrants then outstanding.
(q)
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, for the
Company’s primary trading market or quotation system with respect to the Common Stock that is in effect on the date of receipt
of an applicable Exercise Notice.
(r)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(s)
“Successor Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder,
the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(t)
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market
is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the
Common Stock is then traded.
(u)
“Transaction Documents” means any agreement entered into by and between the Company and the Holder, as applicable.
(v)
“Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for such
security on the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market
publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function or,
if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces
is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security
by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest closing ask price of any of the market makers
for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. If the Weighted Average Price cannot
be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such
date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 11 with the term “Weighted
Average Price” being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation
period.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out
above.
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Sonnet
BioTherapeutics Holdings, Inc.
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By:
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Name:
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Pankaj
Mohan
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Title:
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Chief
Executive Office
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[Signature
Page to Pre-Funded Warrant]
ANNEX
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
PRE-FUNDED
WARRANT TO PURCHASE COMMON STOCK
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
The
undersigned holder hereby exercises the right to purchase _________________ shares of Common Stock (“Warrant Shares”)
of Sonnet BioTherapeutics Holdings, Inc., a company organized under the laws of Delaware (the “Company”), evidenced
by the attached Pre-Funded Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1.
Form of Exercise Price. The holder intends that payment of the Exercise Price shall be made as:
____________
a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
____________
a “Cashless Exercise” with respect to _______________ Warrant Shares.
2.
Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in
accordance with the terms of the Warrant.
3.
Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.
Date:
_______________ __, ______
Name of Registered Holder
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs Securities Transfer Corporation to issue the above indicated number
of shares of Common Stock on or prior to the applicable Share Delivery Date.
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Sonnet BioTherapeutics,
Inc.
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EXHIBIT
B
FORM
OF WARRANT
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
WARRANT
TO PURCHASE COMMON STOCK
Warrant
No.: [ ]
Number
of Shares of Common Stock: [ ]
Date
of Issuance: [ ], 2021 (“Issuance Date”)
Sonnet
BioTherapeutics Holdings, Inc., a company organized under the laws of Delaware (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [ ], the registered holder hereof
or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company,
at the Exercise Price (as defined below) then in effect, at any time or times on or after [ ] (the “Initial Exercisability Date”),
but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), [ ] ([ ]) fully paid non-assessable shares of Common
Stock (as defined below), subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise
defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, this “Warrant”), shall have the meanings set forth in Section 16. This Warrant
is one of the Warrants to Purchase Common Stock (the “Warrants”) issued pursuant to (i) that certain Underwriting
Agreement, dated as of [ ], 2021 (the “Subscription Date”) by and between the Company and BTIG, LLC, as representative
of the several underwriters named therein, (ii) the Company’s Registration Statement on Form S-1 (File number 333-258092) under
the Securities Act of 1933, as amended (the “Registration Statement”) and (iii) the Company’s prospectus dated
as of [ ], 2021.
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in
whole or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto
as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this
Warrant. Within one (1) Trading Day following the delivery of the Exercise Notice, the Holder shall make payment to the
Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares
as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash by wire transfer of
immediately available funds or, if the provisions of Section 1(d) are applicable, by notifying the Company that this Warrant is
being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder, nor shall any ink-original signature or medallion guarantee (or other
type of guarantee or notarization) with respect to any Exercise Notice be required. Execution and delivery of the Exercise
Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and
issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares and the Holder shall not be
required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for
cancellation within three (3) Trading Days of the date on which the final Exercise Notice is delivered to the Company. On or
before the first (1st) Trading Day following the date on which the Holder has delivered the applicable Exercise Notice, the Company
shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form
attached to the Exercise Notice, to the Holder and the Transfer Agent. So long as the Holder delivers the Aggregate Exercise
Price (or notice of a Cashless Exercise, if applicable) on or prior to the first (1st) Trading Day following the date on which the
Exercise Notice has been delivered to the Company, then on or prior to the earlier of (i) the second (2nd) Trading Day
and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case following the date on which the Exercise
Notice has been delivered to the Company, or, if the Holder does not deliver the Aggregate Exercise Price (or notice of a Cashless
Exercise, if applicable) on or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been
delivered to the Company, then on or prior to the first (1st) Trading Day following the date on which the Aggregate Exercise Price
(or notice of a Cashless Exercise) is delivered (such earlier date, or if later, the earliest day on which the Company is required
to deliver Warrant Shares pursuant to this Section 1(a), the “Share Delivery Date”), the Company shall (X)
provided that the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program (“FAST”),
credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or
its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is
not participating in FAST, issue and dispatch by overnight courier to the physical address or email address as specified in the
Exercise Notice, a certificate or evidence of a credit of book-entry shares, registered in the name of the Holder or its designee,
for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible
for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if
any, including without limitation for same day processing. Upon delivery of the Exercise Notice, the Holder shall be deemed
for all corporate purposes to have become the holder of record and beneficial owner of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date
of delivery of the certificates evidencing such Warrant Shares, as the case may be. If this Warrant is physically delivered to
the Company in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this
Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall
as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own expense, issue and
deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the
number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with
respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant,
but rather the number of Warrant Shares to be issued shall be rounded down to the nearest whole number. The Company shall pay
any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the
Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this
Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the
conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination; provided, however, that the Company shall not
be required to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise
Price (or notice of a Cashless Exercise) with respect to such exercise.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $[ ] per share, subject to adjustment as
provided herein.
(c) Company’s
Failure to Timely Deliver Securities. If either (I) the Company shall fail for any reason or for no reason to issue to the
Holder on or prior to the applicable Share Delivery Date, if (x) the Transfer Agent is not participating in FAST, a certificate or
evidence of a book-entry credit for the number of shares of Common Stock to which the Holder is entitled and register such Common
Stock on the Company’s share register or (y) the Transfer Agent is participating in FAST, to credit the Holder’s balance
account with DTC, for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this
Warrant or (II) a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant
Shares that are the subject of the Exercise Notice (the “Exercise Notice Warrant Shares”) is not available for
the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and (x) the Company fails to promptly, but in no event
later than one (1) Business Day after such registration statement becomes unavailable, to so notify the Holder and (y) the Company
is unable to deliver the Exercise Notice Warrant Shares electronically without any restrictive legend by crediting such aggregate
number of Exercise Notice Warrant Shares to the Holder’s or its designee’s balance account with DTC through its Deposit
/ Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a
“Notice Failure” and together with the event described in clause (I) above, an “Exercise
Failure”), then, in addition to all other remedies available to the Holder, if on or prior to the applicable Share
Delivery Date either (I) if the Transfer Agent is not participating in FAST, the Company shall fail to issue and deliver a
certificate or evidence of a book-entry credit to the Holder and register such shares of Common Stock on the Company’s share
register or, if the Transfer Agent is participating in FAST, credit the Holder’s balance account with DTC for the number of
shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s
obligation pursuant to clause (ii) below or (II) if a Notice Failure occurs, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s
request, (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of
Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price
at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate
the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such
exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms
hereof. The Company’s current transfer agent participates in FAST. In the event that the Company changes transfer
agents while this Warrant is outstanding, the Company shall use commercially reasonable efforts to select a transfer agent that
participates in FAST. While this Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST
with respect to this Warrant. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number
of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right
to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this
Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect
the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c)
or otherwise, and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale of the
Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Exercise
Notice Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such
registration statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian
system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in
part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such
Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make any
payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some or
all of such Exercise Notice from a cash exercise to a Cashless Exercise. In addition to the foregoing, if the Company fails
for any reason to deliver to the Holder the Warrant Shares subject to an Exercise Notice by the second Trading Day following the
Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of
Warrant Shares subject to such exercise (based on the Weighted Average Price of the Common Stock on the date of the applicable
Exercise Notice), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages
begin to accrue) for each Trading Day after the second Trading Day following such Share Delivery Date until such Warrant Shares are
delivered or Holder rescinds such exercise.
(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary, if a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Exercise Notice Warrant Shares is not available for the issuance or resale, as
applicable, of such Exercise Notice Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in
part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock
determined according to the following formula (a “Cashless Exercise”):
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Net Number = (A x B) - (A x C)
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B
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For purposes of the foregoing
formula:
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A = the total number of shares with respect to which this Warrant is then being exercised.
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B = as applicable: (i) the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the Weighted Average Price on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 1(a) hereof or (iii) the Weighted Average Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.
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C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
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If
Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of
the Securities Act of 1933, as amended, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised,
and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company
agrees not to take any position contrary to this Section 1(d). Without limiting the rights of a Holder to receive Warrant Shares
on a “cashless exercise,” and to receive the cash payments contemplated pursuant to Sections 1(c) and 4(b), in no event will
the Company be required to net cash settle a Warrant exercise.
(e) Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 11.
(f) Beneficial
Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any
portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and
conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after
giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess
of 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) (the “Maximum Percentage”)
of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the
foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution
Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being
made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of
the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes
or convertible preferred stock or warrants, including the other Warrants) beneficially owned by the Holder or any other Attribution
Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f). For
purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “1934 Act”). For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum
Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most
recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Reports on Form 8-K or other public filing with the
Securities and Exchange Commission (the “SEC”), as the case may be, (y) a more recent public announcement by the
Company or (z) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock
outstanding (the “Reported Outstanding Share Number”). If the Company receives an Exercise Notice from the
Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number,
the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that
such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 1(f), to
exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to
such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”) and (ii) as
soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction
Shares. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business
Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise
of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the
Reported Outstanding Share Number was reported. In the event that the issuance of Common Stock to the Holder upon exercise of
this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than
the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the
number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership
exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab
initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable
after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price
paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time
increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided
that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such
notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution
Parties and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the
shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be
beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act.
No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions
of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent
necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended
beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor
holder of this Warrant.
(g) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as
shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding
(without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that
at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(g) be reduced other than in connection
with any exercise of Warrants or such other event covered by Section 2(c) below. The Required Reserve Amount (including,
without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Warrants
based on the number of shares of Common Stock issuable upon exercise of Warrants held by each holder thereof on the Issuance Date
(without regard to any limitations on exercise) (the “Authorized Share Allocation”). In the event that a
holder shall sell or otherwise transfer any of such holder’s Warrants, each transferee shall be allocated a pro rata portion
of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which
ceases to hold any Warrants shall be allocated to the remaining holders of Warrants, pro rata based on the number of shares of
Common Stock issuable upon exercise of the Warrants then held by such holders thereof (without regard to any limitations on
exercise).
(h) Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount (an
“Authorized Share Failure”), then the Company shall promptly take all action reasonably necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve
Amount for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of
such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy
statement and shall use its reasonable best efforts to solicit its stockholders’ approval of such increase in authorized
shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.
Notwithstanding the foregoing, if at any such time of an Authorized Share Failure, the Company is able to obtain the written consent
of a majority of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized
shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an
Information Statement on Schedule 14C.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:
(a) Intentionally
omitted.
(b) Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price
to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
(c) Adjustment
Upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription
Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and
the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective
at the close of business on the date the subdivision or combination becomes effective.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if, on or after the Subscription
Date and on or prior to the Expiration Date, the Company shall declare or make any dividend or other distribution of its assets (or
rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by
way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be
entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or
restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which
a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common
Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holder’s
right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to
beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and
the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right
thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times
the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any
subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription Date and
on or prior to the Expiration Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for
the grant, issuance or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to
participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to
beneficial ownership of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such
Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto
would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent
Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transaction. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b),
including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a
corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of
this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such
adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value
of this Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each
Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for the Company (so that from and after the date
of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as
the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable
Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such
items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise
of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable
Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard
to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant.
Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of
written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this
Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to
or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other
securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue
to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights)
(collectively, the “Corporate Event Consideration”) which the Holder would have been entitled to receive upon the
happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental
Transaction (without regard to any limitations on the exercise of this Warrant). The provision made pursuant to the preceding
sentence shall be in a form and substance reasonably satisfactory to the Requisite Holders. The provisions of this Section
4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events. Notwithstanding the foregoing,
in the event of a Change of Control (other than a Change of Control which was not approved by the Board of Directors, as to which
this right shall not apply), at the request of the Holder delivered before the 30th day after such Change of Control, the Company
(or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days after
such request (or, if later, on the effective date of the Change of Control), an amount equal to the Black Scholes Value of the
remaining unexercised portion of this Warrant on the effective date of such Change of Control, payable in cash; provided, that if
the applicable Change of Control was not approved by the Company’s Board of Directors, the Black-Scholes Value of the
remaining unexercised portion of this Warrant shall be payable at the option of the Company in either (x) Common Stock, whereby the
Company would be continually obligated to actively settle shares of Common Stock in the event insufficient authorized shares of
Common Stock were available (or corresponding Corporate Event Consideration, as applicable) valued at the value of the consideration
received by the shareholders in such Change of Control or (y) cash.
5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws, or
through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to
protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall from time to time be
necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).
6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such
Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of
capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder,
solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right
to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of
this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities
are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the
Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously
with the giving thereof to the stockholders.
7. REISSUANCE
OF WARRANTS.
(a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the
Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with
Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a
new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not
being transferred.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender.
(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new
Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right
to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.
8. NOTICES.
Whenever notice is required to be given under this Warrant, including, without limitation, an Exercise Notice, unless otherwise provided
herein, such notice shall be given in writing, (i) if delivered (a) from within the domestic United States, by first-class registered
or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile or (b) from
outside the United States, by International Federal Express, electronic mail or facsimile, and (ii) will be deemed given (A) if delivered
by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally recognized
overnight carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal Express, two (2) Business Days after
so mailed and (D) at the time of transmission, if delivered by electronic mail to each of the email addresses specified in this Section
8 prior to 5:00 p.m. (New York time) on a Trading Day, (E) the next Trading Day after the date of transmission, if delivered by
electronic mail to each of the email addresses specified in this Section 8 on a day that is not a Trading Day or later than 5:00 p.m.
(New York time) on any Trading Day and (F) if delivered by facsimile, upon electronic confirmation of delivery of such facsimile, and
will be delivered and addressed as follows:
(i)
if to the Company, to:
Sonnet
BioTherapeutics Holdings, Inc.
100
Overlook Center
Princeton,
NJ 08540
Attention:
Jay Cross, Chief Financial Officer
Email:
jcross@sonnetbio.com
(ii)
if to the Holder, at such address or other contact information delivered by the Holder to the Company or as is on the books and
records of the Company.
The
Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail
a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written
notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or
sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares
of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided
in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the
Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be
definitive and may not be disputed or challenged by the Company.
9. AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company
may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the Holder.
10. GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The
City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby
irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to the Company at the address set forth in Section 8(i) above or such other address as the Company
subsequently delivers to the Holder and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by
law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal
action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any
collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.
If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such
action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding. THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
11. DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail
within two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to
the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or
the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the
Holder, then the Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination
of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the
disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company
shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed
determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case
may be, shall be binding upon all parties absent demonstrable error.
12. REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in
addition to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a
decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue
actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be
inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder of this Warrant
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of
showing economic loss and without any bond or other security being required.
13. TRANSFER.
This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the
Company.
14. SEVERABILITY;
CONSTRUCTION; HEADINGS. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of
such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred
upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s). This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be
construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall
not form part of, or affect the interpretation of, this Warrant.
15. DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice
contains material, nonpublic information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder
contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume
that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its
subsidiaries.
16. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is
controlled by, or is under common control with, such Person, it being understood for purposes of this definition that
“control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary
voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.
(b)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle,
including, any funds, feeder funds or managed accounts, currently, or from time to time after the Subscription Date, directly or
indirectly managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or
indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group
together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common
Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the
1934 Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to
the Maximum Percentage.
(c)
“Bid Price” means, for any security as of the particular time of determination, the bid price for such security
on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the bid price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the
foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg
as of such time of determination, the average of the bid prices of any market makers for such security as reported in the OTC Link
or the Pink Open Market as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in
Section 11. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period.
(d)
“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg determined as of the day immediately following the first public announcement of the
applicable Change of Control, or, if the Change of Control is not publicly announced, the date the Change of Control is consummated,
for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the
remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to 100%, (iii) the underlying price per
share used in such calculation shall be the greater of (A) the sum of the price per share being offered in cash, if any, plus the
per share value of any non-cash consideration, if any, being offered in such Change of Control and (B) the greater of (x) the last
Weighted Average Price immediately prior to the public announcement of such Change of Control and (y) the last Weighted Average
Price immediately prior to the consummation of such Change of Control, (iv) a zero cost of borrow and (v) a 360 day annualization
factor.
(e)
“Bloomberg” means Bloomberg Financial Markets.
(f)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of
New York are authorized or required by law to remain closed.
(g)
“Change of Control” means any Fundamental Transaction other than (i) any reorganization, recapitalization or
reclassification of the Common Stock in which holders of the Company’s voting power immediately prior to such reorganization,
recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly
traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power of the surviving
entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other
than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification, (ii) pursuant to a
migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or (iii) a merger in
connection with a bona fide acquisition by the Company of any Person in which (x) the gross consideration paid, directly or
indirectly, by the Company in such acquisition is not greater than 20% of the Company’s market capitalization as calculated on
the date of the consummation of such merger and (y) such merger does not contemplate a change to the identity of a majority of the
board of directors of the Company. Notwithstanding anything herein to the contrary, any transaction or series of transactions that,
directly or indirectly, results in the Company or the Successor Entity not having Common Stock or common stock, as applicable,
registered under the Exchange Act and listed on an Eligible Market shall be deemed a Change of Control.
(h)
“Closing Bid Price” means, for any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to
operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then
the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by
Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last
closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last
trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg,
the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link
or the Pink Open Market. If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and
the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute
shall be resolved pursuant to Section 11. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
(i)
“Common Stock” means (i) the Company’s Common Stock, par value $0.01 per share, and (ii) any capital stock
into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common
Stock.
(j)
“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for shares of Common Stock.
(k)
“Eligible Market” means The Nasdaq Capital Market, the NYSE American LLC, The Nasdaq Global Select Market, The
Nasdaq Global Market or The New York Stock Exchange, Inc.
(l)
“Expiration Date” means the date sixty (60) months after the Initial Exercisability Date or, if such date falls
on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next day that is not a Holiday.
(m)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in
Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow
the Company to be subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a
purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common
Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities
making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not
outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any
Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in
Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either
(x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as
if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or
party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common
Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at
least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common Stock, (B)
that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related
transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase,
assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or
reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power
represented by issued and outstanding shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by
issued and outstanding shares of Common Stock not held by all such Subject Entities as of the Subscription Date calculated as if any
shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting
power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow
such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company to
surrender their Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other
instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case
this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition
to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the
intended treatment of such instrument or transaction.
(n)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule
13d-5 thereunder.
(o)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or
Convertible Securities.
(p)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person,
including such entity whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected
by the Holder, any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person
or such entity designated by the Holder or in the absence of such designation, such Person or entity with the largest public market
capitalization as of the date of consummation of the Fundamental Transaction.
(q)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
(r)
“Principal Market” means The Nasdaq Capital Market.
(s)
“Requisite Holders” means the holders of the Warrants representing a majority of the shares of Common Stock
underlying the Warrants then outstanding.
(t)
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, for the
Company’s primary trading market or quotation system with respect to the Common Stock that is in effect on the date of receipt
of an applicable Exercise Notice.
(u)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or
Group.
(v)
“Successor Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent
Entity) formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by
the Holder, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(w)
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on
which the Common Stock is then traded.
(x)
“Transaction Documents” means any agreement entered into by and between the Company and the Holder, as
applicable.
(y)
“Transfer Agent” means Securities Transfer Corporation, the current transfer agent of the Company, with a mailing
address of 2901 N Dallas Parkway, Suite 380, Plano, TX 75093 and any successor transfer agent of the Company.
(z)
“Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for
such security on the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the
Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at
Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the
over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York
time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York
time (or such other time as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no
dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest Closing
Bid Price and the lowest closing ask price of any of the market makers for such security as reported in the OTC Link or the Pink
Open Market. If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases,
the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and
the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute
shall be resolved pursuant to Section 11 with the term “Weighted Average Price” being substituted for the term
“Exercise Price.” All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination, reclassification or other similar transaction during the applicable calculation period.
[Signature
Page Follows]
IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
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Sonnet BioTherapeutics Holdings, Inc.
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By:
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Name:
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Pankaj
Mohan
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Title:
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Chief
Executive Officer
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[Signature
Page to Warrant to Purchase Common Stock]
EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE COMMON STOCK
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
The
undersigned holder hereby exercises the right to purchase ______________ shares of Common Stock (“Warrant Shares”)
of Sonnet BioTherapeutics Holdings, Inc, a company organized under the laws of Delaware (the “Company”), evidenced
by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.
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1.
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Form
of Exercise Price. The holder intends that payment of the Exercise Price shall be made as:
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______________
a “Cash Exercise” with respect to ______________ Warrant Shares; and/or
______________
a “Cashless Exercise” with respect to ______________ Warrant Shares.
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2.
Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant
Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $ _________ to the Company in
accordance with the terms of the Warrant.
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3.
Delivery of Warrant Shares. The Company shall deliver to the holder ______________ Warrant Shares in accordance with the terms
of the Warrant.
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Date:
__________________
Name
of Registered Holder
By:
_________________________
Name:
Title:
Exhibit
A-1
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs Securities Transfer Corporation to issue the above indicated number
of shares of Common Stock on or prior to the applicable Share Delivery Date.
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Sonnet BioTherapeutics Holdings, Inc.
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By:
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Name:
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Title:
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Exhibit
4.8
FORM
OF WARRANT
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
PRE-FUNDED
WARRANT TO PURCHASE COMMON STOCK
Warrant
No.: [ ]
Number
of Shares of Common Stock: [ ]
Date
of Issuance: [ ] (“Issuance Date”)
Sonnet
BioTherapeutics Holdings, Inc., a company organized under the laws of Delaware (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [ ], the registered holder hereof
or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company,
at the Exercise Price (as defined below) then in effect, at any time or times on or after [ ] (the “Initial Exercisability Date”),
until exercised in full (the “Termination Date”), [ ] ([ ]) fully paid non-assessable shares of Common Stock (as defined
below), subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined herein, capitalized
terms in this Warrant to Purchase Common Stock (including any Pre-Funded Warrants to Purchase Common Stock issued in exchange, transfer
or replacement hereof, this “Warrant”), shall have the meanings set forth in Section 16. This Warrant is one of the
Pre-Funded Warrants to Purchase Common Stock (the “Warrants”) issued pursuant to (i) that certain Underwriting Agreement,
dated as of July [•], 2021 (the “Subscription Date”) by and between the Company and BTIG, LLC, as representative
of the several underwriters named therein, (ii) the Company’s Registration Statement on Form S-1 (File number 333-[•]) (the
“Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”) and
(iii) the Company’s prospectus dated as of July [•], 2021.
1. EXERCISE OF WARRANT.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole
or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto as Annex
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day
following the delivery of the Exercise Notice, the Holder shall make payment to the Company of an amount equal to the Exercise Price
in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash by wire transfer of immediately available funds or, if the provisions of Section 1(d) are applicable,
by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original Warrant in order to effect an exercise hereunder, nor shall any ink-original signature
or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice be required. Execution and delivery
of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares and the Holder shall not
be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder
and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within
three (3) Trading Days of the date on which the final Exercise Notice is delivered to the Company. On or before the first (1st) Trading
Day following the date on which the Holder has delivered the applicable Exercise Notice, the Company shall transmit by facsimile or electronic
mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise Notice, to the Holder
and the Company’s transfer agent (the “Transfer Agent”). So long as the Holder delivers the Aggregate Exercise
Price (or notice of a Cashless Exercise, if applicable) on or prior to the first (1st) Trading Day following the date on which the Exercise
Notice has been delivered to the Company, then on or prior to the earlier of (i) the second (2nd) Trading Day and (ii) the number of
Trading Days comprising the Standard Settlement Period, in each case following the date on which the Exercise Notice has been delivered
to the Company, or, if the Holder does not deliver the Aggregate Exercise Price (or notice of a Cashless Exercise, if applicable) on
or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or
prior to the first (1st) Trading Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered
(such earlier date, or if later, the earliest day on which the Company is required to deliver Warrant Shares pursuant to this Section
1(a), the “Share Delivery Date”), the Company shall (X) provided that the Transfer Agent is participating in The Depository
Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to
which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through
its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program (“FAST”), issue and dispatch by overnight courier to the physical address or email address as specified
in the Exercise Notice, a certificate or evidence of a credit of book-entry shares, registered in the name of the Holder or its designee,
for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible for all
fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including
without limitation for same day processing. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes
to have become the holder of record and beneficial owner of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates
evidencing such Warrant Shares, as the case may be. If this Warrant is physically delivered to the Company in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the
number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three
(3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to
be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded down to the nearest
whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation,
fees and expenses of the Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise
of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the
conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver
or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or
any setoff, counterclaim, recoupment, limitation or termination; provided, however, that the Company shall not be required
to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise Price (or notice
of a Cashless Exercise) with respect to such exercise.
(b)
Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.001 per Warrant Share,
was pre-funded to the Company on or prior to the Initial Exercisability Date and, consequently, no additional consideration (other than
the nominal exercise price of $0.001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise
of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate Exercise
Price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to
the Termination Date. The exercise price per share of Common Stock under this Warrant shall be $0.001, subject to adjustment hereunder
(the “Exercise Price”).
(c)
Company’s Failure to Timely Deliver Securities. If either (I) the Company shall fail for any reason or for no reason to
issue to the Holder on or prior to the applicable Share Delivery Date, if (x) the Transfer Agent is not participating in FAST, a certificate
or evidence of a book-entry credit for the number of shares of Common Stock to which the Holder is entitled and register such Common
Stock on the Company’s share register or (y) the Transfer Agent is participating in FAST, to credit the Holder’s balance
account with DTC, for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this
Warrant or (II) a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares
that are the subject of the Exercise Notice (the “Exercise Notice Warrant Shares”) is not available for the issuance
or resale, as applicable, of such Exercise Notice Warrant Shares and (x) the Company fails to promptly, but in no event later than one
(1) Business Day after such registration statement becomes unavailable, to so notify the Holder and (y) the Company is unable to deliver
the Exercise Notice Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Exercise Notice
Warrant Shares to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system
(the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and together
with the event described in clause (I) above, an “Exercise Failure”), then, in addition to all other remedies available
to the Holder, if on or prior to the applicable Share Delivery Date either (I) if the Transfer Agent is not participating in FAST, the
Company shall fail to issue and deliver a certificate or evidence of a book-entry credit to the Holder and register such shares of Common
Stock on the Company’s share register or, if the Transfer Agent is participating in FAST, credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant
to the Company’s obligation pursuant to clause (ii) below or (II) if a Notice Failure occurs, and if after such date the Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which
(x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares
of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. The Company’s current transfer agent participates
in FAST. In the event that the Company changes transfer agents while this Warrant is outstanding, the Company shall use commercially
reasonable efforts to select a transfer agent that participates in FAST. While this Warrant is outstanding, the Company shall request
its transfer agent to participate in FAST with respect to this Warrant. In addition to the foregoing rights, (i) if the Company fails
to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then
the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may
be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise
shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this
Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale
of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Exercise
Notice Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration
statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive
legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option,
by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case
may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an
Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice
pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless
Exercise. In addition to the foregoing, if the Company fails for any reason to deliver to the Holder the Warrant Shares subject to an
Exercise Notice by the second Trading Day following the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the Weighted Average Price of the
Common Stock on the date of the applicable Exercise Notice), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading
Day after such liquidated damages begin to accrue) for each Trading Day after the second Trading Day following such Share Delivery Date
until such Warrant Shares are delivered or Holder rescinds such exercise.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary, if a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Exercise Notice Warrant Shares is not available for the issuance or resale, as applicable,
of such Exercise Notice Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu
of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following
formula (a “Cashless Exercise”):
Net
Number = (A x B) - (A x C)
B
For
purposes of the foregoing formula:
A=
the total number of shares with respect to which this Warrant is then being exercised.
B=
as applicable: (i) the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii)
at the option of the Holder, either (y) the Weighted Average Price on the Trading Day immediately preceding the date of the applicable
Exercise Notice or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice
if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours
thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section
1(a) hereof or (iii) the Weighted Average Price of the Common Stock on the date of the applicable Exercise Notice if the date of such
Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close
of “regular trading hours” on such Trading Day.
C=
$0.001, as adjusted hereunder.
If
Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of
the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding
period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any
position contrary to this Section 1(d). Without limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise,”
and to receive the cash payments contemplated pursuant to Sections 1(c) and 4(b), in no event will the Company be required to net cash
settle a Warrant exercise.
(e)
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in
accordance with Section 11.
(f)
Beneficial Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of
any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and
conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving
effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of [4.99/9.99]%
(the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to
such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder
and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties
plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible
preferred stock or warrants, including the other Warrants) beneficially owned by the Holder or any other Attribution Party subject to
a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). For purposes of this Warrant, in determining the number of outstanding shares of Common Stock the Holder may acquire
upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current
Reports on Form 8-K or other public filing with the Securities and Exchange Commission (the “SEC”), as the case may
be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent setting
forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives
an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding
Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the
extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section
1(f), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant
to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”) and (ii)
as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares.
For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally
and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number
was reported. In the event that the issuance of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the
other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding
shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder’s
and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess
Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return
to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder
may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such
notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such
notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties
and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common
Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned
by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to
exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with
respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to correct this paragraph or any portion
of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section
1(f) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in
this paragraph may not be waived and shall apply to a successor holder of this Warrant.
(g)
Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall
be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding (without regard
to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the number
of shares of Common Stock reserved pursuant to this Section 1(g) be reduced other than in connection with any exercise of Warrants or
such other event covered by Section 2(c) below. The Required Reserve Amount (including, without limitation, each increase in the number
of shares so reserved) shall be allocated pro rata among the holders of the Warrants based on the number of shares of Common Stock issuable
upon exercise of Warrants held by each holder thereof on the Issuance Date (without regard to any limitations on exercise) (the “Authorized
Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Warrants, each transferee
shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated
to any Person which ceases to hold any Warrants shall be allocated to the remaining holders of Warrants, pro rata based on the number
of shares of Common Stock issuable upon exercise of the Warrants then held by such holders thereof (without regard to any limitations
on exercise).
(h)
Insufficient Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount (an
“Authorized Share Failure”), then the Company shall promptly take all action reasonably necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount
for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of
the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized Share
Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable
best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board
of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing, if at any such time of
an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding
shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation
by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C.
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted
from time to time as follows:
(a)
Intentionally omitted.
(b)
Intentionally omitted.
(c)
Adjustment Upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into
a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the
number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by
combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant
Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the
date the subdivision or combination becomes effective.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if, on or after the Subscription
Date and on or prior to the Termination Date, the Company shall declare or make any dividend or other distribution of its assets (or
rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, that to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Distribution to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of
such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding
the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made
on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no
such limitation).
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription Date
and on or prior to the Termination Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issuance or sale of such Purchase
Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would
result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such Common Stock as a result of such Purchase
Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of
the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the
Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on
such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had
been no such limitation).
(b)
Fundamental Transaction. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b), including
agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital
stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation
of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for the Company (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant
and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as
if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity
shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property
(except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the
exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without
limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section
4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled
to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of
this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Termination Date, in lieu
of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections
3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or
subscription rights) (collectively, the “Corporate Event Consideration”) which the Holder would have been entitled
to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). The provision made pursuant to the preceding
sentence shall be in a form and substance reasonably satisfactory to the Requisite Holders. The provisions of this Section 4(b) shall
apply similarly and equally to successive Fundamental Transactions and Corporate Events.
5.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation
or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or
sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions
as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common
Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take all action necessary to
reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise
of the Warrants, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the Warrants
then outstanding (without regard to any limitations on exercise).
6.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock of
the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s
capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of
the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant
or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
7.
REISSUANCE OF WARRANTS.
(a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the
Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as
the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b)
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender
and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then underlying this Warrant.
(c)
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of
such Warrant Shares as is designated by the Holder at the time of such surrender.
(d)
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such
new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right
to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or
Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii)
shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have
the same rights and conditions as this Warrant.
8.
NOTICES. Whenever notice is required to be given under this Warrant, including, without limitation, an Exercise Notice, unless
otherwise provided herein, such notice shall be given in writing, (i) if delivered (a) from within the domestic United States, by first-class
registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile
or (b) from outside the United States, by International Federal Express, electronic mail or facsimile, and (ii) will be deemed given
(A) if delivered by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally
recognized overnight carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal Express, two (2) Business
Days after so mailed and (D) at the time of transmission, if delivered by electronic mail to each of the email addresses specified in
this Section 8 prior to 5:00 p.m. (New York time) on a Trading Day, (E) the next Trading Day after the date of transmission, if delivered
by electronic mail to each of the email addresses specified in this Section 8 on a day that is not a Trading Day or later than 5:00 p.m.
(New York time) on any Trading Day and (F) if delivered by facsimile, upon electronic confirmation of delivery of such facsimile, and
will be delivered and addressed as follows:
(i) if to the Company, to:
Sonnet
BioTherapeutics Holdings, Inc.
100
Overlook Center
Princeton,
NJ 08540
Attention:
Jay Cross, Chief Financial Officer
Email:
jcross@sonnetbio.com
(ii)
if to the Holder, at such address or other contact information delivered by the Holder to the Company or as is on the books and records
of the Company.
The
Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail
a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written
notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or
sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares
of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided
in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to
the Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be
definitive and may not be disputed or challenged by the Company.
9.
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company
may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Holder.
10.
GOVERNING LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New
York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New
York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set
forth in Section 8(i) above or such other address as the Company subsequently delivers to the Holder and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling
in favor of the Holder. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
11.
DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within
two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the Holder.
If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares
within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company
shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation
of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank
or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results
no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s
or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
12.
REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in
addition to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages
for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required.
13.
TRANSFER. This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent
of the Company.
14.
SEVERABILITY; CONSTRUCTION; HEADINGS. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). This Warrant shall be
deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings
of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
15.
DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company
has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the
Company or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic
information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic
information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery
of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice
do not constitute material, nonpublic information relating to the Company or its subsidiaries.
16.
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(b)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Subscription Date, directly or indirectly managed
or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of
the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose
of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(c)
“Bid Price” means, for any security as of the particular time of determination, the bid price for such security on
the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the
bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg
as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the
average of the bid prices of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets
Group Inc. as of such time of determination. If the Bid Price cannot be calculated for a security as of the particular time of determination
on any of the foregoing bases, the Bid Price of such security as of such time of determination shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security,
then such dispute shall be resolved in accordance with the procedures in Section 11. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.
(d)
“Bloomberg” means Bloomberg Financial Markets.
(e)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed.
(f)
“Closing Bid Price” means, for any security as of any date, the last closing bid price and last closing trade price,
respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price
or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal
Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported
by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively,
of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. If the Closing
Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 11. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction
during the applicable calculation period.
(g)
“Common Stock” means (i) the Company’s Common Stock, par value $0.01 per share, and (ii) any capital stock into
which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.
(h)
“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into
or exercisable or exchangeable for shares of Common Stock.
(i)
“Eligible Market” means The Nasdaq Capital Market, the NYSE American LLC, The Nasdaq Global Select Market, The Nasdaq
Global Market or The New York Stock Exchange, Inc.
(j)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer
that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares
of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding
shares of Common Stock, or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the
outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or
Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding;
or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in
Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify
its shares of Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common
Stock not held by all such Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such
Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short
form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval of the
stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related
transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that
circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than
in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition
which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(k)
“Group” means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule
13d-5 thereunder.
(l)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(m)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including
such entity whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder,
any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity
designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization as
of the date of consummation of the Fundamental Transaction.
(n)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity and a government or any department or agency thereof.
(o)
“Principal Market” means The Nasdaq Capital Market.
(p)
“Requisite Holders” means the holders of the Warrants representing a majority of the shares of Common Stock underlying
the Warrants then outstanding.
(q)
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, for the
Company’s primary trading market or quotation system with respect to the Common Stock that is in effect on the date of receipt
of an applicable Exercise Notice.
(r)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(s)
“Successor Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder,
the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(t)
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market
is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the
Common Stock is then traded.
(u)
“Transaction Documents” means any agreement entered into by and between the Company and the Holder, as applicable.
(v)
“Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for such
security on the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market
publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function or,
if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces
is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security
by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest closing ask price of any of the market makers
for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. If the Weighted Average Price cannot
be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such
date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 11 with the term “Weighted
Average Price” being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation
period.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out
above.
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Sonnet
BioTherapeutics Holdings, Inc.
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By:
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Name:
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Pankaj
Mohan
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Title:
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Chief
Executive Office
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[Signature
Page to Pre-Funded Warrant]
ANNEX
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
PRE-FUNDED
WARRANT TO PURCHASE COMMON STOCK
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
The
undersigned holder hereby exercises the right to purchase _________________ shares of Common Stock (“Warrant Shares”)
of Sonnet BioTherapeutics Holdings, Inc., a company organized under the laws of Delaware (the “Company”), evidenced
by the attached Pre-Funded Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1.
Form of Exercise Price. The holder intends that payment of the Exercise Price shall be made as:
____________
a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
____________
a “Cashless Exercise” with respect to _______________ Warrant Shares.
2.
Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in
accordance with the terms of the Warrant.
3.
Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.
Date:
_______________ __, ______
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Name of Registered Holder
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By:
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Name:
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Title:
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ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs Securities Transfer Corporation to issue the above indicated number
of shares of Common Stock on or prior to the applicable Share Delivery Date.
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Sonnet BioTherapeutics, Inc.
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By:
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Name:
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Title:
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Exhibit
4.9
COMMON
STOCK PURCHASE WARRANT
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
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Warrant
Shares: _______
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Initial
Exercise Date: [●], 2021
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Issue
Date: [●], 2021
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THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the
“Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set
forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York
City time) on [•], 2026 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Sonnet
BioTherapeutics Holdings, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment
hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section 2(b).
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated
in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets”
published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most
recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding
and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
are open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York
Stock Exchange (or any successors to any of the foregoing.
“Transfer
Agent” means Securities Transfer Corporation, the current transfer agent of the Company, with a mailing address of 2901 N Dallas
Parkway, Suite 380, Plano, TX 75093 and a facsimile number of [●]1, and any successor transfer agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets”
published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most
recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding
and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
Section
2. Exercise.
a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within
the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in
Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares
specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless
exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case,
the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final
Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number
of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder
in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
Without
limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise” and without limiting the liquidated damages
provision in Section 2(d)(i) and the buy-in provision in Section 2(d)(iv), in no event will the Company be required to net cash settle
a Warrant exercise.
1
NTD: To be provided.
b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $[•]2, subject to adjustment
hereunder (the “Exercise Price”).
c)
Cashless Exercise. If at any time after the six-month anniversary of the Issue Date, there is no effective registration statement
registering, or no current prospectus available for, the issuance of the Warrant Shares to the Holder, then this Warrant may also be
exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive
a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where
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(A)
=
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as
applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise
is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64)
of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the
VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock
on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice
of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within
two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant
to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a
Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular
trading hours” on such Trading Day;
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(B)
=
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the
Exercise Price of this Warrant, as adjusted hereunder; and
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(X)
=
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the
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
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If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2(c).
2
NTD: 125% of the public offering price of the shares being offered in the same offering.
d)
Mechanics of Exercise.
i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale
limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest
of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the
aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery
to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice
of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate
Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise
(based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per
Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery
Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is
a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement
Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading
Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x)
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares
of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share..
vi.
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed
with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of
a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder,
upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day
after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.
b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise, other than cash (including, without limitation, any distribution of stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
d)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock,
(iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock
or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each
a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right
to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number
of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of
the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance
with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver
to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity
(or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard
to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant
to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor
Entity had been named as the Company herein.
e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the Warrant Register of the Company, at least five (5) calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly
set forth herein.
Section
4. Transfer of Warrant.
a)
Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof,
this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of
the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company
unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three
(3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly
assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date of
this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
d)
Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public
information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or
transferee of this Warrant, as the case may be, provides to the Company an opinion of counsel, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that the transfer of this Warrant does not require registration under
the Securities Act.
e)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to
or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
Section
5. Miscellaneous.
a)
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section
3.
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business
Day.
d)
Authorized Shares.
The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
e)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant,
the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h)
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized
overnight courier service, addressed to the Company, at 100 Overlook Center, Princeton, NJ 08540, Attention: Jay Cross, Chief Compliance
Officer, facsimile number: [●3], email address: jcross@sonnetbio.com, or such other facsimile number, email address
or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries
to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally
recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing
on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest
of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at
the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the
time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail
address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes,
or contains, material, non-public information regarding the Company or any subsidiaries, the Company shall promptly file such notice
with the Commission pursuant to a Current Report on Form 8-K.
i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on
the one hand, and the Holders of a majority in interest of the Warrants issued on this date then outstanding, on the other hand.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
(Signature
Page Follows)
3
NTD: To be provided.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
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SONNET
BIOTHERAPEUTICS HOLDINGS, inc.
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By:
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Name:
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Title:
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NOTICE
OF EXERCISE
To:
sonnet biotherapeutics holdings, inc.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity: _________________________________________________
Name
of Authorized Signatory: ___________________________________________________________________
Title
of Authorized Signatory: ____________________________________________________________________
Date:
________________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
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Dated:
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Holder’s
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Exhibit
4.10
FORM
OF WARRANT
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
WARRANT
TO PURCHASE COMMON STOCK
Warrant
No.: [ ]
Number
of Shares of Common Stock: [ ]
Date
of Issuance: [ ], 2021 (“Issuance Date”)
Sonnet
BioTherapeutics Holdings, Inc., a company organized under the laws of Delaware (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [ ], the registered holder
hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from
the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after [ ] (the “Initial
Exercisability Date”), but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), [ ]
([ ]) fully paid non-assessable shares of Common Stock (as defined below), subject to adjustment as provided herein (the “Warrant
Shares”). Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants
to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”), shall have the meanings
set forth in Section 16. This Warrant is one of the Warrants to Purchase Common Stock (the “Warrants”) issued pursuant
to (i) that certain Underwriting Agreement, dated as of [ ], 2021 (the “Subscription Date”) by and between
the Company and BTIG, LLC, as representative of the several underwriters named therein, (ii) the Company’s Registration Statement
on Form S-1 (File number 333-258092) under the Securities Act of 1933, as amended (the “Registration Statement”) and
(iii) the Company’s prospectus dated as of [ ], 2021.
1.
EXERCISE OF WARRANT.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole
or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day
following the delivery of the Exercise Notice, the Holder shall make payment to the Company of an amount equal to the Exercise Price
in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash by wire transfer of immediately available funds or, if the provisions of Section 1(d) are applicable,
by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original Warrant in order to effect an exercise hereunder, nor shall any ink-original signature
or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice be required. Execution and delivery
of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares and the Holder shall not
be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder
and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within
three (3) Trading Days of the date on which the final Exercise Notice is delivered to the Company. On or before the first (1st) Trading
Day following the date on which the Holder has delivered the applicable Exercise Notice, the Company shall transmit by facsimile or electronic
mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise Notice, to the Holder
and the Transfer Agent. So long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise, if applicable)
on or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on
or prior to the earlier of (i) the second (2nd) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement
Period, in each case following the date on which the Exercise Notice has been delivered to the Company, or, if the Holder does not deliver
the Aggregate Exercise Price (or notice of a Cashless Exercise, if applicable) on or prior to the first (1st) Trading Day following the
date on which the Exercise Notice has been delivered to the Company, then on or prior to the first (1st) Trading Day following the date
on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered (such earlier date, or if later, the earliest day
on which the Company is required to deliver Warrant Shares pursuant to this Section 1(a), the “Share Delivery Date”),
the Company shall (X) provided that the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program (“FAST”),
credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating
in FAST, issue and dispatch by overnight courier to the physical address or email address as specified in the Exercise Notice, a certificate
or evidence of a credit of book-entry shares, registered in the name of the Holder or its designee, for the number of Warrant Shares
to which the Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer
Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including without limitation for same
day processing. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder
of record and beneficial owner of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date
such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant
Shares, as the case may be. If this Warrant is physically delivered to the Company in connection with any exercise pursuant to this Section
1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares
being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after
any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d))
representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less
the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the
exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded down to the nearest whole number. The
Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and
expenses of the Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this
Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions
hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination; provided, however, that the Company shall not be required to deliver Warrant
Shares with respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise Price (or notice of a Cashless Exercise)
with respect to such exercise.
(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $[ ] per share, subject to adjustment
as provided herein.
(c)
Company’s Failure to Timely Deliver Securities. If either (I) the Company shall fail for any reason or for no reason to
issue to the Holder on or prior to the applicable Share Delivery Date, if (x) the Transfer Agent is not participating in FAST, a certificate
or evidence of a book-entry credit for the number of shares of Common Stock to which the Holder is entitled and register such Common
Stock on the Company’s share register or (y) the Transfer Agent is participating in FAST, to credit the Holder’s balance
account with DTC, for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this
Warrant or (II) a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares
that are the subject of the Exercise Notice (the “Exercise Notice Warrant Shares”) is not available for the issuance
or resale, as applicable, of such Exercise Notice Warrant Shares and (x) the Company fails to promptly, but in no event later than one
(1) Business Day after such registration statement becomes unavailable, to so notify the Holder and (y) the Company is unable to deliver
the Exercise Notice Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Exercise Notice
Warrant Shares to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system
(the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and together
with the event described in clause (I) above, an “Exercise Failure”), then, in addition to all other remedies available
to the Holder, if on or prior to the applicable Share Delivery Date either (I) if the Transfer Agent is not participating in FAST, the
Company shall fail to issue and deliver a certificate or evidence of a book-entry credit to the Holder and register such shares of Common
Stock on the Company’s share register or, if the Transfer Agent is participating in FAST, credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant
to the Company’s obligation pursuant to clause (ii) below or (II) if a Notice Failure occurs, and if after such date the Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s request,
(A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions,
if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that
the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order
giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant
and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded)
or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover
a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation
of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the
Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect
to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms
hereof. The Company’s current transfer agent participates in FAST. In the event that the Company changes transfer agents while
this Warrant is outstanding, the Company shall use commercially reasonable efforts to select a transfer agent that participates in FAST.
While this Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST with respect to this Warrant. In
addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant
to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part
and retain and/or have the Company return, as the case may be, any portion of this Warrant that has not been exercised pursuant to such
Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s obligation to make any payments that
have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which
may be the Registration Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not
available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and the Holder has submitted an Exercise
Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already delivered the
Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC
through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice to the Company, to (x)
rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant that has
not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s
obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or
(y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise. In addition to the foregoing, if the Company
fails for any reason to deliver to the Holder the Warrant Shares subject to an Exercise Notice by the second Trading Day following the
Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the Weighted Average Price of the Common Stock on the date of the applicable Exercise Notice),
$10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each
Trading Day after the second Trading Day following such Share Delivery Date until such Warrant Shares are delivered or Holder rescinds
such exercise.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary, if a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Exercise Notice Warrant Shares is not available for the issuance or resale, as applicable,
of such Exercise Notice Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu
of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following
formula (a “Cashless Exercise”):
Net
Number = (A x B) - (A x C)
B
For
purposes of the foregoing formula:
|
|
A
= the total number of shares with respect to which this Warrant is then being exercised.
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B
= as applicable: (i) the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a
Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular
trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading
Day, (ii) at the option of the Holder, either (y) the Weighted Average Price on the Trading Day immediately preceding the date of
the applicable Exercise Notice or (z) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable
Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered
within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading
Day) pursuant to Section 1(a) hereof or (iii) the Weighted Average Price of the Common Stock on the date of the applicable Exercise
Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section
1(a) hereof after the close of “regular trading hours” on such Trading Day.
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C
= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
|
If
Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of
the Securities Act of 1933, as amended, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised,
and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees
not to take any position contrary to this Section 1(d). Without limiting the rights of a Holder to receive Warrant Shares on a “cashless
exercise,” and to receive the cash payments contemplated pursuant to Sections 1(c) and 4(b), in no event will the Company be required
to net cash settle a Warrant exercise.
(e)
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in
accordance with Section 11.
(f)
Beneficial Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of
any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and
conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving
effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99%
(or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) (the “Maximum Percentage”) of the number
of shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares
of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder
or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities
of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including the other
Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous
to the limitation contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”). For purposes of this Warrant,
in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding
the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Reports on Form 8-K or other public filing with the
Securities and Exchange Commission (the “SEC”), as the case may be, (y) a more recent public announcement by the Company
or (z) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the
“Reported Outstanding Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the
actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify
the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise
cause the Holder’s beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder
must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares
by which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company
shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written
or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the
Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and
any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance
of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially
own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section
13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate
beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall
be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable
after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid
by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase or decrease
the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase
in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company
and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of
Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the
terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose
including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to
this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination
of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 1(f) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective
or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply
to a successor holder of this Warrant.
(g)
Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall
be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding (without regard
to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the number
of shares of Common Stock reserved pursuant to this Section 1(g) be reduced other than in connection with any exercise of Warrants or
such other event covered by Section 2(c) below. The Required Reserve Amount (including, without limitation, each increase in the number
of shares so reserved) shall be allocated pro rata among the holders of the Warrants based on the number of shares of Common Stock issuable
upon exercise of Warrants held by each holder thereof on the Issuance Date (without regard to any limitations on exercise) (the “Authorized
Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Warrants, each transferee
shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated
to any Person which ceases to hold any Warrants shall be allocated to the remaining holders of Warrants, pro rata based on the number
of shares of Common Stock issuable upon exercise of the Warrants then held by such holders thereof (without regard to any limitations
on exercise).
(h)
Insufficient Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount (an
“Authorized Share Failure”), then the Company shall promptly take all action reasonably necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount
for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of
the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized Share
Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable
best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board
of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing, if at any such time of
an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding
shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation
by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C.
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted
from time to time as follows:
(a)
Intentionally omitted.
(b)
Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
(c)
Adjustment Upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into
a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the
number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by
combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant
Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the
date the subdivision or combination becomes effective.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if, on or after the Subscription
Date and on or prior to the Expiration Date, the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder
and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution
to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and
beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until
such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution
or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription Date
and on or prior to the Expiration Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issuance or sale of such Purchase
Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would result
in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such Common Stock as a result of such Purchase
Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of
the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the
Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on
such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had
been no such limitation).
(b)
Fundamental Transaction. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b), including
agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital
stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation
of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for the Company (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant
and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as
if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity
shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property
(except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the
exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor
Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations
on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without
limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section
4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled
to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of
this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of
the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections
3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or
subscription rights) (collectively, the “Corporate Event Consideration”) which the Holder would have been entitled
to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). The provision made pursuant to the preceding
sentence shall be in a form and substance reasonably satisfactory to the Requisite Holders. The provisions of this Section 4(b) shall
apply similarly and equally to successive Fundamental Transactions and Corporate Events. Notwithstanding the foregoing, in the event
of a Change of Control (other than a Change of Control which was not approved by the Board of Directors, as to which this right shall
not apply), at the request of the Holder delivered before the 30th day after such Change of Control, the Company (or the Successor Entity)
shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days after such request (or, if later,
on the effective date of the Change of Control), an amount equal to the Black Scholes Value of the remaining unexercised portion of this
Warrant on the effective date of such Change of Control, payable in cash; provided, that if the applicable Change of Control was not
approved by the Company’s Board of Directors, the Black-Scholes Value of the remaining unexercised portion of this Warrant shall
be payable at the option of the Company in either (x) Common Stock, whereby the Company would be continually obligated to actively settle
shares of Common Stock in the event insufficient authorized shares of Common Stock were available (or corresponding Corporate Event Consideration,
as applicable) valued at the value of the consideration received by the shareholders in such Change of Control or (y) cash.
5.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation
or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or
sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect
the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions
as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common
Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take all action necessary to
reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise
of the Warrants, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the Warrants
then outstanding (without regard to any limitations on exercise).
6.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock of
the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s
capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent
to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of
the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant
or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
7.
REISSUANCE OF WARRANTS.
(a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the
Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as
the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b)
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender
and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then underlying this Warrant.
(c)
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of
such Warrant Shares as is designated by the Holder at the time of such surrender.
(d)
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such
new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right
to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or
Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii)
shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have
the same rights and conditions as this Warrant.
8.
NOTICES. Whenever notice is required to be given under this Warrant, including, without limitation, an Exercise Notice, unless
otherwise provided herein, such notice shall be given in writing, (i) if delivered (a) from within the domestic United States, by first-class
registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile
or (b) from outside the United States, by International Federal Express, electronic mail or facsimile, and (ii) will be deemed given
(A) if delivered by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally
recognized overnight carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal Express, two (2) Business
Days after so mailed and (D) at the time of transmission, if delivered by electronic mail to each of the email addresses specified in
this Section 8 prior to 5:00 p.m. (New York time) on a Trading Day, (E) the next Trading Day after the date of transmission, if delivered
by electronic mail to each of the email addresses specified in this Section 8 on a day that is not a Trading Day or later than 5:00 p.m.
(New York time) on any Trading Day and (F) if delivered by facsimile, upon electronic confirmation of delivery of such facsimile, and
will be delivered and addressed as follows:
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(i)
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if
to the Company, to:
Sonnet
BioTherapeutics Holdings, Inc.
100
Overlook Center
Princeton,
NJ 08540
Attention:
Jay Cross, Chief Financial Officer
Email:
jcross@sonnetbio.com
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(ii)
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if
to the Holder, at such address or other contact information delivered by the Holder to the Company or as is on the books and records
of the Company.
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The
Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail
a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written
notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or
sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares
of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided
in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the
Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive
and may not be disputed or challenged by the Company.
9.
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company
may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Holder.
10.
GOVERNING LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New
York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New
York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set
forth in Section 8(i) above or such other address as the Company subsequently delivers to the Holder and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling
in favor of the Holder. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
11.
DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within
two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the Holder.
If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares
within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company
shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation
of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank
or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results
no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s
or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
12.
REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in
addition to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages
for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required.
13.
TRANSFER. This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent
of the Company.
14.
SEVERABILITY; CONSTRUCTION; HEADINGS. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). This Warrant shall be
deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings
of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
15.
DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company
has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the
Company or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic
information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic
information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery
of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice
do not constitute material, nonpublic information relating to the Company or its subsidiaries.
16.
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(b)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Subscription Date, directly or indirectly managed
or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of
the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(c)
“Bid Price” means, for any security as of the particular
time of determination, the bid price for such security on the Principal Market as reported by Bloomberg as of such time of determination,
or, if the Principal Market is not the principal securities exchange or trading market for such security, the bid price of such security
on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time
of determination, or if the foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such
security by Bloomberg as of such time of determination, the average of the bid prices of any market makers for such security as reported
in the OTC Link or the Pink Open Market as of such time of determination. If the Bid Price cannot be calculated for a security as of
the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall
be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon
the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 11. All such
determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during
such period.
(d)
“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from
the “OV” function on Bloomberg determined as of the day immediately following the first public announcement of the applicable
Change of Control, or, if the Change of Control is not publicly announced, the date the Change of Control is consummated, for pricing
purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term
of this Warrant as of such date of request, (ii) an expected volatility equal to 100%, (iii) the underlying price per share used in such
calculation shall be the greater of (A) the sum of the price per share being offered in cash, if any, plus the per share value of any
non-cash consideration, if any, being offered in such Change of Control and (B) the greater of (x) the last Weighted Average Price immediately
prior to the public announcement of such Change of Control and (y) the last Weighted Average Price immediately prior to the consummation
of such Change of Control, (iv) a zero cost of borrow and (v) a 360 day annualization factor.
(e)
“Bloomberg” means Bloomberg Financial Markets.
(f)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed.
(g)
“Change of Control” means any Fundamental Transaction other than (i) any reorganization, recapitalization or reclassification
of the Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly
or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority
or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities)
after such reorganization, recapitalization or reclassification, (ii) pursuant to a migratory merger effected solely for the purpose
of changing the jurisdiction of incorporation of the Company or (iii) a merger in connection with a bona fide acquisition by the Company
of any Person in which (x) the gross consideration paid, directly or indirectly, by the Company in such acquisition is not greater than
20% of the Company’s market capitalization as calculated on the date of the consummation of such merger and (y) such merger does
not contemplate a change to the identity of a majority of the board of directors of the Company. Notwithstanding anything herein to the
contrary, any transaction or series of transactions that, directly or indirectly, results in the Company or the Successor Entity not
having Common Stock or common stock, as applicable, registered under the Exchange Act and listed on an Eligible Market shall be deemed
a Change of Control.
(h)
“Closing Bid Price” means, for any security as of
any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported
by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or
the closing trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to
4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board
for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the
OTC Link or the Pink Open Market. If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the
Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved
pursuant to Section 11. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or other similar transaction during the applicable calculation period.
(i)
“Common Stock” means (i) the Company’s Common
Stock, par value $0.01 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock
resulting from a reclassification of such Common Stock.
(j)
“Convertible Securities” means any stock or securities
(other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.
(k)
“Eligible Market” means The Nasdaq Capital Market,
the NYSE American LLC, The Nasdaq Global Select Market, The Nasdaq Global Market or The New York Stock Exchange, Inc.
(l)
“Expiration Date” means the date sixty (60) months
after the Initial Exercisability Date or, if such date falls on a day other than a Business Day or on which trading does not take place
on the Principal Market (a “Holiday”), the next day that is not a Holiday.
(m)
“Fundamental Transaction” means (A) that the Company
shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its “significant subsidiaries”
(as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to
make, or allow the Company to be subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities
making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of
Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities
making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding;
or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject
Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares
of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the
Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other
business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively
the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v)
reorganize, recapitalize or reclassify its shares of Common Stock, (B) that the Company shall, directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities
in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly,
whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common
Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization,
recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting
power represented by issued and outstanding shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented
by issued and outstanding shares of Common Stock not held by all such Subject Entities as of the Subscription Date calculated as if any
shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power
represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject
Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their
Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates
or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured
in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(n)
“Group” means a “group” as that term
is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(o)
“Options” means any rights, warrants or options
to subscribe for or purchase shares of Common Stock or Convertible Securities.
(p)
“Parent Entity” of a Person means an entity that,
directly or indirectly, controls the applicable Person, including such entity whose common stock or equivalent equity security is quoted
or listed on an Eligible Market (or, if so elected by the Holder, any other market, exchange or quotation system), or, if there is more
than one such Person or such entity, the Person or such entity designated by the Holder or in the absence of such designation, such Person
or entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(q)
“Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or
any department or agency thereof.
(r)
“Principal Market” means The Nasdaq Capital Market.
(s)
“Requisite Holders” means the holders of the Warrants
representing a majority of the shares of Common Stock underlying the Warrants then outstanding.
(t)
“Standard Settlement Period” means the standard
settlement period, expressed in a number of Trading Days, for the Company’s primary trading market or quotation system with respect
to the Common Stock that is in effect on the date of receipt of an applicable Exercise Notice.
(u)
“Subject Entity” means any Person, Persons or Group
or any Affiliate or associate of any such Person, Persons or Group.
(v)
“Successor Entity” means one or more Person or Persons
(or, if so elected by the Holder, the Company or Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or
one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent Entity) with which such Fundamental Transaction
shall have been entered into.
(w)
“Trading Day” means any day on which the Common
Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on
the principal securities exchange or securities market on which the Common Stock is then traded.
(x)
“Transaction Documents” means any agreement entered
into by and between the Company and the Holder, as applicable.
(y)
“Transfer Agent” means Securities Transfer Corporation,
the current transfer agent of the Company, with a mailing address of 2901 N Dallas Parkway, Suite 380, Plano, TX 75093 and any successor transfer agent of the Company.
(z)
“Weighted Average Price” means, for any security
as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01
a.m., New York time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00
p.m., New York time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by
Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average
price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning
at 9:30:01 a.m., New York time (or such other time as such market publicly announces is the official open of trading), and ending at
4:00:00 p.m., New York time (or such other time as such market publicly announces is the official close of trading), as reported by Bloomberg,
or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest
Closing Bid Price and the lowest closing ask price of any of the market makers for such security as reported in the OTC Link or the Pink
Open Market. If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the
Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant
to Section 11 with the term “Weighted Average Price” being substituted for the term “Exercise Price.” All such
determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar
transaction during the applicable calculation period.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out
above.
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Sonnet
BioTherapeutics Holdings, Inc.
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By:
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Name:
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Pankaj
Mohan
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Title:
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Chief
Executive Officer
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EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE COMMON STOCK
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
The
undersigned holder hereby exercises the right to purchase ______________ shares of Common Stock (“Warrant Shares”)
of Sonnet BioTherapeutics Holdings, Inc, a company organized under the laws of Delaware (the “Company”), evidenced
by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.
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1.
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Form
of Exercise Price. The holder intends that payment of the Exercise Price shall be made as:
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______________
a “Cash Exercise” with respect to ______________ Warrant Shares; and/or
______________
a “Cashless Exercise” with respect to ______________ Warrant Shares.
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2.
Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $ _________ to the Company in accordance
with the terms of the Warrant.
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3.
Delivery of Warrant Shares. The Company shall deliver to the holder ______________ Warrant Shares in accordance with the terms of
the Warrant.
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Date:
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Name
of Registered Holder
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By:
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Name:
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Title:
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Exhibit
A-1
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs Securities Transfer Corporation to issue the above indicated number
of shares of Common Stock on or prior to the applicable Share Delivery Date.
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Sonnet
BioTherapeutics Holdings, Inc.
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By:
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Name:
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Title:
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