UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): November 17, 2017
SenesTech,
Inc.
(Exact name of registrant as specified in its
charter)
|
Delaware
|
|
001-37941
|
|
20-2079805
|
|
(State or other jurisdiction
of incorporation)
|
|
(Commission
File No.)
|
|
(IRS Employer
Identification No.)
|
3140 N. Caden Court, Suite 1
Flagstaff, AZ 86004
(Address of principal executive offices) (Zip
Code)
(928) 779-4143
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
|
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act of
1934 (17 CFR 240.12b-2).
Emerging growth company
☒
If an emerging growth company, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
|
|
Item 1.01
|
Entry into a Material Definitive Agreement.
|
On November 17, 2017, SenesTech, Inc. (the “Company”)
entered into an underwriting agreement (the “Underwriting Agreement”) with Roth Capital Partners, LLC, as sole book-runner,
and Craig-Hallum Capital Group, as co-manager (the “Underwriters”), relating to a firm commitment underwritten public
offering (the “Offering”) of 5,400,000 shares of common stock and warrants to purchase 4,050,000 shares of common stock
(the “Securities”). The Securities will be sold at a price equal to $1.00 per share of common stock, including the
warrant. The warrants will have an exercise price of $1.50 per share, are exercisable immediately and will expire five years from
the date of issuance.
The Company granted the Underwriters a 30-day option to purchase
up to an additional 810,000 shares of common stock and warrants to purchase 607,500 shares of common stock to cover over-allotments,
if any. The Securities are being offered pursuant to a registration statement on Form S-1 (File No. 333-221433) which became effective
on November 16, 2017, and any related prospectus or prospectus supplement.
Pursuant to the Underwriting Agreement, the Company will pay the
Underwriters a commission equal to 7.0% of the gross proceeds of the offering, an advisory fee equal to 1.0% of the gross proceeds
of the offering and will also issue the Underwriters a warrant (the “Underwriters’ Warrant”) to purchase an aggregate
of 540,000 shares of common stock, with an exercise price of $1.50 per share, which is equal to 150% of the public offering price
per share of common stock and warrant. The Underwriters’ Warrant will be exercisable at any time, and from time to time,
in whole or in part, during the five year period commencing on the effective date of this offering.
The Underwriting Agreement contains customary representations, warranties
and agreements by the Company, and customary conditions to closing, indemnification obligations of the Company and the Underwriters,
including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties, and termination provisions.
A copy of the Underwriting Agreement is attached as Exhibit 1.1
and is incorporated herein by reference. The foregoing description of the Underwriting Agreement is not complete and is qualified
in its entirety by reference to Exhibit 1.1. The prospectus relating to the offering will be filed with the Securities and Exchange
Commission. Copies of the form of Underwriters’ Warrant and the form of Warrant are filed hereto as Exhibit 4.1 and Exhibit
4.2, respectively. The foregoing descriptions of the Underwriter’s Warrant and Warrant are not complete, and are qualified
in their entirety by reference to Exhibit 4.1 and Exhibit 4.2, respectively.
On November 17, 2017, the Company issued a
press release announcing the pricing of the public offering of common stock and warrants to purchase common stock. A copy of the
press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
|
|
Item 9.01
|
Financial Statements and Exhibits.
|
(d) Exhibits
The following exhibits are being furnished
herewith:
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: November 17, 2017
|
|
|
SENESTECH, INC.
|
|
|
|
By:
|
|
/s/ Thomas C. Chesterman
|
|
|
|
|
|
Thomas C. Chesterman
|
|
|
|
|
|
Chief Financial Officer
|
Exhibit
1.1
SENESTECH,
INC.
5,400,000
Shares of Common Stock
Warrants
to Purchase up to 4,050,000 Shares of Common Stock
UNDERWRITING
AGREEMENT
November
17, 2017
Roth
Capital Partners, LLC
Craig-Hallum
Capital Group LLC
c/o
Roth Capital Partners, LLC,
888
San Clemente Drive, Suite 400
Newport
Beach, CA 92660
Ladies
and Gentlemen:
SenesTech,
Inc., a Delaware corporation (the “
Company
”), proposes, subject to the terms and conditions stated herein,
to issue and sell to the underwriters named in
Schedule I
hereto (the “
Underwriters
,” or each, an “
Underwriter
”)
, an aggregate of 5,400,000 authorized but unissued shares (the “
Firm Shares
”) of common stock, par value $0.001
per share (the “
Common Stock
”), of the Company and (ii) warrants (the “
Firm Warrants
”) to
purchase up to an aggregate of 4,050,000 shares of Common Stock (the “
Firm Warrant Shares
”). The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth in Section 4 hereof, up to an additional (i) 810,000
shares of Common Stock (the “
Option Shares
”) and warrants (the “
Option Warrants
”) to purchase
up to an aggregate of 607,500 shares of Common Stock (the “
Option Warrant Shares
” and together with the Firm
Warrant Shares, the “
Warrant Shares
”). The Firm Shares and the Option Shares are hereinafter collectively referred
to as the “
Shares
” and the Firm Warrants and the Option Warrants are collectively referred to as the “
Warrants
”.
The Shares, the Warrants, and the Warrant Shares are collectively referred to as the “
Securities
.” The Firm
Shares and the Firm Warrants shall be sold together as a fixed combination, each consisting of one share of Common Stock and one
Warrant. The Option Shares and the Option Warrants shall be sold together as a fixed combination, each consisting of one share
of Common Stock and one Warrant. The Shares and the Warrants shall be immediately separable and transferable upon issuance.
The
Company also confirms its agreement that, in partial consideration for the Underwriters’ services hereunder, the Company
will cause warrants (the “
Underwriters’ Warrants
”) to be issued to the Underwriters for the purchase
of an aggregate of 540,000 shares of Common Stock (the “
Underwriters’ Warrant Shares
”), with such additional
terms and provisions as may be set forth in the form of warrant agreement attached hereto as
Exhibit A
(the “
Underwriters’
Warrant Agreement
”).
The
Company and the several 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 covering the Securities on Form S-1 (File No. 333-221433 under the Securities Act of 1933, as amended (the “
Securities
Act
”), and the rules and regulations (the “
Rules and Regulations
”) of the Commission thereunder and
such amendments to such registration statement (including post effective amendments) as may have been required to the date of
this Agreement. Such registration statement, as amended (including any post effective amendments), has been declared effective
by the Commission. Such registration statement, including amendments thereto (including post effective amendments thereto) and
all documents and information deemed to be a part of the Registration Statement through incorporation by reference or otherwise
at the time of effectiveness of the Registration Statement (the “
Effective Time
”), the exhibits and any schedules
thereto at the Effective Time or thereafter during the period of effectiveness and the documents and information otherwise deemed
to be a part thereof or included therein by the Securities Act or otherwise pursuant to the Rules and Regulations at the Effective
Time or thereafter during the period of effectiveness, is herein called the “
Registration Statement
.” If the
Company has filed or files an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “
Rule
462 Registration Statement
”), then any reference herein to the term Registration Statement shall include such Rule 462
Registration Statement. Any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant
to Rule 424(a) under the Securities Act is hereinafter called a “
Preliminary Prospectus
.” The last Preliminary
Prospectus relating to the Securities that was filed with the Commission pursuant to Rule 424(a) prior to the pricing of the offering
contemplated hereby is hereinafter called the “
Pricing Prospectus
.”
The
Company is filing with the Commission pursuant to Rule 424 under the Securities Act a final prospectus relating to the Securities,
which includes the information permitted to be omitted therefrom at the Effective Time by Rule 430A under the Securities Act.
Such final prospectus, as so filed, is hereinafter called the “
Final Prospectus
.” The Final Prospectus, the
Pricing Prospectus and any Preliminary Prospectus in the form in which they were included in the Registration Statement or filed
with the Commission pursuant to Rule 424 under the Securities Act is hereinafter called a “
Prospectus
.” Reference
made herein to any Prospectus shall be deemed to refer to and include any documents incorporated by reference therein and any
reference to any amendment or supplement to any Prospectus shall be deemed to refer to and include any document filed under the
Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and the rules and regulations of the Commissions
thereunder, incorporated by reference in such Prospectus, as the case may be.
2. Representations
and Warranties Regarding the Offering.
(a)
Underwriter
Representations and Warranties
. The Underwriters represent and warrant to the Company, severally and not jointly, as of the
date hereof and as of the Closing Date (as defined in Section 4(d) below) and as of each Option Closing Date (as defined in Section
4(b) below), as follows:
(i)
Testing-the-Waters
Communications.
Each Underwriter (i) has not engaged in any Testing-the-Waters Communication with respect to the offering
contemplated by this agreement, other than Testing-the-Waters Communications with entities that are qualified institutional buyers
within the meaning of Rule 144A under the Securities Act or accredited institutional investors within the meaning of Rule 501
under the Securities Act, and (ii) has not authorized anyone to engage in any Testing-the-Waters Communications with respect to
the offering contemplated by this agreement. Each Underwriter has not distributed any Testing-the-Waters Communication with respect
to the offering contemplated by this agreement that is a written communication within the meaning of Rule 405 under the
Securities
Act (“
Written Testing-the-Waters Communications
”), other than those previously
provided by the Company and listed on
Schedule IV
hereto. “
Testing-the-Waters Communication
” means any
oral or written communication with potential investors undertaken in reliance on Section 5(d) of the
Securities
Act.
Each
Written Testing-the-Waters Communications with respect to the offering contemplated
by this agreement, did not, at the time of disclosure and at all times through the completion of the public offer and sale of
the
Securities
will not, include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement
, the Time of Sale Disclosure Package and the Final
Prospectus.
(b)
Company
Representations and Warranties
. The Company represents and warrants to, and agrees with, the several Underwriters, as of the
date hereof and as of the Closing Date (as defined in Section 4(d) below) and as of each Option Closing Date (as defined in Section
4(b) below), as follows:
(i)
No
Material Misstatements or Omissions
. At each time of effectiveness, at the date hereof, at the Closing Date, and at each Option
Closing Date, if any, the Registration Statement and any post-effective amendment thereto complied or will comply in all material
respects with the requirements of the Securities Act and the Rules and Regulations and did not, does not, and will not, as the
case may be, 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 in Section 2(b)(v)(A)
below) as of the date hereof and at the Closing Date and on each Option Closing Date, if any, and the Final Prospectus, as amended
or supplemented, as of its date, at the time of filing pursuant to Rule 424(b) under the Securities Act, at the Closing Date,
and at each Option Closing Date, if any, and any individual Written Testing-the-Waters Communication, when considered together
with the Time of Sale Disclosure Package, did not, does not and will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein, 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, written information furnished to the Company by any Underwriter specifically for use
in the preparation thereof, which written information is described in Section 7(f). The Registration Statement contains all exhibits
and schedules required to be filed by the Securities Act or the Rules and Regulations. 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)
Emerging
Growth Company
. The Company is an “emerging growth company,” as defined in Section 2(a) of the
Securities
Act (an “
Emerging Growth Company
”).
(iv)
Testing-the-Waters
Communications.
The Company (i) has not engaged in any Testing-the-Waters Communication with respect to the offering contemplated
by this agreement, other than Testing-the-Waters Communications with entities that are qualified institutional buyers within the
meaning of Rule 144A under the Securities Act or accredited institutional investors within the meaning of Rule 501 under the Securities
Act, and (ii) has not authorized anyone to engage in any Testing-the-Waters Communications with respect to the offering contemplated
by this agreement. The Company has not distributed any Written Testing-the-Waters Communication, other than those previously provided
to the Underwriters and listed on
Schedule IV
hereto.
Each
Written Testing-the-Waters
Communications with respect to the offering contemplated by this agreement, did not, at the time of disclosure and at all times
through the completion of the public offer and sale of the
Securities
will not, include
any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement
,
the Time of Sale Disclosure Package and the Final Prospectus.
(v)
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 Securities. 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 and the Final Prospectus, no Issuer Free
Writing Prospectus, as of its issue date and at all subsequent times though the completion of the public offer and sale of Securities,
has, 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, conflicts or will conflict with the information contained in the Registration Statement, the Time of Sale Disclosure
Package and the Final 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 Final Prospectus or any Issuer Free Writing
Prospectus in reliance upon, and in conformity with, written information furnished to the Company by any Underwriter specifically
for use in the preparation thereof, which written information is described in Section 7(f). As used in this paragraph and elsewhere
in this Agreement:
(1) “
Time
of Sale Disclosure Package
” means the Prospectus most recently filed with the Commission before the time of this Agreement,
each Issuer Free Writing Prospectus, and, if applicable, the description of the transaction provided by the Underwriters included
on
Schedule II
.
(2) “
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.
(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, if any, satisfied, as of its issue date and at all subsequent times through
the Prospectus Delivery Period, 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.
(vi)
Financial
Statements
. The financial statements of the Company, together with the related notes and schedules, included or incorporated
by reference in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus comply in all material
respects with the applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations of the Commission
thereunder, and fairly present in all material respects the financial condition of the Company as of the dates indicated and the
results of operations and changes in cash flows for the periods therein specified in conformity with U.S. generally accepted accounting
principles (“
GAAP
”) consistently applied throughout the periods involved. No other financial statements, pro
forma financial information or schedules are required under the Securities Act, the Exchange Act, or the Rules and Regulations
to be included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus.
(vii)
Independent
Accountants.
To the Company’s knowledge, M&K CPAs, PLLC, which has expressed its opinion with respect to the financial
statements and schedules incorporated by reference as a part of the Registration Statement and incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, is an independent registered public accounting
firm with respect to the Company within the meaning of the Securities Act and the Rules and Regulations.
(viii)
Accounting
Controls.
The Company maintains systems of “internal control over financial reporting” (as defined under
Rules 13a-15 and 15d-15 under the Exchange Act) that have been designed by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP,
including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences;
and (v) the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus fairly present the information called for in all material
respects and are prepared in accordance with the Commission’s rules and guidelines applicable thereto in all material respects,
in each case, to the extent applicable to an Emerging Growth Company and a Smaller Reporting Company as defined in Section 12b-2
of the Exchange Act. Since the date of the latest audited financial statements incorporated by reference in the Registration Statement,
the Time of Sale Disclosure Package and the Final Prospectus, there has been 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.
(ix)
Forward-Looking
Statements
. The Company had a reasonable basis for, and made in good faith, each “forward-looking statement” (within
the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) contained or incorporated by reference in
the Registration Statement, the Time of Sale Disclosure Package, the Final Prospectus or the Marketing Materials, in each case
at the time such “forward-looking” statement was made.
(x)
Statistical
and Marketing-Related Data
. All statistical or market-related data included or incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus, or included in the Marketing Materials, are based on
or derived from sources that the Company reasonably believes to be reliable and accurate, and the Company has obtained the written
consent to the use of such data from such sources, to the extent required.
(xi)
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
”). There is no action pending by the Company or, to the Company’s knowledge,
Nasdaq to delist the Common Stock from Nasdaq, nor has the Company received any notification that Nasdaq is contemplating terminating
such listing. When issued, the Shares and the Warrant Shares will be listed on Nasdaq.
(xii)
Absence
of Manipulation
. The Company has not taken, directly or indirectly, any action that is designed to or that has constituted
or that would 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.
(xiii)
Investment
Company Act
. 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 the exercise of the Warrants, will not be an “investment
company,” as such term is defined in the Investment Company Act of 1940, as amended.
3. Representations
and Warranties Regarding the Company.
(a) The
Company represents and warrants to, and agrees with, the several Underwriters, as of the date hereof and as of the Closing Date
and as of each Option Closing Date, as follows:
(i)
Good
Standing
. The Company has been duly organized and is validly existing as a corporation or other entity in good standing under
the laws of its jurisdiction of incorporation. The Company has the power and authority (corporate or otherwise) to own its properties
and conduct its business as currently being carried on and as described in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus, and is duly qualified to do business as a foreign corporation or other entity in good standing
in each jurisdiction in which it owns or leases real property or in which the conduct of its business makes such qualification
necessary, except where the failure to so qualify would not have or be reasonably likely to result in a material adverse effect
upon the business, prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company,
taken as a whole, or in its ability to perform its obligations under this Agreement (“
Material Adverse Effect
”).
(ii)
Authorization
.
The Company has the power and authority to enter into this Agreement and
the Warrants
and
to authorize, issue and sell the Shares and
the Warrant Shares
as contemplated by
this Agreement and the Warrants. This Agreement and
the Warrants
have been duly authorized
by the Company, and 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.
(iii)
Contracts
.
The execution, delivery and performance of this Agreement and
the Warrants
and the
consummation of the transactions herein contemplated will not (A) result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any law, order, rule or regulation to which the Company is subject, or by which any property
or asset of the Company is bound or affected, except to the extent such breach, violation or default is not reasonably likely
to have a Material Adverse Effect, (B) conflict with, result in any violation or breach of, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) (a “
Default Acceleration Event
”)
of, any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or other instrument (the “
Contracts
”)
or obligation or other understanding to which the Company is a party or by which any property or asset of the Company is bound
or affected, except to the extent that such conflict, default, or Default Acceleration Event is not reasonably likely to result
in a Material Adverse Effect, or (C) result in a breach or violation of any of the terms and provisions of, or constitute a default
under, the Company’s Certificate of Incorporation, as amended, or by-laws, as amended.
(iv)
No
Violations of Governing Documents
. The Company is not in violation, breach or default under its Certificate of Incorporation,
as amended, by-laws, as amended, or other equivalent organizational or governing documents.
(v)
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 and the Warrants and 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 and the 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 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.
(vi)
Capitalization;
Subsidiaries
. The Company has an authorized capitalization as set forth in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus. All of the issued and outstanding shares of capital stock of the Company are duly authorized
and validly issued, fully paid and nonassessable, and have been issued in compliance 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 Final Prospectus. Except for the issuances of options or restricted stock in the ordinary course of business, since the
respective dates as of which information is provided in the Registration Statement, the Time of Sale Disclosure Package and the
Final 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, 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 to the description of the capital stock of the Company contained in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus.
The Warrant Shares, when issued, paid for and
delivered upon due exercise of the 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. The
Warrant Shares have been reserved for issuance. The Warrants, when issued, will conform in all material respects to the descriptions
thereof set forth in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. The Company has
no “Subsidiary” as such term is defined in Rule 1-02(x) of Regulation S-X of the Commission.
(vii)
Taxes
.
The Company has (a) filed all foreign, federal, state and local tax returns (as hereinafter defined) required to be filed with
taxing authorities for the seven fiscal years prior to the date hereof or has duly obtained extensions of time for the filing
thereof except insofar as the failure to file such returns would not result in a Material Adverse Effect, and (b) paid all taxes
(as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the
Company, except, in all cases, for any such amounts that the Company is contesting in good faith and for which appropriate reserves
have been established on the Company’s books and records or to the extent that any inadequacy that would not result in a
Material Adverse Effect. The provisions for taxes payable, if any, shown on the financial statements included or incorporated
by reference in the Registration Statement,
the Time of Sale Disclosure Package and the
Final Prospectus
are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including
the dates of such consolidated financial statements. To the knowledge of the Company, no issues have been raised (and are currently
pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company, and no waivers
of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company.
The term “
taxes
” mean all federal, state, local, foreign, and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments,
or charges of any kind whatever, together with any interest and any penalties, additions to tax, or additional amounts with respect
thereto. The term “
returns
” means all returns, declarations, reports, statements, and other documents required
to be filed in respect to taxes.
(viii)
Material
Change
. Since the respective dates as of which information is given (including information incorporated by reference) in the
Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, except as otherwise disclosed in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus, (a) the Company has not 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 (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 the issuance of restricted stock awards or restricted stock units
under the Company’s existing stock awards plan, or any new grants thereof in the ordinary course of business), (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.
(ix)
Absence
of Proceedings
. There is not pending or, to the knowledge of the Company, threatened, any action, suit or proceeding to which
the Company is a party or of which any property or assets of the Company is the subject before or by any court or governmental
agency, authority or body, or any arbitrator or mediator, which is reasonably likely to result in a Material Adverse Effect
(x)
Permits
.
Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, the Company holds,
and is in compliance with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders
(“
Permits
”) of any governmental or self-regulatory agency, authority or body (including, without limitation,
those administered by the U.S. Environmental Protection Agency (the “
EPA
”) or any foreign, federal, state or
local governmental or regulatory authority performing functions similar to those performed by the EPA) required for the conduct
of its business, and all such Permits are in full force and effect, in each case except where the failure to hold, or comply with,
any of them is not reasonably likely to result in a Material Adverse Effect or adversely affect the consummation of the transactions
contemplated by this Agreement.
(xi)
Good
Title
. The Company has good and marketable title to all property (whether real or personal) described in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus as being owned by them that are material to the business
of the Company, in each case free and clear of all liens, claims, security interests, other encumbrances or defects, except those
that are not reasonably likely to result in a Material Adverse Effect. The property held under lease by the Company is held by
it under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere
in any material respect with the conduct of the business of the Company.
(xii)
Intellectual
Property
. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus,
the Company owns or possesses or has valid right to use all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (“
Intellectual
Property
”) necessary for the conduct of the business of the Company in the manner as described in the Registration Statement,
the Time of Sale Disclosure Package and the Final Prospectus, except where the lack thereof is not reasonably likely to result
in a Material Adverse Effect. To the knowledge of the Company, no such action or use of the Intellectual Property by the Company
referred to in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus involves or gives rise
to any infringement of, or license or similar fees for, any Intellectual Property of others, other than as disclosed in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus. Other than as disclosed in the Registration Statement,
the Time of Sale Disclosure Packages and the Final Prospectus, the Company has not received any notice alleging any such infringement
or fee.
(xiii)
Employment
Matters
. There is no unfair labor practice complaint pending against the Company nor, to the Company’s knowledge, threatened
against it, before the National Labor Relations Board, any state or local labor relation board or any foreign labor relations
board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against
the Company, or, to the Company’s knowledge, threatened against it that could reasonably be expected, singularly or in the
aggregate, to have a Material Adverse Effect. The Company is not aware that any Key Employee of the Company plans to terminate
employment with the Company. For purposes of this Agreement, “Key Employee” means any one of the following: Loretta
Mayer, Cheryl Dyer, Tom Chesterman, Andrew Altman.
(xiv)
ERISA
Compliance
. No “prohibited transaction” (as defined in Section 406 of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations thereunder (“
ERISA
”), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time (the “
Code
”)) or “accumulated
funding deficiency” (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other
than events with respect to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred
or could reasonably be expected to occur with respect to any employee benefit plan of the Company which would reasonably be expected
to, singularly or in the aggregate, have a Material Adverse Effect. Each employee benefit plan of the Company is in compliance
in all material respects with applicable law, including ERISA and the Code. The Company has not incurred and could not reasonably
be expected to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan
(as defined in ERISA). Each pension plan for which the Company would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified, and, to the Company’s knowledge, nothing has occurred, whether by action or
by failure to act, which could, singularly or in the aggregate, cause the loss of such qualification.
(xv)
Environmental
Matters
. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus,
the Company is in compliance with all foreign, federal, state and local rules, laws and regulations relating to the use, treatment,
storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment which are
applicable to their businesses (“
Environmental Laws
”), except where the failure to comply has not had and would
not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect. There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other
hazardous substances by, due to, or caused by the Company (or, to the Company’s knowledge, any other entity for whose acts
or omissions the Company is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company,
or upon any other property, in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or
which would, under any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit,
give rise to any liability, except for any violation or liability which has not had and would not reasonably be expected to have,
singularly or in the aggregate, a Material Adverse Effect; and there has been no disposal, discharge, emission or other release
of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which the Company has knowledge.
(xvi)
SOX
Compliance
. The Company is in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act
of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof.
(xvii)
Certain
Regulatory Matters
. The studies, tests and trials (collectively, “
Studies
”) that are described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus were and, if still pending, are being, conducted in all material
respects in accordance with the protocols submitted to the
EPA
or any state, local or foreign governmental body exercising
comparable authority, procedures and controls pursuant to, where applicable, accepted professional and scientific standards, and
all applicable laws and regulations; the descriptions of the Studies conducted by or, to the Company’s knowledge, on behalf
of the Company, and the results thereof, contained in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus are accurate and complete in all material respects; the Company is not aware of any other Studies, the results of which
call into question the results described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus;
and the Company has not received any notices or correspondence from the EPA, any foreign, state or local governmental body exercising
comparable authority or any institutional review board requiring the termination, suspension, material modification or hold of
any Studies conducted by or on behalf of the Company, other than ordinary course communications with respect to modifications
in connection with the design and implementation of such Studies.
(xviii)
Money
Laundering Laws
. The operations of the Company are and have been conducted at all times in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “
Money
Laundering Laws
”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with
respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened. “
Governmental Entity
”
shall be defined as any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body
or agency (whether foreign or domestic) having jurisdiction over the Company or any of its properties, assets or operations
.
(xix)
Foreign
Corrupt Practices Act
. Neither the Company nor any director or officer of the Company, nor, to the knowledge of the Company,
any employee, representative, agent, affiliate of the Company or any other person acting on behalf of the Company, 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 (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 and the Company and, to
the knowledge of the Company, its affiliates have conducted their 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.
(xx)
OFAC
.
Neither the Company nor any director or officer of the Company, nor, to the knowledge of the Company, any employee, representative,
agent or affiliate of the Company or any other person acting on behalf of the Company 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 of the Securities contemplated hereby, or lend, contribute or
otherwise make available such proceeds to any person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(xxi)
Insurance
.
The Company carries, or is covered by, insurance in such amounts and covering such risks as, in the Company’s reasonable
judgment, is adequate for the conduct of its business and the value of its properties and as is customary for similarly sized
companies engaged in similar businesses in similar industries.
(xxii)
Books
and Records
. The minute books of the Company have been made available to the Underwriters and counsel for the Underwriters,
and such books (i) contain a complete summary of all meetings and actions of the board of directors (including each board committee)
and stockholders of the Company (or analogous governing bodies and interest holders, as applicable), and each of its subsidiaries
since the time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) accurately
in all material respects reflect all transactions referred to in such minutes.
(xxiii)
No
Violation
. Neither the Company nor, to its knowledge, any other party is in violation, breach or default of any Contract that
has resulted in or could reasonably be expected to result in a Material Adverse Effect.
(xxiv)
No
Finder’s Fee
. There are no claims, payments, issuances, arrangements or understandings for services in the nature of
a finder’s, consulting or origination fee with respect to the introduction of the Company to any Underwriter or the sale
of the Securities hereunder or any other arrangements, agreements, understandings, payments or issuances with respect to the Company
that may affect the Underwriters’ compensation, as determined by FINRA.
(xxv)
No
Fees.
Except as disclosed to the Underwriters in writing or otherwise disclosed publicly in a document that is filed or furnished
with the Commission, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person,
as a finder’s fee, investing fee or otherwise, in consideration of such person raising capital for the Company or introducing
to the Company persons who provided capital to the Company, (ii) any FINRA member, or (iii) any person or entity that has any
direct or indirect affiliation or association with any FINRA member within the 12-month period prior to the date on which the
Registration Statement was filed with the Commission (“
Filing Date
”) or thereafter.
(xxvi)
Proceeds
. None of the net proceeds of the offering will be paid by the Company to any participating FINRA member or any
affiliate or associate of any participating FINRA member, except as specifically authorized herein.
(xxvii)
No
FINRA Affiliations
. To the Company’s knowledge, no (i) officer or director of the Company, (ii) owner of 5% or more
of any class of the Company’s securities or (iii) owner of any amount of the Company’s unregistered securities acquired
within the 180-day period prior to the Filing Date, has any direct or indirect affiliation or association with any FINRA member.
The Company will advise the Underwriters and counsel to the Underwriters if it becomes aware that any officer, director of the
Company or any owner of 5% or more of any class of the Company’s securities is or becomes an affiliate or associated person
of a FINRA member participating in the offering.
(xxviii)
No
Financial Advisor
. Except as disclosed to the Underwriters in writing, 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.
(xxix)
Certain
Statements
. The statements set forth in our Annual Report on Form 10-K, filed with the Commission on March 31, 2017 and incorporated
by reference in the Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus, under the captions “Business
– Government Regulations and Product Approval,” and “Prospectus Summary – Regulatory Strategy” insofar
as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair in all
material respects, and under the caption “Description of the Securities To Be Registered” insofar as they purport
to constitute a summary of (i) the terms of the Company’s outstanding securities, (ii) the terms of the Shares and the Warrants,
and (iii) the terms of the documents referred to therein, are accurate, complete and fair in all material respects.
(xxx)
No
Registration Rights
. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right
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 in the securities registered pursuant
to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(xxxi)
Prior
Sales of Securities
. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus, the Company has not sold or issued any shares of Common Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act, other than shares issued pursuant
to employee benefit plans, stock option plans or other employee compensation plans or pursuant to outstanding preferred stock,
options, rights or warrants or other outstanding convertible securities.
(b) Any
certificate signed by any officer of the Company and delivered to the Underwriters or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
4. Purchase,
Sale and Delivery of Shares.
(a) On
the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell the Firm Shares and the Firm Warrants to the several Underwriters, and the several
Underwriters agree, severally and not jointly, to purchase the Firm Shares and the Firm Warrants set forth opposite the names
of the Underwriters in
Schedule I
hereto. The
combined purchase price to be paid
by the Underwriters to the Company for the Firm Shares and the Firm Warrants shall be shall be $0.93 per share and related Warrant.
(b) The
Company hereby grants to the Underwriters the option to purchase some or all of the Option Shares and/or the Option Warrants and,
upon the basis of the warranties and representations and subject to the terms and conditions herein set forth, the Underwriters
shall have the right, severally and not jointly, to purchase all or any portion of the Option Shares and/or the Option Warrants
as may be necessary to cover over-allotments made in connection with the transactions contemplated hereby. The purchase price
to be paid by the Underwriters shall be $0.99 per Option Share and/or $0.01 per
Option Warrant
.
This option may be exercised by the Underwriters at any time and from time to time on or before the thirtieth (30
th
)
day following the date hereof, by written notice to the Company (the “
Option Notice
”). The Option 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 the
“
Option Closing Date
”);
provided
,
however
, that the Option Closing Date shall not be earlier
than the Closing Date (as defined below) nor earlier than the first business day after the date on which the option shall have
been exercised nor later than the fifth business day after the date on which the option shall have been exercised unless the Company
and the Underwriter otherwise agree. If the Underwriters elect to purchase less than all of the Option Shares and/or Option Warrants,
the Company agrees to sell to the Underwriters the number of Option Shares and/or Option Warrants obtained by multiplying the
number of Option Shares and/or Option Warrants, as applicable, specified in such notice by a fraction, the numerator of which
is the number of Option Shares and/or Option Warrants, as applicable, set forth opposite the name of the Underwriter in
Schedule
I
hereto under the caption “Number of Option Shares to be Sold” or “Number of Option Warrants to be Purchased”,
as applicable and the denominator of which is the total number of Option Shares and/or Option Warrants, as applicable.
(c) Payment
of the purchase price for and delivery of the Option Shares and/or the Option Warrants shall be made on an Option Closing Date
in the same manner and at the same office as the payment for the Firm Shares and the Firm Warrants, as applicable, as set forth
in subparagraph (d) below.
(d) The
Firm Shares and the Firm Warrants will be delivered by the Company to the Underwriters, against payment of the purchase price
therefor by wire transfer of same day funds payable to the order of the Company at the offices of Roth Capital Partners, LLC,
888 San Clemente Drive, Suite 400, Newport Beach, CA 92660, or such other location as may be mutually acceptable, at 6:00 a.m.
Pacific Time, on the second (or if the Firm Shares and the Firm 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 Underwriters and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, or, in the case of the Option
Shares and/or Option Warrants, at such date and time set forth in the Option Notice. The time and date of delivery of the Firm
Shares and the Firm Warrants is referred to herein as the “
Closing Date
.” On the Closing Date, the Company
shall deliver the Firm Shares and the Firm Warrants which shall be registered in the name or names and shall be in such denominations
as the Underwriters may request at least one (1) business day before the Closing Date, to the respective accounts of the several
Underwriters, which delivery shall (a) with respect to the Firm Shares, be made through the facilities of the Depository Trust
Company’s DWAC system and (b) with respect to the Firm Warrants, be made by physical delivery to be received or directed
by the Underwriters no later than one (1) business day following the Closing Date.
(e) Underwriters’
Warrants. On the Closing Date, the Company shall execute and deliver to the Underwriters warrants in the form attached hereto
as
Exhibit A
evidencing the right to purchase an aggregate of 540,000 shares of Common Stock an amount equal to 10% of
the Firm Shares issued in the offering (to be allocated amongst the underwriters as indicated in Schedule I). The Underwriters’
Warrants will have an exercise price equal to $1.50 per share, 150% of the offering price per share of the Initial Securities
sold in the offering. The Underwriters’ Warrants and any shares of Common Stock acquired upon exercise of the Underwriters’
Warrants shall be subject to lock-up pursuant to FINRA Rule 5110(g) for a period of 180 days immediately following the date of
this Agreement.
5. Covenants.
(a) The
Company covenants and agrees with the Underwriters as follows:
(i) The
Company shall prepare the Final Prospectus in a form approved by the Underwriters and file such Final Prospectus pursuant to Rule
424(b) under the Securities Act not later than the Commission’s close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by the Rules and Regulations.
(ii) During
the period beginning on the date hereof and ending on the later of the Closing Date or such date as determined by the Underwriters
the Final Prospectus is no longer required by law to be delivered in connection with sales by an underwriter or dealer (the “
Prospectus
Delivery Period
”), prior to amending or supplementing the Registration Statement, including any Rule 462 Registration
Statement, the Time of Sale Disclosure Package or the Final Prospectus, the Company shall furnish to the Underwriters 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 Underwriters reasonably object.
(iii) From
the date of this Agreement until the end of the Prospectus Delivery Period, the Company shall promptly advise the Underwriters
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 Final 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 Final 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 that
it shall comply with the provisions of Rules 424(b),
430A, 430B or 430C
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 Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus. If during the
Prospectus Delivery Period any event occurs the result of which would cause the Final Prospectus (or if the Final 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 then existing,
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 counsel to the Underwriters to amend the Registration Statement or supplement the Final Prospectus (or if the Final 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 Final 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 supplement or document, and will amend the Registration
Statement or supplement the Final Prospectus (or if the Final 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) If
at any time during the Prospectus Delivery Period there occurred or occurs an event or development the result of which 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 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 will promptly notify the Underwriters and will 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 will furnish to the Underwriters and counsel to the Underwriters copies of the Registration Statement, each Prospectus,
any Issuer Free Writing Prospectus, and all amendments and supplements to such documents, 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, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause
to be paid (A) all expenses (including transfer taxes allocated to the respective transferees) incurred in connection with the
delivery to the Underwriters of the Securities (including all fees and expenses of the registrar and transfer agent of the Shares
and the Warrant Shares and the registrar and transfer agent of the Warrants (if other than the Company), and the cost of preparing
and printing stock certificates and 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, the Final 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 Underwriters’ 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 reasonable
filing fees and reasonable fees and disbursements of counsel to the Underwriters incident to any required review and approval
by FINRA, of the terms of the sale of the Securities, (F) listing fees, if any, and (G) all other costs and expenses of the Company
incident to the performance of its obligations hereunder that are not otherwise specifically provided for herein. The Company
will reimburse the Underwriters for the Underwriters’ reasonable out-of-pocket expenses up to $50,000, including legal fees
and disbursements of Underwriter’s legal counsel, inclusive of fees and disbursements of counsel to the Underwriters incident
to any required review and approval by FINRA, of the terms of the sale of the Securities. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 6 or Section 9(a)(ii), (vii) or (viii), the Company will reimburse the
Underwriters for all out-of-pocket disbursements up to $50,000 (including, but not limited to, reasonable fees and disbursements
of counsel, travel expenses, postage, facsimile and telephone charges) incurred by the Underwriters in connection with their investigation,
preparing to market and marketing the Securities or in contemplation of performing their obligations hereunder.
(ix) 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 Registration Statement, the Time of Sale Disclosure Package and the Final Prospectus under the heading “Use of Proceeds”.
(x) 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.
(xi) The
Company represents and agrees that, unless it obtains the prior written consent of the Underwriters, and each Underwriter, severally,
and not jointly, 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 III
, if any. Any such free writing prospectus consented to by the Company and the Underwriters 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.
(xii) The
Company hereby agrees that, without the prior written consent of the Underwriters, it will not, during the period ending ninety
(90) days after the date hereof (“
Lock-Up Period
”), (i) offer, pledge, issue, sell, contract to sell, purchase,
contract to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock; (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise,
provided that such securities have not been amended since the date of this Agreement to increase the number of such securities
or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock
splits or combinations) or to extend the term of such securities; or (iii) file any registration statement with the Commission
relating to the offering of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common
Stock (other than a registration statement on Form S-4 or Form S-8). The restrictions contained in the preceding sentence shall
not apply to (1) the Securities to be sold hereunder, (2) the issuance of Common Stock upon the exercise of outstanding options
or warrants and the vesting of restricted stock awards or units or the conversion of outstanding convertible securities disclosed
as outstanding in the Registration Statement (excluding exhibits thereto), the Time of Sale Disclosure Package, and the Final
Prospectus, or (3) the issuance of employee stock options not exercisable during the Lock-Up Period (provided such stock options
may become exercisable during the Lock-Up Period upon the occurrence of a triggering event that accelerates the vesting of such
stock options) and the grant, redemption or forfeiture of restricted stock awards or restricted stock units or shares of Common
Stock pursuant to equity incentive plans or as new employee inducement grants described in the Registration Statement (excluding
exhibits thereto), the Time of Sale Disclosure Package, and the Final Prospectus.
(xiii) To
engage and maintain, at its expense, a registrar and transfer agent for the Common Stock and a registrar and transfer agent for
the Warrants (if other than the Company).
(xiv) To
use its reasonable best efforts to obtain approval to list the Shares and the Warrant Shares on Nasdaq.
(xv) The
Company will promptly notify the Underwriters if the Company ceases to be an Emerging Growth Company at any time prior to the
later of (a) the end of the Prospectus Delivery Period and (b) the expiration of the lock-up period described in Section 5(a)(xii)
above.
6. Conditions
of the Underwriters’ Obligations.
The respective obligations of the several Underwriters
hereunder to purchase the Shares and the Warrants are subject to the accuracy, as of the date hereof and at all times through
the Closing Date, and on each Option Closing Date (as if made on the Closing Date or such Option Closing Date, as applicable),
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 Final 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 Final 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 Registration Statement, or any amendment thereof,
nor suspending or preventing the use of the Time of Sale Disclosure Package, any Prospectus, the Final 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 Underwriters for additional information (to be included in
the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus, any Issuer Free Writing
Prospectus or otherwise) shall have been complied with to the satisfaction of the Underwriters.
(b) The
Shares and the Warrant Shares shall be approved for listing on the Nasdaq, subject to official notice of issuance.
(c) FINRA
shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.
(d) The
Underwriters shall not have reasonably determined, and advised the Company, that the Registration Statement, the Time of Sale
Disclosure Package, any Prospectus, the Final Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing
Prospectus, contains an untrue statement of fact which, in the reasonable opinion of the Underwriters, is material, or omits to
state a fact which, in the reasonable opinion of the Underwriters, is material and is required to be stated therein or necessary
to make the statements therein not misleading.
(e) On
the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriters the opinion and negative
assurance letters of Perkins Coie LLP, counsel to the Company, dated the Closing Date or the Option Closing Date, as applicable,
and addressed to the Underwriters, in form and substance reasonably satisfactory to the Underwriters.
(f) On
the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriters the negative assurance letter
of Dickinson Wright PLLC, counsel to the Underwriters, dated the Closing Date or the Option Closing Date, as applicable, and addressed
to the Underwriters, in form and substance reasonably satisfactory to Underwriters.
(g) The
Underwriters shall have received a letter of M&K CPAs, PLLC, on the date hereof and on the Closing Date and on each Option
Closing Date, addressed to the Underwriters, confirming that they are independent registered 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 Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus, 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 with respect to the financial information
and other matters required by the Underwriters.
(h) On
the Closing Date and on each Option Closing Date, there shall have been furnished to the Underwriters a certificate, dated the
Closing Date and on each Option Closing Date and addressed to the Underwriters, 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 and on the Option Closing Date, and the
Company has complied in all material respects with all the agreements and satisfied all the conditions on its part required to
be performed or satisfied at or prior to the Closing Date or on the 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, any Prospectus, the Final 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 on the Option Closing Date, as applicable.
(i) On
or before the date hereof, the Underwriters shall have received duly executed lock-up agreement, substantially in the form of
Exhibit B
hereto (each a “
Lock-Up Agreement
”), from each of the parties specified in
Schedule V
.
(j) On
the Closing Date of the sale of the Firm Shares, the Underwriters’ Warrants shall have been issued to the Underwriters.
(k) The
Company shall have furnished to the Underwriters and their counsel such additional documents, certificates and evidence as the
Underwriters or their counsel may have reasonably and customarily requested.
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 Underwriters by notice to the Company at any time at or prior to the Closing Date or on the Option Closing
Date, as applicable, and such termination shall be without liability of any party to any other party, except that Section 5(a)(viii),
Section 7 and Section 9 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 each Underwriter, its affiliates, directors and officers and employees,
and each person, if any, who controls such 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 such Underwriter 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, any Written Testing-the-Waters Communications, any Prospectus, the Final Prospectus, or any
amendment or supplement thereto, any Issuer Free Writing Prospectus, or the Marketing Materials or in any other materials used
in connection with the offering of the Securities, 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, 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 each Underwriter 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;
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, any Written Testing-the-Waters Communications, any Prospectus, the Final 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 such Underwriter specifically for use in the preparation thereof, which written information is described in
Section 7(f).
(b) Each
Underwriter, severally and not jointly, 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, any Prospectus, the Final Prospectus, or any amendment or supplement thereto or any Issuer Free Writing
Prospectus, 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, any Prospectus, the Final 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 such Underwriter
specifically for use in the preparation thereof, which written information is described in Section 7(f), and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in connection with evaluating, investigating, and defending
against any such loss, claim, damage, liability or action. The obligation of each Underwriter to indemnify the Company (including
any controlling person, director or officer thereof) shall be limited to the amount of the underwriting discount applicable to
the Shares and Warrants to be purchased by such Underwriter hereunder actually received by such Underwriter.
(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, and it shall notify the indemnifying
party of the commencement thereof, 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 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 Shares and the Warrants 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
discount received by the Underwriters, in each case as set forth in the table on the cover page of the Final 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),
no Underwriter shall be required to contribute any amount in excess of the amount of the of the underwriting discount applicable
to the Shares and the Warrants to be purchased by such Underwriter hereunder actually received by such Underwriter. 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. The Underwriters’ respective obligations to contribute
as provided in this Section 7 are several in proportion to their respective underwriting commitments and not joint.
(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 any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the obligations of each Underwriter
under this Section 7 shall be in addition to any liability that each Underwriter may otherwise have and the benefits of such obligations
shall extend, upon the same terms and conditions, to the Company, and its 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, each Underwriter severally confirms, and the Company acknowledges, that there is no
information concerning such Underwriter furnished in writing to the Company by such Underwriter specifically for preparation
of or inclusion in the Registration Statement, the Time of Sale Disclosure Package, any Prospectus, the Final Prospectus or
any Issuer Free Writing Prospectus, other than the marketing and legal names of each Underwriter, and the statements set
forth in the “Underwriting” section of the Registration Statement, the Time of Sale Disclosure Package, and the
Final Prospectus only insofar as such statements relate to the amount of selling concession and re-allowance, if any, or to
over-allotment, stabilization and related activities that may be undertaken by such Underwriter.
8. Representations
and Agreements to Survive Delivery
. All representations, warranties, and agreements of the
Company contained herein or in certificates delivered pursuant hereto, including, but not limited to, the agreements of the several
Underwriters and the Company contained in Section 5(a)(viii) and Section 7 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the several 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 Shares
and the Warrants to and by the Underwriters hereunder.
9.
Termination of this Agreement
.
(a) The
Underwriters 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 or any Option Closing Date (as to the Option Shares and the Option Warrants to be purchased
on such Option Closing Date only), if in the discretion of the Underwriters, (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 Underwriters,
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 Underwriters, inadvisable or impracticable to market the Shares and the Warrants or enforce
contracts for the sale of the Shares and the Warrants, (ii) trading in the Company’s Common Stock shall have been suspended
by the Commission or Nasdaq, (iii) trading in securities generally on the Nasdaq Stock Market, the NYSE or the NYSE MKT shall
have been suspended, (iv) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the Nasdaq Stock Market, the NYSE or NYSE MKT, by such exchange or by order of the Commission or
any other governmental authority having jurisdiction, (v) a banking moratorium shall have been declared by federal or state authorities,
(vi) 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,
(vii) the Company suffers any loss by strike, fire, flood, earthquake, accident or other calamity, whether or not covered by insurance,
or (viii) in the judgment of the Underwriters, there has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Registration Statement, the Time of Sale Disclosure Package and the Final 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, 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)(viii) and Section 7 hereof
shall at all times be effective and shall survive such termination.
(b) If
the Underwriters elect to terminate this Agreement as provided in this Section, the Company shall be notified promptly by the
Underwriters by telephone, confirmed by letter.
10. Substitution
of Underwriters
. If any Underwriter or Underwriters shall default in its or their obligations
to purchase Shares and Warrants hereunder on the Closing Date or any Option Closing Date and the aggregate number of Shares and
Warrants which such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed ten percent (10%) of
the total number of Shares and Warrants to be purchased by all Underwriters on such Closing Date or Option Closing Date, the other
Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Shares and
Warrants which such defaulting Underwriter or Underwriters agreed but failed to purchase on such Closing Date or Option Closing
Date. If any Underwriter or Underwriters shall so default and the aggregate number of Shares and Warrants with respect to which
such default or defaults occur is more than ten percent (10%) of the total number of Shares and Warrants to be purchased by all
Underwriters on such Closing Date or Option Closing Date and arrangements satisfactory to the remaining Underwriters and the Company
for the purchase of such Shares and Warrants by other persons are not made within forty-eight (48) hours after such default, this
Agreement shall terminate.
If
the remaining Underwriters or substituted Underwriters are required hereby or agree to take up all or part of the Shares and Warrants
of a defaulting Underwriter or Underwriters on such Closing Date or Option Closing Date as provided in this Section 10, (i) the
Company shall have the right to postpone such Closing Date or Option Closing Date for a period of not more than five (5) full
business days in order to permit the Company to effect whatever changes in the Registration Statement, the Final Prospectus, or
in any other documents or arrangements, which may thereby be made necessary, and the Company agrees to promptly file any amendments
to the Registration Statement or the Final Prospectus which may thereby be made necessary, and (ii) the respective numbers of
Shares and Warrants to be purchased by the remaining Underwriters or substituted Underwriters shall be taken as the basis of their
underwriting obligation for all purposes of this Agreement. Nothing herein contained shall relieve any defaulting Underwriter
of its liability to the Company or any other Underwriter for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 10 shall be without liability on the part of any non-defaulting Underwriters or the Company,
except that the representations, warranties, covenants, indemnities, agreements and other statements set forth in Section 2 and
3, the obligations with respect to expenses to be paid or reimbursed pursuant to Section 5(a)(viii) and Section 7 and Sections
11 through 18, inclusive, shall not terminate and shall remain in full force and effect.
11. Notices
.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriters shall be directed to Roth at 888 San Clemente, Newport
Beach, CA 92660, attention of John Dalfonsi (email:JDalfonsi@roth.com), with a copy to Dickinson Wright PLLC at 2600 W. Big Beaver
Road, Suite 300, Troy, MI 48084 attention of Michael T. Raymond (email: mraymond@dickinsonwrigtht.com) 433-7274); notices to the
Company shall be directed to it at 3140 N. Caden Ct., Suite 1, Flagstaff, AZ 86004, attention of Thomas C. Chesterman (email:
tom.chesterman@senestech.com), with a copy to Perkins Coie LLP, 1120 N.W. Couch Street Tenth Floor, Portland, OR 97209-4128 attention
of Chris Hall (email: Chall@perkinscoie.com). 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 Shares and Warrants from any
Underwriter.
13. Absence
of Fiduciary Relationship
. The Company acknowledges and agrees that: (a) each Underwriter
has been retained solely to act as underwriter in connection with the sale of the Shares and Warrants and that no fiduciary, advisory
or agency relationship between the Company and any Underwriter has been created in respect of any of the transactions contemplated
by this Agreement, irrespective of whether the Underwriter has advised or is advising the Company on other matters; (b) the price
and other terms of the Shares and the Warrants 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 no Underwriter has any obligation to disclose such interest and transactions to the Company by virtue
of any fiduciary, advisory or agency relationship; and (d) it has been advised that each Underwriter is acting, in respect of
the transactions contemplated by this Agreement, solely for the benefit of such Underwriter, and not on behalf of the Company.
14. 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.
15. 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.
16. Governing
Law
. This Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware.
17. Submission
to Jurisdiction
. Any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby shall be instituted in any court of the State of Delaware (collectively, the “
Specified
Courts
”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard
to the enforcement of a judgment of any such court, as to which such jurisdiction is non-exclusive) of such courts in any such
suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth
above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably
and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other
proceeding brought in any such court has been 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, THE TIME OF SALE DISCLOSURE PACKAGE, ANY PROSPECTUS AND THE FINAL PROSPECTUS.
18. Counterparts.
This Agreement may be executed and delivered (including by facsimile transmission or electronic
mail) 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 letter whereupon this letter will become a binding agreement between
the Company and the several Underwriters in accordance with its terms.
|
|
Very truly yours,
|
|
|
|
|
|
|
|
SENESTECH, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Thomas C. Chesterman
|
|
|
|
Name:
|
Thomas C. Chesterman
|
|
|
|
Title:
|
Chief Financial Officer
|
|
|
Confirmed as of the date first above-mentioned by the Underwriters.
|
|
|
|
|
|
|
ROTH CAPITAL PARTNERS, LLC
|
|
|
|
|
|
|
By:
|
/s/ Aaron
M. Gurewitz
|
|
|
Name:
|
Aaron
M. Gurewitz
|
|
|
Title:
|
Head
of Equity Capital Markets
|
|
[Signature
page to Underwriting Agreement]
SCHEDULE
I
|
Name
|
|
Number of Firm Shares to be Purchased
|
|
|
Number of Firm Warrants to be Purchased
|
|
|
Number of Option Shares to be Purchased
|
|
|
Number of Optional Warrants to be Purchased
|
|
|
Roth Capital Partners, LLC
|
|
|
4,860,000
|
|
|
|
3,645,000
|
|
|
|
729,000
|
|
|
|
546,750
|
|
|
Craig-Hallum Capital Group LLC
|
|
|
540,000
|
|
|
|
405,000
|
|
|
|
81,000
|
|
|
|
60,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,400,000
|
|
|
|
4,050,000
|
|
|
|
810,000
|
|
|
|
607,500
|
|
SCHEDULE
II
SENESTECH,
INC.
5,400,000
Shares of Common Stock
Warrants
to Purchase up to 4,050,000 Shares of Common Stock
Final
Term Sheet
|
Issuer:
|
SenesTech,
Inc. (the “Company”)
|
|
|
|
|
Symbol:
|
SNES
|
|
|
|
|
Securities:
|
5,400,000
shares of common stock, par value $0.001 per share (the “Common Stock”), of the Company and warrants (the “Warrants”)
to purchase up to 4,050,000 shares of Common Stock at an exercise price of $1.50 per share (subject to adjustment). Each share
of Common Stock is being sold together with a Warrant to purchase one share of Common Stock.
|
|
|
|
|
Exercisability
of Warrants:
|
The
Warrants will be exercisable immediately and will expire five years from the original issuance date.
|
|
|
|
|
Over-allotment
option:
|
Up
to an additional 810,000 shares of Common Stock at a price of $0.99 per share and Warrants to purchase up to 810,000 shares
of Common Stock at a price of $0.01 per Warrant.
|
|
|
|
|
Public offering
price:
|
$1.00
per share of Common Stock and related Warrant
|
|
|
|
|
Underwriting
discount:
|
$.07
per share of Common Stock and related Warrant
|
|
|
|
|
Expected net
proceeds:
|
Approximately
$5,400,000 million ($6,210,000 million if the overallotment option is exercised in full) (after deducting the underwriting
discount and estimated offering expenses payable by the Company).
|
|
|
|
|
Trade date:
|
|
|
|
|
|
Settlement
date:
|
|
|
|
|
|
Underwriters:
|
Roth
Capital Partners, LLC and Craig-Hallum Capital Group LLC
|
SCHEDULE
III
Free
Writing Prospectus
[None]
SCHEDULE
IV
Written
Testing-the-Waters Communications
[None]
SCHEDULE
V
List
of officers, directors and stockholders executing lock-up agreements
EXHIBIT
A
Form
of Underwriters’ Warrant
EXHIBIT
B
Form
of Lock-Up Agreement
Exhibit 4.1
PURSUANT
TO THE TERMS OF SECTION 1 OF THIS WARRANT, ALL OR A PORTION OF THIS WARRANT MAY HAVE BEEN EXERCISED, AND THEREFORE THE ACTUAL
NUMBER OF WARRANT SHARES REPRESENTED BY THIS WARRANT MAY BE LESS THAN THE AMOUNT SET FORTH ON THE FACE HEREOF.
This
warrant IS void after 5:00 pm, EAstern time on NOVEMBER [__], 2022.
SenesTech
Inc.
Warrant
To Purchase Common Stock
Warrant No.: 2017-UW-[01]
Number of Shares of Common Stock:
Date of Issuance: (
“Issuance
Date”
)
SenesTech, Inc. a Delaware
corporation (the
“Company”
), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Roth Capital Partners, LLC, 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, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, the
“Warrant”
), at any time or times on or after the Issuance Date
(the
“Exercisability Date”
), but not after 11:59 p.m., New York time, on the Expiration Date (as defined below),
fully paid and non-assessable shares of Common Stock (the
“Warrant Shares”
). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in
Section 15
. This Warrant is one of the Underwriter
Warrants to Purchase Common Stock (this
“Warrant”
) issued pursuant to (i) Section 4(e) of the Underwriting
Agreement, dated as of November 17, 2017,
by and between the Company and Roth Capital Partners, LLC (the “
Underwriting Agreement
”) and (ii) the Company’s
Registration Statement on Form S-1 File No.: 333-221433).
This Warrant is one of a series of warrants containing substantially identical terms and conditions issued pursuant to Section
4(e) of the Underwriting Agreement (collectively, the “
Warrants
”).
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(e)),
this Warrant may be exercised by the Holder on any day on or after the Exercisability Date, in whole or in part (but not as to
fractional shares), by delivery of a written notice, in the form attached hereto as
Exhibit A
(the “
Exercise Notice
”)
of the Holder’s election to exercise this Warrant. The Holder shall, within two (2) Trading Days following delivery of such
Exercise Notice, pay to the Company an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares
as to which this Warrant is being exercised (the “
Aggregate Exercise Price
”) in cash or wire transfer of immediately
available funds. The Holder shall not be required to surrender this Warrant in order to effect an exercise hereunder; provided,
however, that in the event that this Warrant is exercised in full or for the remaining unexercised portion hereof, the Holder
shall deliver this Warrant to the Company for cancellation within a reasonable time after such exercise, but in any event within
five (5) Trading Days of the delivery of the Exercise Notice. On or before the second (2nd) Trading Day following the date on
which the Company has received the Exercise Notice and the Aggregate Exercise Price (the date upon which the Company has received
the Exercise Notice and the Aggregate Exercise Price, the “
Exercise Date
”), the Company shall transmit by facsimile
or e-mail transmission an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company’s
transfer agent for the Common Stock (the “
Transfer Agent
”). The Company shall deliver any objection to the
Exercise Notice on or before the second (2
nd
) Trading Day following the date on which the Company has received the
Exercise Notice. On or before the third (3
rd
) Trading Day following the date on which the Company has received the
Exercise Notice and the Aggregate Exercise Price (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 (the “
FAST Program
”) and so long as the certificates therefor are not required to bear a legend
regarding restriction on transferability, upon the request of the Holder, credit such aggregate number of shares of Common Stock
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 Agent Commission system, or (Y), if the Transfer Agent is not participating in the FAST Program
or if the certificates are required to bear a legend regarding restriction on transferability, issue and dispatch by overnight
courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in
the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such
exercise. Upon delivery of the Exercise Notice and payment of the Aggregate Exercise Price, 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 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 delivery of the original warrant and at its own expense, issue and deliver
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately
prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant has been and/or
is exercised. The Company shall pay any and all taxes and other expenses of the Company (including overnight delivery charges)
that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant;
provided
,
however
, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved
in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder or an affiliate
thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.
(b)
Exercise Price
. For purposes of this Warrant,
“Exercise Price”
means $1.50 per share of Common
Stock, subject to adjustment as provided herein.
(c)
Company’s
Failure to Timely Deliver Securities
. If the Company shall fail for any reason or for no reason to issue to the Holder within
five (5) Trading Days of the Exercise Date a certificate for the number of shares of Common Stock to which the Holder is entitled
and register such shares of Common Stock on the Company’s share register or 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,
and if on or after such fifth (5
th
) Trading Day 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 shares of the Warrant Shares that the Holder anticipated receiving from the Company upon such exercise
(a
“Buy-In”
), then the Company shall, within three (3) Trading Days after the Holder’s written request
and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the
“Buy-In Price”
),
at which point the Company’s obligation to deliver such certificate (and to issue such Warrant Shares) shall terminate,
or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares
and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock, times (B) the Weighted Average Price (as reported by Bloomberg) on the date of the event giving rise to
the Company’s obligation to deliver such certificate.
(d)
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.
(e)
Beneficial
Ownership
. The Company shall not effect the exercise of this Warrant, and the Holder shall not have the right to exercise
this Warrant, to the extent that after giving effect to such exercise, such Person (together with such Person’s affiliates)
would beneficially own in excess of 4.99% (the “
Maximum Percentage
”) of the 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 such Person and its affiliates shall include 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 shares of Common Stock
which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such Person
and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company
beneficially owned by such Person and its affiliates (including, without limitation, any convertible notes or convertible preferred
stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set
forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), it being acknowledged 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.. For purposes of this Warrant,
in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common
Stock as reflected in the most recent of (1) 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, as the case may be,
(2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth
the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of the Holder,
where such request indicates that it is being made pursuant to this Warrant, the Company shall within two (2) Trading Days confirm
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 its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By 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% specified in such notice; provided that (i) any such increase 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 not
to any other holder of the Warrants. 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(g) 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.
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)
Voluntary
Adjustment by Company
. The Company may, but shall have no obligation to, 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.
(b)
Adjustment
upon Subdivision or Combination of Common Stock
. If the Company at any time on or after the Issuance Date subdivides (by any
stock split, stock dividend, recapitalization, reorganization, scheme, arrangement 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 Issuance Date combines (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement 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(b) shall become effective at the close of business on the date the subdivision
or combination becomes effective.
3.
[RESERVED]
4.
PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS
.
(a)
Purchase
Rights
. In addition to any adjustments pursuant to Section 2 above, if at any time 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
to all the record holders of any class of Common Stock on a pro rata basis (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 the exercise of this Warrant) 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.
(b)
Fundamental
Transactions
. Upon the occurrence of any 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.
Upon consummation of the 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 Fundamental Transaction, in lieu of the shares
of the Common Stock (or other securities, cash, assets or other property purchasable 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), if any, that the Holder would have been entitled to receive upon the happening of such
Fundamental Transaction had this Warrant been exercised immediately prior to such Fundamental Transaction, as adjusted in accordance
with the provisions of this Warrant.
5.
NONCIRCUMVENTION
.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, 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 comply with all the provisions of this Warrant and take all actions consistent with effectuating
the purposes of this Warrant. 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
non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as this Warrant is 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 this Warrant, the number of shares of Common Stock which are then issuable upon exercise
of this Warrant (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 share capital
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.
7.
REISSUANCE
OF WARRANTS
.
(a)
Transfer
of Warrant
. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company and deliver the completed
and executed Assignment Form, in the form attached hereto as
Exhibit B
, 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. The acceptance of the new Warrant by the transferee
thereof shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the new Warrant that
the Holder has in respect of this Warrant.
(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 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; provided, however, that no Warrants for fractional
shares of Common Stock shall be given.
(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, unless otherwise provided herein, such notice shall be given in writing,
will be mailed (a) if within the domestic United States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile or (b) if delivered from outside the United States, by International
Federal Express or facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified mail domestic,
three (3) Business Days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one (1) Business Day after
so mailed, (iii) if delivered by International Federal Express, two (2) Business Days after so mailed and (iv) if delivered by
facsimile, upon electronic confirmation of receipt, and will be delivered and addressed as follows:
|
|
(i)
|
if to the Company, to:
|
SenesTech,
Inc.
3140
N. Caden Court, Suite 1
Flagstaff,
AZ 86004
Attn:
Chief Executive Officer
Email:
Loretta.Mayer@senestech.com
with a copy to:
1120
NW Couch Street
10th
Floor
Portland,
Oregon 97209-4128
Attn: Chris Hall
Facsimile: (503)727-2222
Email:chall@perkinscoie.com
(ii) if to the Holder, at the address
of the Holder appearing on the books of the Company.
9.
AMENDMENT
AND WAIVER
. Except as otherwise provided herein, the provisions of this Warrant may be amended 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; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of Delaware, without reference to the choice of law provisions thereof. The Company and, by accepting
this Warrant, the Holder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware for the
purpose of any suit, action, proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated
hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere
in the world by the same methods as are specified for the giving of notices under this Warrant. The Company and, by accepting
this Warrant, the Holder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding
and to the laying of venue in such court. The Company and, by accepting this Warrant, the Holder, each irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE COMPANY
AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO
THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
11.
CONSTRUCTION;
HEADINGS
. 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.
12.
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 email or facsimile within two (2)
Trading 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 five (5) Trading Days of such disputed determination or arithmetic calculation being submitted to the Holder, then
the Company shall, within two (2) Trading Days submit via email or facsimile (a) the disputed determination of the Exercise Price
to an independent, reputable investment bank selected by the Company and approved by the Holder, which approval shall not be unreasonably
withheld, or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant.
The Company shall cause 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) Trading Days from the time it receives the disputed
determinations or calculations. The prevailing party (which, for purposes of this Warrant, is the party whose determinations or
calculations is closest to those of the investment bank or the accountant, as the case may be) in any dispute resolved pursuant
to this Section 12 shall be entitled to the full amount of all reasonable expenses, including all costs and fees paid or incurred
in good faith, in relation to the resolution of such dispute. Such investment bank’s or accountant’s determination
or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
13.
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, 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.
14.
TRANSFER
.
Subject to applicable laws and the restrictions set forth in this paragraph, this Warrant may be offered for sale, sold, transferred
or assigned without the consent of the Company. The Holder agrees that, pursuant to the Lock-Up Period (as defined below) contained
in Rule 5110(g)(1) of the Financial Industry Regulatory Authority, Inc. (“
FINRA
”), it will not (a) sell, transfer,
assign, pledge, hypothecate or otherwise transfer this Warrant (including any Warrant Shares issued or issuable hereunder) other
than to a bona fide officer or partner of the Holder or any selected dealer in connection with the offering contemplated by the
Underwriting Agreement, in each case in accordance with FINRA Conduct Rule 5110(g)(1), or (b) cause this Warrant or any Warrant
Shares issued or issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would
result in the effective economic disposition of this Warrant or any Warrant Shares issued or issuable hereunder, except as provided
for in FINRA Rule 5110(g)(2). As used herein, the term “
Lock-Up Period
” means the period beginning on the date
that the registration statement registering this Warrant is declared effective by the Securities and Exchange Commission (the
“
Effective Date
”) and ending on the one hundred eighty day anniversary of the Effective Date. In addition,
notwithstanding the other terms of this Warrant or any agreement between the Company and the Holder, the Holder agrees that, as
required by FINRA Rule 5110(f)(2)(G): (i) this Warrant may not be exercised more than five years from the Effective Date; (ii)
the Holder shall not have more than one demand registration right at the Company’s expense; (iii) the Holder shall not have
the right to demand registration of this Warrant or the Warrant Shares more than five years from the earlier of the Effective
Date or the commencement of sales of the public offering contemplated by the Underwriting Agreement; (iv) the Holder shall not
have the right to piggyback registration with respect to this Warrant or the Warrant Shares more than seven years from the earlier
of the Effective Date or the commencement of sales of the public offering contemplated by the Underwriting Agreement; (v) this
Warrant may not have anti-dilution terms that allow the Holder and related persons to receive more shares or to exercise at a
lower price than originally agreed upon at the time of the public offering, when the public shareholders have not been proportionally
affected by a stock split, stock dividend, or other similar event; and (iii) this Warrant may not have anti-dilution terms that
allow the Holder and related persons to receive or accrue cash dividends prior to the exercise or conversion of the security.
15.
CERTAIN
DEFINITIONS
. For purposes of this Warrant, the following terms shall have the following meanings:
(a)
“Bloomberg”
means Bloomberg Financial Markets.
(b)
“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.
(c)
“Common
Stock”
means (i) the Company’s shares of Common Stock, par value $0.001 per share, and (ii) any share
capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common
Stock.
(d)
“Convertible
Securities”
means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.
(e)
“Eligible
Market”
means the Principal Market, The New York Stock Exchange, Inc., The NYSE MKT, The NASDAQ Global Market or The
NASDAQ Global Select Market.
(f)
“Expiration Date”
means 5:00 pm Eastern time on November , 2022, and will not exceed five years from
the effective date of the offering contemplated by the Underwriting Agreement, pursuant to FINRA Rule 5110(f)(2)(G)(i).
(g)
“Fundamental
Transaction”
means that (A) the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii)
allow another Person providing to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of
the outstanding shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party
to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate
a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with another Person whereby such other Person 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 purchase agreement or other business combination), or (v) reorganize,
recapitalize or reclassify the Common Stock or (B) any “person” or “group” (as these terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued
and outstanding Common Stock.
(h)
“Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(i)
“Parent
Entity”
of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(j)
“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.
(k)
“Principal
Market”
means The NASDAQ Capital Market.
(l)
“Successor
Entity”
means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.
(m)
“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;
provided
that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during
the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).
(n)
“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 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, 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 “pink sheets”
by OTC Markets LLC. 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 12 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 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.
|
|
SENESTECH, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
SENESTECH,
INC.
The undersigned holder
hereby exercises the right to purchase
of the shares of Common Stock (
“Warrant Shares”
) of SenesTech, Inc., a Delaware corporation (the
“Company”
),
evidenced by the attached Warrant to Purchase Common Stock (the
“Warrant”
). Capitalized terms used herein and
not otherwise defined shall have the respective meanings set forth in the Warrant.
1.
Payment of Exercise
Price
. The holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with
the terms of the Warrant.
2.
Delivery of
Warrant Shares
. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant
and, after delivery of such Warrant Shares, _____________ Warrant Shares remain subject to the Warrant.
3.
Representations
and Warranties
. By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving
effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock
(determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under
Section 1(d) of this Warrant to which this notice relates.
|
Date: _______________ __, ______
|
|
|
|
|
|
|
|
|
Name of Registered Holder
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
(Signature must conform in all respects
to name of the Holder as specified on the face of the Warrant)
|
|
EXHIBIT B
ASSIGNMENT FORM
SENESTECH, INC.
(To assign the
foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED,
the foregoing Warrant and all rights evidenced thereby are hereby assigned to
|
Name:
|
|
|
|
(Please Print)
|
|
Address:
|
|
|
|
(Please Print)
|
|
|
|
|
Dated: _______________ __, ______
|
|
|
Holder’s Signature:
|
|
|
|
|
|
|
|
Holder’s Address:
|
|
|
NOTE: The signature to this Assignment
Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever.
Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority
to assign the foregoing Warrant.
Exhibit 4.2
SENESTECH,
INC.
Warrant
To Purchase Common Stock
Warrant No.: [___]-[___]
Number of Shares of Common Stock:
[___]
Date of Issuance:
[______________]
,
2017 (“
Issuance Date
”)
SenesTech, Inc., a Delaware
corporation (the “
Company
”), hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged
, [PURCHASER]
, 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 in Section 1(b)) then in effect, at any time or times on or
after the Issuance Date (the “
Initial Exercisability Date
”), but not after 11:59 p.m., Eastern time, on
the Expiration Date, up to such number of fully paid and non-assessable shares of Common Stock equal to [________], subject
to adjustment as provided herein (the “
Warrant Shares
”). Except as otherwise defined herein, capitalized
terms in this Series [*] 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
18. This Warrant is one of the Series [*] Warrants to Purchase Common Stock (the “
Series [*] Warrants
”)
originally issued pursuant to that certain Underwriting Agreement, dated as of November 17, 2017
(the “
Subscription Date
”), by and among the Company and the underwriters signatory thereto.
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 applicable Exercise Price (as defined below) 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. On or before the first (1
st
) Trading Day following the date on which
the Company has received the applicable Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment
of confirmation of receipt of the Exercise Notice to the Holder and the Company’s transfer agent (the “
Transfer
Agent
”). So long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to
the first (1st) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior
to the second (2nd) Trading Day following the date on which the Exercise Notice has been delivered to the Company, or, if the Holder
does not deliver the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the first (1st) Trading Day following
the date on which the Exercise Notice has been delivered to the Company, then on or prior to the first (1st) Trading Day following
the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered (the “
Share Delivery Date
”),
the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“
DTC
”)
Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian
system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch
by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the 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. 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 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 two (2) 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 up to the nearest whole number. The Company
shall pay any and all taxes (other than the Holder’s income taxes) and costs and expenses (including, without limitation,
fees and expenses of the Transfer Agent but excluding those of the Holder) 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. For purposes of clarity,
if the Holder exercises this Warrant (other than by Cashless Exercise) at a time when the Holder may not sell the Warrant Shares
without restriction or limitation either (I) pursuant to Rule 144 of the 1933 Act and without the requirement to be in compliance
with Rule 144(c)(1) of the 1933 Act (or the Holder does not undertake to resell such Warrant Shares promptly after issuance while
the Company is in compliance with the public information requirements of Rule 144(c)(1)) or (II) pursuant to an effective registration
statement registering the Warrant Shares for issuance, the Company may satisfy the delivery of Warrant Shares under this Section
1(a) by issue and dispatch by overnight courier to the address as specified in the Exercise Notice, 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, which certificate may contain a restrictive legend.
(b)
Exercise
Price
. For purposes of this Warrant, “
Exercise Price
” means
$[*]
, 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 the DTC Fast Automated
Securities Transfer Program, a certificate for the number of shares of Common Stock to which the Holder is entitled and register
such Common Stock on the Company’s share register or (y) the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, to credit the Holder’s balance account with DTC, for such number of shares of Common Stock to which the
Holder is entitled upon the Holder’s exercise of this Warrant or (II) a registration statement (which may be the Registration
Statement (as defined below)) covering the issuance of the Warrant Shares that are the subject of the Exercise Notice (the “
Exercise
Notice Warrant Shares
”) is not available for the issuance 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 pursuant to an Exercise Notice 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 the DTC Fast Automated
Securities Transfer Program, the Company shall fail to issue and deliver a certificate to the Holder and register such shares of
Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder
is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below
or (II) if a Notice Failure occurs, and if on or after such Trading Day the Holder purchases (in an open market transaction or
otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise
that the Holder anticipated receiving from the Company (a “
Buy-In
”), then the Company shall, within three (3)
Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount
equal to the Holder’s total purchase price (including brokerage commissions and legal fees to enforce this provision, if
any) for the shares of Common Stock so purchased (the “
Buy-In Price
”), at which point the Company’s obligation
to deliver such certificate (and to issue such shares of Common Stock) or credit such Holder’s balance account with DTC for
such shares of Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable (unless the Holder
elects rescission below), and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock, times (B) any trading price of the Common Stock selected by the Holder in writing
as in effect at any time during the period beginning on the applicable Exercise Date and ending on the applicable Share Delivery
Date. Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity,
including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure
to timely deliver certificates representing Warrant Shares (or to electronically deliver such Warrant Shares) upon the exercise
of this Warrant as required pursuant to the terms hereof. While this Warrant is outstanding, the Company shall cause its transfer
agent to participate in the DTC Fast Automated Securities Transfer Program. In addition to the foregoing rights (other than in
the case the Holder elects clause (i) above which shall be in lieu of this right), (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
of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance 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 shall not affect the Company’s obligation to make any payments that have accrued prior to the date
of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise
to a Cashless Exercise.
(d)
Cashless
Exercise
. Notwithstanding anything contained herein to the contrary, if a registration statement (which may be the Registration
Statement) covering the issuance of the Exercise Notice Warrant Shares is not available for the issuance 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)
D
For purposes of the foregoing formula:
A= the total number
of shares with respect to which this Warrant is then being exercised.
B= the arithmetic
average of the Closing Sale Prices of the Common Stock for the five (5) consecutive Trading Days ending on the date immediately
preceding the date of the Exercise Notice.
C= the Exercise
Price then in effect for the applicable Warrant Shares at the time of such exercise.
D= as applicable:
(i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice
if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(d) hereof on a day that is not a Trading Day or
(2) both executed and delivered pursuant to Section 1(d) 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) 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 pursuant
to Section 1(d) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the
date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(d)
hereof after the close of “regular trading hours” on such Trading Day.
If Warrant Shares are issued
in a Cashless Exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of the 1933 Act, the Warrant
Shares shall take on the registered characteristics of the Warrant being exercised, and the holding period of the Warrant being
exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to
this Section 1(d).
(e)
Disputes
.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 13.
(f)
Beneficial
Ownership Limitation on Exercises
. 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% (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 (3) 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 shares 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
,
however
, that (i) any such increase in the Maximum
Percentage will not be effective until the sixty-first (61
st
) 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 Series [*] 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 section shall have any effect of the applicability of the provisions
of this section 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.
The Holder acknowledges that the Company may rely on the information set forth in the Exercise Notice, and shall not be required
to independently verify whether or not an exercise would trigger the provisions of this section.
(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(a) 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 immediately 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 and the other Series [*] Warrants then outstanding. Without limiting the generality of the foregoing
sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty
(60) days after the occurrence of such Authorized Share Failure, the Company shall either (x) obtain the written consent of its
stockholders for the approval of an increase in the number of authorized shares of Common Stock and provide each stockholder with
an information statement with respect thereto or (y) 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 best efforts to solicit its stockholders’ approval of such increase in authorized shares
of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding
the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority
of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares
of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information
Statement on Schedule 14C.
2.
ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:
(a)
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.
(b)
Adjustment
Upon Subdivision or Combination of Shares 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.
(c)
Adjustment
Upon Issuance of Shares of Common Stock
. If and whenever on or after the Subscription Date, the Company issues, sells, publicly
announces the contemplated issuance or sale of, or in accordance with this Section 2 is deemed to have issued or sold, any shares
of Common Stock (including the issuance, sale or public announcement of the issuance or sale of shares of Common Stock owned or
held by or for the account of the Company, but excluding any Excluded Securities issued or sold or deemed to have been issued or
sold) for a consideration per share (the “
New Issuance Price
”) less than a price equal to the Exercise Price
in effect immediately prior to such issuance or sale or deemed issuance or sale (such Exercise Price then in effect is referred
to herein as the “
Applicable Price
”) (the foregoing a “
Dilutive Issuance
”), then immediately
after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price.
For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and the New Issuance
Price under this Section 2(c)), the following shall be applicable:
(i)
Issuance
of Options
. If the Company in any manner grants or sells, or publicly announces the issuance or sale of, any Options and the
lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon
conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant
to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and
to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes
of this Section 2(c)(i), the “lowest price per share for which one share of Common Stock is at any time issuable upon the
exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of
any such Option or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the
granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security
issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in
such Option for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon
the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of
such Option (or any other Person) upon the granting or sale of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof
plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any
other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance
of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the
terms of or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities.
(ii)
Issuance
of Convertible Securities
. If the Company in any manner issues or sells, or publicly announces the issuance or sale of, any
Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of
such Convertible Securities for such price per share. For the purposes of this Section 2(c)(ii), the “lowest price per share
for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant
to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and
upon conversion, exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest
conversion price set forth in such Convertible Security for which one share of Common Stock is issuable (or may become issuable
assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof
minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person) upon the issuance
or sale of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Exercise
Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made
upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this
Section 2(c), except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issuance
or sale.
(iii)
Change
in Option Price or Rate of Conversion
. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other
than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 2(a)),
the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have
been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or
sold. For purposes of this Section 2(c)(iii), if the terms of any Option or Convertible Security that was outstanding as of the
Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option or
Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(c) shall be made if such
adjustment would result in an increase of the Exercise Price then in effect.
(iv)
Calculation
of Consideration Received
. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the
issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “
Primary
Security
”, and such Option and/or Convertible Security and/or Adjustment Right, the “
Secondary Securities
”
and together with the Primary Security, each a “
Unit
”), together comprising one integrated transaction, the
aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to be the lowest of (x)
the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security, the lowest price per share
for which one share of Common Stock is at any time issuable upon the exercise or conversion of the Primary Security in accordance
with Section 2(c)(i) or 2(c)(ii) above and (z) the lowest Weighted Average Price of the Common Stock on any Trading Day during
the four Trading Day period immediately following the public announcement of such Dilutive Issuance (for the avoidance of doubt,
if such public announcement is released prior to the opening of the Principal Market on a Trading Day, such Trading Day shall be
the first Trading Day in such four Trading Day period). If any shares of Common Stock, Options or Convertible Securities are issued
or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount
of consideration received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued
or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of
such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration
received by the Company for such securities will be the arithmetic average of the Weighted Average Prices of such security for
each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case may
be). The fair market value of any consideration other than cash or publicly traded securities will be determined jointly by the
Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring
valuation (the “
Valuation Event
”), the fair market value of such consideration will be determined within five
(5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected
by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
(v)
Record
Date
. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the
making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(vi)
No
Readjustments
. For the avoidance of doubt, in the event the Exercise Price has been adjusted pursuant to this Section 2(c)
and the Dilutive Issuance that triggered such adjustment does not occur, is not consummated, is unwound or is cancelled after the
facts for any reason whatsoever, in no event shall the Exercise Price be readjusted to the Exercise Price that would have been
in effect if such Dilutive Issuance had not occurred or been consummated.
(d)
Holder’s
Right of Alternative Exercise Price Following Issuance of Certain Options or Convertible Securities
. In addition to and not
in limitation of the other provisions of this Section 2, if the Company at any time after the Subscription Date in any manner issues
or sells or enters into any agreement to issue or sell, any Common Stock, Options or Convertible Securities (any such securities,
“
Variable Price Securities
”) that are issuable pursuant to such agreement or convertible or exercisable into
or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares
of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary
anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations
for such variable price being herein referred to as, the “
Variable Price
”), the Company shall provide written
notice thereof via facsimile or electronic mail and overnight courier to the Holder on the date of such agreement and the issuance
of such Convertible Securities or Options. From and after the earlier to occur of (i) the date the Company enters into such agreement,
if any, and (ii)the date the Company issues any such Variable Price Securities, the Holder shall have the right, but not the obligation,
in its sole discretion to substitute the Variable Price for the Exercise Price upon exercise of this Warrant by designating in
the Exercise Notice delivered upon any exercise of this Warrant that solely for purposes of such exercise the Holder is relying
on the Variable Price rather than the Exercise Price then in effect. The Holder’s election to rely on a Variable Price for
a particular exercise of this Warrant shall not obligate the Holder to rely on a Variable Price for any future exercises of this
Warrant.
(e)
Other
Events
. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features except for those granted pursuant to an Approved Equity Plan), then the Company’s Board of Directors
will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares, as mutually determined by the Company’s
Board of Directors and the Required Holders, so as to protect the rights of the Holder; provided that no such adjustment pursuant
to this Section 2(e) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant
to this Section 2.
3.
RIGHTS
UPON DISTRIBUTION OF ASSETS
. In addition to any adjustments pursuant to Section 2 above, if, on or after the Subscription Date
and on or prior to the Expiration Date, the Company shall declare or make any dividend or other distribution of its assets (or
rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock (not including shares of Common Stock of the Company) 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 only be entitled
to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership
of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and
the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, 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 all 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 shares of Common Stock are to be determined
for the grant, issue or sale of such Purchase Rights (
provided
,
however
, that to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder 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 shares of 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 held similarly in abeyance) to the same extent as if there had been no such limitation).
(b)
Fundamental
Transactions
. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for the Company (so that from and after the date of such Fundamental Transaction, each and every provision of this Warrant referring
to the “Company” shall instead refer to the Successor Entity), and the Successor Entity may exercise every prior right
and power of the Company and shall assume all prior obligations of the Company under this Warrant with the same effect as if the
Successor Entity had been named as the Company in this Warrant and the adjustments in the following sentence had occurred. On or
prior to the 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 Fundamental Transaction, in lieu of the
shares of Common Stock (or other securities, cash, assets or other property purchasable upon the exercise of this 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), which for purposes of clarification may continue to be shares of Common Stock, if any,
that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility
or other determination date for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately
prior to such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental
Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions
of this Warrant.
(c) Notwithstanding
anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall,
at the Holder’s option, exercisable at any time prior to or concurrently with, and conditioned on, the consummation of the Fundamental
Transaction, purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of
the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction;
provided
,
however
, that, if the Fundamental Transaction is not within the Company’s control, including not approved by
the Company’s Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity, as of
the date of consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion),
at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common
Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or
any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of
consideration in connection with the Fundamental Transaction.
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 non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the
Series [*] 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 Series [*] Warrants, the Required Reserve Amount
to effect the exercise of the Series [*] 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, except for notices and information filed or furnished to the SEC,
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 an 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;
provided
,
however
,
that no Series [*] Warrants for fractional Warrant Shares shall be given.
(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
. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Exercise Notice, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Company, at 3140 N. Caden Ct., Suite 1, Flagstaff, Arizona 86004, Attention: Thomas C. Chesterman,
email address: tom.chesterman@senestech.com, or such other email address or address as the Company may specify for such purposes
by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall
be in writing and delivered personally, by mail, 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 received and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail
address set forth in this Section prior to 5:30 p.m. (Eastern time) on any date, (ii) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address set forth in this
Section on a day that is not a Trading Day or later than 5:30 p.m. (Eastern time) on any Trading Day, (iii) the second Trading
Day following the date of delivery to the courier service, if sent by U.S. nationally recognized overnight courier service, (iv)
the third Trading Day following the date of mailing to Holders (v) upon actual receipt by the party to whom such notice is required
to be given.
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 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.
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.
VARIABLE
RATE TRANSACTIONS
. Notwithstanding anything to the contrary contained herein, including without limitation, the provisions
set forth in Section 2(d) of this Warrant, from and after the Subscription Date and on or prior to the Expiration Date, the Company
shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries
of Common Stock, Convertible Securities or Options (or a combination thereof) involving a Variable Rate Transaction. As used herein,
“Variable Rate Transaction” means a transaction in which the Company or any of its Subsidiaries (i) issues or sells
any debt or equity security that are convertible into, exchangeable or exercisable for, or include the right to receive additional
shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt
or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after
the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, or issues any securities
pursuant to any agreement, including, but not limited to an equity line of credit or at-the-market offering, whereby the Company
or any of its Subsidiaries may issue securities at a future determined price.
12.
CONSTRUCTION;
HEADINGS
. This Warrant shall be deemed to be jointly drafted by the Company and all the Holders 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.
13.
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 after 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 after 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 (such approval
not to be unreasonably withheld or delayed), 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.
14.
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, 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.
15.
TRANSFER
. This
Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company.
16.
SEVERABILITY
.
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).
17.
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 within four (4) Business Days after 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.
18.
CERTAIN
DEFINITIONS
. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “
1933 Act
” means the Securities Act of 1933, as amended.
(b) “
Adjustment
Right
” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance
or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock (other than rights of the type described
in Section 3 and 4 hereof) that could result in a decrease in the net consideration received by the Company in connection with,
or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar
rights).
(c) “
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.
(d) “
Approved
Equity Plan
” means any employee benefit plan which has been approved by a majority of the disinterested members of the
Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer, or
director for services provided to the Company.
(e) “
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.
(f) “
Bid
Price
” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply,
the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination,
the average of the bid prices of any market makers for such security as reported in the “pink sheets” by OTC Markets
Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for a security as
of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section
13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.
(g) “
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 Fundamental
Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction 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 the greater of 100% and the
100 day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the
applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction
is consummated, (iii) the underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common Stock
during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction
(or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s
request pursuant to Section 4(c), and (2) the sum of the price per share being offered in cash in the applicable Fundamental Transaction
(if any), plus the per share value of any non-cash consideration, if any, being offered in the Fundamental Transaction, (iv) a
zero cost of borrow and (v) a 360 day annualization factor.
(h) “
Bloomberg
”
means Bloomberg Financial Markets.
(i) “
Business
Day
” means any day other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized
or required by law to remain closed.
(j) “
Closing
Sale Price
” means, for any security as of any date, the last closing trade price 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
trade price, then the last trade price of such security prior to 4:00:00 p.m., Eastern time, as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or trading market for such security, the last trade price 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 trade price of such security in the over-the-counter market on the electronic bulletin board
for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average
of the ask prices of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets
Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Sale Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Sale 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 13. All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation
period.
(k) “
Common
Stock
” means (i) the Company’s shares of Class A Common Stock, par value $0.001 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.
(l) “
Convertible
Securities
” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.
(m) “
Eligible
Market
” means the Principal Market, the NYSE American, The NASDAQ Global Market, The NASDAQ Global Select Market, The
New York Stock Exchange, Inc., the OTC Bulletin Board, the OTC QX or the OTC QB.
(n) “
Excluded
Securities
” means any shares of Common Stock or other securities issued or issuable, or deemed issued or issuable pursuant
to Section 2(a): (i) in connection with any Approved Equity Plan, (ii) upon exercise of the Warrants; provided, that the terms
of such Warrants are not amended, modified or changed on or after the Subscription Date and (iii) upon conversion, exercise or
exchange of any Options or Convertible Securities which are outstanding on the day immediately preceding the Subscription Date;
provided, that the terms of such Options or Convertible Securities are not amended, modified or changed on or after the Subscription
Date.
(o) “
Expiration
Date
” means the date that is 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.
(p) “
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 and its subsidiaries, taken as a whole, or (iii) make, or allow one or more Subject Entities
to make, or allow the Company to be subject to or have its shares of Common Stock be subject to or party to one or more Subject
Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding
shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all
Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange
offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or
Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial
owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate
a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate,
acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common
Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject
Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number
of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares
of Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in
one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become
the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification
or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued
and outstanding shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock not held by all such Subject Entities as of the Issuance Date calculated as if any shares of Common Stock
held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented
by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities
to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their Common
Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates
or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured
in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct
this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument
or transaction.
(q) “
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.
(r) “
Options
”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(s) “
Parent
Entity
” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity
whose common shares or 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 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.
(t) “
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.
(u) “
Principal
Market
” means The NASDAQ Capital Market.
(v) “
Registration
Statement
” means the effective registration statement on Form S-1 (Commission File No. 333-221433) of the Company.
(w) “
Required
Holders
” means the holders of the Series [*] Warrants representing at least a majority of Warrant Shares underlying the
Series [*] Warrants then outstanding.
(x) “
Standard
Settlement Period
” means the standard settlement period, expressed in a number of Trading Days, on 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.
(y) “
Subject
Entity
” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(z) “
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.
(aa) “
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.
(bb) “
Weighted
Average Price
” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time
as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted
average price is reported for such security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest
closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC
Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 13 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.
|
|
SENESTECH, INC.
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
Title:
|
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS
WARRANT TO PURCHASE COMMON STOCK
SenesTech, Inc.
The undersigned holder hereby
exercises the right to purchase _________________ of the shares of Class A Common Stock, par value $0.001 per share (the “
Warrant
Shares
”), of SenesTech, Inc., a Delaware corporation (the “
Company
”), evidenced by the attached Series
[*] Warrant to Purchase Common Stock No. K-____ (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; 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. Maximum
Percentage Representation. Notwithstanding anything to the contrary contained herein, this Exercise Notice shall constitute a representation
by the Holder that after giving effect to the exercise provided for in this Exercise Notice, such Holder (together with the other
Attribution Parties) will not have beneficial ownership (together with the other Attribution Parties) of a number of shares of
Common Stock which exceeds the Maximum Percentage (as defined in the Warrant) of the total outstanding shares of Common Stock of
the Company as determined pursuant to the provisions of Section 1(f) of the Warrant and utilizing a Reported Outstanding Share
Number equal to ______________.
4. Delivery
of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.
5. Variable
Price Securities. By checking the box in this Item 5, the holder elects to exercise the Warrant by substituting the Variable Price
for the Exercise Price pursuant to Section 2(d) of the Warrant, which Variable Price equals $___________ per share. •
|
Please
issue the Warrant Shares in the following name and to the following account:
|
|
|
|
Issue
to:
|
|
|
|
|
|
|
|
|
Facsimile
Number and Electronic Mail:
|
|
|
|
|
|
Authorization:
|
|
|
|
|
|
By:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
Dated:
|
|
|
|
|
|
Broker
Name:
|
|
|
|
|
|
Broker
DTC #:
|
|
|
|
|
|
Broker
Telephone #:
|
|
|
|
|
|
Account
Number:
|
|
|
(if
electronic book entry transfer)
|
|
|
|
|
|
Transaction
Code Number:
|
|
|
(if
electronic book entry transfer)
|
|
|
|
|
|
|
|
|
TRANSFER AGENT INSTRUCTIONS
SENESTECH,
INC.
__________ __, 20__
|
|
Re:
|
Order to Issue Common Stock of SenesTech, Inc.
|
Ladies and Gentlemen:
This instruction letter shall serve as our authorization
and direction to you to issue:
|
|
●
|
to the recipient identified under “Issue to” in the Exercise Notice,
|
|
|
●
|
such number of shares of Common Stock as set forth under “Delivery of Warrant Shares,” respectively, in the Exercise Notice,
|
|
|
●
|
out of the Transfer Agent Reserve (as defined in the [________] 20__ Instruction),
|
|
|
●
|
by crediting the designated recipient’s balance account with the Depository Trust Company, identified in the Exercise Notice under “Broker Name,” “Broker DTC#,” “Account Number,” and “Transaction Code Number” through its Deposit Withdrawal at Custodian system
|
The issuance of these shares
of Common Stock have been registered pursuant to an effective registration statement as indicated in the attached Counsel Instruction.
[
Signature Page Follows
]
Should you have any questions
concerning this matter, please contact me at ____________________.
|
|
Very
truly yours,
|
|
|
|
|
|
COMPANY
|
|
|
|
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
|
Title:
|
Exhibit 99.1
SenesTech
Announces Pricing of Public Offering
of
Common Stock and Warrants to Purchase Common Stock
FLAGSTAFF,
AZ,
November 17, 2017 – SenesTech, Inc. (NASDAQ: SNES), a developer of proprietary technologies for managing animal
pest populations through fertility control, today announced that it has priced its underwritten public offering of 5,400,000 shares
of common stock and warrants to purchase 4,050,000 shares of common stock at a price of $1.00 per share, including the warrants.
The warrants will have an exercise price of $1.50 per share, are exercisable immediately and will expire five years from the date
of issuance. The gross proceeds to SenesTech from this offering are expected to be approximately $5,400,000, before deducting
underwriting discounts, commissions and other estimated offering expenses. SenesTech has granted the underwriters a 30-day option
to purchase up to an additional 810,000 shares of Common Stock and warrants to purchase 607,500 shares of common stock to cover
over-allotments, if any. The offering is expected to close on November 21, 2017, subject to customary closing conditions.
SenesTech’s
common stock is listed on The NASDAQ Capital Market under the symbol “SNES.” A registration statement on Form S-1
relating to these securities has been filed with the Securities and Exchange Commission and became effective on November 16, 2017.
Roth
Capital Partners acted as the sole book-runner for the offering with Craig-Hallum Capital Group acting as co-manager. Copies of
the registration statement and any prospectus or prospectus supplement related to the offering may be obtained from Roth Capital
Partners, LLC, 888 San Clemente, Newport Beach, CA 92660, (800) 678-9147 or by accessing the SEC’s website, www.sec.gov.
This
press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall
there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering may be made only
by means of an effective registration statement and prospectus.
About
SenesTech
SenesTech
has developed an innovative technology for managing animal pest populations through fertility control as opposed to a lethal approach.
ContraPest’s
novel technology and approach targets the reproductive capabilities of both sexes in rat populations, inducing egg loss in female
rats and impairing sperm development in males. Using a proprietary bait delivery method, ContraPest is dispensed in a highly palatable
liquid formulation that promotes sustained consumption by rat communities. ContraPest is designed, formulated and dispensed to
be low hazard for handlers and non-target species such as wildlife, livestock and pets, where the active ingredients break down
rapidly, unlike rodenticides. In contrast, the historical approach to managing rat pest populations, rodenticides, carries a high
risk of environmental contamination and the poisoning of non-target animals, pets and children. ContraPest is a Restricted Use
product.
SenesTech
believes its innovative non-lethal approach, targeting reproduction, is more humane, less harmful to the environment, and more
effective in providing a sustainable solution to pest infestations than traditional lethal pest management methods. SenesTech
believes ContraPest
®
will establish a new paradigm in rodent control, resulting in improved performance in rodent
control over rodenticides, without the negative environmental effects of rodenticides. For more information visit the SenesTech
website at
www.senestech.com
.
Safe
Harbor Statement
This
release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements”
describe future expectations, plans, results, or strategies and are generally preceded by words such as “may,” “future,”
“plan” or “planned,” “will” or “should,” “expected,” “anticipates,”
“draft,” “eventually” or “projected.” You are cautioned that such statements are subject to
a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those
in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking
statements as a result of various factors and other risks identified in our filings with the Securities and Exchange Commission.
Forward looking statements include, but are not limited to, our expectation regarding gross proceeds.
CONTACT:
Investor:
Robert Blum, Joe Dorame, Joe Diaz, Lytham Partners, LLC, 602-889-9700,
senestech@lythampartners.com
.
Company:
Tom Chesterman, Chief Financial Officer, SenesTech, Inc., 928-779-4143.
Underwriter:
Aaron M. Gurewitz, Managing Director, Head of Capital Markets, Roth Capital Partners, LLC, 949-720-5703, agurewitz@roth.com.