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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): October 30, 2023
Biofrontera
Inc.
(Exact
name of registrant as specified in its charter)
Delaware |
|
001-40943 |
|
47-3765675 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification No.) |
120
Presidential Way, Suite 330
Woburn,
Massachusetts |
|
01801 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (781) 245-1325
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Exchange Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
stock, par value $0.001 per share |
|
BFRI |
|
The
Nasdaq Stock Market LLC |
Preferred
Stock Purchase Rights |
|
|
|
The
Nasdaq Stock Market LLC |
Warrants
to purchase common stock |
|
BFRIW |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item
1.01 Entry into a Material Definitive Agreement
Registered
Public Offering
On
October 30, 2023, Biofrontera Inc., a Delaware corporation (the “Company”), entered into a placement agency agreement (the
“Placement Agency Agreement”) with Roth Capital Partners, LLC (the “Placement Agent”) and a securities
purchase agreement (the “Purchase Agreement”) with an institutional investor for the purchase and sale, in a registered
public offering by the Company (the “Public Offering”) of an aggregate of 1,205,000 shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock”), or pre-funded warrants to purchase Common Stock in
lieu thereof, each of which is coupled with a warrant to purchase one and one-half shares of Common Stock. Specifically, the Company
agreed to issue and sell to the institutional investor: (i) 150,000 shares of Common Stock at a combined offering price of $3.74, (ii) 1,055,000 pre-funded warrants to purchase up to 1,055,000 shares of Common Stock (the “Pre-Funded Warrants”)
at a combined offering price of $3.7399 and (iii) 1,205,000 warrants to purchase up to 1,807,500 shares of Common
Stock (the “Common Warrants”), resulting in gross proceeds of approximately $4.5 million. The Public Offering closed
on November 2, 2023.
The
Common Warrants are exercisable upon issuance, will expire five years following the date of issuance and have an exercise price of $3.55
per share. The Pre-Funded Warrants are exercisable upon issuance, will expire five years following the date of issuance and have an exercise
price of $0.0001 per share.
Each
of the Placement Agency Agreement and Purchase Agreement contains representations, warranties and covenants made by the Company that
are customary for transactions of this type. In addition, pursuant to the terms of the Purchase Agreement, the Company and its executive
officers and directors have agreed not to, subject to limited exceptions, offer, sell, transfer or otherwise dispose of the Company’s
securities for a period of 90 days following the date of closing of the Public Offering.
As
compensation in connection with the Public Offering, the Company paid the Placement Agent a cash fee of 7% of the aggregate gross proceeds
raised in the Public Offering, plus reimbursement of certain expenses and legal fees.
The
Common Stock, Pre-Funded Warrants and Common Warrants described above were offered pursuant to the Registration Statement on Form S-1
(File No. 333-274871), as amended, that was declared effective by the Securities and Exchange Commission (the “Commission”)
on October 30, 2023.
The
foregoing descriptions of the Purchase Agreement, Placement Agency Agreement, Common Warrant, and the Pre-Funded Warrants, do not purport
to be complete and are subject to, and qualified by, the full text of such documents, copies of which are filed as Exhibits 10.1, 10.2,
4.1, and 4.2, respectively, and incorporated by reference herein. The Placement Agency Agreement and Purchase Agreement are attached
hereto as exhibits to provide interested persons with information regarding their terms, but are not intended to provide any other factual
information about the Company. The representations, warranties and covenants contained in the Placement Agency Agreement and Purchase
Agreement were made only for purposes of such agreements as of specific dates indicated therein, were solely for the benefit of the parties
thereto, and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures exchanged
between the parties in connection with the execution of such agreements.
Warrant
Amendment
As
previously reported in a Current Report on Form 8-K filed with the Commission on May 20, 2022, the Company issued (i) a common stock
purchase warrant, dated May 16, 2022 and exercisable until November 18, 2027, to purchase up to 170,950 shares of Common Stock,
at an exercise price of $55.40 and (ii) a common stock purchase warrant, dated July 26, 2022 and exercisable until December 1, 2026,
to purchase up to 214,286 shares of Common Stock at an exercise price of $33.20 (collectively, the “Existing Warrants”)
to an institutional investor.
On
October 30, 2023, in connection with the Purchase Agreement, the Company entered into an amendment to the Existing Warrants (the “Existing
Warrants Amendment”) pursuant to which the Company agreed, effective November 2, 2023, to (i) revise the exercise price of
the Existing Warrants to $3.55 and (ii) extend the date until which the Existing Warrants can be exercised until November 2, 2028. No
other terms of the Existing Warrants were revised or changed.
The
foregoing description of the Existing Warrant Amendment does not purport to be complete and is qualified in its entirety by reference
to the Existing Warrants Amendment, a copy of which is filed herewith as Exhibit 10.3, and incorporated herein by reference.
For further discussion of the terms of the Existing Warrants, see the Company’s Current Report on Form 8-K, filed with the Commission
on May 20, 2022, and the Company’s Current Report on Form 8-K, filed with the Commission on July 27, 2022, which portions describing
the Existing Warrants are incorporated herein by reference.
Item
3.03 Material Modifications to Rights of Security Holders
The
disclosure set forth under Item 1.01 is incorporated herein by reference into this Item 3.03 in its entirety.
Item
7.01 Regulation FD Disclosure
On
October 31, 2023, the Company issued a press release announcing the pricing of the Public Offering, a copy of which is furnished as Exhibit
99.1 and incorporated by reference herein.
The
information in Item 7.01 of this Current Report is being furnished and shall not be deemed “filed” for the purpose of Section
18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item
7.01 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the
Securities Act of 1933, as amended.
Item
9.01 Financial Statements and Exhibits
4.1 |
Form of Common Warrant |
4.2 |
Form of Pre-Funded Warrant |
10.1 |
Securities Purchase Agreement, dated October 30, 2023, by and between Biofrontera Inc. and an institutional investor |
10.2
|
Placement Agency Agreement, dated October 30, 2023, by and between Biofrontera Inc. and Roth Capital Partners, LLC |
10.3 |
Amendment to Common Stock Purchase Warrants, dated October 30, 2023, by and between Biofrontera Inc. and institutional investor |
99.1 |
Press release, dated October 31, 2023 |
104 |
Cover
Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL
document)
|
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.
November
2, 2023
(Date) |
|
Biofrontera
Inc.
(Registrant) |
|
|
|
|
|
/s/
E. Fred Leffler, III |
|
|
E.
Fred Leffler, III
Chief
Financial Officer |
Exhibit
4.1
Execution
Version
BIOFRONTERA
INC.
COMMON
STOCK PURCHASE WARRANT
Warrant
Shares: [_____] |
Initial
Exercise Date: November 2, 2023 |
|
Issue
Date: November 2, 2023 |
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [______]. or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on November 2, 2028
(the “Termination Date”) but not thereafter, to subscribe for and purchase from Biofrontera Inc., a Delaware corporation
(the “Company”), up to [______] shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b).
Section
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain
Securities Purchase Agreement (the “Purchase Agreement”), dated October 30, 2023 among the Company and the purchasers
signatory thereto.
Section
2. Exercise.
a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice
of Exercise”) and the Warrant Certificate evidencing the Warrants to be exercised. Within the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the
date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice
of Exercise by wire transfer of immediately available funds or cashier’s check drawn on a United States bank unless the cashless
exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case,
the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final
Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number
of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder
in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise
Price. The exercise price per share of Common Stock under this Warrant shall be $3.55, subject to adjustment hereunder
(the “Exercise Price”).
c) Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus
contained therein is not available for the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in
whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a
number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
|
(A) |
= |
as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is
(1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule
600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either
(y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common
Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours”
on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular
trading hours” on a Trading Day) pursuant to Section 2(a) or (iii) the VWAP on the date of the applicable Notice of Exercise
if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section
2(a) hereof after the close of “regular trading hours” on such Trading Day; |
|
|
|
|
|
(B) |
= |
the Exercise Price of this
Warrant, as adjusted hereunder; and |
|
|
|
|
|
(X) |
= |
the number of Warrant Shares
that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means
of a cash exercise rather than a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised. The Company agrees not to take
any position contrary to this Section 2(c).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York
Stock Exchange (or any successors to any of the foregoing).
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
d) Mechanics
of Exercise.
i. Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the
Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with the
Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company’s
transfer agent is then a participant in such system and either (A) there is an effective registration statement registering the
issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless
exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the
Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address
specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to
the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and
(iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of
Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder
shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that the Company shall have
received payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of
(i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the
Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise
by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for
each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice
of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date)
for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such
exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains
outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect
on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise
delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the
time of execution of the Purchase Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m.
(New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for
purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is
received by such Warrant Share Delivery Date.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares remaining available under this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of
Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the
amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise
to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded)
or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of this Warrant to purchase shares of Common Stock with an aggregate
sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company
shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to
the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay
all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or
another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant
Shares.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed
with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of
a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder,
upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day
after such notice is delivered to the Company. The provisions of this Section 2(e) shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this Section 2(e) shall apply to a successor holder of this
Warrant.
Section
3. Certain Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant or warrants of this same class issued on or about the same date), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common
Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock
of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain
unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.
b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if
the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights; provided, however,
that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or
beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to
such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
c) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other
than cash) 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 stock or other securities, property or options by
way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be
entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on
exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is
taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to
participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as
a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).
d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary),
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of
50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or
indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person
or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with
the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a
“Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right
to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such
Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior
to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of
any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and
the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the
Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding
anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall,
at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the
Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this
Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the
remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however,
that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board
of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity 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; provided, further, that if
holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of
Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be the Company following such
Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant
based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of
consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable
Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately
following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such
calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash
consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the
Trading Day immediately preceding the 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 this Section 3(d) and
(D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of
immediately available funds (or such other consideration) within the later of (i) five Business Days of the Holder’s election
and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to
this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and
such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of
such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any
such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein.
e)
Calculations. All calculations under this Section 3 shall be made by the Company to the nearest cent or the nearest 1/100th of a
share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding
as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.
f) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall
promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any
resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such
adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a
party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or
email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at
least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required
to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly
set forth herein.
g) Voluntary
Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term
of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the board of directors of the Company.
Section
4. Transfer of Warrant.
a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all
rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its agent or attorney, and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of
this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in
full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the
Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue
Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
a) No
Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as
expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless
exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no
event shall the Company be required to net cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, may include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
d) Authorized
Shares.
The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take such
reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the
purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
e) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. The Company and, by accepting this Warrant, the Holder each agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against the Company or
the Holder or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. The Company and, by accepting this Warrant,
the Holder each hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New
York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding. The Company and, by accepting this Warrant, the Holder each hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect
for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by
law. If the Company or the Holder shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the
prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or
proceeding.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of
appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.
h) Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder including, without limitation, any
Notice of Exercise, shall be in writing and delivered personally, by email or sent by a nationally recognized overnight courier
service, addressed to the Company, at Biofrontera Inc., 120 Presidential Way, Suite 330, Woburn, Massachusetts 01801 Attention: E.
Fred Leffler, III, email address: f.leffler@bfinc.com, or such other email address or address as the Company may specify for such
purposes by notice to the Holder. Any and all notices or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service addressed to
the Holder at the email address or address of the Holder appearing on the books of the Company. Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or
communication is delivered via email at the email address set forth in this Section prior to 5:30 p.m. (New York City time) on any
date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via email at the email
address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or
(iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided by the
Company hereunder constitutes, or contains, material, non-public information regarding the Company or any subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder
for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to
the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the
Holder.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
o) Electronic
Signature. Electronically scanned and transmitted signatures, including by email attachment, shall be deemed originals all
purposes of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
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BIOFRONTERA
INC. |
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By: |
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Name: |
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Title: |
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NOTICE
OF EXERCISE
To:
[_______________________
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if
any.
(2)
Payment shall take the form of (check applicable box):
[ ]
in lawful money of the United States; or
[ ]
[if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The
Warrant Shares shall be delivered to the following DWAC Account Number:
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity: _________________________________________________
Name
of Authorized Signatory: ___________________________________________________________________
Title
of Authorized Signatory: ____________________________________________________________________
Date:
________________________________________________________________________________________
EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
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(Please
Print) |
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Address: |
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(Please
Print) |
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Phone
Number: |
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Email
Address: |
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Dated:
_______________ __, ______ |
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Holder’s
Signature:_____________________________ |
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Holder’s
Address:_____________________________ |
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Signature
Guaranteed: |
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_____________________________ |
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Exhibit
4.2
Execution
Version
BIOFRONTERA
INC.
PRE-FUNDED
COMMON STOCK PURCHASE WARRANT
Warrant
Shares: [______] |
Initial
Exercise Date: November 2, 2023 |
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Issue
Date: November 2, 2023 |
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [______] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on November 2, 2028
(the “Termination Date”) but not thereafter, to subscribe for and purchase from Biofrontera Inc., a Delaware corporation
(the “Company”), up to [______] shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b).
Section
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain
Securities Purchase Agreement (the “Purchase Agreement”), dated October 30, 2023 among the Company and the purchasers
signatory thereto.
Section
2. Exercise.
a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice
of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States
bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of
Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this
Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised
in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the
date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection
to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated
on the face hereof.
b)
Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.001 per Warrant Share,
was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the
nominal exercise price of $0.001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of
this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price
under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination
Date. The remaining unpaid exercise price per share of Common Stock under this Warrant shall be $0.001, subject to adjustment hereunder
(the “Exercise Price”).
c)
Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise”
in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by
(A), where:
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(A) |
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as
applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of
Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined
in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder,
either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of
the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours”
on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular
trading hours” on a Trading Day) pursuant to Section 2(a) or (iii) the VWAP on the date of the applicable Notice of Exercise
if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section
2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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(B) |
=
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the
Exercise Price of this Warrant, as adjusted hereunder; and |
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(X) |
= |
the
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised. The Company agrees not to take
any position contrary to this Section 2(c).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in
question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock
Exchange (or any successors to any of the foregoing).
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
d)
Mechanics of Exercise.
i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company’s transfer agent
is then a participant in such system and either (A) there is an effective registration statement registering the issuance of the Warrant
Shares to or resale of the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by
physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the
number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice
of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise,
(ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising
the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery
Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant
Shares, provided that the Company shall have received payment of the aggregate Exercise Price (other than in the case of a cashless exercise)
is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period
following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject
to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not
as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable
Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery
Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a
number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m.
(New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement,
the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise
Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate
Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares remaining available under this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x)
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of this
Warrant to purchase shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause
(A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the
amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
vi.
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed
with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of
a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of
this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership
Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this
Section 2(e) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to
correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this Section 2(e) shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.
b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to
the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if
the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights; provided, however,
that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
c)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other
than cash) 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 stock or other securities, property or options by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
d)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary),
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender
or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than
50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making
or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at
the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of
shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior
to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after
the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named
as the Company herein.
e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any
sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into
other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at
its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior
to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the
holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective
or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer
or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant
constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously
file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant
during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise
be expressly set forth herein.
g)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during
the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and
for any period of time deemed appropriate by the board of directors of the Company.
Section
4. Transfer of Warrant.
a)
Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof,
this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of
this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay
any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and
shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
d)
Authorized Shares.
The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take such
reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the
purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. The Company and, by accepting this Warrant, the Holder each agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Warrant (whether brought against the Company or the Holder or their
respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York. The Company and, by accepting this Warrant, the Holder each hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. The Company and, by
accepting this Warrant, the Holder each hereby irrevocably waives personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. If the Company or the Holder shall commence an action, suit or proceeding to enforce any
provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action
or proceeding.
f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder including, without limitation,
any Notice of Exercise, shall be in writing and delivered personally, by email or sent by a nationally recognized overnight courier service,
addressed to the Company, at Biofrontera Inc., 120 Presidential Way, Suite 330, Woburn, Massachusetts 01801 Attention: E. Fred Leffler,
III, email address: f.leffler@bfinc.com, or such other email address or address as the Company may specify for such purposes by notice
to the Holder. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing
and delivered personally, by email, or sent by a nationally recognized overnight courier service addressed to the Holder at the email
address or address of the Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall
be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via email
at the email address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the
time of transmission, if such notice or communication is delivered via email at the email address set forth in this Section on a day
that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. To the extent that any notice provided by the Company hereunder constitutes, or contains, material, non-public
information regarding the Company or any subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K.
i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holder.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
o)
Electronic Signature. Electronically scanned and transmitted signatures, including by email attachment, shall be deemed originals
all purposes of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
|
BIOFRONTERA
INC. |
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By: |
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Name: |
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Title: |
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NOTICE
OF EXERCISE
To: |
[_______________________ |
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
☐ in
lawful money of the United States; or
☐
[if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ___________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity: _____________________________________________________
Name
of Authorized Signatory: _______________________________________________________________________
Title
of Authorized Signatory: ________________________________________________________________________
Date:
___________________________________________________________________________________________
EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
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(Please
Print) |
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Address: |
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(Please
Print) |
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Phone
Number: |
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Email
Address: |
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Dated:
_______________ __, ______ |
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Holder’s
Signature: |
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Holder’s
Address: |
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Exhibit 10.1
Execution
Version
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of October 30, 2023, between Biofrontera Inc., a Delaware
corporation (the “Company”), and the purchasers identified on the signature pages hereto (including each purchaser’s
successors and assigns, individually, a “Purchaser”, in the aggregate, the “Purchasers”). Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in the Placement Agency Agreement.
Recitals
Subject
to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”), the Company desires to issue and sell to each of the Purchasers, and each
of the Purchasers desire to purchase from the Company, securities of the Company as more fully described in this Agreement.
Terms
and Conditions
In
consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Company and each of the Purchasers agree as follows:
ARTICLE
I
Definitions
1.1
Definitions. In addition to the terms defined elsewhere in this Agreement: the following
terms have the meanings set forth in this Section 1.1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the third Trading Day following
the date hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the Common Stock of the Company, par value $0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Material
Adverse Effect” means a material adverse effect on the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole.
“Per
Combined Pre-Funded Warrant and Warrant Purchase Price” equals $3.7399, subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement
but on or prior to the Closing Date.
“Per
Combined Share and Warrant Purchase Price” equals $3.7400, subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement but on or
prior to the Closing Date.
Securities Purchase Agreement | | Page 1 |
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement
Agency Agreement” means the placement agency agreement entered into between the Company and the Placement Agent on or about
the date hereof.
“Pre-Funded
Warrants” means the warrants delivered to the Purchasers at Closing in accordance with Section 2.2(a) hereof, which Pre-Funded
Warrants shall be exercisable immediately upon issuance and shall expire when exercised in full, in the form of Exhibit C attached
hereto.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Prospectus”
means the final prospectus filed for the Registration Statement.
“Registration
Statement” means the effective registration statement with Commission File No. 333-274871, that registers the sale of the Securities
to each of the Purchasers.
“Securities”
means the Shares, Pre-Funded Warrants and the Warrants.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock issued or issuable to each of the Purchasers pursuant to this Agreement.
“Subscription
Amount” means the aggregate amount to be paid for the Securities purchased hereunder as specified next to each Purchaser’s
name on Exhibit A of this Agreement and next to the heading “Subscription Amount” in United States dollars and in immediately
available funds.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE
American (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Pre-Funded Warrants, the Warrants, the Lock-Up Agreements and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Computershare Trust Company, N.A., and any successor transfer agent of the Company.
“Warrants”
means the common stock purchase warrants delivered to the Purchasers at Closing in accordance with Section 2.2(a) hereof, which Warrants
shall be exercisable immediately upon issuance and may be exercised during a period of five years commencing from their issuance, in the
form of Exhibit B attached hereto.
Securities Purchase Agreement | | Page 2 |
ARTICLE
II
Purchase and Sale
2.1
Closing.
(a)
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and each of the Purchasers, severally and not jointly, agree to purchase,
the Securities identified in Exhibit A hereto. Each Purchaser’s Subscription Amount as set forth in Exhibit A hereto shall
be made available for “Delivery Versus Payment” settlement with the Company or its designee. Each
of the Purchasers shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to each Purchaser’s
Subscription Amount as set forth in Exhibit A hereto and the Company shall deliver to each Purchaser the Securities in accordance with
Exhibit A hereto, and the Company and each of the Purchasers shall deliver the other items set forth in Section 2.3 deliverable at the
Closing. Upon satisfaction of the conditions set forth in Sections 2.3 and 2.4, the Closing shall occur at the offices of the Company,
120 Presidential Way, Suite 330, Woburn, Massachusetts 01801, or such other location or by electronic exchange of documents, as the parties
shall mutually agree. Roth Capital Partners, LLC (“Roth”), is serving as placement agent (the “Placement Agent”)
solely for certain investors in this offering identified in agreements with the Company; unless otherwise specifically indicated in writing
by Roth, Roth, is not serving as a placement agent in connection with the offer and sale of the Securities to any Purchaser. The Securities
are being issued directly by the Company to each of the Purchasers.
(b)
Unless otherwise directed by a Purchaser, settlement of the Shares and Warrants shall occur via “Delivery Versus Payment”
(“DVP”) (i.e., on the Closing Date, the Company shall issue the Securities registered in the Purchasers’ names
and addresses and released by the Transfer Agent directly to the account(s) identified by each Purchaser and payment therefor shall be
made by each Purchaser by wire transfer to the Company). To the extent there are any Pre-Funded Warrants issuable under this Agreement,
the Company will deliver the Pre-Funded Warrants to each Purchase via first class mail to address provided by such Purchaser.
(c) Notwithstanding anything herein
to the contrary, if at any time on or after the time of execution of this Agreement by the Company and an applicable Purchaser, through,
and including the time immediately prior to the Closing (the “Pre-Settlement Period”), if such Purchaser sells to any
Person all, or any portion, of any Security to be issued hereunder to such Purchaser at the Closing (collectively, the “Pre-Settlement
Securities”), such Purchaser shall, automatically hereunder (without any additional required actions by such Purchaser or the
Company), be deemed to be unconditionally bound to purchase, and the Company shall be deemed unconditionally bound to sell, such Pre-Settlement
Securities to such Purchaser at the Closing; provided, that the Company shall not be required to deliver any Pre-Settlement Securities
to such Purchaser prior to the Company’s receipt of the Subscription Amount for such Pre-Settlement Securities hereunder; provided,
further, that the Company hereby acknowledges and agrees that the forgoing shall not constitute a representation or covenant by such Purchaser
as to whether or not such Purchaser will elect to sell any Pre-Settlement Securities during the Pre-Settlement Period. The decision to
sell any Securities will be made in the sole discretion of such Purchaser from time to time, including during the Pre-Settlement Period.
(d) Notwithstanding anything to
the contrary herein and each Purchaser’s subscription amount set forth in Exhibit A hereto, the number of Securities purchased by
a Purchaser (and its Affiliates) hereunder shall not, when aggregated with all other Securities owned by such Purchaser (and its Affiliates)
at such time, result in such Purchaser beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) in excess of 9.99% of the then issued and outstanding Common Stock outstanding at the Closing (the “Beneficial Ownership
Maximum”), and such Purchaser’s subscription amount, to the extent it would otherwise exceed the Beneficial Ownership
Maximum immediately prior to the Closing, shall be conditioned upon the issuance of Securities at the Closing to the other Purchasers
signatory hereto. To the extent that a Purchaser’s beneficial ownership of the Securities would otherwise be deemed to exceed the
Beneficial Ownership Maximum, such Purchasers’ subscription amount shall automatically be reduced as necessary in order to comply
with this paragraph.
Securities Purchase Agreement | | Page 3 |
2.2
Prospectus. Each Purchaser represents to the Company that it has received
(or otherwise had made available to it by the filing by the Company of an electronic version thereof with the Commission) the Prospectus
contained in the Registration Statement filed by the Company with the Commission, if applicable, certain “free writing prospectuses”
(as that term is defined in Rule 405 under the Securities Act), that have been or will be filed with the Commission and delivered to each
Purchaser on or prior to the date hereof (the “Issuer Free Writing Prospectus”), containing certain supplemental information
regarding the Securities, the terms of the Offering and the Company. Each Purchaser acknowledges that, prior to the delivery of this Agreement
by it to the Company, each Purchaser will receive certain additional information regarding the Offering, including pricing information.
Such information may be provided to the Purchasers by any means permitted under the Securities Act, including a free writing prospectus
and oral communications.
2.3
Deliveries.
(a)
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchasers the following:
(i)
this Agreement duly executed by the Company;
(ii)
a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver via The Depository Trust Company
Deposit or Withdrawal at Custodian system: (i) Shares equal to the number of Shares designated in Exhibit A as “Number of
Shares Subscribed For,” and (ii) Warrants equal to the number of Warrants designated in Exhibit A as “Total Number of Warrants
Subscribed For,” in each case, registered in the name of the respective Purchaser;
(iii)
for each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, a Pre-Funded Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to the number of Pre-Funded Warrants designated in Exhibit A as “Number of
Pre-Funded Warrants Subscribed For”, subject to adjustment therein; and
(iv)
the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act).
(b)
On or prior to the Closing Date, the Purchasers shall deliver or cause to be delivered to the Company the following:
(i)
this Agreement duly executed by the Purchasers; and
(ii)
each Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company.
2.4
Closing Conditions.
(a)
The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i)
all obligations and agreements of the Purchasers required to be performed at or prior to the Closing Date shall have been performed; and
Securities Purchase Agreement | | Page 4 |
(ii)
the delivery by the Purchasers of the items set forth in Section 2.3(b) of this Agreement.
(b)
The obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i)
all obligations and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(ii)
the delivery by the Company of the items set forth in Section 2.3(a) of this Agreement;
(iii)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(iv)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, from the date hereof and at any time prior to the Closing Date, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades
are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, makes it reasonably
impracticable or inadvisable to purchase the Securities at the Closing.
ARTICLE
III
Miscellaneous
3.1
Representations and Warranties Incorporated by Reference. The Company hereby represents,
warrants and covenants to the Purchasers as of the date hereof, and as of each Closing Date, unless such representation, warranty or agreement
specifies a different date or time, as follows:
(a)
Securities Law Filings. The Company has filed with the Commission the Registration Statement under the Securities Act, which was
filed on October 5, 2023 and subsequently amended on October 13, 2023 and October 26, 2023 and was declared effective on October 30, 2023
for the registration of the Securities under the Securities Act. Following the determination of pricing among the Company and the prospective
Investors introduced to the Company by Placement Agent, the Company will file with the Commission pursuant to Rules 430A and 424(b) under
the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder,
a final prospectus relating to the placement of the Securities, their respective pricings and the plan of distribution thereof and will
advise the Purchasers of all further information (financial and other) with respect to the Company required to be set forth therein. Such
registration statement, at any given time, including the exhibits thereto filed at such time, as amended at such time, is hereinafter
called the “Registration Statement”; such prospectus in the form in which it appears in the Registration Statement
at the time of effectiveness, is hereinafter called the “Preliminary Prospectus”; and the final prospectus, in the
form in which it will be filed with the Commission pursuant to Rules 430A and/or 424(b) (including the Preliminary Prospectus as it may
be amended or supplemented) is hereinafter called the “Final Prospectus.” The Registration Statement at the time it
originally became effective is hereinafter called the “Original Registration Statement.” Any reference in this Agreement
to the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Final Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein (the “Incorporated Documents”), if any, which
were or are filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at any given time, as
the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date
of the Preliminary Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. All references
in this Agreement to financial statements and schedules and other information which is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration Statement, the
Preliminary Prospectus or the Final Prospectus (and all other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement,
the Preliminary Prospectus or the Final Prospectus, as the case may be. As used in this paragraph and elsewhere in this Agreement, “Time
of Sale Disclosure Package” means the Preliminary Prospectus, this Agreement, the final terms of the Offering provided to the
Purchasers (orally or in writing), and any issuer free writing prospectus as defined in Rule 433 of the Act (each, an “Issuer
Free Writing Prospectus”), if any, that the parties hereto shall hereafter expressly agree in writing to treat as part of the
Time of Sale Disclosure Package. The term “any Prospectus” shall mean, as the context requires, the Preliminary Prospectus,
the Final Prospectus and any supplement to either thereof. The Company has not received any notice that the Commission has issued or intends
to issue a stop order suspending the effectiveness of the Registration Statement or the use of the Preliminary Prospectus or any Prospectus
or intends to commence a proceeding for any such purpose.
Securities Purchase Agreement | | Page 5 |
(b)
Assurances. The Original Registration Statement, as amended, (and any further documents to be filed with the Commission) contains
all exhibits and schedules as required by the Securities Act and the Company was at the time of the filing of the Registration Statement
eligible to use Form S-1. Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective,
complied in all material respects with the Securities Act and the applicable Rules and Regulations and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
The Final Prospectus, as of its date, complied or will comply in all material respects with the Securities Act and the applicable Rules
and Regulations. The Final Prospectus, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising
after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is
required to be filed with the Commission. Except for this Agreement and the Transaction Documents, there are no documents required to
be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant
to the Securities Act or (y) will not be filed within the requisite time period. Except for this Agreement and the Transaction Documents,
there are no contracts or other documents required to be described in Final Prospectus, or to be filed as exhibits or schedules to the
Registration Statement, which have not been described or filed as required. The foregoing shall not apply to statements in, or omissions
from, any such document made in reliance upon, and in conformity with, information furnished to the Company by the Placement Agent specifically
for use in the preparation thereof.
(c)
Offering Materials. Neither the Company nor any of its directors and officers has distributed and none of them will distribute,
prior to each Closing Date, any offering material in connection with the offering and sale of the Securities other than the Time of Sale
Disclosure Package.
(d)
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in the Company’s SEC Reports (as defined
below). The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear
of any lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction (each, a “Lien”
and collectively, the “Liens”), and all of the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If
the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded,
and if the Company only has one Subsidiary all references to Subsidiaries shall be deemed to refer to such Subsidiary.
Securities Purchase Agreement | | Page 6 |
(e)
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in: (i) a material adverse effect on the results of operations, assets, business, prospects or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (ii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i) or (ii) , a “Material
Adverse Effect”) and no action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation
or partial proceeding, such as a deposition), whether commenced or threatened (each, a “Proceeding”) has been instituted
in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(f)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other
than in connection with the Required Approvals (as hereinafter defined). This Agreement and each other Transaction Document to which it
is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof
and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms,
except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.
(g)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which
it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets
of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property
or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not
have or reasonably be expected to result in a Material Adverse Effect.
Securities Purchase Agreement | | Page 7 |
(h)
Reliance. The Company has not relied upon the Purchasers or legal counsel for the Purchasers for any legal, tax or accounting advice
in connection with the offering and sale of the Securities.
(i)
Forward-Looking Statements. No forward-looking statements (within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act) contained in the Time of Sale Disclosure Package has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(j)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filing
with the Commission of the Final Prospectus, (ii) such filings as are required to be made under applicable state securities laws and (iii)
the listing of additional shares notification to the Trading Market (as defined below) for the Securities (collectively, the “Required
Approvals”). “Trading Market” means any of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange, the Pink Open Market, OTCQB or the OTCQX (or any successors to any of the foregoing).
(k)
Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents. The Warrant Shares and Pre-Funded Warrant Shares, when
issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear
of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved
from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement, the Warrants
and the Pre-Funded Warrants.
(l)
Capitalization. The capitalization of the Company is as set forth on the SEC Reports. The Company has not issued any capital stock
since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under
the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock
purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents (as defined below) outstanding as of the date
of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of
the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate
the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Investors). There are
no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange
or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding
securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully
paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization
of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders
agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a
party or, to the knowledge of the Company, between or among any of the Company’s stockholders other than as disclosed in the SEC
Reports.
Securities Purchase Agreement | | Page 8 |
(m)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein
as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer
subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(n)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as set forth in the SEC Reports there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice
and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment
of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth in the SEC Reports, no event,
liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect
to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that
would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made
that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.
Securities Purchase Agreement | | Page 9 |
(o)
Litigation. Except as set forth in the SEC Reports and/or the Preliminary Prospectus, there is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an “Action”). None of the Actions set forth in the SEC
Reports and/or the Preliminary Prospectus, (i) adversely affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result
in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor to the knowledge of the Company, any director or officer thereof,
is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim
of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or threatened, any investigation
by the Commission of the Company or any current or former director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act
or the Securities Act.
(p)
Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the
Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that
their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in material compliance with all U.S. federal, state,
local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(q)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be
expected to result in a Material Adverse Effect.
Securities Purchase Agreement | | Page 10 |
(r)
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating
to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received
all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and
(iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(s)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification
of any Material Permit.
(t)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which
is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
(u)
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Except
as disclosed in the SEC Reports, none of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two years from the date of this Agreement. Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary has received,
since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has
any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have, or not
reasonably be expected to have, a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(v)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company
nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase
in cost.
Securities Purchase Agreement | | Page 11 |
(w)
Transactions with Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to
or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other
employee benefits, including stock option agreements under any stock option plan of the Company.
(x)
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are applicable to it as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such
disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules
and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company
and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the
conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as
of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such
term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially
affect, the internal control over financial reporting of the Company and its Subsidiaries.
(y)
Certain Fees. Except for the fees payable by the Placement Agent in connection with the transactions contemplated by the Transaction
Documents, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Investors shall have no obligation with respect to any fees or with respect to any claims made by or
on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated
by the Transaction Documents.
(z)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
Securities Purchase Agreement | | Page 12 |
(aa)
Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities
Act of any securities of the Company or any Subsidiary.
(bb)
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. Except as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice
from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. The Common Stock is currently eligible for electronic transfer through
the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository
Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(cc)
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to the Investors as a result of the Investors and the Company fulfilling
their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s
issuance of the Securities and the Investors’ ownership of the Securities.
(dd)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Investors or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms
that the Investors will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure
furnished by or on behalf of the Company to the Investors regarding the Company and its Subsidiaries, their respective businesses and
the transactions contemplated hereby is true and correct and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made,
not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as
a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made and when made, not misleading.
Securities Purchase Agreement | | Page 13 |
(ee)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt
by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business
as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of
the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the
current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws
of any jurisdiction within one year from the Closing Date. The SEC Reports sets forth as of the date hereof all outstanding secured and
unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes
of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other
than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet
(or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(ff)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income
and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for
any such claim.
(gg)
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign
or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law or (iv) taken any action that would reasonably be expected to subject the Company to any
damage or penalty in any criminal or governmental litigation or proceeding under any provision of FCPA.
(hh)
Accountants. To the knowledge and belief of the Company, Marcum LLP (the “Accountants”) is a registered public
accounting firm as required by the Exchange Act.
(ii)
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.
(jj)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection
with the placement of the Securities.
Securities Purchase Agreement | | Page 14 |
(kk)
FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the
Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is, to the knowledge of the Company, being manufactured, packaged, labeled, tested, distributed,
sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations
relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices,
good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports,
except where the failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company’s
knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any
notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance,
licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale
of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure
of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii)
imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility
of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company
or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries,
and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the
Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the
FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States
of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or
clearing for marketing any product being developed or proposed to be developed by the Company.
(ll)
Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the
Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy
or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release
or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(mm)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
Securities Purchase Agreement | | Page 15 |
(nn)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended.
(oo)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly,
five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(pp)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance in
all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened.
3.2
Covenants and Agreements of the Company.
Subsequent
Equity Sales.
(i)
From the date hereof until 60 days after the date of the Final Prospectus (the “Restricted Period”), unless otherwise
consented to by the Placement Agent, neither the Company nor any Subsidiary (as defined in the Placement Agency Agreement) shall (i) issue,
enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents
(as defined below) or (ii) file any registration statement or amendment or supplement thereto, other than the Prospectus, supplements
to its registration statements to reflect the effect of the reverse stock split effective on July 3, 2023 or filing a registration statement
on Form S-8 in connection with any employee benefit plan or a post-effective amendment to its registration statement in connection with
the publicly traded warrants (File No. 333-257722), provided the sole purpose of such post-effective amendment is to update the registration
statement to permit forward incorporation by reference.
(ii)
From the date hereof until one hundred eighty (180) days after the date of the Final Prospectus, 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 or Common Stock
Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or
exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into,
or effects a transaction under, any agreement, including, but not limited to, an equity line of credit or an “at-the-market offering”,
whereby the Company may issue securities at a future determined price.
Securities Purchase Agreement | | Page 16 |
(iii)
Notwithstanding the foregoing, this Section 3.2 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction
shall be an Exempt Issuance.
(iv)
The term “Exempt Issuance” means: (i) the issuance of shares of Common Stock or securities convertible into or exercisable
for shares of Common Stock pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of warrants
or options (including net exercise) or the issuance of shares of Common Stock underlying restricted stock units (“RSUs”)
or performance stock units (“PSUs”) (including net settlement), in each case outstanding on the date of this Agreement
and described in the Final Prospectus; (ii) grants of stock options, stock awards, restricted stock, RSUs, PSUs, or any other equity awards
and the issuance of shares of Common Stock or securities convertible into or exercisable or exchangeable for shares of Common Stock (whether
upon the exercise of stock options or otherwise) to the Company’s employees, officers, directors, advisors, or consultants pursuant
to the terms of an equity compensation plan in effect as of the Closing Date and described in the Final Prospectus; provided that, in
each case, such recipients who are directors or executive officers have delivered a lock-up agreement to the Placement Agent substantially
in the form of Exhibit A to the Placement Agency Agreement (the “Lock-Up Agreement”); and (iii) the issuance of shares
of Common Stock or securities convertible into or exercisable for shares of Common Stock in connection with the Company entering into
an agreement providing for the acquisition by the Company of the securities, business, or other assets of another person or entity or
pursuant to an employee benefit plan assumed by the Company in connection with such acquisition, whether entered into during or prior
to the Restricted Period; provided that the total number of shares of Common Stock issued pursuant to this clause (iii) shall not exceed
10% of the total number of shares of the Company’s Common Stock issued and outstanding immediately following the completion of the
transactions contemplated by this Agreement (determined on a fully diluted basis and as adjusted for stock splits, stock dividends and
other similar events after the date hereof); provided, further, that the recipients of any shares of Common Stock or securities convertible
into or exercisable for shares of Common Stock issued pursuant to this clause (iii) during the Restricted Period shall enter into an agreement
substantially in the form of Exhibit A to the Placement Agency Agreement with respect to the remaining portion of the Restricted Period
on or prior to the date of such issuance.
(v)
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
ARTICLE
IV
Miscellaneous
4.1
Termination. This Agreement may be terminated by the Purchasers or by the Company
by written notice to the other party if the Closing has not been consummated on or before November 9, 2023; provided, however, that no
such termination will affect the right of any party to sue for any breach by any other party (or parties).
4.2
Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchasers.
4.3
Entire Agreement. The Transaction Documents, together with the exhibits and schedules
thereto, and the Prospectus, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.
Securities Purchase Agreement | | Page 17 |
4.4
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers, or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right
hereunder in any manner impair the exercise of any such right.
4.5
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchasers. Following the Closing, any Purchaser may assign any or all of its rights under this
Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to
be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the Purchasers.
4.6
No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns only, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
4.7
Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the
State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the County of New York, New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the County of New York, New York, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or
Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that such court is an improper or inconvenient
venue for such suit, action or Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. If either party shall commence a suit, action or Proceeding to enforce any provisions of
the Transaction Documents, then the prevailing party in such suit, action or Proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other reasonable costs and expenses incurred with the investigation, preparation and prosecution
of such suit, action or Proceeding.
4.8
Execution. This Agreement may be executed by electronic signature and in counterparts,
all of which when taken together shall be considered one and the same agreement and this Agreement shall become effective when each party
has delivered its signature to the other party. In the event that any signature is delivered by electronic signature, facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed), with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.
Securities Purchase Agreement | | Page 18 |
4.9
Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants
and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.
4.10
Remedies. In addition to being entitled to exercise all rights provided herein or
granted by law, including recovery of damages, the Purchasers and the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages would not be adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance
of any such obligation the defense that a remedy at law would be adequate. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein
provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.
4.11
Independent Nature of Purchasers’ Obligations and Rights. The obligations of
each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser
shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create
a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including,
without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by
its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so
by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and
among the Purchasers.
4.12
Liquidated Damages. The Company’s obligation to pay any amounts owing under
the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid amounts have been paid, notwithstanding
the fact that the instrument or security pursuant to which such amounts are due and payable shall have been canceled.
4.13
Construction. The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents
or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document
shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.
4.14
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
[Signature
Pages Follow]
Securities Purchase Agreement | | Page 19 |
IN
WITNESS WHEREOF, the parties hereto have caused this Common Stock Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
BIOFRONTERA INC. |
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Address for Notice: |
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Biofrontera Inc. |
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120 Presidential Way, Suite 330 |
By: |
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Woburn, Massachusetts 01801 |
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E. Fred Leffler, III |
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Attention: Fred Leffler |
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Chief Financial Officer |
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Email: f.leffler@bfinc.com |
With a copy
to (which shall not constitute notice):
McGuireWoods
LLP
1251 Avenue
of the Americas, 20th Floor
New York, New
York 10020
Attention: Stephen
Older
Email: solder@mcguirewoods.com
Common Stock Purchase Agreement | Company Signature Page |
IN
WITNESS WHEREOF, the undersigned has caused this Common Stock Purchase Agreement to be duly executed by an authorized signatory as of
the date first indicated above.
Name of Purchaser: |
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Signature of Authorized Signatory of Purchaser: |
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Title of Authorized Signatory: |
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Email Address of Authorized Signatory: |
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Address for Notice to Purchaser: |
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Address for Delivery of Pre-Funded Warrant (if not same address for notice): |
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DWAC information for Shares and Warrants |
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Common Stock Purchase Agreement | Company Signature Page |
EXHIBIT A
Investor | |
Subscription Amount | |
Number of Shares Subscribed For | |
Number of Pre- Funded Warrants Subscribed For | |
Number of Warrants Subscribed For |
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Common Stock Purchase Agreement | Company Signature Page |
EXHIBIT B
Form of Warrant
[see attached]
Common Stock Purchase Agreement | Company Signature Page |
EXHIBIT C
Form of Pre-Funded Warrant
[see attached]
Common Stock Purchase Agreement | Company Signature Page |
Exhibit
10.2
Execution
Version
PLACEMENT
AGENCY AGREEMENT
October
30, 2023
Roth
Capital Partners, LLC
57
W 57th Street, 16th Floor
New
York, NY 10019
Ladies
and Gentlemen:
Introduction.
Subject to the terms and conditions herein (this “Agreement”), Biofrontera Inc., a Delaware corporation (the “Company”),
hereby agrees to sell up to an aggregate of $4,506,700 of registered securities of the Company, consisting of 150,000 shares (the “Shares”)
of the Company’s common stock, $0.001 par value per share (the “Common Stock”), pre-funded Common Stock purchase
warrants to purchase up to an aggregate of 1,055,000 shares of Common Stock (the “Pre-Funded Warrants”, and the Shares
issuable upon exercise thereof, the “Pre-Funded Warrant Shares”), and common stock purchase warrants to purchase up
to an aggregate of 1,807,500 shares of Common Stock (the “Warrants”, and the Shares issuable upon exercise thereof,
the “Warrant Shares”, and, together with the Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares, the
“Securities”) directly to various investors (each, an “Investor” and, collectively, the “Investors”)
through Roth Capital Partners, LLC, as placement agent (the “Placement Agent”). The documents executed and delivered
by the Company and the Investors in connection with the Offering (as defined below), including, without limitation, a securities purchase
agreement (the “Purchase Agreement”), shall be collectively referred to herein as the “Transaction Documents.”
The combined purchase price to the Investors for each Share and accompanying Warrant is $3.74 and for each Pre-Funded Warrant and accompanying
Warrant is $3.7399, the exercise price to the Investors for each share of Common Stock issuable upon exercise of the Pre-Funded Warrants
is $0.0001, and the exercise price to the Investors for each share of Common Stock issuable upon exercise of the Warrants is $3.55. The
Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Offering.
The
Company hereby confirms its agreement with the Placement Agent as follows:
Section
1. Agreement to Act as Placement Agent.
(a)
On the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and conditions
of this Agreement, the Placement Agent shall be the exclusive placement agent in connection with the offering and sale by the Company
of the Securities pursuant to the Company’s registration statement on Form S-1 (File No. 333-274871) (and including any registration
statement prepared and filed by the Company in accordance with Rule 462(b) pursuant to the Securities Act) (the “Registration
Statement”), with the terms of such offering (the “Offering”) to be subject to market conditions and negotiations
between the Company, the Placement Agent and the prospective Investors. The Placement Agent will act on a reasonable best efforts basis
and the Company agrees and acknowledges that there is no guarantee of the successful placement of the Securities, or any portion thereof,
in the prospective Offering. Under no circumstances will the Placement Agent or any of its “Affiliates” (as defined below)
be obligated to underwrite or purchase any of the Securities for its own account or otherwise provide any financing. The Placement Agent
shall act solely as the Company’s agent and not as principal. The Placement Agent shall market the Securities only to “accredited
investors” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act of
1933, as amended (the “Securities Act”). The Placement Agent shall have no authority to bind the Company with respect
to any prospective offer to purchase the Securities and the Company shall have the sole right to accept offers to purchase the Securities
and may reject any such offer, in whole or in part. Subject to the terms and conditions hereof, payment of the purchase price for, and
delivery of, the Securities shall be made at one or more closings (each a “Closing” and the date on which each Closing
occurs, a “Closing Date”). The Closing shall occur via “Delivery Versus Payment”, i.e., on the Closing
Date, the Company shall issue the Shares directly to the account designated by the Placement Agent and, upon receipt of such Shares,
the Placement Agent shall electronically deliver such Shares to the applicable Investor and payment shall be made by the Placement Agent
(or its clearing firm) by wire transfer to the Company. As compensation for services rendered, on each Closing Date, the Company shall
pay to the Placement Agent the fees and expenses set forth below:
(i)
A cash fee equal to 7.0% of the gross proceeds received by the Company from the sale of the Securities at the closing of the Offering
(the “Closing”).
(ii)
The Company also agrees to reimburse Placement Agent’s expenses (with supporting invoices/receipts), including, but not limited
to, the expenses of Placement Agent’s legal counsel, up to $100,000.
(b)
The term of the Placement Agent’s exclusive engagement will be as set forth in Section 1 of the Engagement Agreement (as defined
below). Notwithstanding anything to the contrary contained herein, the provisions concerning confidentiality, indemnification and contribution
contained herein and the Company’s obligations contained in the indemnification provisions will survive any expiration or termination
of this Agreement, and the Company’s obligation to pay fees actually earned and payable and to reimburse expenses actually incurred
and reimbursable pursuant to Section 1 hereof and which are permitted to be reimbursed under the applicable FINRA Rules, will survive
any expiration or termination of this Agreement. Nothing in this Agreement shall be construed to limit the ability of the Placement Agent
or its Affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business
relationship with Persons (as defined below) other than the Company. As used herein (i) “Persons” means an individual or
corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind and (ii) “Affiliate” means any Person that,
directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such
terms are used in and construed under Rule 405 under the Securities Act.
Section
2. Representations, Warranties and Covenants of the Company. The Company hereby represents, warrants and covenants to the Placement
Agent as of the date hereof, and as of each Closing Date, unless such representation, warranty or agreement specifies a different date
or time, as follows:
(a)
Securities Law Filings. The Company has filed with the Securities and Exchange Commission (the “Commission”)
the Registration Statement under the Securities Act, which was filed on October 5, 2023 and declared effective on October 30, 2023 for
the registration of the Securities under the Securities Act. Following the determination of pricing among the Company and the prospective
Investors introduced to the Company by Placement Agent, the Company will file with the Commission pursuant to Rules 430A and 424(b) under
the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder,
a final prospectus relating to the placement of the Securities, their respective pricings and the plan of distribution thereof and will
advise the Placement Agent of all further information (financial and other) with respect to the Company required to be set forth therein.
Such registration statement, at any given time, including the exhibits thereto filed at such time, as amended at such time, is hereinafter
called the “Registration Statement”; such prospectus in the form in which it appears in the Registration Statement
at the time of effectiveness, is hereinafter called the “Preliminary Prospectus”; and the final prospectus, in the
form in which it will be filed with the Commission pursuant to Rules 430A and/or 424(b) (including the Preliminary Prospectus as it may
be amended or supplemented) is hereinafter called the “Final Prospectus.” The Registration Statement at the time it
originally became effective is hereinafter called the “Original Registration Statement.” Any reference in this Agreement
to the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Final Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein (the “Incorporated Documents”), if any, which
were or are filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at any given time, as
the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date
of the Preliminary Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. All references
in this Agreement to financial statements and schedules and other information which is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration Statement, the
Preliminary Prospectus or the Final Prospectus (and all other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement,
the Preliminary Prospectus or the Final Prospectus, as the case may be. As used in this paragraph and elsewhere in this Agreement, “Time
of Sale Disclosure Package” means the Preliminary Prospectus, any subscription agreement between the Company and the Investors,
the final terms of the Offering provided to the Investors (orally or in writing), and any issuer free writing prospectus as defined in
Rule 433 of the Act (each, an “Issuer Free Writing Prospectus”), if any, that the parties hereto shall hereafter expressly
agree in writing to treat as part of the Time of Sale Disclosure Package. The term “any Prospectus” shall mean, as
the context requires, the Preliminary Prospectus, the Final Prospectus and any supplement to either thereof. The Company has not received
any notice that the Commission has issued or intends to issue a stop order suspending the effectiveness of the Registration Statement
or the use of the Preliminary Prospectus or any Prospectus or intends to commence a proceeding for any such purpose.
(b)
Assurances. The Original Registration Statement, as amended, (and any further documents to be filed with the Commission) contains
all exhibits and schedules as required by the Securities Act and the Company was at the time of the filing of the Registration Statement
eligible to use Form S-1. Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective,
complied in all material respects with the Securities Act and the applicable Rules and Regulations and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
The Final Prospectus, as of its date, complied or will comply in all material respects with the Securities Act and the applicable Rules
and Regulations. The Final Prospectus, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events
arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein
is required to be filed with the Commission. Except for this Agreement and the Transaction Documents, there are no documents required
to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant
to the Securities Act or (y) will not be filed within the requisite time period. Except for this Agreement and the Transaction Documents,
there are no contracts or other documents required to be described in Final Prospectus, or to be filed as exhibits or schedules to the
Registration Statement, which have not been described or filed as required. The foregoing shall not apply to statements in, or omissions
from, any such document made in reliance upon, and in conformity with, information furnished to the Company by the Placement Agent specifically
for use in the preparation thereof.
(c)
Offering Materials. Neither the Company nor any of its directors and officers has distributed and none of them will distribute,
prior to each Closing Date, any offering material in connection with the offering and sale of the Securities other than the Time of Sale
Disclosure Package.
(d)
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in the Company’s SEC Reports (as
defined below). The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free
and clear of any lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction (each,
a “Lien” and collectively, the “Liens”), and all of the issued and outstanding shares of capital
stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe
for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction
Documents shall be disregarded, and if the Company only has one Subsidiary all references to Subsidiaries shall be deemed to refer to
such Subsidiary.
(e)
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in: (i) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (ii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i)
or (ii) , a “Material Adverse Effect”) and no action, claim, suit, investigation or proceeding (including, without
limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened (each, a “Proceeding”)
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.
(f)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith
other than in connection with the Required Approvals (as hereinafter defined). This Agreement and each other Transaction Document to
which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
(g)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(h)
Reliance. The Company has not relied upon the Placement Agent or legal counsel for the Placement Agent for any legal, tax or accounting
advice in connection with the offering and sale of the Securities.
(i)
Forward-Looking Statements. No forward-looking statements (within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act) contained in the Time of Sale Disclosure Package has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(j)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filing
with the Commission of the Final Prospectus, (ii) such filings as are required to be made under applicable state securities laws and
(iii) the listing of additional shares notification to the Trading Market (as defined below) for the Securities (collectively, the “Required
Approvals”). “Trading Market” means any of the following markets or exchanges on which the Common Stock
is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, the New York Stock Exchange, the Pink Open Market, OTCQB or the OTCQX (or any successors to any of the foregoing).
(k)
Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents. The Warrant Shares and Pre-Funded Warrant Shares, when
issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear
of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved
from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement, the Warrants
and the Pre-Funded Warrants.
(l)
Capitalization. The capitalization of the Company is as set forth on the SEC Reports. The Company has not issued any capital stock
since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under
the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents (as defined below) outstanding as of
the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as
a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable
for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or
contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional
shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not
obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Investors).
There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion,
exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no
outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security
of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There
are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders other than as disclosed
in the SEC Reports.
(m)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein
as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer
subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(n)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as set forth in the SEC Reports there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice
and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment
of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth in the SEC Reports, no event,
liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect
to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that
would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made
that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.
(o)
Litigation. Except as set forth in the SEC Reports and/or the Preliminary Prospectus, there is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an “Action”). None of the Actions set forth in
the SEC Reports and/or the Preliminary Prospectus, (i) adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor to the knowledge of the Company, any director or officer
thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws
or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or threatened,
any investigation by the Commission of the Company or any current or former director or officer of the Company. The Commission has not
issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary
under the Exchange Act or the Securities Act.
(p)
Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the
employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its
Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary,
and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company
or any Subsidiary is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in
favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries
to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in material compliance with all U.S.
federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment
and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(q)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be
expected to result in a Material Adverse Effect.
(r)
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating
to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have
received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and
(iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(s)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
(t)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which
is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
(u)
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Except
as disclosed in the SEC Reports, none of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two years from the date of this Agreement. Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary has
received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise
has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have,
or not reasonably be expected to have, a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(v)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company
nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase
in cost.
(w)
Transactions with Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to
or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other
employee benefits, including stock option agreements under any stock option plan of the Company.
(x)
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are applicable to it as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and
designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it
files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of
the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act
(such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations
as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as
such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely
to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
(y)
Certain Fees. Except for the fees payable by the Placement Agent in connection with the transactions contemplated by the Transaction
Documents, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker,
financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Investors shall have no obligation with respect to any fees or with respect to any claims made by or
on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated
by the Transaction Documents.
(z)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(aa)
Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities
Act of any securities of the Company or any Subsidiary.
(bb)
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. Except as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received
notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. The Common Stock is currently eligible for electronic transfer through
the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository
Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(cc)
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to the Investors as a result of the Investors and the Company fulfilling
their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s
issuance of the Securities and the Investors’ ownership of the Securities.
(dd)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Investors or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms
that the Investors will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure
furnished by or on behalf of the Company to the Investors regarding the Company and its Subsidiaries, their respective businesses and
the transactions contemplated hereby is true and correct and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made,
not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as
a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made and when made, not misleading.
(ee)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt
by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its
business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements
of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii)
the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any
facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date. The SEC Reports sets forth as of the date hereof all outstanding secured
and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes
of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other
than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to
be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(ff)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income
and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii)
has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material
taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no
basis for any such claim.
(gg)
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any
agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf
of which the Company is aware) which is in violation of law or (iv) taken any action that would reasonably be expected to subject the
Company to any damage or penalty in any criminal or governmental litigation or proceeding under any provision of FCPA.
(hh)
Accountants. To the knowledge and belief of the Company, Marcum LLP (the “Accountants”) is a registered public
accounting firm as required by the Exchange Act.
(ii)
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.
(jj)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection
with the placement of the Securities.
(kk)
FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under
the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured,
packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is, to the knowledge of the Company, being manufactured, packaged, labeled, tested,
distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and
regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing
practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing
of reports, except where the failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or,
to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding,
charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries
has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the
premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the
testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall,
suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical
Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production
at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction
with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company
or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties,
business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws,
rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license
or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any
concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.
(ll)
Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the
Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or
prospects.
(mm)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
(nn)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within
the meaning of Section 897 of the Internal Revenue Code of 1986, as amended.
(oo)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly,
five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(pp)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance in
all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened.
Section
3. Delivery and Payment. Each Closing shall occur at the offices of Faegre Drinker Biddle & Reath LLP, 200 Wells Fargo Center
90 S. Seventh Street, Minneapolis, Minnesota 55402 (“Placement Agent Counsel”) (or at such other place as shall be
agreed upon by the Placement Agent and the Company). Subject to the terms and conditions hereof, at each Closing payment of the purchase
price for the Securities sold on such Closing Date shall be made by Federal Funds wire transfer, against delivery of such Securities,
and such Securities shall be registered in such name or names and shall be in such denominations, as the Placement Agent may request
at least one business day before the Closing Date.
Deliveries
of the documents with respect to the purchase of the Securities, if any, shall be made at the offices of Placement Agent Counsel. All
actions taken at a Closing shall be deemed to have occurred simultaneously.
Section
4. Covenants and Agreements of the Company. The Company further covenants and agrees with the Placement Agent as follows:
(a)
Registration Statement Matters. The Company will advise the Placement Agent promptly after it receives notice thereof of the time
when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Final Prospectus has been
filed and will furnish the Placement Agent with copies thereof. The Company will file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 14 or 15(d) of the Exchange
Act subsequent to the date of any Prospectus and for so long as the delivery of a prospectus is required in connection with the Offering.
The Company will advise the Placement Agent, promptly after it receives notice thereof (i) of any request by the Commission to amend
the Registration Statement or to amend or supplement any Prospectus or for additional information, and (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or any order directed
at any Incorporated Document, if any, or any amendment or supplement thereto or any order preventing or suspending the use of the Preliminary
Prospectus or the Final Prospectus or any prospectus supplement or any amendment or supplement thereto or any post-effective amendment
to the Registration Statement, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of
the institution or threatened institution of any proceeding for any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or a Prospectus or for additional information. The Company shall use its best efforts
to prevent the issuance of any such stop order or prevention or suspension of such use. If the Commission shall enter any such stop order
or order or notice of prevention or suspension at any time, the Company will use its best efforts to obtain the lifting of such order
at the earliest possible moment, or will file a new registration statement and use its best efforts to have such new registration statement
declared effective as soon as practicable. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b),
430A, 430B and 430C, as applicable, under the Securities Act, including with respect to the timely filing of documents thereunder, and
will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) are received in a timely manner
by the Commission.
(b)
Blue Sky Compliance. The Company will cooperate with the Placement Agent and the Investors in endeavoring to qualify the Securities
for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent and the Investors may reasonably
request and will make such applications, file such documents, and furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in
any jurisdiction where it is not now so qualified or required to file such a consent, and provided further that the Company shall not
be required to produce any new disclosure document. The Company will, from time to time, prepare and file such statements, reports and
other documents as are or may be required to continue such qualifications in effect for so long a period as the Placement Agent may reasonably
request for distribution of the Securities. The Company will advise the Placement Agent promptly of the suspension of the qualification
or registration of (or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation
or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration
or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.
(c)
Amendments and Supplements to a Prospectus and Other Matters. The Company will comply with the Securities Act and the Exchange
Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and any Prospectus. If during the period in which a prospectus is required by law to be delivered in
connection with the distribution of Securities contemplated by any Prospectus (the “Prospectus Delivery Period”),
any event shall occur as a result of which, in the judgment of the Company or in the opinion of the Placement Agent or counsel for the
Placement Agent, it becomes necessary to amend or supplement any Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, as the case may be, not misleading, or if it is necessary at any time to amend or supplement
any Prospectus , the Company will promptly prepare and file with the Commission, and furnish at its own expense to the Placement Agent
and to dealers, an appropriate amendment to the Registration Statement or supplement to the Registration Statement or any Prospectus
that is necessary in order to make the statements in any Prospectus as so amended or supplemented, in light of the circumstances under
which they were made, as the case may be, not misleading, or so that the Registration Statement, or any Prospectus, as so amended or
supplemented, will comply with law. Before amending the Registration Statement or supplementing any Prospectus in connection with the
Offering, the Company will furnish the Placement Agent with a copy of such proposed amendment or supplement and will not file any such
amendment or supplement to which the Placement Agent reasonably objects.
(d)
Copies of any Amendments and Supplements to a Prospectus. The Company will furnish the Placement Agent, without charge, during
the period beginning on the date hereof and ending on the later of the last Closing Date of the Offering, as many copies of any Prospectus
or prospectus supplement and any amendments and supplements thereto, as the Placement Agent may reasonably request.
(e)
Free Writing Prospectus. The Company covenants that it will not, unless it obtains the prior written consent of the Placement
Agent, make any offer relating to the Securities that would constitute an Company Free Writing Prospectus or that would otherwise constitute
a “free writing prospectus” (as defined in Rule 405 of the Securities Act) required to be filed by the Company with
the Commission or retained by the Company under Rule 433 of the Securities Act. In the event that the Placement Agent expressly consents
in writing to any such free writing prospectus (a “Permitted Free Writing Prospectus”), the Company covenants that
it shall (i) treat each Permitted Free Writing Prospectus as an Company Free Writing Prospectus, and (ii) comply with the requirements
of Rule 164 and 433 of the Securities Act applicable to such Permitted Free Writing Prospectus, including in respect of timely filing
with the Commission, legending and record keeping.
(f)
Transfer Agent. The Company will maintain, at its expense, a registrar and transfer agent for the Common Stock.
(g)
Earnings Statement. As soon as practicable and in accordance with applicable requirements under the Securities Act, but in any
event not later than 18 months after the last Closing Date, the Company will make generally available to its security holders and to
the Placement Agent an earnings statement, covering a period of at least 12 consecutive months beginning after the last Closing Date,
that satisfies the provisions of Section 11(a) and Rule 158 under the Securities Act.
(h)
Periodic Reporting Obligations. During the Prospectus Delivery Period, the Company will duly file, on a timely basis, with the
Commission and the Trading Market all reports and documents required to be filed under the Exchange Act within the time periods and in
the manner required by the Exchange Act.
(i)
Additional Documents. The Company will enter into any subscription, purchase or other customary agreements as the Placement
Agent or the Investors deem necessary or appropriate to consummate the Offering, all of which will be in form and substance reasonably
acceptable to the Placement Agent and the Investors. The Company agrees that the Placement Agent may rely upon, and each is a third party
beneficiary of, the representations and warranties, and applicable covenants, set forth in any such purchase, subscription or other agreement
with Investors in the Offering.
(j)
Reservation of Common Stock. As of the Closing Date, the Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company
to issue the Shares, the Warrant Shares pursuant to any exercise of the Warrants and the Pre-Funded Warrant Shares pursuant to any exercise
of the Pre-Funded Warrants.
(k)
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be otherwise be disclosed by the Company, the Company covenants and agrees that neither it, nor any other Person
acting on its behalf will provide any Investor or its agents or counsel with any information that constitutes, or the Company reasonably
believes constitutes, material non-public information, unless prior thereto such Investor shall have consented in writing to the receipt
of such information and agreed in writing with the Company to keep such information confidential. The Company understands and confirms
that each Investor shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that
the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates delivers any material,
non-public information to a Investor without such Investor’s consent, the Company hereby covenants and agrees that such Investor
shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees,
Affiliates or agents, including, without limitation, the Placement Agent, or a duty to the Company, any of its Subsidiaries or any of
their respective officers, directors, employees, Affiliates or agents, including, without limitation, the Placement Agent, not to trade
on the basis of, such material, non-public information, provided that the Investor shall remain subject to applicable law. To the extent
that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the
Company or any Subsidiaries, the Company shall simultaneously with the delivery of such notice file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Company understands and confirms that each Investor shall be relying on the foregoing covenant in
effecting transactions in securities of the Company.
(l)
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder as set forth in the Preliminary
Prospectus and the Final Prospectus.
(m)
Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock
on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all
of the Shares, Pre-Funded Warrant Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares,
Pre-Funded Warrant Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will then include in such application all of the Shares, Pre-Funded Warrant Shares and Warrant
Shares, and will take such other action as is necessary to cause all of the Shares, Pre-Funded Warrant Shares and Warrant Shares to be
listed or quoted on such other Trading Market as promptly as possible. The Company will then take all reasonable action necessary to
continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to take all reasonable action to maintain
the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation,
including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation
in connection with such electronic transfer.
(n)
Subsequent Equity Sales.
(i)
From the date hereof until 60 days after the date of the Final Prospectus (the “Restricted Period”), unless otherwise
consented to by the Placement Agent, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce
the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents (as defined below) or (ii) file any registration
statement or amendment or supplement thereto, other than the Final Prospectus, supplements to its registration statements to reflect
the effect of the reverse stock split effective on July 3, 2023 or filing a registration statement on Form S-8 in connection with any
employee benefit plan or a post-effective amendment to its registration statement in connection with the publicly traded warrants (File
No. 333-257722), provided the sole purpose of such post-effective amendment is to update the registration statement to permit forward
incorporation by reference.
(ii)
From the date hereof until 180 days after the date of the Final Prospectus, 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 or Common Stock Equivalents (or a
combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which
the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include
the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price
that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial
issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly
or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction
under, any agreement, including, but not limited to, an equity line of credit or an “at-the-market offering”, whereby the
Company may issue securities at a future determined price. Any Investor shall be entitled to obtain injunctive relief against the Company
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
(iii)
Notwithstanding the foregoing, this Section 4(n) shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction
shall be an Exempt Issuance.
(iv)
The term “Exempt Issuance” means: (i) the issuance of shares of Common Stock or securities convertible into or exercisable
for shares of Common Stock pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of warrants
or options (including net exercise) or the issuance of shares of Common Stock underlying restricted stock units (“RSUs”)
or performance stock units (“PSUs”) (including net settlement), in each case outstanding on the date of this Agreement
and described in the Final Prospectus; (ii) grants of stock options, stock awards, restricted stock, RSUs, PSUs, or any other equity
awards and the issuance of shares of Common Stock or securities convertible into or exercisable or exchangeable for shares of Common
Stock (whether upon the exercise of stock options or otherwise) to the Company’s employees, officers, directors, advisors, or consultants
pursuant to the terms of an equity compensation plan in effect as of the Closing Date and described in the Final Prospectus; provided
that, in each case, such recipients who are directors or executive officers have delivered a lock-up agreement to the Placement Agent
substantially in the form of Exhibit A hereto (the Lock-Up Agreement”); and (iii) the issuance of shares of Common Stock
or securities convertible into or exercisable for shares of Common Stock in connection with the Company entering into an agreement providing
for the acquisition by the Company of the securities, business, or other assets of another person or entity or pursuant to an employee
benefit plan assumed by the Company in connection with such acquisition, whether entered into during or prior to the Restricted Period;
provided that the total number of shares of Common Stock issued pursuant to this clause (iii) shall not exceed 10% of the total number
of shares of the Company’s Common Stock issued and outstanding immediately following the completion of the transactions contemplated
by this Agreement (determined on a fully diluted basis and as adjusted for stock splits, stock dividends and other similar events after
the date hereof); provided, further, that the recipients of any shares of Common Stock or securities convertible into or exercisable
for shares of Common Stock issued pursuant to this clause (iii) during the Restricted Period shall enter into an agreement substantially
in the form of Exhibit A hereto with respect to the remaining portion of the Restricted Period on or prior to the date of such issuance.
(v)
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder
thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.
(o)
Furnishing of Information. Until the earliest of the time that (i) no Investor owns Securities or (ii) the Warrants and/or Pre-Funded
Warrants have expired, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not
then subject to the reporting requirements of the Exchange Act.
(p)
Lock-Up Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements except
to extend the term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms. If
any party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use its best efforts to seek
specific performance of the terms of such Lock-Up Agreement.
(q)
Warrant Shares and Pre-Funded Warrant Shares. If all or any portion of a Warrant or Pre-Funded Warrant is exercised at a time
when there is an effective registration statement to cover the issuance or resale of the Warrant Shares or the Pre-Funded Warrant Shares
or if the Warrant or Pre-Funded Warrant is exercised via cashless exercise, the Warrant Shares and Pre-Funded Warrant Shares issued pursuant
to any such exercise shall be issued free of all legends. If at any time following the date hereof the Registration Statement (or any
subsequent registration statement registering the sale or resale of the Warrant Shares and/or the Pre-Funded Warrant Shares) is not effective
or is not otherwise available for the sale or resale of the Warrant Shares and/or Pre-Funded Warrant Shares, the Company shall immediately
notify the holders of the Warrants and/or Pre-Funded Warrants in writing that such registration statement is not then effective and thereafter
shall promptly notify such holders when the registration statement is effective again and available for the sale or resale of the Warrant
Shares and/or Pre-Funded Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company
to issue, or any Investor to sell, any of the Warrant Shares and/or Pre-Funded Warrant Shares in compliance with applicable federal and
state securities laws). The Company shall use best efforts to keep a registration statement (including the Registration Statement) registering
the issuance or resale of the Warrant Shares and/or Pre-Funded Warrant Shares effective during the term of the Warrants and/or Pre-Funded
Warrants.
(r)
No Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result in,
or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities
of the Company.
(s)
Acknowledgment. The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit
and use of the Board of Directors of the Company and may not be used, reproduced, disseminated, quoted or referred to, without the Placement
Agent’s prior written consent.
(t)
Securities Law Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material
terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company
shall have publicly disclosed all material, non-public information delivered to any of the Investors by the Company or any of its Subsidiaries,
or any of their respective officers, directors, employees, Affiliates or agents, including, without limitation, the Placement Agent,
in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press
release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written
or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees, Affiliates or
agents, including, without limitation, the Placement Agent, on the one hand, and any of the Investor or any of their Affiliates on the
other hand, shall terminate and be of no further force or effect. The Company understands and confirms that each Investor shall rely
on the foregoing covenant in effecting transactions in securities of the Company. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Investor, or include the name of any Investor in any filing with the Commission or any regulatory agency
or Trading Market, without the prior written consent of such Investor, except (a) as required by federal securities law in connection
with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Investors with prior notice of such disclosure permitted under this clause
(b) and reasonably cooperate with such Investors regarding such disclosure. “Disclosure Time” means, (i) if this Agreement
is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any
Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as
to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New
York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise instructed as to
an earlier time by the Placement Agent.
(u)
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person,
that any Investor is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Investor could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under
the Transaction Documents.
(v)
Announcement of Offering. The Company acknowledges and agrees that the Placement Agent may, subsequent to the Closing, make public
its involvement with the Offering.
(w)
Reliance on Others. The Company confirms that it will rely on its own counsel and accountants for legal and accounting advice.
(x)
Research Matters. By entering into this Agreement, the Placement Agent does not
provide any promise, either explicitly or implicitly, of favorable or continued research coverage of the Company and the Company hereby
acknowledges and agrees that the Placement Agent’s selection as a placement agent for the Offering was in no way conditioned, explicitly
or implicitly, on the Placement Agent providing favorable or any research coverage of the Company. In accordance with FINRA Rule 2711(e),
the parties acknowledge and agree that the Placement Agent has not directly or indirectly offered favorable research, a specific rating
or a specific price target, or threatened to change research, a rating or a price target, to the Company or inducement for the receipt
of business or compensation.
Section
5. Conditions of the Obligations of the Placement Agent. The obligations of the Placement Agent hereunder shall be subject to the
accuracy of the representations and warranties on the part of the Company set forth in Section 2 hereof, in each case as of the date
hereof and as of each Closing Date as though then made, to the timely performance by each of the Company of its covenants and other obligations
hereunder on and as of such dates, and to each of the following additional conditions:
(a)
Accountant’s Comfort Letter. The Placement Agent shall have received, and the Company shall have caused to be delivered
to the Placement Agent, a letter from Marcum LLP (the independent registered public accounting firm of the Company), addressed to the
Placement Agent, dated as of the date hereof and each Closing Date, in form and substance satisfactory to the Placement Agent. The letter
shall not disclose any change in the condition (financial or other), earnings, operations, business or prospects of the Company from
that set forth in the applicable Prospectus or prospectus supplement, which, in the Placement Agent’s sole judgment, is material
and adverse and that makes it, in the Placement Agent’s sole judgment, impracticable or inadvisable to proceed with the Offering
of the Securities as contemplated by such Prospectus.
(b)
Compliance with Registration Requirements; No Stop Order; No Objection from the FINRA. Each Prospectus (in accordance with Rule
424(b)) and “free writing prospectus” (as defined in Rule 405 of the Securities Act), if any, shall have been duly
filed with the Commission, as appropriate; no stop order suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no order preventing
or suspending the use of any Prospectus shall have been issued and no proceeding for that purpose shall have been initiated or threatened
by the Commission; no order having the effect of ceasing or suspending the distribution of the Securities or any other securities of
the Company shall have been issued by any securities commission, securities regulatory authority or stock exchange and no proceedings
for that purpose shall have been instituted or shall be pending or, to the knowledge of the Company, contemplated by any securities commission,
securities regulatory authority or stock exchange; all requests for additional information on the part of the Commission shall have been
complied with; and the FINRA shall have raised no objection to the fairness and reasonableness of the placement terms and arrangements.
(c)
Corporate Proceedings. All corporate proceedings and other legal matters in connection with this Agreement, the Registration Statement
and each Prospectus, and the registration, sale and delivery of the Securities, shall have been completed or resolved in a manner reasonably
satisfactory to the Placement Agent’s counsel, and such counsel shall have been furnished with such papers and information as it
may reasonably have requested to enable such counsel to pass upon the matters referred to in this Section 5.
(d)
No Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to each Closing Date, in the
Placement Agent’s sole judgment after consultation with the Company, there shall not have occurred any Material Adverse Effect
or any material adverse change or development involving a prospective material adverse change in the condition or the business activities,
financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement and
Prospectus (“Material Adverse Change”).
(e)
Opinion of Counsel for the Company. The Placement Agent shall have received on each Closing Date the favorable opinion of McGuireWoods
LLP, counsel to the Company, dated as of such Closing Date, including, without limitation, a negative assurance letter addressed to the
Placement Agent and in form and substance satisfactory to the Placement Agent.
(f)
Officers’ Certificate. The Placement Agent shall have received on each Closing Date a certificate of the Company, dated
as of such Closing Date, signed by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect that, and the
Placement Agent shall be satisfied that, the signers of such certificate have reviewed the Registration Statement, the Final Prospectus,
and this Agreement and to the further effect that:
(i)
The representations and warranties of the Company in this Agreement are true and correct, as if made on and as of such Closing Date,
and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date;
(ii)
No stop order suspending the effectiveness of the Registration Statement or the use of the Final Prospectus has been issued and no proceedings
for that purpose have been instituted or are pending or, to the Company’s knowledge, threatened under the Securities Act; no order
having the effect of ceasing or suspending the distribution of the Securities or any other securities of the Company has been issued
by any securities commission, securities regulatory authority or stock exchange in the United States and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory
authority or stock exchange in the United States;
(iii)
When the Registration Statement became effective, at the time of sale, and at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Incorporated Documents, if any, when such documents became effective or were filed with
the Commission, and any Prospectus, contained all material information required to be included therein by the Securities Act and the
Exchange Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and in all material respects
conformed to the requirements of the Securities Act and the Exchange Act and the applicable rules and regulations of the Commission thereunder,
as the case may be, and the Registration Statement and the Incorporated Documents, if any, and any Prospectus, did not and do not include
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 light of the circumstances under which they were made, not misleading (provided, however, that the preceding representations
and warranties contained in this paragraph (iii) shall not apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the Placement Agent expressly for use therein) and, ; and
(iv)
Subsequent to the respective dates as of which information is given in the Registration Statement, and the Final Prospectus, there has
not been: (a) any Material Adverse Change; (b) any transaction that is material to the Company and the Subsidiaries taken as a whole,
except transactions entered into in the ordinary course of business; (c) any obligation, direct or contingent, that is material to the
Company and the Subsidiaries taken as a whole, incurred by the Company or any Subsidiary, except obligations incurred in the ordinary
course of business; (d) any material change in the capital stock (except changes thereto resulting from the exercise of outstanding stock
options or warrants) or outstanding indebtedness of the Company or any Subsidiary; (e) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company; or (f) any loss or damage (whether or not insured) to the property of the Company or
any Subsidiary which has been sustained or will have been sustained which has a Material Adverse Effect.
(g)
Stock Exchange Listing. The Common Stock shall be registered under the Exchange Act and shall be listed on the Trading Market,
and the Company shall not have taken any action designed to terminate, or likely to have the effect of terminating, the registration
of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from the Trading Market, nor shall
the Company have received any information suggesting that the Commission or the Trading Market is contemplating terminating such registration
or listing except as disclosed in any Prospectus.
(h)
Lock-Up Agreements. On the Closing Date, the Placement Agent shall have received the executed lock-up agreement, in the form attached
hereto as Exhibit A, from each of the directors and officers of the Company.
(i)
[Reserved].
(j)
CFO Certificate. On the date hereof and on each Closing Date, the Company shall have furnished to the Placement Agent, a certificate,
dated as of such date, signed on behalf of the Company by its chief financial officer, regarding certain financial information included
in any Prospectus or in certain materials related to the Offering, in form and substance reasonably satisfactory to the Placement Agent.
(k)
Additional Documents. On or before each Closing Date, the Placement Agent and counsel for the Placement Agent shall have received
such information and documents as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of
the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
If
any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by
the Placement Agent by notice to the Company at any time on or prior to a Closing Date, which termination shall be without liability
on the part of any party to any other party, except that Section 6 (Payment of Expenses), Section 7 (Indemnification and Contribution)
and Section 8 (Representations and Indemnities to Survive Delivery) shall at all times be effective and shall survive such termination.
Section
6. Payment of Expenses. In addition to the expenses set forth in 1(a)(ii), the Company agrees to pay all costs, fees and expenses
incurred by the Company in connection with the performance of its obligations hereunder and in connection with the transactions contemplated
hereby, including, without limitation: (i) all expenses incident to the issuance, delivery and qualification of the Securities (including
all printing and engraving costs); (ii) all fees and expenses of the registrar and transfer agent of the Common Stock; (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities; (iv) all fees and expenses of the Company’s
counsel, independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits,
schedules, consents and certificates of experts), the Preliminary Prospectus, the Final Prospectus and each Prospectus Supplement, if
any, and all amendments and supplements thereto, and this Agreement; (vi) all filing fees, reasonable attorneys’ fees and expenses
incurred by the Company or the Placement Agent in connection with qualifying or registering (or obtaining exemptions from the qualification
or registration of) all or any part of the Securities for offer and sale under the state securities or blue sky laws or the securities
laws of any other country, and, if requested by the Placement Agent, preparing and printing a “Blue Sky Survey,” an
“International Blue Sky Survey” or other memorandum, and any supplements thereto, advising the Placement Agent of
such qualifications, registrations and exemptions; provided, however, that any such fees shall be subject to the overall expense
cap set forth in Section 1(a)(ii); (vii) the filing fees incident to the review and approval by the Financial Industry Regulatory Authority
of the Placement Agent’s participation in the offering and distribution of the Securities; (viii) the fees and expenses associated
with including the Shares, the Warrant Shares and the Pre-Funded Warrant Shares on the Trading Market;; and (viii) all other fees, costs
and expenses referred to in Part II of the Registration Statement.
Section
7. Indemnification and Contribution.
(a)
The Company agrees to indemnify and hold harmless the Placement Agent, its affiliates and each person controlling the Placement Agent
(within the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of the Placement Agent, its
affiliates and each such controlling person (the Placement Agent, and each such entity or person. an “Indemnified Person”)
from and against any losses, claims, damages, judgments, assessments, costs and other liabilities (collectively, the “Liabilities”),
and shall reimburse each Indemnified Person for all reasonable, documented out-of-pocket fees and expenses (including the reasonable,
documented out-of-pocket fees and expenses of one counsel for all Indemnified Persons, except as otherwise expressly provided herein)
(collectively, the “Expenses”) as they are incurred by an Indemnified Person in investigating, preparing, pursuing
or defending any Actions, whether or not any Indemnified Person is a party thereto, (i) caused by, or arising out of or in connection
with, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any Prospectus
or by any omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading or (ii) otherwise arising out of or in connection with advice or services rendered or to be
rendered by any Indemnified Person pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person’s
actions or inactions in connection with any such advice, services or transactions; provided, however, that, in the case
of clause (ii) only, the Company shall not be responsible for any Liabilities or Expenses of any Indemnified Person that are finally
judicially determined to have resulted solely from such Indemnified Person’s (x) gross negligence or willful misconduct in connection
with any of the advice, actions, inactions or services referred to above or (y) use of any offering materials or information concerning
the Company in connection with the offer or sale of the Securities in the Offering which were not authorized for such use by the Company
and which use constitutes gross negligence or willful misconduct. The Company also agrees to reimburse each Indemnified Person for all
Expenses as they are incurred in connection with enforcing such Indemnified Person’s rights under this Agreement.
(b)
Upon receipt by an Indemnified Person of actual notice of an Action against such Indemnified Person with respect to which indemnity may
be sought under this Agreement, such Indemnified Person shall promptly notify the Company in writing; provided that failure by any Indemnified
Person so to notify the Company shall not relieve the Company from any liability which the Company may have on account of this indemnity
or otherwise to such Indemnified Person, except to the extent the Company shall have been prejudiced by such failure. The Company shall,
if requested by the Placement Agent, assume the defense of any such Action including the employment of counsel reasonably satisfactory
to the Placement Agent, which counsel may also be counsel to the Company. Any Indemnified Person shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless: (i) the Company has failed promptly to assume the defense and employ counsel or (ii) the named parties
to any such Action (including any impeded parties) include such Indemnified Person and the Company, and such Indemnified Person shall
have been advised in the reasonable opinion of counsel that there is an actual conflict of interest that prevents the counsel selected
by the Company from representing both the Company (or another client of such counsel) and any Indemnified Person; provided that the Company
shall not in such event be responsible hereunder for the fees and expenses of more than one firm of separate counsel for all Indemnified
Persons in connection with any Action or related Actions, in addition to any local counsel. The Company shall not be liable for any settlement
of any Action effected without its written consent (which shall not be unreasonably withheld). In addition, the Company shall not, without
the prior written consent of the Placement Agent (which shall not be unreasonably withheld), settle, compromise or consent to the entry
of any judgment in or otherwise seek to terminate any pending or threatened Action in respect of which indemnification or contribution
may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Person from all Liabilities arising out of such Action for which indemnification
or contribution may be sought hereunder. The indemnification required hereby shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.
(c)
In the event that the foregoing indemnity is unavailable to an Indemnified Person other than in accordance with this Agreement, the Company
shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion as is appropriate to reflect
(i) the relative benefits to the Company, on the one hand, and to the Placement Agent and any other Indemnified Person, on the other
hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding clause is not permitted
by applicable law, not only such relative benefits but also the relative fault of the Company, on the one hand, and the Placement Agent
and any other Indemnified Person, on the other hand, in connection with the matters as to which such Liabilities or Expenses relate,
as well as any other relevant equitable considerations; provided that in no event shall the Company contribute less than the amount necessary
to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities and Expenses in excess of the amount of
fees actually received by the Placement Agent pursuant to this Agreement. For purposes of this paragraph, the relative benefits to the
Company, on the one hand, and to the Placement Agent on the other hand, of the matters contemplated by this Agreement shall be deemed
to be in the same proportion as (a) the total value paid or contemplated to be paid to or received or contemplated to be received by
the Company in the transaction or transactions that are within the scope of this Agreement, whether or not any such transaction is consummated,
bears to (b) the fees paid to the Placement Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act, as amended, shall be entitled to contribution from a party who was not guilty
of fraudulent misrepresentation.
(d)
The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise)
to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement,
the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services
or transactions except for Liabilities (and related Expenses) of the Company that are finally judicially determined to have resulted
solely from such Indemnified Person’s gross negligence or willful misconduct in connection with any such advice, actions, inactions
or services.
(i)
The reimbursement, indemnity and contribution obligations of the Company set forth herein shall apply to any modification of this Agreement
and shall remain in full force and effect regardless of any termination of, or the completion of any Indemnified Person’s services
under or in connection with, this Agreement.
Section
8. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other
statements of the Company or any person controlling the Company, of its officers, and of the Placement Agent set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Placement Agent,
the Company, or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery
of and payment for the Securities sold hereunder and any termination of this Agreement. A successor to a Placement Agent, or to the Company,
its directors or officers or any person controlling the Company, shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Agreement.
Section
9. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered, e-mailed or telecopied and confirmed
to the parties hereto as follows:
If
to the Placement Agent to the address set forth above, attention: Head of Equity Capital Markets, e-mail: rothecm@roth.com
With
a copy to:
Faegre
Drinker Biddle & Reath LLP
200
Wells Fargo Center
90
S. Seventh Street
Minneapolis,
Minnesota 55402
Attention:
Jonathon R. Zimmerman and Tyler J. Vivian
E-mail:
Jonathan.zimmerman@faegredrinker.com
If
to the Company:
Biofrontera
Inc.
120
Presidential Way, Suite 330
Woburn,
Massachusetts 01801
Attention:
E. Fred Leffler, III
Email:
f.leffler@bfinc.com
With
a copy to:
McGuireWoods
LLP
1251
Avenue of the Americas, 20th Floor
New
York, New York 10020-1104
Attention:
Stephen E. Older, Esq.
Email:
solder@mcguirewoods.com
Any
party hereto may change the address for receipt of communications by giving written notice to the others.
Section
10. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees,
officers and directors and controlling persons referred to in Section 7 hereof, and to their respective successors, and personal representative,
and no other person will have any right or obligation hereunder.
Section
11. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not
affect the validity or enforceability of any other section, paragraph or provision hereof. If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and
only such minor changes) as are necessary to make it valid and enforceable.
Section
12. Governing Law Provisions. This Agreement shall be deemed to have been made and delivered in New York City and both this engagement
letter and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect and in all other
respects by the internal laws of the State of New York, without regard to the conflict of laws principles thereof. Each of the Placement
Agent and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to this engagement letter and/or
the transactions contemplated hereby shall be instituted exclusively in New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York, (ii) waives any objection which it may have or hereafter to the venue of
any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the New York Supreme Court, County of New
York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the
Placement Agent and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such
suit, action or proceeding in the New York Supreme Court, County of New York, or in the United States District Court for the Southern
District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address shall
be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process
upon the Placement Agent mailed by certified mail to the Placement Agent’s address shall be deemed in every respect effective service
process upon the Placement Agent, in any such suit, action or proceeding. Notwithstanding any provision of this engagement letter to
the contrary, the Company agrees that neither the Placement Agent nor its affiliates, and the respective officers, directors, employees,
agents and representatives of the Placement Agent, its affiliates and each other person, if any, controlling the Placement Agent or any
of its affiliates, shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection
with the engagement and transaction described herein except for any such liability for losses, claims, damages or liabilities incurred
by us that are finally judicially determined to have resulted from the willful misconduct or gross negligence of such individuals or
entities. If either party shall commence an action or proceeding to enforce any provision of this Agreement, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such action or proceeding.
Section
13. General Provisions.
(a)
This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject matter hereof. Notwithstanding anything herein to the contrary,
the Engagement Agreement, dated March 24, 2023 (the “Engagement Agreement”), between the Company and Roth Capital
Partners, LLC shall continue to be effective and the terms therein shall continue to survive and be enforceable by the Placement Agent
in accordance with its terms, provided that, in the event of a conflict between the terms of the Engagement Agreement and this Agreement,
the terms of this Agreement shall prevail. This Agreement may be executed in two or more counterparts, each one of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended
or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit. Section headings herein are for the convenience of the parties only
and shall not affect the construction or interpretation of this Agreement.
(b)
The Company acknowledges that in connection with the offering of the Securities: (i) the Placement Agent has acted at arm’s length,
are not agents of, and owe no fiduciary duties to the Company or any other person, (ii) the Placement Agent owes the Company only those
duties and obligations set forth in this Agreement and (iii) the Placement Agent may have interests that differ from those of the Company.
The Company waives to the full extent permitted by applicable law any claims it may have against the Placement Agent arising from an
alleged breach of fiduciary duty in connection with the offering of the Securities
[The
remainder of this page has been intentionally left blank.]
If
the foregoing is in accordance with your understanding of our agreement, please sign below whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
|
Very
truly yours, |
|
|
|
|
biofrontera
INC., |
|
a
Delaware corporation |
|
|
|
|
By: |
/s/
E. Fred Leffler, III |
|
Name: |
E. Fred Leffler, III |
|
Title: |
Chief Financial Officer |
The
foregoing Placement Agency Agreement is hereby confirmed and accepted as of the date first above written.
roth
capital partners, LLC
By: |
/s/
Benjamin Bowen |
|
Name: |
Benjamin
Bowen |
|
Title: |
Managing
Director |
|
EXHIBIT
A
[See
Attached.]
Exhibit 10.3
AMENDMENT
TO
COMMON STOCK PURCHASE WARRANTS
October
30, 2023
This
Amendment (the “Amendment”), dated October 30, 2023 and effective as of November 2, 2023 (the “Effective
Date”), to certain common stock warrants issued by Biofrontera Inc., a Delaware corporation (the “Company”),
and set forth on Schedule 1 hereto, to purchase the Company’s common stock, par value $0.0001 (“Common Stock”),
at an exercise price set forth therein (each such warrant, a “Warrant” and, collectively, the “Warrants”),
is made and entered into by and between the Company and [_______] (the “Investor”).
WHEREAS,
the Investor is, and as of the effective date of this Amendment will be, the holder of each Warrant;
WHEREAS,
the Company and the Investor entered into a securities purchase agreement, dated as of October 30, 2023 (the “Purchase Agreement”),
pursuant to which the Investor has agreed to purchase and the Company has agreed to issue and sell to the Investor shares of Common Stock
at a price of $3.74 per share of Common Stock and the Company will also issue to the Investor certain warrants with an exercise price
of $3.55 per share of Common Stock;
WHEREAS,
in connection with the entry into the Purchase Agreement, the Company agreed to amend the terms of each of the Warrants to reduce the
exercise price to $3.55 per share of Common Stock (the “Exercise Price Adjustment”); and
WHEREAS,
the Investor and the Company have agreed to amend each Warrant pursuant to Section 4(l) of each such Warrant.
NOW,
THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
Capitalized terms used and not defined in this Amendment have the respective meanings ascribed to them in each of the
Warrants.
2. Amendments
to the Warrant.
| (a) | Exercise
Price Adjustment. Section 2(b) of each Warrant shall be deleted and replaced in its
entirety with the following: |
“Exercise
Price. The exercise price per share of Common Stock under this Warrant shall be $3.55, subject to adjustment hereunder (the “Exercise
Price”).”
| (b) | Termination
Date Adjustment. The “Termination Date” for each warrant shall be changed
to November 2, 2028. |
3. Effective
Date. Unless otherwise stated herein, this Amendment is effective as of the Effective Date.
4. Miscellaneous.
a.
Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed in that state, without reference to conflict of laws principles thereof.
b. Counterparts.
This Amendment may be executed and delivered (including by facsimile or other electronic transmission) in any number of counterparts,
and by the different parties hereto in separate counterparts, each of which when executed (including by the affixing of signatures electronically)
and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. This Amendment
may be executed and delivered (including by facsimile or other electronic transmission) in any number of counterparts, and by the different
parties hereto in separate counterparts, each of which when executed (including by the affixing of signatures electronically) and delivered
shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
c. Continuation
of the Warrants. Except as expressly modified by this Amendment, the Warrants shall continue to be and remain in full
force and effect in accordance with its terms. Any future reference to any of the Warrants shall be deemed to be a reference to such
Warrant as modified by this Amendment.
(signature
pages follow)
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their respective duly authorized officers as
of the date first above written.
BIOFRONTERA
INC.
By: |
|
|
Name: |
E.
Fred Leffler, III |
|
Title: |
Chief
Financial Officer |
|
[______________________]
Schedule
1
Warrant |
|
Issue
Date |
|
Number
of Shares of Common Stock Underlying Warrant |
Biofrontera
Inc. Common Stock Purchase Warrant |
|
May
16, 2022 |
|
170,950 |
Biofrontera
Inc. Common Stock Purchase Warrant |
|
July
27, 2022 |
|
214,286 |
Exhibit 99.1
Biofrontera
Inc. Announces $4.5 Million Registered Direct Offering Priced At-the-market Under NASDAQ Rules
October
31, 2023 / Biofrontera Inc. (NASDAQ:BFRI) (“Biofrontera” or the “Company”), a biopharmaceutical company specializing
in the commercialization of dermatologic products, entered into a securities purchase agreement with a certain institutional investor,
pursuant to which the Company agreed to issue and sell to the investor an aggregate of 1,205,000 shares of its common stock (or common
stock equivalents in lieu thereof) and warrants to purchase an aggregate of up to 1,807,000 shares of Common Stock, at an exercise price
of $3.55 per share of Common Stock. The warrants are exercisable immediately upon issuance and will expire five years following the date
of issuance. The Company also agreed to adjust the strike price of 385,236 outstanding warrants held by the investor to $3.55. The offering
is expected to close on or about November 2, 2023, subject to customary closing conditions.
Roth
Capital Partners is acting as the exclusive placement agent for the offering.
The
Company intends to use the net proceeds from this offering for working capital and general corporate purposes.
The
securities described above are being offered pursuant to the Company’s registration statement on Form S-1 originally filed with
the Securities and Exchange Commission (“SEC”). The public offering is being made only by means of a prospectus, which is
part of the effective registration statement. When available, electronic copies of the final prospectus may be obtained for free on the
SEC’s website located at http://www.sec.gov and may also be obtained by contacting Roth Capital Partners, LLC at 888 San Clemente
Drive, Newport Beach CA 92660, or by phone at (800) 678-9147 or e-mail at rothecm@roth.com.
This
press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor
shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful
prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
About
Biofrontera Inc.
Biofrontera
Inc. is a U.S.-based biopharmaceutical company commercializing a portfolio of products for the treatment of dermatologic conditions with
a focus on photodynamic therapy (PDT) and topical antibiotics. The Company’s licensed products are used for the treatment of actinic
keratoses, which are pre-cancerous skin lesions, as well as impetigo, a bacterial skin infection.
Forward-Looking
Statements
Certain
statements in this press release may constitute “forward-looking statements” within the meaning of the United States Private
Securities Litigation Reform Act of 1995, as amended to date. We have based these forward-looking statements on our current expectations
and projections about future events, nevertheless, actual results or events could differ materially from the plans, intentions and expectations
disclosed in, or implied by, the forward-looking statements we make. These risks and uncertainties, many of which are beyond our control,
including, but not limited to, the impact of any extraordinary external events; any changes in the Company’s relationship with
its licensors; the ability of the Company’s licensors to fulfill their obligations to the Company in a timely manner; the Company’s
ability to achieve and sustain profitability; whether the current global disruptions in supply chains will impact the Company’s
ability to obtain and distribute its licensed products; changes in the practices of healthcare providers, including any changes to the
coverage, reimbursement and pricing for procedures using the Company’s licensed products; the uncertainties inherent in the initiation
and conduct of clinical trials; availability and timing of data from clinical trials; whether results of earlier clinical trials or trials
of Ameluz® in combination with BF-RhodoLED® in different disease indications or product applications will be indicative of the
results of ongoing or future trials; uncertainties associated with regulatory review of clinical trials and applications for marketing
approvals; whether the market opportunity for Ameluz® in combination with BF-RhodoLED® is consistent with the Company’s
expectations; the Company’s ability to comply with public company requirements; the Company’s ability to retain and hire
key personnel; the sufficiency of cash resources and need for additional financing and other factors that may be disclosed in the Company’s
filings with the SEC, which can be obtained on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates,
projections, expectations and beliefs. The Company does not plan to update any such forward-looking statements and expressly disclaims
any duty to update the information contained in this press release except as required by law.
Contact:
Barwicki
Investor Relations
Andrew Barwicki
516-662-9461
andrew@barwicki.com
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