As filed with the U.S. Securities and Exchange
Commission on July 26, 2024
Registration No. 333-279133
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3
to
FORM S-1
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
LogicMark, Inc.
(Exact name of registrant as specified in its charter)
Nevada |
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7381 |
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46-0678374 |
(State or other jurisdiction of
incorporation or organization) |
|
(Primary Standard Industrial
Classification Code Number) |
|
(I.R.S. Employer
Identification Number) |
LogicMark, Inc.
2801 Diode Lane
Louisville, KY 40299
(502) 442-7911
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Chia-Lin Simmons
Chief Executive Officer
LogicMark, Inc.
2801 Diode Lane
Louisville, KY 40299
(502) 442-7911
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
David E. Danovitch, Esq.
Michael DeDonato, Esq.
Sullivan & Worcester LLP
1633 Broadway
New York, NY 10019
(212) 660-3060 |
|
M. Ali Panjwani, Esq.
Pryor Cashman LLP
7 Times Square
New York, New York 10036
(212) 421-4100 |
Approximate date of commencement of proposed
sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:
☒
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
Non-accelerated filer |
☒ |
Smaller reporting company |
☒ |
|
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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 7(a)(2)(B) of the Securities Act. ☐
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The
information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is soliciting
an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY
PROSPECTUS |
SUBJECT
TO COMPLETION |
DATED
JULY 26, 2024 |
UP
TO 12,306,610 UNITS
EACH UNIT CONSISTING OF
ONE SHARE OF COMMON STOCK,
ONE SERIES A WARRANT TO PURCHASE ONE
SHARE OF COMMON STOCK AND ONE SERIES B
WARRANT TO PURCHASE ONE SHARE OF COMMON STOCK
UP TO 12,306,610 PRE-FUNDED UNITS
EACH UNIT CONSISTING OF
ONE PRE-FUNDED WARRANT TO PURCHASE ONE SHARE
OF COMMON STOCK
ONE SERIES A WARRANT TO PURCHASE ONE SHARE OF
COMMON STOCK
AND ONE SERIES B WARRANT TO PURCHASE ONE SHARE
OF COMMON STOCK
UP TO 36,919,830 SHARES OF COMMON STOCK
UNDERLYING THE SERIES A WARRANTS, THE
SERIES B WARRANTS AND THE PRE-FUNDED WARRANTS
![](https://www.sec.gov/Archives/edgar/data/1566826/000101376224001682/image_001.jpg)
LogicMark, Inc.
LogicMark, Inc. (the “Company”,
“LogicMark”, “we”, “us” or “our”) is offering, pursuant to this prospectus and on a best-efforts
basis, up to 12,306,610 units (the “Units”) at an assumed offering price of $0.5688 per Unit, which is equal to the closing
price of our Common Stock on the Nasdaq Capital Market (“Nasdaq”) on July 18, 2024, with each Unit consisting of: (i) one
share of common stock, par value $0.0001 per share (the “Common Stock”); (ii) one Series A warrant to purchase Common Stock
exercisable for one share of Common Stock (the “Series A Warrants”); and (iii) one Series B warrant to purchase Common Stock
exercisable for one share of Common Stock ( the “Series B Warrants” and, together with the Series A Warrants, the “Warrants”).
Each Warrant, upon exercise at a price of $0.5688 per share (100% of the assumed public offering price of the Unit), will result in the
issuance of one share of Common Stock to the holder of such Warrant. This prospectus also relates to the shares of Common Stock that
are issuable from time to time upon exercise of each of the Warrants (the “Warrant Shares”). Each of the Warrants will be
exercisable only on or after the date on which stockholder approval is obtained to approve the issuance of the Warrant Shares upon exercise
of the Warrants (“Stockholder Approval”), solely to the extent such approval is required by Rule 5635(d) of The Nasdaq Stock
Market LLC (“Rule 5635(d)”) (See “Risk Factors – Risks Related to this Offering and Ownership of Our Securities”
and “Description of Securities That We Are Offering – Series A Warrants, Series B Warrants and Pre-Funded Warrants –
Stockholder Approval – Series A Warrants and Series B Warrants” for additional information regarding Stockholder Approval
and Rule 5635(d)). The Series A Warrants will expire five (5) years after the date of their issuance and the Series B Warrants will expire
two and a half (2.5) years after the date of their issuance.
We are also offering to those purchasers, if any,
whose purchase of Units in this offering would otherwise result in the purchaser, together with its affiliates and related parties, beneficially
owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock immediately following the consummation
of this offering, the opportunity to purchase, if they so choose, pre-funded units (“Pre-Funded Units”) in lieu of the Units
that would otherwise result in ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock,
with each Pre-Funded Unit consisting of one pre-funded warrant to purchase one share of our Common Stock (each, a “Pre-Funded Warrant”);
(ii) one Series A Warrant; and (iii) one Series B Warrant. The purchase price of each Pre-Funded Unit will equal the price per Unit, minus
$0.001, and the exercise price of each Pre-Funded Warrant included in the Pre-Funded Unit will be $0.001 per share. There can be no assurance
that we will sell any of the Pre-Funded Units being offered. The Pre-Funded Warrants offered hereby will be immediately exercisable and
may be exercised at any time until exercised in full. For each Pre-Funded Unit we sell, the number of Units we are offering will be decreased
on a one-for-one basis. Because we will issue two Warrants as part of each Unit or Pre-Funded Unit, the number of Warrants sold in this
offering will not change as a result of a change in the mix of the Units and Pre-Funded Units sold.
We are also registering the Common Stock issuable
from time to time upon exercise of each of the Warrants and Pre-Funded Warrants included in the Units and Pre-Funded Units offered hereby.
See “Description of Securities That We Are Offering” in this prospectus for more information. We refer to the shares of our
Common Stock, the Warrants, the Pre-Funded Warrants, and the shares of our Common Stock issued or issuable upon exercise of the Warrants
and Pre-Funded Warrants, collectively, as the “Securities”.
Neither the Units nor the Pre-Funded Units have
stand-alone rights nor will they be certificated or issued as stand-alone securities. The shares of Common Stock, the Series A Warrants
and the Series B Warrants included in the Units are immediately separable, and will be issued separately in this offering, and the Pre-Funded
Warrants, the Series A Warrants and the Series B Warrants included in the Pre-Funded Units are immediately separable, and will be issued
separately in this offering.
Our Common Stock is listed on Nasdaq under
the symbol “LGMK”. The last reported closing price for our Common Stock on Nasdaq on July 18, 2024 was $0.5688 per share.
There is no established trading market for the
Units, Pre-Funded Units, Series A Warrants, Series B Warrants or Pre-Funded Warrants, and we do not expect a market to develop. In addition,
we do not intend to apply for the listing of the Series A Warrants, Series B Warrants or the Pre-Funded Warrants on any national securities
exchange or other trading market. Without an active trading market, the liquidity of such securities will be limited.
The Securities will be offered at a fixed price
and are expected to be issued in a single closing. Investors purchasing the Securities offered hereby will execute a securities purchase
agreement with us. When we price the Securities, we will simultaneously enter into securities purchase agreements relating to the offering
with those investors who choose to participate in the offering. We expect this offering to be completed not later than one (1) business
day following the commencement of this offering and we will deliver all of the Securities to be issued in connection with this offering
delivery versus payment/receipt versus payment upon receipt of investor funds received by us. Accordingly, neither we nor the placement
agent have made any arrangements to place investor funds in an escrow account or trust account since the placement agent will not receive
investor funds in connection with the sale of the Securities offered hereunder.
We are a “smaller reporting company”
as defined under the federal securities laws and, under applicable U.S. Securities and Exchange Commission (“SEC”) rules,
we have elected to comply with certain reduced public company reporting and disclosure requirements.
We have engaged Roth Capital Partners, LLC as
our exclusive placement agent (the “placement agent”) to use its reasonable best efforts to solicit offers to purchase the
Securities in this offering. The placement agent has no obligation to purchase any of the Securities from us or to arrange for the purchase
or sale of any specific number or dollar amount of the Securities. Because there is no minimum offering amount required as a condition
to closing in this offering, the actual public offering amount, placement agent’s fee, and proceeds to us, if any, are not presently
determinable and may be substantially less than the total maximum offering amounts set forth above and throughout this prospectus. We
have agreed to pay the placement agent the placement agent fees set forth in the table below. See “Plan of Distribution” in
this prospectus for more information.
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Per Unit | | |
Per Pre- Funded Unit | | |
Total | |
Public offering price | |
$ | | | |
$ | | | |
$ | | |
Placement agent fees (1) | |
$ | | | |
$ | | | |
$ | | |
Proceeds, before expenses, to us (2) | |
$ | | | |
$ | | | |
$ | | |
(1) |
Represents a cash fee equal to 7.0% of the aggregate purchase price paid by investors in this offering. We have also agreed to reimburse the placement agent for certain of its offering-related expenses. See “Plan of Distribution” beginning on page 35 of this prospectus for a description of the compensation to be received by the placement agent. |
(2) |
Does not include proceeds from the exercise of the Warrants and Pre-Funded Warrants in cash, if any. |
Pursuant to the placement agency agreement
that we will enter into with the placement agent in connection with this offering, in the event that the aggregate value of Securities
sold in connection with this offering equals or exceeds $5 million, we will issue to the placement agent warrants exercisable for up
to a number of shares of Common Stock equal to three percent (3%) of the Securities issued in this offering, and such placement agent
warrants shall have a term of five years. The registration statement of which this prospectus is a part also registers for sale such
placement agent warrants and the shares of Common Stock issuable upon exercise of such placement agent warrants.
Investing in our securities involves a high
degree of risk. See “Risk Factors” beginning on page 5 of this prospectus and in the documents which are incorporated by reference
herein to read about factors you should consider before investing in our securities.
We will deliver the shares of Common Stock being
issued to the purchasers electronically and will electronically deliver to such investors electronic warrant certificates for each of
the Pre-Funded Warrants, the Series A Warrants and the Series B Warrants sold in this offering, upon closing and receipt of investor funds
for the purchase of the Securities offered pursuant to this prospectus. We anticipate that delivery of the shares of Common Stock, Pre-Funded
Warrants, the Series A Warrants and Series B Warrants against payment therefor will be made on or before ,
2024.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
Sole Placement Agent
Roth
Capital Partners
The date of this prospectus is ,
2024
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
The registration statement on Form S-1 of which
this prospectus forms a part and that we have filed with the SEC, includes exhibits that provide more detail of the matters discussed
in this prospectus. You should read this prospectus and the related exhibits filed with the SEC, together with the additional information
described under the heading “Where You Can Find More Information.”
You should rely only on the information contained
in this prospectus and the related exhibits, any prospectus supplement or amendment thereto and the documents incorporated by reference,
or to which we have referred you, before making your investment decision. Neither we nor any placement agent engaged by us in connection
with this offering, have authorized anyone to provide you with additional information or information different from that contained in
this prospectus. Neither we nor any placement agents engaged by us take any responsibility for, and can provide no assurance as to the
reliability of, any other information that others may give you. Neither the delivery of this prospectus nor the sale of the Securities
means that the information contained in this prospectus is correct after the date of this prospectus.
You should not assume that the information contained
in this prospectus, any prospectus supplement or amendments thereto, as well as information we have previously filed with the SEC, is
accurate as of any date other than the date on the front cover of the applicable document. Our business, financial condition, results
of operations and prospects may have changed since those dates. This prospectus, any prospectus supplement or amendments thereto do not
constitute an offer to sell, or a solicitation of an offer to purchase, the Securities offered by this prospectus, any prospectus supplement
or amendments thereto in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer or solicitation
of an offer in such jurisdiction.
For investors outside the United States: Neither
we nor any placement agent engaged by us in connection with this offering, have taken any action that would permit this offering or possession
or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons
outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating
to, the offering of the Securities covered hereby and the distribution of this prospectus outside of the United States.
No person is authorized in connection with this
prospectus to give any information or to make any representations about us, the Securities offered hereby or any matter discussed in this
prospectus, other than the information and representations contained in this prospectus. If any other information or representation is
given or made, such information or representation may not be relied upon as having been authorized by us. To the extent there is a conflict
between the information contained in this prospectus and any prospectus supplement, you should rely on the information in such prospectus
supplement, provided that if any statement in one of these documents is inconsistent with a statement in another document having a later
date — for example, a document incorporated by reference in this prospectus or any prospectus supplement — the statement in
the document having the later date modifies or supersedes the earlier statement.
Neither we nor the placement agent have done anything
that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is
required, other than the United States. You are required to inform yourself about, and to observe any restrictions relating to, this offering
and the distribution of this prospectus.
We own or have rights to certain trademarks that
we use in conjunction with the operations of our business. Each trademark, trade name, service mark or copyright of any other company
appearing or incorporated by reference in this prospectus belongs to its holder. Solely for convenience, trademarks, trade names, service
marks and copyrights referred to in this prospectus may appear with or without the “©”, “®” or “™”
symbols, but the inclusion, or not, of such references are not intended to indicate, in any way, that we, or the applicable owner, will
not assert, to the fullest extent possible under applicable law, our or their, as applicable, rights to these trademarks, trade names
service marks or copyrights. We do not intend our use or display of other companies’ trademarks, trade names, service marks or copyrights
to imply a relationship with, or endorsement or sponsorship of us by, such other companies.
PROSPECTUS SUMMARY
This summary highlights selected information
contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before investing
in our securities. You should carefully read this entire prospectus, and our other filings with the SEC, including the following sections,
which are either included herein and/or incorporated by reference herein, “Risk Factors,” “Special Note Regarding Forward-Looking
Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated
financial statements incorporated by reference herein, before making a decision about whether to invest in our securities. When used herein,
unless the context requires otherwise, references to the “LogicMark,” “Company,” “we,” “our”
and “us” refer to LogicMark, Inc., a Nevada corporation.
Company Overview
LogicMark, Inc. provides personal emergency response
systems (“PERS”), health communications devices, and Internet of Things (“IoT”) technology that creates a connected
care platform. The Company’s devices provide people with the ability to receive care at home and age independently. The Company’s
PERS devices incorporate two-way voice communication technology directly in the medical alert pendant and provide life-saving technology
at a customer-friendly price point aimed at everyday consumers. These PERS technologies as well as other personal safety devices are sold
direct-to-consumer through the Company’s eCommerce website and Amazon.com, through dealers and distributors, as well as directly
to the United States Veterans Health Administration (the “VHA”). The Company was awarded a contract by the U.S. General Services
Administration (the “GSA”) that enables the Company to distribute its products to federal, state, and local governments (the
“GSA Agreement”).
Healthcare
LogicMark builds technology to remotely check,
manage and monitor a loved one’s health and safety. The Company is focused on modernizing remote monitoring to help people stay
safe and live independently longer. We believe there are five trends driving the demand for better remote monitoring systems:
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1. |
The “Silver Tsunami”. With 11,000 Baby Boomers turning 65 in the U.S. every day, there will be more older adults than children under 18 for the first time in the near future. With 72 million “Baby Boomers” in the United States, they are not only one of the largest generations, but the wealthiest. Unlike generations before them, Baby Boomers are reliant and comfortable with technology. Most of them expect to live independently in their current home or downsize to a smaller home as they get older. |
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2. |
Shift to At-Home Care. As it stands, the current healthcare system is unprepared for the resource strain and is shifting much of the care elderly patients used to receive at a hospital or medical facility to the patient’s home. The rise of digital communication to support remote care exploded during the COVID-19 pandemic. The need for connected and remote monitoring devices is more necessary and in-demand than ever before. |
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3. |
Rise of Data and IoT. Doctors and clinicians are asking patients to track more and more vital signs. Whether it’s how they’re reacting to medication or tracking blood sugar, patients and their caregivers are participating in their healthcare in unprecedented ways. Consumers are using data collected from connected devices like never before. This data can be used to prevent health emergencies as technology companies use machine learning (ML) / artificial intelligence (“AI”) to learn patient patterns and alert the patient and their care team of potential emergencies, leading to a switch from predicting potential problems to reacting to current problems after they occur. |
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4. |
Lack of Healthcare Workers. It’s estimated that 20% of healthcare workers quit during the COVID-19 pandemic. Many healthcare workers who were working during the COVID-19 pandemic suffered from burnout, exhaustion and demoralization due to the COVID-19 pandemic. There were not enough healthcare workers to support our entire population throughout the pandemic, let alone enough to support our elderly population. The responsibility of taking care of elderly family members is increasingly falling on the family, and they need help. |
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5. |
Rise of the Care Economy. The term “Care Economy” refers to the money people contribute to care for people until the end of their lives; the Care Economy offsets the deficiencies within the healthcare system and the desire to age in place. There has been little innovation in the industry because the majority of PERS are operated by home security companies. It is not their main line of business, and they have little expertise in developing or launching machine-learning algorithms or artificial intelligence. |
Together, we believe these trends have produced
a large and growing market opportunity for LogicMark. The Company enjoys a strong base of business with the VHA and plans to expand to
other government agencies after being awarded the five-year GSA Agreement in July 2021, which is renewable for up to 25 years.
The PERS Opportunity
PERS, also known as a medical alert or medical
alarm system, is designed to detect a threat that requires attention and then immediately contacts a trusted family member and/or the
emergency medical workforce. Unlike conventional alarm systems which consist of a transmitter and are activated in the case of an emergency,
PERS transmits signals to an alarm monitoring medical team, which then departs for the location where the alarm was activated. These types
of medical alarms are traditionally utilized by the disabled, elderly or those living alone.
The PERS market is generally divided into direct-to-consumer
and healthcare customer channels. With the advent of new technologies, demographic changes, and our five previously stated trends in healthcare,
an expanded opportunity exists for LogicMark to provide at-home and on-the-go health and safety solutions to both customer channels.
For LogicMark, growing the healthcare opportunity
relies on partnering with organizations such as government, Medicaid, hospitals, insurance companies, managed care organizations, affiliates
and dealers. Partners can provide leads at no cost for new and replacement customers, have significant buying power and can provide collaboration
on product research and development.
Our longstanding partnership with the VHA is a
good example. LogicMark has sold over 850,000 PERS devices since 2012, of which over 500,000 devices have been sold to the U.S. government.
The signing of the GSA Agreement in 2021 further strengthened our partnership with the government and expanded our ability to capture
new sales. We envision a continued focus on growing the healthcare channel during 2023 given lower acquisition costs and higher customer
unit economics.
In addition to the healthcare channel, LogicMark
also expects to continue growth in sales volume through its direct-to-consumer channel. It is estimated that approximately 70% of PERS
customers fall into the direct-to-consumer category. Family members regularly conduct research and purchase PERS devices for their loved
ones through online websites. The Company expects traditionally higher customer acquisition costs to be balanced by higher sales growth
and lower sales cycles with an online DTC channel.
With the growth in IoT devices, data driven solutions
using AI and ML are helping guide the growth of the PERS industry. In both the healthcare and direct-to-consumer channels, product offerings
can include 24/7 emergency response, fall detection, location tracking and geo-fencing, activity monitoring, medication management, caregiver
and patient portals, concierge services, telehealth, vitals monitoring, and customer dashboards. These product offerings are primarily
delivered via mobile and home-base equipment. LogicMark will also continue to pursue research and development partnerships to grow our
product offering.
Implications of Being A Smaller Reporting Company
To the extent that we continue to qualify as a
“smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, we will continue to be permitted
to make certain reduced disclosures in our periodic reports and other documents that we file with the SEC.
Corporate Information
We were originally incorporated in the State of
Delaware on February 8, 2012. In July 2016, we acquired LogicMark, LLC, which operated as a wholly-owned subsidiary of the Company until
December 30, 2021, when it was merged into the Company (formerly known as Nxt-ID, Inc.) along with the Company’s other subsidiary,
3D-ID, LLC. Effective February 28, 2022, the Company changed its name from Nxt-ID, Inc. to LogicMark, Inc. The Company has realigned its
business strategy with that of its former LogicMark, LLC operating division, managing contract manufacturing and distribution of non-monitored
and monitored PERS sold through the VHA, direct-to-consumers, healthcare durable medical equipment dealers and distributors and monitored
security dealers and distributors.
On June 1, 2023, the Company was incorporated
in the State of Nevada by merging its predecessor entity with and into its wholly-owned subsidiary, LogicMark, Inc., a Nevada corporation,
pursuant to an agreement and plan of merger, dated as of June 1, 2023. Such Nevada entity survived and succeeded to the assets, continued
the business and assumed the rights and obligations of LogicMark, Inc., the Delaware corporation that existed immediately prior to the
effective date of such agreement.
Our principal executive office is located at 2801
Diode Lane, Louisville, KY 40299, and our telephone number is (502) 519-2419. Our website address is www.logicmark.com. The information
contained therein or connected thereto shall not be deemed to be incorporated into this prospectus.
THE OFFERING
Units offered by us |
Up
to 12,306,610 Units, based on an assumed public offering price of $0.5688 per Unit, each consisting of one share of: (i) one share
of Common Stock; (ii) one Series A Warrant; and (iii) one Series B Warrant. Each Series A Warrant and each Series B Warrant is exercisable
to purchase one share of Common Stock. The Units have no stand-alone rights and will not be certificated or issued as stand-alone
securities. The Common Stock and each of the Warrants are immediately separable and will be issued separately in this offering. |
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Pre-Funded Units offered by us |
We are also offering to those purchasers, if any, whose purchase of Units in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock immediately following the consummation of this offering, Pre-Funded Units, each consisting of: (i) one Pre-Funded Warrant to purchase one share of our Common Stock; (ii) one Series A Warrant; and (iii) one Series B Warrant. The Pre-Funded Units have no stand-alone rights and will not be certificated or issued as stand-alone securities. The Pre-Funded Warrants and each of the Warrants are immediately separable and will be issued separately in this offering. For each Pre-Funded Unit we sell, the number of Units we are offering will be decreased on a one-for-one basis. The purchase price of each Pre-Funded Unit is equal to the price per Unit being sold to the public in this offering, minus $0.001, and the exercise price of each Pre-Funded Warrant included in the Pre-Funded Unit is $0.001 per share. Because we will issue two Warrants as part of each Unit or Pre-Funded Unit, the number of Warrants sold in this offering will not change as a result of a change in the mix of the Units and Pre-Funded Units sold. |
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Series A Warrants and Series B Warrants |
Each of
the Warrants will have an exercise price of $0.5688 (equal to 100% of the assumed public offering
price of each Unit sold in this offering) and will be exercisable on or after the date on which Stockholder
Approval is obtained, solely to the extent required under Rule 5635(d) (See “Risk Factors –
Risks Related to this Offering and Ownership of Our Securities” and “Description of Securities
That We Are Offering – Series A Warrants, Series B Warrants and Pre-Funded Warrants –
Stockholder Approval – Series A Warrants and Series B Warrants” for additional information
regarding Stockholder Approval and Rule 5635(d)). Each of the Warrants will be immediately exercisable
upon Stockholder Approval by paying the aggregate exercise price for such Warrants being exercised
and, in the event of any exercise thereof, there is, at any time, no effective registration statement
registering the Warrant Shares issuable upon such Warrants, or the prospectus contained therein is
not available for the issuance of such Warrant Shares, then such Warrants may also be exercised on
a cashless basis for a net number of shares, as provided in the formula in each of the Warrants.
The Series A Warrants will expire on the fifth anniversary of their
issuance and the Series B Warrants will expire two and one-half years after their issuance. The Warrants include certain mechanisms,
including (i) an alternative cashless exercise provision in the Series B Warrants and (ii) certain anti-dilution provisions and reverse
stock split provisions. To better understand the terms of each of the Warrants, you should carefully read the “Description of Securities
That We Are Offering” section of this prospectus. You should also read the forms of each of the Warrants, which are filed as exhibits
to the registration statement of which this prospectus forms a part. This offering also relates to the shares of Common Stock issuable
upon exercise of each of the Warrants.
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Pre-Funded Warrants |
Each Pre-Funded Warrant will be immediately exercisable at an exercise price of $0.001 per share of our Common Stock and may be exercised at any time until exercised in full, and the Pre-Funded Warrants may also be exercised on a cashless basis for a net number of shares, as provided in the formula in the Pre-Funded Warrants. To better understand the terms of the Pre-Funded Warrants, you should carefully read the “Description of Securities That We Are Offering” section of this prospectus. You should also read the form of Pre-Funded Warrant, which is filed as an exhibit to the registration statement of which this prospectus forms a part. This offering also relates to the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants. |
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Placement
Agent Warrants |
The registration
statement of which this prospectus is a part also registers for sale warrants to purchase
up to 369,198 shares of our Common Stock issuable to the placement agent, as a portion of
the compensation payable to the placement agent in connection with this offering. In accordance
with the terms of the placement agency agreement, such warrants issued to the placement agent
(the “PA Warrants”) will only be issued to the placement agent in the event that
$5 million or more of the Securities are sold in this offering. The PA Warrants will be exercisable
on or after the date of Stockholder Approval and for a five-year period commencing 180 days
following the date of commencement of sales of the Securities, at an exercise price of $0.5688
per share, which is equal to the assumed public offering price of the Units offered hereby.
Please see “Plan of Distribution — Placement Agent Warrants” for a description
of the PA Warrants. |
Assumed
public offering price per Unit and per Pre-Funded Unit |
$0.5688
per Unit and $0.5678 per Pre-Funded Unit, based on the last reported closing price for our Common Stock on Nasdaq on July 18, 2024. |
|
|
Common
Stock outstanding immediately after this offering (1) |
14,500,197
shares of Common Stock (assuming the sale of all of the Securities offered hereby, and assuming no sale of any Pre-Funded Units and
no exercise of the Series A Warrants, Series B Warrants or PA Warrants issued in this offering, if any). |
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|
Use
of proceeds |
We estimate that the net proceeds to us
from the offering will be approximately $6.12 million (based on an assumed public offering price of $0.5688 per Unit), after deducting
the placement agent fees and estimated offering expenses payable by us, and assuming the sale of all Units offered hereby, no sale
of any Pre-Funded Units and no exercise of the Warrants or PA Warrants (if any) issued in this offering. However, this is a best-efforts
offering with no minimum number of Securities or amount of proceeds as a condition to closing, and we may not sell all or any of
the Securities offered pursuant to this prospectus; as a result, we may receive significantly less in net proceeds.
We intend to use the net proceeds of this offering
for continued new product development, working capital and other general corporate purposes. See “Use of Proceeds” for a more
complete description of the intended use of proceeds from this offering. |
|
|
Purchases
by directors and officers |
Our
directors and officers intend to purchase an aggregate of approximately 105,480 Units
in this offering and have represented to us that such purchases will be solely for investment intent. |
|
|
Risk factors |
An investment in our securities is highly speculative and involves substantial risk. Please carefully consider the “Risk Factors” section on page 5 and other information in this prospectus for a discussion of factors to consider before deciding to invest in the Securities offered hereby. Additional risks and uncertainties not presently known to us or that we currently deem to be immaterial may also impair our business and operations. |
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|
Lock-up agreements |
Our directors and officers have agreed with the
placement agent, subject to certain exceptions, not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any
of our Common Stock or securities convertible into common stock for a period of 60 days from the date of this prospectus without the prior
written consent of the placement agent. See “Plan of Distribution.”
In addition, pursuant to the securities purchase
agreements that we will enter into with purchasers of Securities in connection with this offering, we will agree, subject to certain exceptions,
not to (i) offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our Common Stock or securities convertible
into Common Stock for a period of 90 days from the closing date of this offering and (ii) effect or enter into an agreement to effect
any issuance by the Company of Common Stock or securities convertible into Common Stock for a period of (or a combination of units thereof)
involving a Variable Rate Transaction (as such term is defined in such securities purchase agreements) for a period of six (6) months
from the closing date of this offering. |
|
|
Transfer agent, warrant agent and registrar |
The transfer agent and registrar for our Common Stock and the warrant agent for the Series A Warrants, Series B Warrants and Pre-Funded Warrants will be Nevada Agency and Transfer Company, with its business address at 50 West Liberty Street, Suite 880, Reno NV 89501 and its telephone number is (775) 322-5623. |
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Nasdaq symbol and trading |
Our Common Stock is listed on Nasdaq under the symbol “LGMK”. There is no established trading market for the Units, Pre-Funded Units, Series A Warrants, Series B Warrants or Pre-Funded Warrants, and we do not expect a trading market for any such securities to develop. We do not intend to list such securities on any securities exchange or other trading market. Without a trading market, the liquidity of such securities will be extremely limited. |
| (1) | Shares
of our Common Stock that will be outstanding after this offering is based on 2,193,587 shares
of Common Stock outstanding as of July 18, 2024, and excludes the following as of such date:
(i) the exercise of outstanding warrants to purchase up to an aggregate of 9,284,290 shares
of Common Stock at a weighted average exercise price of approximately $33.09 per share, (ii)
the exercise of outstanding options granted to certain directors of the Company to purchase
up to an aggregate of 140,624 shares of Common Stock at a weighted average exercise price
of $5.16 per share, (iii) the conversion of the 106,333 outstanding shares of Series F Preferred
Stock into up to 2,658 shares of Common Stock based on a conversion price equal to $120 per
share, and (iv) the shares of Common Stock issuable upon exercise of each of the Warrants, as
well as the Pre-Funded Warrants and PA Warrants, if any. |
RISK FACTORS
An investment in the Securities offered under
this prospectus involves a high degree of risk. You should carefully consider and evaluate all of the information contained in this prospectus
and in the documents that we incorporate by reference herein before you decide to invest in our securities. In particular, you should
carefully consider and evaluate the risks and uncertainties described under the heading “Risk Factors” in this prospectus
and in the documents incorporated by reference herein. Investors are further advised that the risks described below may not be the only
risks we face. Additional risks that we do not yet know of, or that we currently think are immaterial, may also negatively impact our
business operations or financial results. Any of the risks and uncertainties set forth in this prospectus and in the documents incorporated
by reference herein, as updated by annual, quarterly and other reports and documents that we file with the SEC and incorporate by reference
into this prospectus, could materially and adversely affect our business, results of operations and financial condition, which in turn
could materially and adversely affect the value of our securities.
Risks Related to this Offering and Ownership
of Our Securities
We have been notified by The Nasdaq Stock
Market LLC of our failure to comply with certain continued listing requirements and, if we are unable to regain compliance with all applicable
continued listing requirements and standards of The Nasdaq Stock Market LLC, our Common Stock could be delisted from the Nasdaq Capital
Market.
Our Common Stock is currently listed on Nasdaq.
In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including
those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price,
and certain corporate governance requirements.
On May 8, 2024, we received a written notification
from the Listing Qualifications Department of The Nasdaq Stock Market LLC notifying us that we were not in compliance with the minimum
bid price requirement for continued listing on Nasdaq, as set forth under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price
Requirement”), because the closing bid price of our shares of common stock, par value $0.0001 per share (“Common Stock”),
was below $1.00 per share for the previous thirty (30) consecutive business days. We were granted 180 calendar days, or until November
4, 2024, to regain compliance with the Minimum Bid Price Requirement. In the event we do not regain compliance with the Minimum Bid Price
Requirement by November 4, 2024, we may be eligible for an additional 180-calendar day grace period. To qualify, we will be required to
meet the continued listing requirement for market value of publicly held shares and all other listing standards for Nasdaq, with the exception
of the Minimum Bid Price Requirement, and will need to provide written notice to The Nasdaq Stock Market LLC of our intent to regain compliance
with such requirement during such second compliance period. If we do not regain compliance within the allotted compliance period(s), including
any extensions that may be granted, The Nasdaq Stock Market LLC will provide notice that our Common Stock will be subject to delisting
from Nasdaq. At that time, we may appeal The Nasdaq Stock Market LLC’s determination to a hearings panel.
The Company intends to continuously monitor the
closing bid price for its Common Stock, and is in the process of considering various measures to resolve the deficiency and regain compliance
with the Minimum Bid Price Requirement. However, there can be no assurance that we will be able to regain or maintain compliance with
the Minimum Bid Price Requirement or any other Nasdaq listing standards, that Nasdaq will grant the Company any extension of time to regain
compliance with the Minimum Bid Price Requirement or any other Nasdaq listing requirements, or that any such appeal to the Nasdaq hearings
panel will be successful, as applicable. If we are unable to maintain compliance with these Nasdaq requirements, our Common Stock will
be delisted from Nasdaq.
In the event that our Common Stock is delisted
from Nasdaq, as a result of our failure to comply with the Minimum Bid Price Requirement, or due to our failure to continue to comply
with any other requirement for continued listing on Nasdaq, and is not eligible for listing on another exchange, trading in the shares
of our Common Stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities
such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price
quotations for, our Common Stock, and it would likely be more difficult to obtain coverage by securities analysts and the news media,
which could cause the price of our Common Stock to decline further. Also, it may be difficult for us to raise additional capital if we
are not listed on a national exchange.
This is a best-efforts
offering, no minimum amount of Securities is required to be sold, and we may not raise the amount of capital that we believe is required
for our business plans.
The placement agent has agreed to use its reasonable
best efforts to solicit offers to purchase the Securities in this offering. The placement agent has no obligation to buy any of the Securities
from us or to arrange for the purchase or sale of any specific number or dollar amount of the Securities. There is no required minimum
number of Securities that must be sold as a condition to completion of this offering. Because there is no minimum offering amount required
as a condition to the closing of this offering, the actual offering amount, placement agent fees and proceeds to us are not presently
determinable and may be substantially less than the maximum amounts set forth herein. We may sell fewer than all of the Securities offered
hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund
in the event that we do not sell an amount of Securities sufficient to support our continued operations. Thus, we may not raise the amount
of capital that we believe is required for our operations and may need to raise additional funds. Such additional fundraises may not be
available or available on terms acceptable to us.
The ownership interests of management as
a result of their purchases in this offering and historical beneficial ownership of Common Stock could enable such insiders to prevent
a merger that may provide shareholders a premium for their shares.
Our directors and officers intend to purchase
an aggregate of 105,480 Units in this offering, based on an assumed offering price of $0.5688 per Unit, and after such purchase would
beneficially own approximately 3.0% of our outstanding shares of Common Stock assuming all Units in this offering are sold, upon the
separation of Units into their component shares, Series A Warrants and Series B Warrants upon the consummation of this offering. However,
depending on the total number of Units issued in this offering, this may result in management controlling a significant percentage of
shares of Common Stock. If such individuals were to act together, they could have significant influence over the outcome of any shareholder
vote. This voting power may discourage a potential sale of the Company that its shareholders may desire.
The market price for our Common Stock is
particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, and lack of profits,
which could lead to wide fluctuations in our share price. You may be unable to sell your shares of Common Stock at or above the assumed
public offering price attributed to the Common Stock included in the Units purchased in this offering or to the Common Stock issued upon
exercise of the Warrants or Pre-Funded Warrants included in the Units and/or Pre-Funded Units in this offering, which may result in substantial
losses to you.
The market for our Common Stock is characterized
by significant price volatility when compared to the shares of larger, more established companies that have large public floats, and we
expect that our share price will continue to be more volatile than the shares of such larger, more established companies for the indefinite
future. The volatility in our share price is attributable to a number of factors. First, as noted above, our Common Stock is, compared
to the shares of such larger, more established companies, sporadically and thinly traded. The price for our Common Stock could, for example,
decline precipitously in the event that a large number of our Common Stock is sold on the market without commensurate demand. Secondly,
we are a speculative or “risky” investment due to our lack of profits to date. As a consequence of this enhanced risk, more
risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress,
be more inclined to sell their shares of Common Stock on the market more quickly and at greater discounts than would be the case with
the stock of a larger, more established company that has a large public float. Many of these factors are beyond our control and may decrease
the market price of our Common Stock regardless of our operating performance.
Because of volatility in the stock market
in general, the market price of our Common Stock will also likely be volatile.
The stock market in general, and the market for
stocks of healthcare technology companies in particular, has been highly volatile. As a result, the market price of our Common Stock is
likely to be volatile, and investors in our Common Stock may experience a decrease, which could be substantial, in the value of their
shares of Common Stock or the loss of their entire investment for a number of reasons, including reasons unrelated to our operating performance
or prospects. The market price of our Common Stock could be subject to wide fluctuations in response to a broad and diverse range of factors,
including those described elsewhere in this “Risk Factors” section and this prospectus and the following:
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recent price volatility and any known risks of investing in our Common Stock under these circumstances; |
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the market price of our Common Stock prior to the recent price volatility; |
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any recent change in financial condition or results of operations, such as in earnings, revenues or other measure of company value that is consistent with the recent change in the prices of our Common Stock; and |
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risk factors addressing the recent extreme volatility in stock price, the effects of a potential “short squeeze” due to a sudden increase in demand for our Common Stock as a result of current investor exuberance associated with technology-related stocks, the impact that this offering could have on the price of our Common Stock and on investors where there is a significant number of shares of Common Stock being offered relative to the number of shares of our Common Stock currently outstanding and, to the extent that the Company expects to conduct additional offerings in the future to fund its operations or provide liquidity, the dilutive impact of those offerings on investors that purchase such shares in the offering at a significantly higher price. |
Substantial future issuances and sales
of shares of our Common Stock, including as a result of certain provisions contained in the Series A Warrants and Series B Warrants,
could cause the market price of our Common Stock to decline.
We expect that significant additional capital
will be needed in the near future to continue our planned operations. Sales of a substantial number of shares of our Common Stock in the
public market following the completion of this offering, or the perception that these sales might occur, could depress the market price
of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict
the effect that such sales may have on the prevailing market price of our Common Stock.
Additionally, if the Series B Warrants are
exercised using the alternative cashless exercise provision contained therein, assuming receipt of Stockholder Approval, such exercising
holder will receive two (2) shares of Common Stock for each Series B Warrant they exercise, without any cash payment to us. Such issuance
may result in substantial dilution to stockholders. Each of the Series A Warrants and Series B Warrants also contain certain anti-dilutive
provisions whereby (i) the exercise price of the Series A Warrants will be reduced in the event of a subsequent issuance by the Company
of Common Stock (or securities exercisable, convertible or exchangeable into Common Stock) to the price of such shares or securities
in such subsequent issuance and (ii) the exercise price of the Series A Warrants and Series B will be reduced in the event of a subsequent
reverse stock split of Common Stock or similar share combination recapitalization event to the lowest VWAP (as defined in the Warrants)
of the Common Stock within a set period before and after such split or other event, which price reduction in each case is subject to
a floor price. In the event that any such price reduction occurs, the number of shares of Common Stock issuable upon exercise of such
Series A Warrants and/or Series B Warrants upon such applicable event will increase proportionately such that the aggregate exercise
price of such Series A Warrants and/or Series B Warrants remains the same. Assuming Stockholder Approval is obtained, in the event that
such Series A Warrants and Series B Warrants are subsequently exercised, such issuances would result in substantial dilution to stockholders.
See “Description of Securities That We Are Offering” for additional information. Furthermore, if previously issued warrants,
options and shares of our preferred stock are exercised for or converted into Common Stock, you will experience further dilution. See
“Description of Securities That We Are Offering” for additional information.
We may seek to raise additional funds, finance
acquisitions or develop strategic relationships by issuing securities that would dilute the ownership of the Common Stock. Depending on
the terms available to us, if these activities result in significant dilution, it may negatively impact the trading price of our shares
of Common Stock.
We have financed our operations, and we expect
to continue to finance our operations, acquisitions, if any, and the development of strategic relationships by issuing equity and/or convertible
securities, which could significantly reduce the percentage ownership of our existing stockholders. Further, any additional financing
that we secure may require the granting of rights, preferences or privileges senior to, or pari passu with, those of our Common Stock.
Additionally, we may acquire other technologies or finance strategic alliances by issuing our equity or equity-linked securities, which
may result in additional dilution. Any issuances by us of equity securities may be at or below the prevailing market price of our Common
Stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our Common Stock to
decline. We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities or instruments
senior to our shares of Common Stock. The holders of any securities or instruments we may issue may have rights superior to the rights
of our common stockholders. If we experience dilution from issuance of additional securities and we grant superior rights to new securities
over such stockholders, it may negatively impact the trading price of our shares of Common Stock.
We could issue “blank check”
preferred stock without stockholder approval with the effect of diluting then current stockholder interests and impairing their voting
rights; and provisions in our charter documents could discourage a takeover that stockholders may consider favorable.
Our articles of incorporation (“Articles
of Incorporation”) authorize the issuance of up to 10,000,000 shares of “blank check” preferred stock with designations,
rights and preferences as may be determined from time to time by our Board. Our Board is empowered, without stockholder approval, to issue
a series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair
the voting power of, our common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying
or preventing a change in control of the Company. For example, it would be possible for our Board to issue preferred stock with voting
or other rights or preferences that could impede the success of any attempt to change control of the Company. The Series C Preferred Stock
currently ranks senior to the Common Stock and our Series F Preferred Stock, and any class or series of capital stock created after the
Series C Preferred Stock and has a special preference upon the liquidation of the Company. The Series F Preferred Stock currently ranks
senior to the Common Stock and any class or series of capital stock created after the Series F Preferred Stock and has a special preference
upon the liquidation of the Company. For further information regarding our shares of (i) Series C Preferred Stock, please refer to the
disclosure contained in our Current Report on Form 8-K filed with the SEC on May 30, 2017 and the Certificate of Designations for our
Series C Preferred Stock filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 2, 2023 and (ii) Series F Preferred
Stock, please refer to the disclosure contained in our Current Report on Form 8-K filed with the SEC on August 17, 2021 and the Certificate
of Designation for the Series F Preferred Stock filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 2, 2023.
If and when a larger trading market for
our Common Stock develops, the market price of our Common Stock is still likely to be highly volatile and subject to wide fluctuations,
and you may be unable to resell your shares of Common Stock at or above the assumed public offering price of the shares of Common Stock
included in the Units in this offering or the assumed public offering price of the Common Stock obtained upon exercise of the Warrants
or Pre-Funded Warrants included in the Units and/or Pre-Funded Units in this offering.
The market price of our Common Stock may be highly
volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including, but not
limited to:
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variations in our revenues and operating expenses; |
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actual or anticipated changes in the estimates of our operating results or changes in stock market analyst recommendations regarding our Common Stock, other comparable companies or our industry generally; |
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market conditions in our industry, the industries of our customers and the economy as a whole; |
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actual or expected changes in our growth rates or our competitors’ growth rates; |
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developments in the financial markets and worldwide or regional economies; |
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announcements of innovations or new products or services by us or our competitors; |
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announcements by the government relating to regulations that govern our industry; |
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sales of our Common Stock or other securities by us or in the open market; |
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changes in the market valuations of other comparable companies; and |
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other events or factors, many of which are beyond our control, including those resulting from such events, or the prospect of such events, including war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere, could disrupt our operations, disrupt the operations of our suppliers or result in political or economic instability. |
We may acquire other technologies or finance strategic
alliances by issuing our equity or equity-linked securities, which may result in additional dilution to our stockholders.
If securities or industry analysts do not
publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could
decline.
The trading market for our Common Stock may depend
in part on the research and reports that securities or industry analysts may publish about us or our business, our market and our competitors.
We do not have any control over such analysts. If one or more such analysts downgrade or publish a negative opinion of our Common Stock,
our share price would likely decline. If analysts do not cover our Company or do not regularly publish reports on us, we may not be able
to attain visibility in the financial markets, which could have a negative impact on our share price or trading volume.
We do not anticipate paying dividends on
our Common Stock in the foreseeable future; you should not invest in our Securities if you expect dividends.
The payment of dividends on our Common Stock will
depend on earnings, financial condition and other business and economic factors affecting us at such time as our Board may consider relevant.
If we do not pay dividends, our shares of Common Stock may be less valuable because a return on your investment will only occur if our
stock price appreciates.
Additionally, the holder of our shares of Series
C Preferred Stock are entitled to receive dividends pursuant to the Series C Certificate of Designations. The Series C Certificate of
Designations requires us to pay cash dividends on our Series C Preferred Stock on a quarterly and cumulative basis at a rate of five percent
(5%) per annum commencing on the date of issuance of such shares, which rate increases to fifteen percent (15%) per annum in the event
that the Company’s market capitalization is $50 million or greater for thirty consecutive days. We are currently obligated to declare
and pay $75,000 in quarterly dividends on our shares of Series C Preferred Stock. The Series F Certificate of Designation required us
to pay dividends on our Series F Preferred Stock at a rate of ten percent (10%) per annum commencing on the date of issuance of such shares,
which were payable until the earlier of the date on which such shares were converted or twelve months from such date of issuance, as applicable.
As of the date of this prospectus, we are no longer obligated to declare and pay dividends on outstanding shares of Series F Preferred
Stock, as such shares were issued over twelve months prior to such date, and an aggregate of approximately 37,800 shares of Common Stock
are payable as dividends to the holder of our shares of Series F Preferred Stock.
Subject to the payment of dividends on our shares
of Series C Preferred Stock, we currently intend to retain our future earnings to support operations and to finance expansion and, therefore,
we do not anticipate paying any cash dividends on our capital stock in the foreseeable future.
Financial Industry Regulatory Authority,
Inc. (“FINRA”) sales practice requirements may limit a stockholder’s ability to buy and sell our shares Common Stock.
FINRA has adopted rules that require that in recommending
an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.
Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts
to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for certain
customers. FINRA requirements will likely make it more difficult for broker-dealers to recommend that their customers buy our shares of
Common Stock, which may have the effect of reducing the level of trading activity in our Common Stock. As a result, fewer broker-dealers
may be willing to make a market in our Common Stock, reducing a stockholder’s ability to resell shares of our Common Stock.
Our management
will have broad discretion over the use of the net proceeds from this offering, you may not agree with how we use the proceeds and the
proceeds may not be invested successfully.
Our management will have broad discretion as to
the use of the net proceeds from this offering and could use them for purposes other than those contemplated at the time of commencement
of this offering. Accordingly, you will be relying on the judgment of our management regarding the use of these net proceeds, and you
will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is
possible that, pending their use, we may invest the net proceeds in a way that does not yield a favorable, or any, return for us. The
failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating
results and cash flows.
There is no public market for the Units,
Pre-Funded Units, Series A Warrants, Series B Warrants or Pre-Funded Warrants.
There is no established public trading market
for the Units, Pre-Funded Units, Series A Warrants, Series B Warrants or Pre-Funded Warrants offered hereby, and we do not expect a market
to develop. In addition, we do not intend to apply to list such securities on any national securities exchange or other nationally recognized
trading system, including Nasdaq. Without an active market, the liquidity of such securities will be limited.
In the event that Rule 5635(d) requires
that our stockholders approve the issuance of the Warrant Shares upon exercise of the Series A Warrants and Series B Warrants, such Series
A Warrants and Series B Warrants will not be exercisable until we are able to receive Stockholder Approval, and if we are unable to obtain
such Stockholder Approval, the Series A Warrants and Series B Warrants will have significantly less value.
Our Common Stock is currently listed on Nasdaq
and, as such, the Company is subject to the listing rules and regulations of The Nasdaq Stock Market LLC. Rule 5635(d) requires prior
stockholder approval for transactions, other than public offerings, involving the issuance of 20% or more of the pre-transaction shares
of Common Stock outstanding at less than the “Minimum Price”, which is defined as a price that is the lower of: (i) the Nasdaq
Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq
Official Closing Price of the Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of
the binding agreement. Shares of Common Stock issuable upon the exercise of warrants issued in such non-public offerings will be considered
shares issued in such a transaction in determining whether the 20% limit has been reached, except in certain circumstances such as issuing
warrants that are not exercisable for a minimum of six months and have an exercise price that exceeds market value.
In the event that Rule 5635(d) requires our
stockholders to approve the issuance of the Warrant Shares upon exercise of the Series A Warrants and Series B Warrants in excess of
such 20% limitation described above, the Series A Warrants and the Series B Warrants will not be exercisable until, and unless, we obtain
Stockholder Approval. Moreover, certain beneficial provisions to investors in this offering contained in the Series A Warrants and Series
B Warrants, such as the issuance of additional Warrant Shares in excess of such 20% limitation upon the triggering of the alternative
cashless exercise provision in the Series B Warrants and certain anti-dilution provisions in both the Series A Warrants and the Series
B Warrants, will not be effective until, and unless, we obtain Stockholder Approval. While we intend to promptly seek Stockholder Approval
to the extent required under Rule 5635(d), there is no guarantee that Stockholder Approval will ever be obtained. If Stockholder Approval
is required and we are unable to obtain such approval, the Warrants will not become exercisable and will have substantially less value.
In addition, we will incur substantial cost, and management will devote substantial time and attention, in attempting to obtain Stockholder
Approval. For the avoidance of doubt, Stockholder Approval would only be sought to approve the issuance of the Warrant Shares underlying
each of the Series A Warrants and the Series B Warrants in order to comply with such 20% limitation set forth in Rule 5635(d); the issuance
of the Warrant Shares, Series A Warrants and Series B Warrants is not otherwise subject to stockholder approval or any other limitation
on their issuance and registration hereon, and upon receipt of Stockholder Approval, the Warrants will be immediately exercisable for
registered Warrant Shares. See also “Description of Securities That We Are Offering – Series A Warrants, Series B Warrants
and Pre-Funded Warrants – Stockholder Approval – Series A Warrants and Series B Warrants”.
We will likely not receive any additional
funds upon the exercise of the Warrants.
If we are able to obtain Stockholder Approval,
the each of the Warrants may be exercised by way of a cashless exercise provision, and the Series B Warrants may be exercised by way
of an alternative cashless exercise provision, meaning that the holders thereof may not pay a cash purchase price upon exercise, but
instead would receive upon such exercise a number of shares of our Common Stock determined according to the applicable formula set forth
in the applicable Warrants. If the Series B Warrants are exercised pursuant to such alternative cashless exercise provision, such exercising
holder will receive two shares of Common Stock for each Series B Warrant exercised, without any cash payment to us. Accordingly, we will
likely not receive any additional funds upon the exercise of such Warrants. See “Description
of Securities That We Are Offering” for more information.
Each of the Series A Warrants, Series B
Warrants and the Pre-Funded Warrants in this offering are speculative in nature.
Following this offering, the market value
of each of the Series A Warrants, Series B Warrants and the Pre-Funded Warrants, if any, is uncertain and there can be no assurance that
the market value of each of the Series A Warrants, Series B Warrants and the Pre-Funded Warrants will equal or exceed their respective
imputed assumed public offering price. In the event that our Common Stock price does not exceed the respective exercise price of the
Series A Warrants, Series B Warrants or Pre-Funded Warrants during the period when such Series A Warrants, Series B Warrants and Pre-Funded
Warrants are exercisable, such Series A Warrants, Series B Warrants and Pre-Funded Warrants may not have any value. Furthermore, each
Series A Warrant, will expire five years from its date of issuance and each Series B Warrant will expire two and one half years from
its date of issuance.
Holders of each of the Series A Warrants,
Series B Warrants and Pre-Funded Warrants will not have rights of holders of our shares of Common Stock until such Series A Warrants,
Series B Warrants and Pre-Funded Warrants are exercised.
Neither the Series A Warrants, the Series B Warrants
nor the Pre-Funded Warrants in this offering confer any rights of share ownership on their holders, but rather merely represent the right
to acquire shares of Common Stock at a fixed price. Until holders of each of the Series A Warrants, Series B Warrants and Pre-Funded Warrants
acquire shares of Common Stock upon exercise of such Series A Warrants, Series B Warrants and Pre-Funded Warrants, respectively, such
holders will have no rights with respect to our shares of Common Stock underlying such Series A Warrants, Series B Warrants and Pre-Funded
Warrants.
Purchasers who
purchase the Securities in this offering pursuant to a securities purchase agreement may have rights not available to purchasers that
purchase without the benefit of a securities purchase agreement.
In addition to rights and remedies available to
all purchasers in this offering under federal securities and state law, the purchasers that enter into a securities purchase agreement
to purchase the Securities will also be able to bring claims of breach of contract against us. The ability to pursue a claim for breach
of contract provides those investors with the means to enforce the covenants uniquely available to them under such securities purchase
agreement.
Risks Related to Our Business
Our inability to win or renew government
contracts during regulated procurement processes or preferences granted to certain bidders for which we would not qualify could harm our
operations and significantly reduce or eliminate our profits.
U.S. government contracts are awarded through
a regulated procurement process. The U.S. government has increasingly relied upon multi-year contracts with pre-established terms and
conditions, such as indefinite delivery, indefinite quantity (“IDIQ”) contracts, which generally require those contractors
who have previously been awarded contracts to engage in an additional competitive bidding process. The increased competition may require
us to make sustained efforts to reduce costs to realize revenue and profits under government contracts. If we are not successful in reducing
the amount of costs we incur, our profitability on government contracts will be negatively impacted.
The U.S. government has also increased its use
of contracts in which the client qualifies multiple contractors for a specific program and then awards specific task orders or projects
among the qualified contractors, which have the potential to create pricing pressure and to increase our costs by requiring us to submit
multiple bids and proposals. The competitive bidding process entails substantial costs and managerial time to prepare bids and proposals
for contracts that may not be awarded to us or may be split among competitors. Further, the U.S. government has announced specific statutory
goals regarding awarding prime and subcontracts to small businesses, women-owned small businesses, service-disabled veteran-owned businesses
and small disadvantaged businesses, which may obligate us to involve such businesses as subcontractors with respect to these contracts,
resulting in lower margins than when we sell direct. While we are unaware of any reason why our status as a public company would negatively
impact our ability to compete for and be awarded government contracts, our inability to win or renew government contracts during regulated
procurement processes or as a result of the policies pursuant to which these processes are implemented could harm our operations and significantly
reduce or eliminate our profits.
Further, our U.S. government contracts are subject
to termination by the U.S. government either at its convenience or upon the default of the contractor. Termination for convenience provisions
provides only for the recovery of costs incurred or committed, settlement expenses, and profit on work completed prior to termination.
Termination for default clauses imposes liability on the contractor for excess costs incurred by the U.S. government in re-procuring undelivered
items from another source. Any decisions by the U.S. government to not exercise contract options or to terminate, cancel, delay, modify
or curtail our major programs or contracts would adversely affect our revenues, revenue growth and profitability.
A failure by us to continue to generate
task orders or fulfill our obligations under an IDIQ contract with the GSA, or our inability to secure an IDIQ contract with the GSA,
would have a material adverse effect on our financial condition and results of operation.
Our contract with the GSA provides for the issuance
by the government of orders for our PERS products under the GSA Agreement and contains a multi-year term with unfunded ceiling amounts,
which allow but do not commit the GSA to purchase from us. Additionally, although we currently do not have an IDIQ contract with the GSA,
we may not be able to secure an IDIQ contract with the GSA. A failure to be awarded task orders under any contracts with the government
would have a material adverse effect on our results of operations and financial conditions. Additionally, any failure by us to fulfill
our contractual obligations under these government contracts, or to secure an IDIQ contract with the GSA, would result in substantially
reduced revenue and profits and would have a material adverse effect on our financial condition and results of operation. Our ability
to fulfill our contractual obligations may be limited by our ability to devote sufficient resources and limited by availability of material
supplies. If we do not fulfill our contractual obligations in a timely manner, we may experience delays in product delivery which would
postpone receipt of revenue from those delayed deliveries. Additionally, if we are consistently unable to fulfill the orders and other
related obligations, this may be a disincentive to customers to award large contracts to us in the future until they are comfortable that
we can effectively manage the orders, or even result a termination of an existing contract.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the sections entitled “Risk
Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business”
included in this prospectus and in our other filings with the SEC incorporated by reference to the registration statement of which this
prospectus forms a part, contains forward-looking statements within the meaning of Section 21(E) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”).
These forward-looking statements include, without limitation: statements regarding proposed new products or services; statements concerning
litigation or other matters; statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial
and operating results and future economic performance; statements of our management’s goals and objectives; statements concerning
our competitive environment, availability of resources and regulation; trends affecting our financial condition, results of operations
or future prospects; our financing plans or growth strategies; and other similar expressions concerning matters that are not historical
facts. Words such as “may”, “will”, “should”, “could”, “would”, “predicts”,
“potential”, “continue”, “expects”, “anticipates”, “future”, “intends”,
“plans”, “believes” and “estimates,” and variations of such terms or similar expressions, are intended
to identify such forward-looking statements.
Our actual results may differ materially from
those expressed in, or implied by, the forward-looking statements in this prospectus, any supplements or amendments thereto or in any
of the documents that we incorporate by reference into the registration statement of which this prospectus forms a part, including, among
other things:
|
● |
our ability to generate sufficient revenue and profitability in the future; |
|
● |
the risk that significant disruptions of information technology systems or security breaches could materially adversely affect our business; |
|
● |
any defects or disruptions in our products or services could diminish demand for such products or services and subject us to substantial liability; |
|
● |
our supply chains in Hong Kong subject us to risks and uncertainties relating to the laws and regulations of China and the changes in relations between the United States and China; |
|
● |
our ability to keep pace with changing industry technology and consumer preferences, develop and introduce new products, and obtain new patents; |
|
● |
our ability to obtain additional capital required to finance our research and development efforts and sales and marketing efforts; |
|
● |
our ability to protect our intellectual property rights adequately may not be certain and the impact of claims by others that we infringe on their intellectual property rights could increase our expenses and delay the development of our business; |
|
● |
our ability to identify, hire, and retain management, engineering and sales and marketing personnel; |
|
● |
the potential strain on our resources, including our employee base, during periods of rapid growth and expansion; |
|
● |
our dependence on contract manufacturers and the harm to our production and products if they are unable to meet our volume and quality requirements and alternative sources are not available; |
|
● |
our products and technologies may not be accepted by the intended commercial consumers of our products; and |
|
● |
other risks and uncertainties discussed under the caption “Risk Factors” in this prospectus and in documents incorporated by reference in this prospectus. |
The foregoing list of factors is not exhaustive.
For further information about these and other risks, uncertainties and factors affecting our business and prospects, please review the
disclosures contained in our filings made with the SEC. You should not place undue reliance on any forward-looking statements. Any forward-looking
statement or information speaks only as of the date on which it is made. Except as expressly required under federal securities laws and
the rules and regulations of the SEC, we expressly disclaim any intent or obligation to update any forward-looking statements or risk
factors, whether written or oral, that may be made from time to time by or on behalf of us or our subsidiaries, whether as a result of
new information, future events or changed circumstances or for any other reason after the date of such forward-looking statements or risk
factors. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.
INDUSTRY AND MARKET DATA
Unless otherwise indicated, information contained
in this prospectus concerning our industry and the market in which we operate, including our market position, market opportunity and market
size, is based on information from various sources, on assumptions that we have made based on such data and other similar sources and
on our knowledge of the markets for our products. These data sources involve a number of assumptions and limitations, and you are cautioned
not to give undue weight to such estimates.
We have not independently verified any third-party
information. While we believe the market position, market opportunity and market size information included in this prospectus is generally
reliable, and reasonable, such information is inherently imprecise. In addition, projections, assumptions and estimates of our future
performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and
risk due to a variety of factors, including those described in the section titled “Risk Factors,” “Special Note Regarding
Forward-Looking Statements” and elsewhere in this prospectus, any supplements or amendments thereto and in any documents that we
incorporate by reference into the registration statement of which this prospectus forms a part. These and other factors could cause results
to differ materially from those expressed in the estimates made by the independent parties and by us.
USE OF PROCEEDS
We estimate that the net proceeds to us from
this offering will be approximately $6.12 million (assuming the sale of all of the Securities offered hereby, at an assumed public offering
price of $0.5688 per Unit, the closing sale price of our Common Stock on Nasdaq on July 18, 2024, and assuming no sale of any Pre-Funded
Units and no exercise of the Warrants or PA Warrants (if any) issued in connection with this offering), after deducting the placement
agent fees and estimated offering expenses payable by us. We will only receive additional proceeds from the exercise of the Warrants,
Pre-Funded Warrants (if any Pre-Funded Units are sold) and PA Warrants (if any PA Warrants are issued) issuable in connection with this
offering if such Warrants, Pre-Funded Warrants or PA Warrants are exercised at their assumed exercise price of $0.5688 per share, $0.001
per share and $0.5688 per share, respectively, and the holders of such Warrants, Pre-Funded Warrants and PA Warrants pay the exercise
price of such Warrants, Pre-Funded Warrants and PA Warrants in cash. However, the Series B Warrants (but not the Series A Warrants) may
be exercised by way of an alternative cashless exercise, meaning that the holder thereof may not pay a cash purchase price upon exercise,
but instead would receive upon such exercise two (2) shares of our Common Stock for every Series B Warrant they exercise. Accordingly,
we will likely not receive any additional funds upon the exercise of the Series B Warrants. Additionally, because this is a best-efforts
offering and there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount,
the placement agent’s fees and net proceeds to us are not presently determinable and may be substantially less than the maximum
amounts set forth on the cover page of this prospectus.
A $0.20 increase (decrease) in the assumed
public offering price of $0.5688 per Unit would increase (decrease) the net proceeds to us from this offering by approximately $2.3 million,
using the same assumptions set forth above.
Similarly, a 100,000 increase (decrease) in
the number of Units offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us
by approximately $52,898, using the same assumptions set forth above.
We intend to use the proceeds of this offering
for continued new product development, working capital and general corporate purposes.
The precise amount and timing of the application
of such net proceeds will depend upon our funding requirements and the availability and cost of other funds. Our management will have
considerable discretion in the application of the net proceeds from this offering, and it is possible that we may allocate the proceeds
differently than investors in the offering may desire or that we may fail to maximize the return on these proceeds. You will be relying
on the judgment of our management with regard to the use of proceeds from this offering, and you will not have the opportunity, as part
of your investment decision, to assess whether the proceeds are being used appropriately.
DIVIDEND POLICY
We have never declared or paid any dividends on
our Common Stock. We currently intend to retain all available funds and any future earnings for the operation and expansion of our business
and, therefore, we do not anticipate declaring or paying dividends in the foreseeable future.
The payment of dividends on our Common Stock will
be at the discretion of our Board, are subject to the terms of the Series C Certificate of Designations and the dividend payments made
to holders of our shares of Series C Preferred Stock, and will depend on our results of operations, capital requirements, financial condition,
prospects, contractual arrangements, any limitations on payment of dividends present in our future debt agreements, and other factors
that our Board may deem relevant. The Series F Certificate of Designation required us to pay dividends on our Series F Preferred Stock
commencing on the date of issuance of such shares, which were payable until the earlier of the date on which such shares were converted
or twelve months from such date of issuance, as applicable. As of the date of this prospectus, we are no longer obligated to declare and
pay dividends on outstanding shares of Series F Preferred Stock, as such shares were issued over twelve months prior to such date. See
“Risk Factors – We do not anticipate paying dividends on our Common Stock in the foreseeable future; you should not invest
in our Securities if you expect dividends.”
CAPITALIZATION
The following table sets forth our actual cash
and cash equivalents and our capitalization as of March 31, 2024:
|
● |
on a pro forma basis to
give effect to the April 5, 2024 grant of 46,200 restricted shares of Common Stock to the Company’s Chief Executive Officer
pursuant to the Company’s 2023 Stock Incentive Plan (the “2023 Plan”) and the withholding and/or cancellation of
an aggregate of 3,025 shares of Common Stock in May and June of 2024 to certain Company employees following the termination of one
employee and to satisfy other employees’ tax withholding obligations; and |
|
● |
on a pro forma as adjusted
basis to give effect to the issuance and sale of 12,306,610 Units, assuming no Pre-Funded Units are sold and no exercise of any Warrants
or PA Warrants (if any), after deducting placement agent fees and estimated offering expenses payable by us. |
You should read this information in conjunction
with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements
and related notes appearing in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on May 15, 2024,
which are incorporated by reference in the registration statement of which this prospectus forms a part. The information below has also
been provided on a pro forma as adjusted basis to give further effect to this offering.
| |
Actual | | |
Pro Forma | | |
Pro Forma As Adjusted | |
Cash and cash equivalents | |
$ | 5,047,449 | | |
$ | 5,047,449 | | |
$ | 11,169,319 | |
Series C Redeemable Preferred Stock,
par value $0.0001 per share: 2,000 shares designated and 10 issued and outstanding – actual, pro forma and pro forma as adjusted | |
$ | 1,807,300 | | |
$ | 1,807,300 | | |
$ | 1,807,300 | |
| |
| | | |
| | | |
| | |
Stockholders’ Equity: | |
| | | |
| | | |
| | |
Preferred stock, par value $0.0001 per share: 10,000,000 shares authorized: | |
| | | |
| | | |
| | |
Series F Preferred Stock, par value $0.0001 per share: 1,333,333
shares designated and 106,333 shares issued and outstanding – actual, pro forma and pro forma as adjusted | |
| 319,000 | | |
| 319,000 | | |
| 319,000 | |
Common Stock, par value $0.0001 per share: 100,000,000 shares
authorized, 2,150,412 shares issued and outstanding, 2,196,612 shares issued and 2,193,587 outstanding, and 14,503,222 shares issued
and 14,500,197 shares outstanding – actual, pro forma and pro forma as adjusted | |
| 216 | | |
| 220 | | |
| 1,451 | |
Additional paid-in capital | |
| 113,257,840 | | |
| 113,254,563 | | |
| 119,375,202 | |
Accumulated deficit | |
| (101,905,434 | ) | |
| (101,905,434 | ) | |
| (101,905,434 | ) |
Total stockholders’ equity | |
| 11,671,622 | | |
| 11,668,349 | | |
| 17,790,219 | |
| |
| | | |
| | | |
| | |
Total capitalization | |
$ | 13,478,922 | | |
$ | 13,475,649 | | |
$ | 19,597,519 | |
A $0.20 increase in the assumed public offering
price of $0.5688 per Unit would increase cash and cash equivalents, working capital, total assets, and total stockholders’ equity
by approximately $2.3 million, assuming the number of Units and Pre-Funded Units offered by us, as set forth on the cover of this prospectus,
remains the same and after deducting the placement agent fees and estimated offering expenses payable by us, and assuming the sale of
all Units offered hereby, no sale of any Pre-Funded Units and no exercise of the Warrants or PA Warrants (if any) issued in connection
with this offering. An increase (decrease) in the number of Units that we are offering of 100,000 Units would increase (decrease) cash
and cash equivalents, working capital, total assets, and total stockholders’ equity by approximately $52,898, after deducting the
placement agent fees and estimated offering expenses payable by us, and assuming the sale of all Units offered hereby, no sale of any
Pre-Funded Units and no exercise of the Warrants or PA Warrants (if any) issued in connection with this offering and that the assumed
public offering price of such Units remains as set forth on the cover page of this prospectus. The pro forma as adjusted information
discussed above is illustrative only and will adjust based on the actual offering price and other terms of this offering determined at
pricing.
The total number of shares of our Common Stock
reflected in the discussion and tables above is based on 2,150,412 shares of our Common Stock outstanding as of March 31, 2024, which
number of outstanding shares excludes as of such date: (i) the exercise of outstanding warrants to purchase up to an aggregate of 9,531,242
shares of Common Stock at a weighted average exercise price of $39.44 per share; (ii) the exercise of outstanding options to purchase
up to an aggregate of 129,845 shares of Common Stock at a weighted average exercise price of $10.24 per share; (iii) the conversion of
106,333 outstanding shares of Series F Preferred Stock into any shares of Common Stock; and (iv) the exercise of any Series A Warrants
or Series B Warrants, as well as the Pre-Funded Warrants or PA Warrants, if any, issued in connection with this offering.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of July
18, 2024, information regarding beneficial ownership of our capital stock by:
|
● |
each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our voting securities; |
|
● |
each of our named executive officers; |
|
● |
each of our directors; and |
|
● |
all of our executive officers and directors as a group. |
The percentage ownership information shown
in the table prior to this offering is based upon 2,193,587 shares of Common Stock, 10 shares of Series C Preferred Stock, and 106,333
shares of Series F Preferred outstanding as of July 18, 2024. The percentage ownership information shown in the table after this offering
is based upon 14,500,197 shares of Common Stock (based on the sale of 12,306,610 shares of Common Stock included in the Units in this
offering, at an assumed public offering price of $0.5688 per Unit), 10 shares of Series C Preferred Stock, and 106,333 shares of Series
F Preferred Stock convertible into an aggregate of 2,658 shares of Common Stock, outstanding as of such date, assuming the sale of all
Units offered hereby, and assuming no sale of any Pre-Funded Units and no exercise of any Series A Warrants, Series B Warrants or PA
Warrants (if any) issued in this offering.
Beneficial ownership is determined according
to the rules of the SEC and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared
voting or investment power of that security, including securities that are exercisable for shares of Common Stock, Series C Preferred
Stock or Series F Preferred Stock within sixty (60) days of July 18, 2024. Except as indicated by the footnotes below, we believe, based
on the information furnished to us, that the persons named in the table below have sole voting and investment power with respect to all
shares of Common Stock, Series C Preferred Stock or Series F Preferred Stock shown that they beneficially own, subject to community property
laws where applicable.
For purposes of computing the percentage of
outstanding shares of our Common Stock, Series C Preferred Stock, and Series F Preferred Stock held by each holder or group of holders
named above, any shares of Common Stock, Series C Preferred Stock or Series F Preferred Stock that such holder or holders has the right
to acquire within sixty (60) days of July 18, 2024 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other holder. The inclusion herein of any shares of Common Stock, Series C Preferred Stock
or Series F Preferred Stock listed as beneficially owned does not constitute an admission of beneficial ownership. Unless otherwise identified,
the address of each beneficial owner listed in the table below is c/o LogicMark, Inc., 2801 Diode Lane, Louisville, KY 40299.
| |
Shares
Beneficially Owned Prior to the Offering | | |
Shares Beneficially Owned After the Offering | |
| |
Common Stock | | |
Series
C Preferred Stock | | |
Series
F Preferred Stock | | |
%
Total Voting | | |
Common Stock | | |
Series
C Preferred Stock | | |
Series
F Preferred Stock | | |
%
Total Voting | |
Name of Beneficial Owner | |
Shares | | |
% | | |
Shares | | |
% | | |
Shares | | |
% | | |
Power (1) | | |
Shares | | |
% | | |
Shares | | |
% | | |
Shares | | |
% | | |
Power (1) (2) | |
Non-Director
or Officer 5% Stockholders: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Anson
Investments Master Fund LP (3) | |
| 168,359 | | |
| 7.13 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 7.12 | | |
| 237,020 | | |
| 1.61 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 1.61 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Alpha
Capital Anstalt(4) | |
| 191,197 | | |
| 8.34 | | |
| -- | | |
| -- | | |
| 106,333 | | |
| 100 | | |
| 8.33 | | |
| 193,770 | | |
| 1.33 | | |
| -- | | |
| -- | | |
| 106,333 | | |
| 100 | | |
| 1.33 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Giesecke+Devrient
Mobile Security America, Inc.(5) | |
| -- | | |
| -- | | |
| 10 | | |
| 100 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 10 | | |
| 100 | | |
| -- | | |
| -- | | |
| -- | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Directors
and executive officers: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Chia-Lin
Simmons, Chief Executive Officer and Director(6) | |
| 131,736 | | |
| 6.01 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 6.00 | | |
| 149,316 | | |
| 1.03 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 1.03 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Mark
Archer, Chief Financial Officer(7) | |
| 28,811 | | |
| 1.31 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 1.31 | | |
| 46,391 | | |
| * | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| * | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Robert
A. Curtis, Director(8) | |
| 38,012 | | |
| 1.70 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 1.70 | | |
| 55,592 | | |
| * | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| * | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
John
Pettitt, Director(9) | |
| 35,755 | | |
| 1.60 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 1.60 | | |
| 53,335 | | |
| * | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| * | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Barbara
Gutierrez, Director(10) | |
| 35,528 | | |
| 1.59 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 1.59 | | |
| 53,108 | | |
| * | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| * | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Carine
Schneider, Director(11) | |
| 17,418 | | |
| * | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| * | | |
| 34,998 | | |
| * | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| * | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Directors
and Executive Officers as a Group (6 persons) | |
| 287,260 | | |
| 12.39 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 12.38 | | |
| 392,740 | | |
| 2.69 | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| 2.69 | |
| (1) | The
number of shares owned and the beneficial ownership percentages set forth in these columns
are based on 2,193,587 shares of Common Stock issued and outstanding as of July 18, 2024.
Shares of Common Stock issuable pursuant to options, preferred stock or warrants currently
exercisable or exercisable within sixty (60) days are considered outstanding for purposes
of computing the percentage beneficial ownership of the holder of such options, preferred
stock, or warrants; they are not considered outstanding for purposes of computing the percentage
of any other stockholder. Exercises of certain warrants and conversions of certain shares
of preferred stock held by certain stockholders listed above are subject to certain beneficial
ownership limitations, which provide that a holder of such securities will not have the right
to exercise or convert any portion of such securities, as applicable, if such holder, together
with such holder’s affiliates, would beneficially own in excess of 4.99% or 9.99%,
as applicable, of the number of shares of Common Stock outstanding immediately after giving
effect to such exercise, provided that upon at least 61 days’ prior notice to the Company,
such holder may increase or decrease such limitation up to a maximum of 9.99% of the number
of shares of Common Stock outstanding. As a result, the number of shares of Common Stock
reflected in these columns as beneficially owned by the applicable stockholders includes
(a) any outstanding shares of Common Stock held by such stockholder, and (b) if any, the
securities convertible into or exercisable for shares of Common Stock that may be held by
such stockholder, in each case which such stockholder has the right to acquire as of July
18, 2024 and without such holder or any of such holder’s affiliates beneficially owning
more than 4.99% or 9.99%, as applicable, of the number of outstanding shares of Common Stock
as of July 18, 2024. |
| (2) | Percentage
of total voting power represents voting power with respect to all shares of Common Stock, Series C Preferred Stock and Series F Preferred
Stock. The holders of our Common Stock and Series C Preferred Stock are entitled to one vote per share. The holders of our Series F Preferred
Stock vote on an as-converted to Common Stock basis. |
|
(3) |
Beneficial
ownership prior to the offering includes (i) 115,208 shares of Common Stock issuable upon exercise, in any combination, of (x) the
Company’s Series B-1 common stock purchase warrants exercisable for up to an aggregate of 75,000 shares of Common Stock, which
are subject to a 4.99% Beneficial Ownership Limitation, (y) the Company’s Series B-2 common stock purchase warrants exercisable
for up to an aggregate of 75,000 shares of Common Stock, which are subject to a 4.99% Beneficial Ownership Limitation and (z) the
Company’s warrants exercisable for up to an aggregate of 33,896 shares of Common Stock, which are subject to a 4.99% Beneficial
Ownership Limitation, and (ii) shares of Common Stock issuable upon the Company’s warrants exercisable for up to an aggregate
of 53,151 shares of Common Stock, which are subject to a 9.99% Beneficial Ownership Limitation, assuming such warrants are exercised
subsequent to the exercise of the warrants for shares of Common Stock described in (i) above and such shares remain held. Beneficial
ownership prior to the offering excludes an aggregate of 68,688 shares of Common Stock issuable in any combination upon the exercise
of such holder’s warrants as a result of the triggering of such 4.99% Beneficial Ownership Limitation provisions. Beneficial
ownership subsequent to the offering includes an aggregate of 237,020 shares of Common Stock issuable upon exercise of all such warrants
of the Company held by such holder, irrespective of the Beneficial Ownership Limitation provisions in such warrants. |
Anson Advisors Inc. (“AAI”)
and Anson Funds Management LP (“AFM”, and together with AAI, “Anson”) are the co-investment advisers of Anson
Investments Master Fund LP (“AIMF”). Anson holds voting and dispositive power over the securities held by AIMF. Bruce Winson
is the managing member of Anson Management GP LLC, which is the general partner of AFM. Moez Kassam and Amin Nathoo are directors of AAI.
Mr. Winson, Mr. Kassam and Mr. Nathoo each disclaim beneficial ownership of these securities except to the extent of their pecuniary interest
therein. The principal business address of the AIMF is Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town,
Grand Cayman KY1-9008, Cayman Islands.
|
(4) |
Beneficial
ownership prior to the offering includes an aggregate of 92,816 shares of Common Stock as well as an aggregate of (i) 17,518 shares
of Common Stock issuable in any combination upon exercise of all such holder’s warrants and shares of Series F Preferred Stock,
as a result of the 4.99% Beneficial Ownership Limitation in such warrants and shares of Series F Preferred Stock and (ii) an aggregate
of 80,863 shares of Common Stock issuable in upon exercise of such holder’s warrants subject to a 9.99% Beneficial Ownership
Limitation, assuming such warrants are exercised subsequent to the exercise and/or conversion of the warrants for shares of Common
Stock and shares of Series F Preferred Stock described in (i) above and such shares remain held. Beneficial ownership excludes an
aggregate of 2,573 shares of Common Stock issuable in any combination upon the exercise of such holder’s warrants and shares
of Series F Preferred Stock as a result of the triggering of such 4.99% Beneficial Ownership Limitation provisions. Beneficial ownership
subsequent to the offering includes an aggregate of 193,770 shares of Common Stock issuable upon exercise of all such warrants of
the Company and shares of Series F Preferred Stock held by such holder, irrespective of the Beneficial Ownership Limitation provisions
in such warrants and shares of Series F Preferred Stock. Konrad Ackermann has voting and investment control over the securities held
by Capital Anstalt. The principal business address of Alpha Capital Anstalt is Altenbach 8 -9490 Vaduz, Principality of Liechtenstein. |
| (5) | Giesecke
& Devrient Mobile Security America, Inc. (“G&D”) is the sole holder of our Series C Preferred Stock and thus has
100% of the voting power of our outstanding shares of Series C Preferred Stock, which have the same voting rights as our shares of Common
Stock (one vote per share). Beneficial ownership of G&D after the offering only includes G&D’s ownership of such shares
of Series C Preferred Stock. The address for G&D is 45925 Horseshoe Drive, Dulles, VA 20166. |
| (6) | Beneficial
ownership prior to the offering represents (i) 13,328 shares of restricted stock granted
outside the 2013 LTIP and the 2017 SIP, which vest over a period of 48 months, with one quarter
on the anniversary of the grant and 1/16 each subsequent quarter until all shares have vested,
so long as Ms. Simmons remains in the service of the Company, (ii) 10,208 shares of restricted
stock granted under the 2013 LTIP, which shares vest over a period of three (3) years commencing
on January 3, 2022, with 1,702 shares having vested on July 3, 2022, and thereafter, 850
shares to vest on the first day of each subsequent quarter until the entire award has vested,
so long as Ms. Simmons remains in the service of the Company for each such quarter, (iii)
62,000 shares of restricted stock granted pursuant to the Company’s 2023 Stock Incentive
Plan (“2023 SIP”), which shares vest over a period commencing on July 3, 2023,
with 1/4 of such shares to vest on July 3, 2024, and thereafter, 1/16 of such shares to vest
on the first day of each subsequent three-month period until the entire award has vested,
so long as Ms. Simmons remains in the service of the Company for each such quarter, and (iv)
46,200 shares of restricted stock granted pursuant to the Company’s 2023 SIP, which
shares vest over a period commencing on April 3, 2024, with 1/4 of such shares to vest on
April 3, 2025, and thereafter, 1/16 of such shares to vest on the first day of each subsequent
three-month period until the entire award has vested, so long as Ms. Simmons remains in the
service of the Company for each such quarter. Beneficial ownership after the offering represents
such holdings as well as 17,580 shares of Common Stock included in the Units purchased by
Ms. Simmons in this offering, based on an assumed public offering price of $0.5688 per Unit. |
| (7) | Beneficial
ownership prior to the offering represents (i) 6,470 shares of restricted stock granted outside
the 2013 LTIP and the 2017 SIP, which vest over a period of 48 months, with one quarter on
the anniversary of the grant and 1/16 each subsequent quarter until all shares have vested,
so long as Mr. Archer remains in the service of the Company; and (ii) 20,900 shares of restricted
stock granted pursuant to the 2023 SIP, which vest commencing on July 3, 2023, with 1/4 of
such shares to vest on July 3, 2024, and thereafter, 1/16 of such shares to vest on the first
day of each subsequent three-month period until the entire award has vested, so long as Mr.
Archer remains in the service of the Company for each such quarter. In addition, FLG Partners,
LLC (“FLG Partners”), of which Mr. Archer is a partner, was granted (i) 341 restricted
shares of Common Stock outside the 2013 LTIP and the 2017 SIP, which vested one quarter on
July 15, 2022, with subsequent vesting at 6.25% for each three-month period thereafter, and
(ii) 1,100 restricted shares of Common Stock, pursuant to the 2023 SIP, which vest commencing
on July 3, 2023, with 1/4 of such shares to vest on July 3, 2024, and thereafter, 1/16 of
such shares to vest on the first day of each subsequent three-month period until the entire
award has vested. Mr. Archer disclaims beneficial ownership of such shares of Common Stock
granted to FLG Partners. Beneficial ownership after the offering represents such holdings
as well as 17,580 shares of Common Stock included in the Units purchased by Mr. Archer in
this offering, based on an assumed public offering price of $0.5688 per Unit. |
| (8) | Beneficial
ownership prior to the offering includes stock options exercisable for 36,630 shares of Common
Stock at a weighted exercise price of $4.79 per share. Beneficial ownership after the offering
represents such holdings as well as 17,580 shares of Common Stock purchased by Mr. Curtis
in this offering, based on an assumed public offering price of $0.5688 per Unit. |
| (9) | Beneficial
ownership prior to the offering consists of stock options exercisable for 35,755 shares of
Common Stock at a weighted average exercise price of $2.54 per share. Beneficial ownership
after the offering represents such holdings as well as 17,580 shares of Common Stock purchased
by Mr. Pettitt in this offering, based on an assumed public offering price of $0.5688 per
Unit. |
| (10) | Beneficial
ownership prior to the offering consists of stock options exercisable for 35,528 shares of
Common Stock at a weighted average exercise price of $2.28 per share. Beneficial ownership
after the offering represents such holdings as well as 17,580 shares of Common Stock purchased
by Ms. Gutierrez in this offering, based on an assumed public offering price of $0.5688 per
Unit. |
| (11) | Beneficial
ownership prior to the offering includes stock options exercisable for 16,918 shares of Common
Stock at a weighted average exercise price of $1.02 per share. Beneficial ownership after
the offering represents such holdings as well as 17,580 shares of Common Stock purchased
by Ms. Schneider in this offering, based on an assumed public offering price of $0.5688 per
Unit. |
DESCRIPTION OF SECURITIES THAT WE ARE OFFERING
We are offering (A) up to 12,306,610 Units
at an assumed offering price of $0.5688 per Unit, each Unit consisting of: (i) one share of our Common Stock; (ii) one Series A Warrant;
and (iii) one Series B Warrant; and (B) up to 12,306,610 Pre-Funded Units, each Pre-Funded Unit at an assumed offering price of $0.5678
per Pre-Funded Unit, each Pre-Funded Unit consisting of: (i) one Pre-Funded Warrant; (ii) one Series A Warrant; and (iii) one Series
B Warrant. The Units and Pre-Funded Units have no stand-alone rights and will not be certificated or issued as stand-alone securities.
The shares of our Common Stock included in the Units will be issued separately from the Series A Warrants and the Series B Warrants included
in the Units, and the Pre-Funded Warrants included in the Pre-Funded Units will be issued separately from the Series A Warrants and the
Series B Warrants included in the Pre-Funded Units. We are also registering the shares of our Common Stock issuable from time to time
upon exercise of the Series A Warrants, Series B Warrants and Pre-Funded Warrants offered hereby. The following descriptions of our Common
Stock, Series A Warrants, Series B Warrants and Pre-Funded Warrants, and certain provisions of our Articles of Incorporation, our bylaws
and Nevada law are summaries and are qualified in their entirety by the full text of each relevant document. You should also refer to
our Articles of Incorporation and our bylaws, which are filed as exhibits to the registration statement of which this prospectus is part.
General
The Company is authorized to issue 110,000,000
shares of its capital stock consisting of (a) 100,000,000 shares of Common Stock and (b) 10,000,000 shares of “blank check”
preferred stock, of which 2,000 shares of preferred stock were designated as the Series C Preferred Stock and 1,333,333 shares of preferred
stock were designated as Series F Preferred Stock.
As of July 18, 2024, 2,193,587 shares of
our Common Stock were issued and outstanding, held by 89 stockholders of record (which do not include shares of Common Stock held in
street name), which number excludes the following as of such date: (i) the exercise of outstanding warrants to purchase up to an
aggregate of 9,284,290 shares of Common Stock at a weighted average exercise price of approximately of $33.09 per share, (ii) the
exercise of outstanding options granted to certain directors of the Company to purchase up to an aggregate of 140,624 shares of
Common Stock at a weighted average exercise price of $5.16 per share, (iii) the conversion of the 106,333 outstanding shares of
Series F Preferred Stock into up to 2,658 shares of Common Stock based on a conversion price equal to $120 per share, and (iv) the
shares of Common Stock issuable upon exercise of the Warrants, Pre-Funded Warrants and PA Warrants, if any. In addition, as of July 18, 2024, 10 shares of our Series C Preferred Stock were issued and
outstanding, held by one stockholder of record and 106,333 shares of Series F Preferred Stock were issued and outstanding, held by
one stockholder of record. The Series C Preferred Stock ranks senior to the Common Stock and the Series F Preferred Stock with
respect to dividends and redemption rights and rights upon liquidation, dissolution or winding up of the Company and the Series F
Preferred Stock ranks senior to the Common Stock with respect to dividends and redemption rights and rights upon liquidation,
dissolution or winding up of the Company.
Common Stock
Each share of Common Stock entitles the holder
to one vote, either in person or by proxy, at meetings of stockholders. Our stockholders are not permitted to vote their shares cumulatively.
Accordingly, the holders of our Common Stock who hold, in the aggregate, more than 50% of the total voting rights can elect all of our
directors and, in such event, the holders of the remaining minority shares will not be able to elect any of such directors. The vote of
the holders of a majority of the issued and outstanding shares of Common Stock cast and entitled to vote thereon is sufficient to authorize,
affirm, ratify or consent to such act or action, except as otherwise provided by law.
Holders of Common Stock are entitled to receive
ratably such dividends, if any, as may be declared by our Board out of funds legally available. We have not paid any dividends since our
inception, and we presently anticipate that all earnings, if any, will be retained for development of our business. Any future disposition
of dividends will be at the discretion of our Board and will depend upon, among other things, our future earnings, operating and financial
condition, capital requirements, and other factors.
Holders of our Common Stock have no preemptive
rights or other subscription rights, conversion rights, redemption or sinking fund provisions. Upon our liquidation, dissolution or winding
up, the holders of our Common Stock will be entitled to share ratably in the net assets legally available for distribution to stockholders
after the payment of all of our debts and other liabilities. The rights, preferences and privileges of holders of our common stock will
be subject to, and may be adversely affected by, the rights of the holders of shares of the Series C Preferred Stock, Series F Preferred
Stock or any series of preferred stock that we may designate in the future.
Series A Warrants, Series B Warrants and Pre-Funded Warrants
Each of the Series A Warrants, Series B Warrants
and the Pre-Funded Warrants will be issued in accordance with a warrant agency agreement to be entered into between us and Nevada Agency
and Transfer Company.
The following summary of certain terms and provisions
of the Series A Warrants, Series B Warrants and Pre-Funded Warrants offered hereby and such warrant agency agreement is not complete and
is subject to, and qualified in its entirety by, the provisions of the form of Series A Warrant, form of Series B Warrant, form of Pre-Funded
Warrant and form of such agreement, each of which is filed as an exhibit to the registration statement of which this prospectus is a part.
Prospective investors should carefully review the terms and provisions set forth in the form of Series A Warrant, form of Series B Warrant,
form of Pre-Funded Warrant and such warrant agency agreement.
Stockholder Approval – Series A Warrants
and Series B Warrants
Our Common Stock is currently listed on Nasdaq
and, as such, the Company is subject to the listing rules and regulations of The Nasdaq Stock Market LLC. Rule 5635(d) requires prior
stockholder approval for transactions, other than public offerings, involving the issuance of 20% or more of the pre-transaction shares
of Common Stock outstanding at less than the “Minimum Price”, which is defined as a price that is the lower of: (i) the Nasdaq
Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq
Official Closing Price of the Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of
the binding agreement. Shares of Common Stock issuable upon the exercise of warrants issued in such non-public offerings will be considered
shares issued in such a transaction in determining whether the 20% limit has been reached, except in certain circumstances such as issuing
warrants that are not exercisable for a minimum of six months and have an exercise price that exceeds market value. The alternative cashless
exercise provision (described below) in the Series B Warrants and certain anti-dilution provisions in both of the Series A Warrants and
the Series B Warrants (described below) will also not be effective until, and unless, we obtain such Stockholder Approval.
In the event that Rule 5635(d) requires our stockholders
to approve the issuance of the Warrant Shares upon exercise of the Series A Warrants and Series B Warrants in excess of such 20% limitation
described above, both of the Series A Warrants and the Series B Warrants (described below) will not be exercisable until, and unless,
we obtain Stockholder Approval. For the avoidance of doubt, Stockholder Approval would only be sought to approve the issuance of the Warrant
Shares underlying each of the Series A Warrants and the Series B Warrants in order to comply with such 20% limitation set forth in Rule
5635(d); the issuance of the Warrant Shares, Series A Warrants and Series B Warrants is not otherwise subject to stockholder approval
or any other limitation on their issuance and registration hereon, and upon receipt of Stockholder Approval, the Warrants will be immediately
exercisable for registered Warrant Shares. Pursuant to the terms of each of the Series A Warrants and the Series B Warrants, the Company
is required to hold a meeting of stockholders at the earliest practicable date after the date of their issuance, but in no event later
than one hundred and eighty (180) days after the closing date of this offering, for the purpose of obtaining Stockholder Approval, and
if such approval is not obtained at such meeting, to hold a meeting of stockholders every one hundred and eighty (180) days thereafter
for purposes of obtaining such Stockholder Approval. While we intend to promptly seek Stockholder Approval to the extent required under
Rule 5635(d), there is no guarantee that Stockholder Approval will ever be obtained. If Stockholder Approval is required and we are unable
to obtain such approval, the Series A Warrants and the Series B Warrants will not be exercisable and such Warrants will have substantially
less value. In addition, we will incur substantial cost, and management will devote substantial time and attention, in attempting to obtain
Stockholder Approval. See also “Risk Factors – Risks Related to this Offering and Ownership of Our Securities”.
Duration and Exercise Price
Each Warrant offered hereby will have an initial
exercise price per share equal to $0.5688. Each Pre-Funded Warrant offered hereby will have an initial exercise price per share equal
to $0.001. The Series A Warrants and the Series B Warrants will not be exercisable until, and unless, Stockholder approval is obtained.
Once Stockholder Approval is obtained, the Series A Warrants will be exercisable by paying the aggregate exercise price for the shares
of Common Stock being exercised or exercised on a cashless basis and will expire on the fifth anniversary of their issuance date, and
the Series B Warrants will be exercisable by paying the aggregate exercise price for the shares of Common Stock being exercised or exercised
on a cashless basis and will expire on the two and one-half years after their issuance date. The Pre-Funded Warrants will be immediately
exercisable and can be exercised until all such Pre-Funded Warrants are exercised in full.
The exercise price and number of shares of
Common Stock issuable upon exercise of such Series A Warrants, Series B Warrants and Pre-Funded Warrants are subject to appropriate adjustment
in the event of stock dividends, stock splits, reorganizations or similar events affecting our Common Stock and the exercise price. In
addition, the exercise price of each Series A Warrant and Series B Warrant will be subject to a one-time adjustment upon the next reverse
stock split of the Common Stock after each such Warrant’s issuance, such that in the event that the lowest VWAP during the five
trading day periods before and after such reverse stock split is lower than the exercise price of the Warrants then in effect, the exercise
price of the Warrants will be reduced to such lowest price during such 11-trading day period, subject to a floor price. Further, upon
such an adjustment to the exercise price, the number of Warrant Shares issuable upon exercise of such Series A Warrant and Series B Warrant
will increase such that the aggregate exercise price payable under the Series A Warrant and Series B Warrant, after taking into account
such decreased exercise price, will equals the aggregate exercise price of such Series A Warrant and Series B Warrant prior to such adjustment;
provided that in the event that such adjustment would result in an increase in such exercise price, the exercise price of the Warrants
will be reduced to such lowest price during the five trading day period prior to and ending on the date of such exercise. The “aggregate
exercise price” in the immediately preceding sentence is based on the aggregate exercise price on the closing of the offering (reduced
ratably for prior exercises), and is not based on an aggregate exercise price resulting from a reduction in the exercise price without
a proportional increase in the number of Warrant Shares issuable upon exercise of the Series A Warrants and Series B Warrants.
Each of the Series A Warrants and Series B Warrants
will be issued separately from the shares of Common Stock included in the Units offered hereby and the Pre-Funded Warrants included in
the Pre-Funded Units offered hereby, as applicable, and each of the Series A Warrants, Series B Warrants and Pre-Funded Warrants may
be transferred separately immediately thereafter. For every one (1) share of Common Stock included in each Unit purchased in this offering,
one (1) Series A Warrant to purchase one (1) share of our Common Stock will be issued and one (1) Series B Warrant to purchase one (1)
share of our Common Stock will be issued; and for every one (1) Pre-Funded Warrant included in each Pre-Funded Unit purchased in this
offering, one (1) Series A Warrant to purchase one (1) share of our Common Stock will be issued and one (1) Series B Warrant to purchase
one (1) share of our Common Stock will be issued.
Exercisability
Each of the Series A Warrants, Series B Warrants
and Pre-Funded Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering a duly executed exercise
notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise (except in the case of
a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the Series A Warrant,
Series B Warrant, or Pre-Funded Warrant to the extent that the holder would own more than 4.99% (or at the election of the holder, 9.99%)
of the outstanding Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to us,
the holder may increase the amount of ownership of outstanding stock after exercising the holder’s Series A Warrants, Series B Warrants
or Pre-Funded Warrants, as applicable. No fractional shares of Common Stock will be issued in connection with the exercise of a Series
A Warrant, Series B Warrant, or Pre-Funded Warrant. In lieu of fractional shares, the number of shares will be rounded down to the nearest
whole share.
Cashless Exercise
If, at the time a holder exercises its Series
A Warrants or Series B Warrants, and a registration statement registering the issuance of the Warrant Shares underlying such Warrants
under the Securities Act is not then effective or available, then in lieu of making the cash payment otherwise contemplated to be made
to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either
in whole or in part) the net number of Warrant Shares determined according to a formula set forth in such Warrants. If, at the time a
holder exercises its Pre-Funded Warrants, in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise
in payment of the aggregate exercise price, the holder thereof may elect instead to receive upon such exercise (either in whole or in
part) the net number of Pre-Funded Warrant Shares determined according to a formula set forth in such Pre-Funded Warrants.
Alternative Cashless Exercise in the
Series B Warrants
The holder of a Series B Warrant may also
effect an “alternative cashless exercise” following the date of Stockholder Approval. In such event, the aggregate number
of shares of Common Stock issuable in such alternative cashless exercise pursuant to any given notice of exercise electing to effect
an alternative cashless exercise shall equal the product of (x) the aggregate number of shares of Common Stock that would be issuable
upon exercise of the Series B Warrant in accordance with the terms of the Series B Warrant if such exercise were by means of a cash exercise
rather than a cashless exercise and (y) 2.0.
Subsequent Equity Sales and Price Reset
in the Series A Warrants
In the event that the Company sells, enters
into an agreement to sell, or grants any option to purchase, sell, enter into an agreement to sell, or grant any right to reprice, or
otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any shares of Common
Stock or Common Stock Equivalents (as defined in the Series A Warrants), at an effective price per share below the exercise price of
the Series A Warrant then in effect, such exercise price will be reduced to such effective price, which in all cases is subject to a
floor price. Further, upon such a reduction of the exercise price, the number of Warrant Shares issuable upon exercise of such Series
A Warrant will increase such that the aggregate exercise price payable under the Series A Warrant, after taking into account such reduced
exercise price, will equal the aggregate exercise price of such Series A Warrant prior to such adjustment.
The Series A Warrants also contain a one-time
exercise price adjustment provision whereby the exercise price of the Series A Warrants will be adjusted to the greater of (i) such floor
price and (ii) the lowest VWAP during the five trading day period immediately preceding the thirtieth (30th) trading day immediately
following the date of issuance of the Series A Warrant.
Fundamental Transaction
In the event of a fundamental transaction, as
described in the Series A Warrants, Series B Warrants and Pre-Funded Warrants and generally including any reorganization, recapitalization
or reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or assets,
our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding Common Stock, or any person
or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the holders of the Warrants
or Pre-Funded Warrants, as applicable, will be entitled to receive upon exercise of such Warrants and Pre-Funded Warrants the kind and
amount of securities, cash or other property that the holders would have received had they exercised such Series A Warrants, Series B
Warrants and Pre-Funded Warrants immediately prior to such fundamental transaction. Notwithstanding the foregoing, in the event of such
a fundamental transaction, the holders will have the option, which may be exercised within 30 days after the consummation of the fundamental
transaction, to require the company or the successor entity purchase such Series A Warrants, Series B Warrants or Pre-Funded Warrant from
the holder by paying to the holder an amount of cash equal to the Black Scholes Value (as defined in such Series A Warrant, Series B Warrant,
or Pre-Funded Warrant) of the remaining unexercised portion of such Series A Warrant, Series B Warrant or Pre-Funded Warrant on the date
of the consummation of such transaction. However, if such fundamental transaction is not within the Company’s control, including
not approved by the Board, the holder will only be entitled to receive from the Company or any successor entity, as of the date of consummation
of such fundamental transaction, the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the
unexercised portion of such Series A Warrant, Series B Warrant or Pre-Funded Warrant, that is being offered and paid to the holders of
Common Stock 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.
Transferability
Subject to applicable laws, a Series A Warrant,
Series B Warrant or Pre-Funded Warrant may be transferred at the option of the holder upon surrender of such Series A Warrant, Series
B Warrant or Pre-Funded Warrant together with the appropriate instruments of transfer.
Exchange Listing
There is no established public trading market
for the Series A Warrants, Series B Warrants or Pre-Funded Warrants, and we do not expect a market to develop. We do not intend to list
the Series A Warrants, Series B Warrants or Pre-Funded Warrants on any securities exchange or nationally recognized trading system. Without
an active trading market, the liquidity of the Series A Warrants, Series B Warrants and Pre-Funded Warrants will be limited.
Warrant Agent; Global Certificate
The Series A Warrants, Series B Warrants and Pre-Funded
Warrants will be issued in registered form under a warrant agent agreement between the Warrant Agent and us. The Series A Warrants, Series
B Warrants and Pre-Funded Warrants will initially be represented only by one or more global warrants deposited with the Warrant Agent,
as custodian on behalf of The Depository Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise
directed by DTC.
Right as a Stockholder
Except as otherwise provided in the Series A Warrants,
Series B Warrants or Pre-Funded Warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holders of the
Series A Warrants, Series B Warrants and Pre-Funded Warrants do not have the rights or privileges of holders of our Common Stock, including
any voting rights, until they exercise their Series A Warrants, Series B Warrants and Pre-Funded Warrants.
Amendment and Waiver
The Series A Warrants, Series B Warrants and Pre-Funded
Warrants may be modified or amended or the provisions thereof waived with the written consent of the Company, on the one hand, and the
respective holders of a majority of interest in Series A Warrants, Series B Warrants and Pre-Funded Warrants, on the other hand.
Governing Law
The Series A Warrants, Series B Warrants and the
Pre-Funded Warrants are governed by New York law.
Anti-Takeover Provisions
Some features of the Nevada Revised Statutes (“NRS”),
which are further described below, may have the effect of deterring third parties from making takeover bids for control of us or may be
used to hinder or delay a takeover bid. This would decrease the chance that our stockholders would realize a premium over market price
for their shares of Common Stock as a result of a takeover bid. These provisions may also adversely affect the prevailing market price
for shares of our Common Stock.
Acquisition of Controlling Interest
The NRS contain provisions governing acquisition
of a controlling interest of a Nevada corporation. These provisions provide generally that any person or entity that acquires a certain
percentage of the outstanding voting shares of a Nevada corporation may be denied voting rights with respect to the acquired shares, unless
certain criteria are satisfied. Our amended and restated bylaws provide that these provisions will not apply to us or to any existing
or future stockholder or stockholders.
Combination with Interested Stockholder
The NRS contain provisions governing combinations
of a Nevada corporation that has 200 or more stockholders of record with an “interested stockholder.” These provisions only
apply to a Nevada corporation that, at the time the potential acquirer became an interested stockholder, has a class or series of voting
shares listed on a national securities exchange, or has a class or series of voting shares traded in an “organized market”
and satisfies certain specified public float and stockholder levels. As we do not now meet those requirements, we do not believe that
these provisions are currently applicable to us. However, to the extent they become applicable to us in the future, they may have the
effect of delaying or making it more difficult to affect a change in control of the Company in the future.
A corporation affected by these provisions may
not engage in a combination within two years after the interested stockholder acquires his, her or its shares unless the combination or
purchase is approved by the board of directors before the interested stockholder acquired such shares. Generally, if approval is not obtained,
then after the expiration of the two-year period, the business combination may be consummated with the approval of the board of directors
before the person became an interested stockholder or a majority of the voting power held by disinterested stockholders, or if the consideration
to be received per share by disinterested stockholders is at least equal to the highest of:
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highest price per share paid by the interested stockholder within the three years immediately preceding the date of the announcement
of the combination or within three years immediately before, or in, the transaction in which he, she or it became an interested stockholder,
whichever is higher; |
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market value per share on the date of announcement of the combination or the date the person became an interested stockholder, whichever
is higher; or |
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higher for the holders of preferred stock, the highest liquidation value of the preferred stock, if any. |
Generally, these provisions define an interested
stockholder as a person who is the beneficial owner, directly or indirectly of 10% or more of the voting power of the outstanding voting
shares of a corporation, and define combination to include any merger or consolidation with an interested stockholder, or any sale, lease,
exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions with an interested stockholder
of assets of the corporation:
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having an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation; |
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having an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation; or |
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representing 10% or more of the earning power or net income of the corporation. |
Anti-Takeover Effects of Certain Provisions
of our Bylaws
Our bylaws provide that directors may be removed
by the stockholders with or without cause upon the vote of a plurality of the votes cast at a meeting of stockholders. Furthermore, the
authorized number of directors may be changed only by resolution of the Board, and vacancies may only be filled by a majority vote of
the directors, although such majority is less than a quorum, or by a plurality of the votes cast at a meeting of stockholders. Except
as otherwise provided in our bylaws and the Articles of Incorporation, any vacancies or newly created directorships on the Board resulting
from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class
may be filled by a majority of the directors then in office, although less than a quorum.
Our bylaws also provide that only a director,
chief executive officer, chief financial officer, president, vice president or corporate secretary may call a special meeting of stockholders.
The combination of these provisions makes it more
difficult for our existing stockholders to replace our Board as well as for another party to obtain control of us by replacing our Board.
Since our Board has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders
or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for
our Board to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our
control.
These provisions are intended to enhance the likelihood
of continued stability in the composition of our Board and its policies and to discourage coercive takeover practices and inadequate takeover
bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be
used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and
may have the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations
in the market price of our Common Stock that could result from actual or rumored takeover attempts. We believe that the benefits of these
provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal
to acquire or restructure our Company, outweigh the disadvantages of discouraging takeover proposals, because negotiation of takeover
proposals could result in an improvement of their terms.
Transfer Agent and Registrar
The transfer agent and registrar for our Common
Stock is Nevada Agency and Transfer Company, which is located at 50 West Liberty Street, Suite 880, Reno, NV 89501 and its telephone number
is (775) 322-5623.
Nasdaq Listing
Our Common Stock is listed on Nasdaq under the
symbol “LGMK”.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
TO HOLDERS OF
COMMON STOCK, PRE-FUNDED WARRANTS AND WARRANTS
The following is a summary of the material U.S.
federal income tax consequences of the acquisition, ownership and disposition of the Units and/or Pre-Funded Units (which units or components
thereof we sometimes refer to as our “securities” and holders thereof as “holders”), and the acquisition, ownership,
exercise, expiration or disposition of the Warrants, but does not purport to be a complete analysis of all the potential tax considerations
relating thereto. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended, or the Code, Treasury Regulations
promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These authorities may be changed or
subject to differing interpretations, possibly with retroactive effect, so as to result in U.S. federal income tax consequences different
from those set forth below. We have not sought and will not seek any ruling from the Internal Revenue Service, or the IRS, with respect
to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS or a court will
agree with such statements and conclusions.
Because the shares of Common Stock and the Series
A Warrant and Series B Warrant components of a Unit, and the Pre-Funded Warrant and the Series A Warrant and Series B Warrant components
of a Pre-Funded Unit, are generally separable at the option of the holder, the holder of a Unit and/or Pre-Funded Unit generally should
be treated, for U.S. federal income tax purposes, as the owner of the underlying shares of Common Stock or Pre-Funded Warrant and Series
A Warrant and Series B Warrant components. As a result, the discussion below with respect to holders of our shares of Common Stock or
Pre-Funded Warrants and Warrants should also apply to holders of Units and/or Pre-Funded Units (as the deemed owners of the underlying
components that constitute the Units and/or the Pre-Funded Units).
This summary also does not address the tax considerations
arising under the laws of any U.S. state or local or any non-U.S. jurisdiction, estate or gift tax, the 3.8% Medicare tax on net investment
income or any alternative minimum tax consequences. In addition, this discussion does not address tax considerations applicable to a holder’s
particular circumstances or to a holder that may be subject to special tax rules, including, without limitation:
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banks, insurance companies or other financial institutions; |
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tax-exempt or government organizations; |
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brokers or dealers in securities or currencies; |
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traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; |
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persons that own, or are deemed to own, more than five percent of our capital stock; |
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certain U.S. expatriates, citizens or former long-term residents of the United States; |
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persons who hold our shares of Common Stock or Warrants as a position in a hedging transaction, “straddle,” “conversion transaction,” synthetic security, other integrated investment, or other risk reduction transaction; |
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persons who do not hold our Common Stock or Warrants as a capital asset within the meaning of Section 1221 of the Code (generally, for investment purposes); |
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persons deemed to sell our Common Stock or Warrants under the constructive sale provisions of the Code; |
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investors in any such entities; |
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persons for whom our stock constitutes “qualified small business stock” within the meaning of Section 1202 of the Code; |
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integral parts or controlled entities of foreign sovereigns; |
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controlled foreign corporations; |
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passive foreign investment companies and corporations that accumulate earnings to avoid U.S. federal income tax; or |
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persons that acquire our Common Stock or Warrants as compensation for services. |
In addition, if a partnership, including any entity
or arrangement classified as a partnership for U.S. federal income tax purposes, holds our securities, the tax treatment of a partner
generally will depend on the status of the partner, the activities of the partnership, and certain determinations made at the partner
level. Accordingly, partnerships that hold our securities, and partners in such partnerships, should consult their tax advisors regarding
the U.S. federal income tax consequences to them of the purchase, ownership, and disposition of our securities.
You are urged to consult your tax advisor with
respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences of the purchase,
ownership and disposition of our securities arising under the U.S. federal estate or gift tax rules or under the laws of any U.S. state
or local or any non-U.S. or other taxing jurisdiction or under any applicable tax treaty.
Definition of a U.S. Holder
For purposes of this summary, a “U.S. Holder”
is any beneficial owner of our securities that is a “U.S. person,” and is not a partnership, or an entity treated as a partnership
or disregarded from its owner, each for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax
purposes, is or is treated as any of the following: (a) a citizen or individual resident of the United States, (b) a corporation (or other
entity or arrangement treated as a corporation for U.S. federal income tax purposes) created in, or organized under the laws of, the United
States or any state thereof or the District of Columbia, (c) an estate whose income is subject to United States federal income tax regardless
of its source, or (d) a trust (i) the administration of which is subject to the primary supervision of a U.S. court and which has one
or more United States persons (within the meaning of Section 7701(a)(30) of the Code) who have the authority to control all substantial
decisions of the trust or (ii) that has otherwise elected to be treated as a United States person under the Code.
For purposes of this summary, a “Non-U.S.
Holder” is any beneficial owner of our securities that is not a U.S. Holder or a partnership, or other entity treated as a partnership
or disregarded from its owner, each for U.S. federal income tax purposes.
Allocation of Purchase Price and Characterization
of a Unit
No statutory, administrative or judicial authority
directly addresses the treatment of a Unit or instruments similar to a Unit for U.S. federal income tax purposes, and therefore, that
treatment is not entirely clear. The acquisition of a Unit or Pre-Funded Unit should be treated for U.S. federal income tax purposes as
the acquisition of one share of our Common Stock or Pre-Funded Warrants, as applicable, and one Series A Warrant and one Series B Warrant.
We intend to treat the acquisition of a Unit and/or Pre-Funded Unit in this manner and, by purchasing a Unit or Pre-Funded Unit, you must
adopt such treatment for tax purposes. For U.S. federal income tax purposes, each holder of a Unit or Pre-Funded Unit must allocate the
purchase price paid by such holder for such Unit or Pre-Funded Unit between the share of our Common Stock or Pre-Funded Warrant, as applicable,
and the Warrants based on the relative fair market value of each at the time of issuance. The price allocated to each share of our Common
Stock or each Pre-Funded Warrant, Series A Warrant and Series B Warrant should be the shareholder’s tax basis in such share of our
Common Stock or Pre-Funded Warrant, Series A Warrant and Series B Warrant. Any disposition of a Unit or Pre-Funded Unit should be treated
for U.S. federal income tax purposes as a disposition of a share of our Common Stock or Pre-Funded Warrant, as applicable, and the Series
A Warrants and Series B Warrants comprising the Unit and Pre-Funded Unit, and the amount realized on the disposition should be allocated
between the share of Common Stock or Pre-Funded Warrant, as applicable, and the Series A Warrants and Series B Warrants based on their
respective relative fair market values. The separation of a share of our Common Stock or Pre-Funded Warrant and the Series A Warrant and
Series B Warrants constituting a Unit or Pre-Funded Unit, as applicable, should not be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the Unit and Pre-Funded
Unit and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly
address instruments that are similar to the Units or Pre-Funded Units, no assurance can be given that the IRS or the courts will agree
with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult its own
tax advisor regarding the tax consequences of an investment in a Unit or Pre-Funded Unit (including alternative characterizations thereof).
The balance of this discussion assumes that the characterization of the Units and Pre-Funded Units described above is respected for U.S.
federal income tax purposes.
Income Tax Treatment of Pre-Funded Warrants
Although not entirely free from doubt, a Pre-Funded
Warrant should be treated as Common Stock for U.S. federal income tax purposes and a holder of Pre-Funded Warrants therefore should generally
be taxed in the same manner as a holder of a share of our Common Stock, as described below. Accordingly, no gain or loss should be recognized
upon the exercise of a Pre-Funded Warrant and, upon exercise, the holding period of a Pre-Funded Warrant should carry over to the shares
of Common Stock received. Similarly, the tax basis of the Pre-Funded Warrant should carry over to the shares of Common Stock received
upon exercise, increased by the exercise price of $0.001 per share. Each prospective investor is urged to consult its tax advisors regarding
the tax risks associated with the acquisition of Pre-Funded Warrants pursuant to this offering (including potential alternative characterizations).
The balance of this discussion generally assumes that the characterization described above is respected for U.S. federal income tax purposes
and the discussion below, to the extent it pertains to shares of our Common Stock, is generally intended also to pertain to Pre-Funded
Warrants.
Tax Consequences to U.S. Holders
Distributions on Common Stock
As discussed above under “Dividend Information
– Dividend Policy,” we do not currently expect to make distributions on our Common Stock. In the event that we do make
distributions of cash or other property, distributions paid on Common Stock, other than certain pro rata distributions of Common Stock,
will be treated as a dividend to the extent paid out of our current or accumulated earnings and profits and will be includible in income
by the U.S. Holder and taxable as ordinary income when received. If a distribution exceeds our current and accumulated earnings and profits,
the excess will be first treated as a tax-free return of the U.S. Holder’s investment, up to the U.S. Holder’s tax basis in
the Common Stock. Any remaining excess will be treated as a capital gain. Subject to applicable limitations, dividends paid to certain
non-corporate U.S. Holders may be eligible for taxation as “qualified dividend income” and therefore may be taxable at rates
applicable to long-term capital gains. U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate
on dividends in their particular circumstances. Dividends received by a corporate U.S. Holder will be eligible for the dividends-received
deduction if the U.S. Holder meets certain holding period and other applicable requirements.
A holder of a Pre-Funded Warrant should consult
its tax advisor regarding the tax treatment of any distribution with respect to such Pre-Funded Warrant that is held in abeyance in connection
with any applicable beneficial ownership cap.
Constructive Dividends on the Warrants
Under Section 305 of the Code, an adjustment to
the number of shares of Common Stock that will be issued on the exercise of the Warrants, or an adjustment to the exercise price of the
Warrants, may be treated as a constructive distribution to a U.S. Holder of the Warrants if, and to the extent that, such adjustment has
the effect of increasing such U.S. Holder’s proportionate interest in our “earnings and profits” or assets, depending
on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash or other property
to our stockholders). Adjustments to the exercise price of a Warrant made pursuant to a bona fide reasonable adjustment formula that has
the effect of preventing dilution of the interest of the holders of the Warrants should generally not result in a constructive distribution.
Any constructive distributions would generally be subject to the tax treatment described above under “Dividends on Common Stock.”
Sale or Other Disposition of Common Stock
For U.S. federal income tax purposes, gain or
loss realized on the sale or other disposition of Common Stock will be capital gain or loss, and will be long-term capital gain or loss
if the U.S. Holder held the Common Stock for more than one year. The amount of the gain or loss will equal the difference between the
U.S. Holder’s tax basis in the Common Stock disposed of and the amount realized on the disposition (or, if the shares of Common
Stock, Pre-Funded Warrants Series A Warrants or Series B Warrants are held as part of Units or Pre-Funded Units, as applicable, at the
time of the disposition, the portion of the amount realized on such disposition that is allocated to the shares of Common Stock, Pre-Funded
Warrants Series A Warrants or Series B Warrants based upon the then fair market values of the shares of Common Stock or Pre-Funded Warrants
Series A Warrant and Series B Warrants included in the Units or Pre-Funded Units, as applicable). Long-term capital gains recognized by
non-corporate U.S. Holders will be subject to reduced tax rates. The deductibility of capital losses is subject to limitations.
Sale or Other Disposition, Exercise or Expiration
of Warrants
For U.S. federal income tax purposes, gain or
loss realized on the sale or other disposition of a Warrant (other than by exercise) will be capital gain or loss and will be long-term
capital gain or loss if the U.S. Holder held the Warrant for more than one year at the time of the sale or other disposition. The amount
of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the Warrants disposed of and the amount realized
on the disposition.
In general, a U.S. Holder will not be required
to recognize income, gain or loss upon the exercise of a Warrant by payment of the exercise price, except to the extent of cash paid in
lieu of a fractional share. A U.S. Holder’s tax basis in a share of Common Stock received upon exercise will be equal to the sum
of (1) the U.S. Holder’s tax basis in the Warrant and (2) the exercise price of the Warrant. A U.S. Holder’s holding period
in the stock received upon exercise will commence on the day or the day after such U.S. Holder exercises the Warrant. No discussion is
provided herein regarding the U.S. federal income tax treatment on the exercise of a Warrant on a cashless basis, and U.S. Holders are
urged to consult their tax advisors as to the exercise of a Warrant on a cashless basis.
If a Warrant expires without being exercised,
a U.S. Holder will recognize a capital loss in an amount equal to such U.S. Holder’s tax basis in the Warrant. This loss will be
long-term capital loss if, at the time of the expiration, the U.S. Holder’s holding period in the Warrant is more than one year.
The deductibility of capital losses is subject to limitations.
FOR NON-U.S. HOLDERS
The following is a general discussion of the material
U.S. federal income tax considerations applicable to non-U.S. holders (as defined herein) with respect to their ownership and disposition
of our securities issued pursuant to this offering. All prospective non-U.S. holders of our securities should consult their tax advisors
with respect to the U.S. federal, state, local and non-U.S. tax consequences of the purchase, ownership and disposition of our securities.
In general, a non-U.S. holder means a beneficial owner of our Common Stock (other than a partnership or an entity or arrangement treated
as a partnership for U.S. federal income tax purposes) that is not, for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the United States; |
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a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia; |
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an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
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a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons have the authority to control all of the trust’s substantial decisions or (2) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person. |
This discussion is based on current provisions
of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, existing U.S. Treasury Regulations promulgated thereunder,
published administrative pronouncements and rulings of the U.S. Internal Revenue Service, which we refer to as the IRS, and judicial decisions,
all as in effect as of the date of this prospectus. These authorities are subject to change and to differing interpretation, possibly
with retroactive effect. Any change or differing interpretation could alter the tax consequences to non-U.S. holders described in this
prospectus.
We assume in this discussion that a non-U.S. holder
holds shares of our securities as a capital asset within the meaning of Section 1221 of the Code (generally, for investment). This discussion
does not address all aspects of U.S. federal income taxation that may be relevant to a particular non-U.S. holder in light of that non-U.S.
holder’s individual circumstances, nor does it address any alternative minimum, Medicare contribution, estate or gift tax consequences,
or any aspects of U.S. state, local or non-U.S. taxes. This discussion also does not consider any specific facts or circumstances that
may apply to a non-U.S. holder and does not address the special tax rules applicable to particular non-U.S. holders, such as holders that
own, or are deemed to own, more than 5% of our capital stock (except to the extent specifically set forth below), corporations that accumulate
earnings to avoid U.S. federal income tax, tax-exempt organizations, banks, financial institutions, insurance companies, brokers, dealers
or traders in securities, commodities or currencies, tax-qualified retirement plans, holders who hold or receive our Common Stock pursuant
to the exercise of employee stock options or otherwise as compensation, holders holding our Common Stock as part of a hedge, straddle
or other risk reduction strategy, conversion transaction or other integrated investment, holders deemed to sell our Common Stock under
the constructive sale provisions of the Code, controlled foreign corporations, passive foreign investment companies and certain former
U.S. citizens or former long-term residents.
In addition, this discussion does not address
the tax treatment of partnerships (or entities or arrangements that are treated as partnerships for U.S. federal income tax purposes)
or persons that hold our securities through such partnerships. If a partnership, including any entity or arrangement treated as a partnership
for U.S. federal income tax purposes, holds our securities, the U.S. federal income tax treatment of a partner in such partnership will
generally depend upon the status of the partner and the activities of the partnership. Such partners and partnerships should consult their
tax advisors regarding the tax consequences of the purchase, ownership and disposition of our securities.
There can be no assurance that a court or the
IRS will not challenge one or more of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, a ruling
with respect to the U.S. federal income tax consequences to a non-U.S. holder of the purchase, ownership or disposition of our securities.
Distributions
As discussed in the section entitled “Dividend
Policy,” we do not anticipate paying any dividends on our Common Stock in the foreseeable future. If we make distributions on
our Common Stock or on the Warrants (as described above under “Constructive Dividends on Warrants”), those payments will constitute
dividends for U.S. federal income tax purposes to the extent we have current or accumulated earnings and profits, as determined under
U.S. federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings and profits,
they will constitute a return of capital and will first reduce a Non-U.S. Holder’s basis in our Common Stock or the Warrants, as
applicable, but not below zero. Any excess will be treated as capital gain and will be treated as described below under “Gain on
Sale or Other Disposition of Common Stock or Warrants.” Any such distributions would be subject to the discussions below regarding
back-up withholding and the Foreign Account Tax Compliance Act, or FATCA.
Subject to the discussion below on effectively
connected income, any dividend paid to a Non-U.S. Holder generally will be subject to U.S. withholding tax either at a rate of 30% of
the gross amount of the dividend or such lower rate as may be specified by an applicable income tax treaty. To receive a reduced treaty
rate, a Non-U.S. Holder must provide us or our agent with an IRS Form W-8BEN, IRS Form W-8 BEN-E or another appropriate version of IRS
Form W-8 (or a successor form), which must be updated periodically, and which, in each case, must certify qualification for the reduced
rate. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.
Dividends paid to a Non-U.S. Holder that are effectively
connected with the Non-U.S. Holder’s conduct of a trade or business within the United States and that are not eligible for relief
from U.S. (net basis) income tax under an applicable income tax treaty generally are exempt from the (gross basis) withholding tax described
above. To obtain this exemption from withholding tax, the Non-U.S. Holder must provide the applicable withholding agent with an IRS Form
W-8ECI or successor form or other applicable IRS Form W-8 certifying that the dividends are effectively connected with the Non-U.S. Holder’s
conduct of a trade or business within the United States. Such effectively connected dividends, if not eligible for relief under a tax
treaty, would not be subject to a withholding tax, but would be taxed at the same graduated rates applicable to U.S. persons, net of certain
deductions and credits and if, in addition, the Non-U.S. Holder is a corporation, may also be subject to a branch profits tax at a rate
of 30% (or such lower rate as may be specified by an applicable income tax treaty).
If you are eligible for a reduced rate of withholding
tax pursuant to a tax treaty, you may be able to obtain a refund of any excess amounts withheld if you timely file an appropriate claim
for refund with the IRS.
Exercise or Expiration of Warrants
In general, a Non-U.S. Holder will not be required
to recognize income, gain or loss upon the exercise of a Warrant by payment of the exercise price, except possibly to the extent of cash
paid in lieu of a fractional share. However, no discussion is provided herein regarding the U.S. federal income tax treatment on the exercise
of a Warrant on a cashless basis, and Non-U.S. Holders are urged to consult their tax advisors as to the exercise of a Warrant on a cashless
basis.
If a Warrant expires without being exercised,
a Non-U.S. Holder that is engaged in a U.S. trade or business to which any income from the Warrant would be effectively connected or who
is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the expiration
occurs (and certain other conditions are met) will recognize a capital loss in an amount equal to such Non-U.S. Holder’s tax basis
in the Warrant. The amount paid to purchase our Common Stock and Warrants will be apportioned between them in proportion to the respective
fair market values of the Common Stock and Warrants, and the apportioned amount will be the tax basis of the Common Stock and Warrants
respectively. The fair market value of our Common Stock for this purpose will generally be its trading value immediately after issuance.
Gain on Sale, Exchange or Other Disposition
of Our Common Stock or Warrants
Subject to the discussion below regarding backup
withholding and FATCA, a Non-U.S. Holder generally will not be required to pay U.S. federal income tax on any gain realized upon the sale
or other disposition of our Common Stock or the Warrants unless:
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the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States and not eligible for relief under an applicable income tax treaty, in which case the Non-U.S. Holder will be required to pay tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates, and for a Non-U.S. Holder that is a corporation, such Non-U.S. Holder may be subject to the branch profits tax at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items; |
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the Non-U.S. Holder is an individual who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met, in which case the Non-U.S. Holder will be required to pay a flat 30% tax on the gain derived from the sale, which tax may be offset by U.S. source capital losses (even though the Non-U.S. Holder is not considered a resident of the United States) (subject to applicable income tax or other treaties); or |
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we are a “U.S. real property holding corporation” for U.S. federal income tax purposes, or a USRPHC, at any time within the shorter of the five-year period preceding the disposition or the Non-U.S. Holder’s holding period for our Common Stock or the Warrants. We believe we are not currently and do not anticipate becoming a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair market value of our United States real property interests relative to the fair market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we become a USRPHC, however, gain arising from the sale or other taxable disposition by a Non-U.S. Holder of our Common Stock will not be subject to United States federal income tax if (A) in the case of our Common Stock, (a) shares of our Common Stock are “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, such as Nasdaq, and (b) the Non-U.S. Holder owns or owned, actually and constructively, 5% or less of the shares of our Common Stock throughout the five-year period ending on the date of the sale or exchange; and (B) in the case of the Warrants, either (a)(i) shares of our Common Stock are “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, such as Nasdaq, (ii) the Warrants are not considered regularly traded on an established securities market and (iii) the Non-U.S. Holder does not own, actually or constructively, Warrants with a fair market value greater than the fair market value of 5% of the shares of our Common Stock, determined as of the date that such Non-U.S. Holder acquired its Warrants, or (b)(i) the Warrants are considered regularly traded on an established securities market, and (ii) the Non-U.S. Holder owns or owned, actually and constructively, 5% or less of the Warrants throughout the five-year period ending on the date of the sale or exchange. The Warrants are not expected to be regularly traded on an established securities market. If the foregoing exception does not apply, and we are a USRPHC, such Non-U.S. Holder’s proceeds received on the disposition of shares will generally be subject to withholding at a rate of 15% and such Non-U.S. Holder will generally be taxed on any gain in the same manner as gain that is effectively connected with the conduct of a U.S. trade or business, except that the branch profits tax generally will not apply. |
Backup Withholding and Information Reporting
Information returns may be filed with the IRS
in connection with distributions on our Common Stock or constructive dividends on the Warrants, and the proceeds of a sale or other disposition
of the Common Stock or the Warrants. A non-exempt U.S. Holder may be subject to U.S. backup withholding on these payments if it fails
to provide its taxpayer identification number to the withholding agent and comply with certification procedures or otherwise establish
an exemption from backup withholding.
A Non-U.S. Holder may be subject to U.S. information
reporting and backup withholding on these payments unless the Non-U.S. Holder complies with certification procedures to establish that
it is not a U.S. person (within the meaning of the Code). The certification requirements generally will be satisfied if the Non-U.S. Holder
provides the applicable withholding agent with a statement on the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or suitable substitute
or successor form), together with all appropriate attachments, signed under penalties of perjury, stating, among other things, that such
Non-U.S. Holder is not a U.S. Person. Applicable Treasury Regulations provide alternative methods for satisfying this requirement. In
addition, the amount of distributions on common stock or constructive dividends on common stock paid to a Non-U.S. Holder, and the amount
of any U.S. federal tax withheld therefrom, must be reported annually to the IRS and the holder. This information may be made available
by the IRS under the provisions of an applicable tax treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder
resides.
Payment of the proceeds of the sale or other disposition
of the Common Stock or the Warrants to or through a non-U.S. office of a U.S. broker or of a non-U.S. broker with certain specified U.S.
connections generally will be subject to information reporting requirements, but not backup withholding, unless the Non-U.S. Holder certifies
under penalties of perjury that it is not a U.S. person or an exemption otherwise applies. Payments of the proceeds of a sale or other
disposition of the Common Stock or the Warrants to or through a U.S. office of a broker generally will be subject to information reporting
and backup withholding, unless the Non-U.S. Holder certifies under penalties of perjury that it is not a U.S. person or otherwise establishes
an exemption.
Backup withholding is not an additional tax. The
amount of any backup withholding from a payment generally will be allowed as a credit against the holder’s U.S. federal income tax
liability and may entitle the holder to a refund, provided that the required information is timely furnished to the IRS.
Foreign Account Tax Compliance Act
FATCA imposes withholding tax on certain types
of payments made to foreign financial institutions and certain other non-U.S. entities. The legislation imposes a 30% withholding tax
on dividends on, or, subject to the discussion of certain proposed Treasury Regulations below, gross proceeds from the sale or other disposition
of, our Common Stock or the Warrants paid to a “foreign financial institution” or to certain “non-financial foreign
entities” (each as defined in the Code), unless (i) the foreign financial institution undertakes certain diligence and reporting
obligations, (ii) the non-financial foreign entity either certifies it does not have any “substantial United States owners”
(as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (iii) the foreign financial
institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial
institution and is subject to the diligence and reporting requirements in (i) above, it must enter into an agreement with the U.S. Treasury
requiring, among other things, that it undertake to identify accounts held by “specified United States persons” or “United
States-owned foreign entities” (each as defined in the Code), annually report certain information about such accounts, and withhold
30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements. If the country
in which a payee is resident has entered into an “intergovernmental agreement” with the United States regarding FATCA, that
agreement may permit the payee to report to that country rather than to the U.S. Department of the Treasury. The U.S. Treasury recently
released proposed Treasury Regulations which, if finalized in their present form, would eliminate the federal withholding tax of 30% applicable
to the gross proceeds of a sale or other disposition of our Common Stock or the Warrants. In its preamble to such proposed Treasury Regulations,
the U.S. Treasury stated that taxpayers may generally rely on the proposed regulations until final regulations are issued. Prospective
investors should consult their own tax advisors regarding the possible impact of these rules on their investment in our Common Stock or
the Warrants, and the possible impact of these rules on the entities through which they hold our Common Stock or the Warrants, including,
without limitation, the process and deadlines for meeting the applicable requirements to prevent the imposition of this 30% withholding
tax under FATCA.
THE PRECEDING DISCUSSION IS FOR GENERAL INFORMATION
ONLY. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX
CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR COMMON STOCK, PRE-FUNDED WARRANTS AND WARRANTS, INCLUDING THE CONSEQUENCES OF
ANY PROPOSED CHANGE IN APPLICABLE LAWS.
PLAN OF DISTRIBUTION
We have engaged Roth Capital Partners, LLC to
act as our exclusive placement agent (the “placement agent”) to solicit offers to purchase the Securities offered by this
prospectus. The placement agent is not purchasing or selling any Securities, nor is it required to arrange for the purchase and sale of
any specific number or dollar amount of Securities, other than to use its “reasonable best efforts” to arrange for the sale
of the Securities by us. Therefore, we may not sell the entire amount of Securities being offered. There is no minimum amount of proceeds
that is a condition to closing of this offering. We will enter into a securities purchase agreement directly with the investors who purchase
the Securities in this offering. The placement agent may engage one or more subagents or selected dealers in connection with this offering.
The placement agency agreement that we intend
to enter into with the placement agent (the “Placement Agency Agreement”) will provide that the placement agent’s obligations
are subject to conditions contained in the Placement Agency Agreement.
We will deliver the Securities being issued to
the investors upon receipt of investor funds for the purchase of the Securities offered pursuant to this prospectus. We expect to deliver
the Securities being offered pursuant to this prospectus on or about ,
2024.
Placement Agent Fees, Commissions and Expenses
Upon the closing of this offering, we will pay
the placement agent a cash transaction fee equal to 7.0% of the aggregate gross cash proceeds to us from the sale of the Securities in
the offering. Pursuant to the Placement Agency Agreement, we will agree to reimburse the placement agent for certain out-of-pocket expenses
of the placement agent payable by us, in an aggregate amount not to exceed $75,000. The Placement Agency Agreement, however, will provide
that in the event this offering is terminated, the placement agent will only be entitled to the reimbursement of out-of-pocket accountable
expenses actually incurred in accordance with FINRA Rule 5110(f) and (g), as applicable.
The following table shows the public offering
price, placement agent fees and proceeds, before expenses, to us.
| |
Per Unit | | |
Per
Pre-Funded Unit | | |
Total | |
Public offering price | |
$ | | | |
$ | | | |
$ | | |
Placement Agent Fees (7.0%) | |
$ | | | |
$ | | | |
$ | | |
Proceeds, before fees and expenses, to us(1) | |
$ | | | |
$ | | | |
$ | | |
(1) |
We estimate that the total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the placement agent’s fee, will be approximately $ , all of which are payable by us. This figure includes, among other things, the placement agent’s fees and expenses (including the legal fees, costs and expenses for the placement agent’s legal counsel) up to $75,000. |
Placement Agent Warrants
We have agreed to issue to the placement agent
the PA Warrants to purchase shares of our Common Stock equal to 3% of the aggregate number of shares of Common Stock included in the Units
sold in connection with this offering, so long as the Company receives gross proceeds equal to or greater than $5,000,000 in this offering.
The PA Warrants will be exercisable on or after the date of Stockholder Approval and commencing 180 days following the commencement of
sales of the Securities, and will terminate five years following the effective date of the registration statement of which this prospectus
is a part in compliance with FINRA Rule 5110(e). The PA Warrants will be exercisable at a per share price equal to the public offering
price per Unit offered hereby. The PA Warrants have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant
to FINRA Rule 5110(e)(1). The placement agent (or permitted assignees under Rule 5110(e)(1)) will not sell, transfer, assign, pledge,
or hypothecate the PA Warrants or the shares of Common Stock issuable upon exercise of the PA Warrants, nor will they engage in any hedging,
short sale, derivative, put, or call transaction that would result in the effective economic disposition of the PA Warrants or the shares
of Common Stock issuable upon exercise of the PA Warrants for a period of 180 days from the commencement of sales of the Securities in
connection with this offering. The exercise price and number of shares of Common Stock issuable upon exercise of the PA Warrants may be
adjusted in certain circumstances including in the event of a stock dividend, extraordinary cash dividend or our recapitalization, reorganization,
merger or consolidation.
Lock-Up Agreements
Each of our officers and directors have agreed,
subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose
of any shares of our Common Stock or other securities convertible into or exercisable or exchangeable for our Common Stock for a period
of 60 days after this offering is completed without the prior written consent of the placement agent.
The placement agent may in its sole discretion
and at any time without notice release some or all of the shares of Common Stock or other Company securities subject to lock-up agreements
prior to the expiration of the lock-up period. When determining whether or not to release such shares and securities from the lock-up
agreements, the placement agent will consider, among other factors, the security holder’s reasons for requesting the release, the
number of shares for which the release is being requested and market conditions at the time.
In addition, pursuant to the securities purchase
agreements that we will enter into with purchasers of Securities in connection with this offering, we will agree, subject to certain exceptions,
not to (i) offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our Common Stock or securities convertible
into Common Stock for a period of 90 days from the closing date of this offering and (ii) effect or enter into an agreement to effect
any issuance by the Company of Common Stock or securities convertible into Common Stock for a period of (or a combination of units thereof)
involving a Variable Rate Transaction (as such term is defined in such securities purchase agreements) for a period of six (6) months
from the closing date of this offering.
Indemnification
We have agreed to indemnify the placement agent
against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the placement agent may
be required to make for these liabilities.
Regulation M
The placement agent may be deemed to be an underwriter
within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit realized on the resale
of the securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities
Act. As an underwriter, the placement agent would be required to comply with the requirements of the Securities Act and the Exchange Act,
including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of
purchases and sales of our securities by the placement agent acting as principal. Under these rules and regulations, the placement agent
(i) may not engage in any stabilization activity in connection with our securities and (ii) may not bid for or purchase any of our securities
or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed
its participation in the distribution.
Determination of Offering Price and Warrant
Exercise Price
The actual offering prices of the Units and Pre-Funded
Units that we are offering, and the exercise price of the Series A Warrants, Series B Warrants and Pre-Funded Warrants included in the
Units and Pre-Funded Units that we are offering, were negotiated between us, the placement agent and the investors in the offering based
on the trading of our shares of Common Stock prior to the offering, among other things. Other factors considered in determining the public
offering prices of the Units and Pre-Funded Units that we are offering, as well as the exercise price of the Series A Warrants, Series
B Warrants and Pre-Funded Warrants included in the Units and Pre-Funded Units that we are offering include our history and prospects,
the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment
of our management, the general conditions of the securities markets at the time of the offering and such other factors as were deemed
relevant.
Electronic Distribution
A prospectus in electronic format may be made
available on a website maintained by the placement agent. In connection with the offering, the placement agent or selected dealers may
distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe® PDF
will be used in connection with this offering.
Other than the prospectus in electronic format,
the information on the placement agent’s website and any information contained in any other website maintained by the placement
agent is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or
endorsed by us or the placement agent in its capacity as placement agent and should not be relied upon by investors.
Certain Relationships
The placement agent and its respective affiliates
have provided, and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and
other services for us in the ordinary course of their business, for which they may receive customary fees and commissions. In addition,
from time to time, the placement agent and its respective affiliates may effect transactions for their own account or the account of customers,
and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so
in the future. The placement agent and their respective affiliates may also make investment recommendations or publish or express independent
research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long
or short positions in such securities and instruments. However, except as disclosed in this prospectus, we have no present arrangements
with the placement agent for any further services.
Transfer Agent and Registrar; Warrant Agent
The transfer agent and registrar for our Common
Stock, and the Warrant Agent for the Series A Warrants, Series B Warrants and Pre-Funded Warrants is Nevada Agency and Transfer Company,
which is located at 50 West Liberty Street, Suite 880, Reno, NV 89501 and its telephone number is (775) 322-5623.
Listing
Our Common Stock is traded on Nasdaq under the symbol “LGMK”.
There is no established trading market for the
Units, Pre-Funded Units, Series A Warrants, Series B Warrants or the Pre-Funded Warrants, and we do not expect a market to develop. In
addition, we do not intend to list the Series A Warrants, Series B Warrants or the Pre-Funded Warrants on Nasdaq or any other national
securities exchange or any other nationally recognized trading system.
Selling Restrictions
Other than in the United States, no action has
been taken by us or the placement agents that would permit a public offering of the securities offered by this prospectus in any jurisdiction
where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly,
nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities
be distributed or published, in any jurisdiction, except under circumstances that will result in compliance with the applicable rules
and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to
observe any restrictions relating to this offering and the distribution of this prospectus. This prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a
solicitation is unlawful.
Australia. No placement document,
prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission
(ASIC), in relation to the offering.
This prospectus does not constitute a prospectus,
product disclosure statement or other disclosure document under the Corporations Act 2001 (the Corporations Act) and does not purport
to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations
Act.
Any offer in Australia of the securities may only
be made to persons (the Exempt Investors) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations
Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one
or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the securities without disclosure to
investors under Chapter 6D of the Corporations Act.
The securities applied for by Exempt Investors
in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except
in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption
under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter
6D of the Corporations Act. Any person acquiring securities must observe such Australian on-sale restrictions.
This prospectus contains general information only
and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not
contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether
the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice
on those matters.
Brazil. The offer of securities
described in this prospectus will not be carried out by means that would constitute a public offering in Brazil under Law No. 6,385, of
December 7, 1976, as amended, under the CVM Rule (Instrução) No. 400, of December 29, 2003. The offer and sale of the securities
have not been and will not be registered with the Comissão de Valores Móbilearios in Brazil. The securities have not been
offered or sold, and will not be offered or sold in Brazil, except in circumstances that do not constitute a public offering or distribution
under Brazilian laws and regulations.
Canada. The securities may be sold
in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National
Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined
in National Instrument 31 103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities
must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities
laws.
Securities legislation in certain provinces or
territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto)
contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with
a legal advisor.
Pursuant to section 3A.3 of National Instrument
33 105 Underwriting Conflicts (NI 33 105), the underwriters are not required to comply with the disclosure requirements of NI 33-105
regarding underwriters’ conflicts of interest in connection with this offering.
Cayman Islands. No invitation, whether
directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our securities.
European Economic Area. In relation
to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”)
an offer to the public of any securities may not be made in that Relevant Member State, except that an offer to the public in that Relevant
Member State of any securities may be made at any time under the following exemptions under the Prospectus Directive, if they have been
implemented in that Relevant Member State:
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to any legal entity which is a qualified investor as defined in the Prospectus Directive; |
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to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for any such offer; or |
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in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall result in a requirement for the publication by us or any placement agent of a prospectus pursuant to Article 3 of the Prospectus Directive. |
For the purposes of this provision, the expression
an “offer to the public” in relation to any securities in any Relevant Member State means the communication in any form and
by any means of sufficient information on the terms of the offer and any securities to be offered so as to enable an investor to decide
to purchase any securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that
Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010
PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the
Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
Hong Kong. The contents of this
prospectus have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer.
If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice. Please note that
(i) our shares may not be offered or sold in Hong Kong, by means of this prospectus or any document other than to “professional
investors” within the meaning of Part I of Schedule 1 of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) (SFO)
and any rules made thereunder, or in other circumstances which do not result in the document being a “prospectus” within the
meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong) (CO) or which do not constitute an offer or invitation to the public for
the purpose of the CO or the SFO, and (ii) no advertisement, invitation or document relating to our shares may be issued or may be in
the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere) which is directed at, or the contents
of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong
Kong) other than with respect to the shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional
investors” within the meaning of the SFO and any rules made thereunder.
Israel. This document does not constitute
a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel
Securities Authority. In the State of Israel, this document is being distributed only to, and is directed only at, and any offer of the
shares is directed only at, investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily
of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the
Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals”,
each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case
purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in
the Addendum). Qualified investors will be required to submit written confirmation that they fall within the scope of the Addendum, are
aware of the meaning of same and agree to it.
The People’s Republic of China.
This prospectus may not be circulated or distributed in the PRC and the shares may not be offered or sold, and will not offer or sell
to any person for re-offering or resale directly or indirectly to any resident of the PRC except pursuant to applicable laws, rules and
regulations of the PRC. For the purpose of this paragraph only, the PRC does not include Taiwan and the special administrative regions
of Hong Kong and Macau.
Switzerland. The securities may
not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (the SIX) or on any other stock exchange or regulated
trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses
under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of
the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document
nor any other offering or marketing material relating to the securities or the offering may be publicly distributed or otherwise made
publicly available in Switzerland.
Neither this document nor any other offering or
marketing material relating to the offering, or the securities have been or will be filed with or approved by any Swiss regulatory authority.
In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market
Supervisory Authority FINMA, and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective
Investment Schemes (CISA). Accordingly, no public distribution, offering or advertising, as defined in CISA, its implementing ordinances
and notices, and no distribution to any non-qualified investor, as defined in CISA, its implementing ordinances and notices, shall be
undertaken in or from Switzerland, and the investor protection afforded to acquirers of interests in collective investment schemes under
CISA does not extend to acquirers of securities.
Taiwan. The securities have not
been and will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations
and may not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the
meaning of the Securities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory Commission
of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering
and sale of the securities in Taiwan.
United Kingdom. This prospectus
has only been communicated or caused to have been communicated and will only be communicated or caused to be communicated as an invitation
or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act of 2000, or
the FSMA) as received in connection with the issue or sale of our Common Stock in circumstances in which Section 21(1) of the FSMA does
not apply to us. All applicable provisions of the FSMA will be complied with in respect to anything done in relation to our Common Stock
in, from or otherwise involving the United Kingdom.
LEGAL MATTERS
The validity of the issuance of the securities
offered hereby will be passed upon for us by Sullivan &Worcester LLP, New York, New York. Certain legal matters in connection with
this offering will be passed on for the placement agent by Pryor Cashman LLP, New York, New York.
EXPERTS
The financial statements of LogicMark, Inc. as
of December 31, 2023 and December 31, 2022, and for each of the two years in the period ended December 31, 2023 incorporated in this prospectus
by reference to the Annual Report on Form 10-K for the year ended December 31, 2023 have been so incorporated in reliance on the report
of BPM LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus constitutes a part of a registration
statement on Form S-1 filed under the Securities Act. As permitted by the SEC’s rules, this prospectus and any prospectus supplement,
which form a part of the registration statement, do not contain all the information that is included in the registration statement. You
will find additional information about us in the registration statement and its exhibits. Any statements made in this prospectus or any
prospectus supplement concerning legal documents are not necessarily complete and you should read the documents that are filed as exhibits
to the registration statement or otherwise filed with the SEC for a more complete understanding of the document or matter.
You can read our electronic SEC filings, including
such registration statement, on the internet at the SEC’s website at www.sec.gov. We are subject to the information reporting
requirements of the Exchange Act, and we file reports, proxy statements and other information with the SEC. These reports, proxy statements
and other information will be available at the website of the SEC referred to above. We also maintain a website at www.logicmark.com,
at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or
furnished to, the SEC. However, the information contained in or accessible through our website is not part of this prospectus or the registration
statement of which this prospectus forms a part, and investors should not rely on such information in making a decision to purchase the
Securities in this offering. All website addresses in this prospectus are intended to be inactive textual references only.
INCORPORATION BY REFERENCE
We incorporate by reference the filed documents
listed below (excluding those portions of any Current Report on Form 8-K that are not deemed “filed” pursuant to the General
Instructions of Form 8-K), except as superseded, supplemented or modified by this prospectus or any subsequently filed document incorporated
by reference herein as described below:
|
● |
our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 16, 2024; |
|
● |
our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, filed with the SEC on May 15, 2024; |
|
● |
our Definitive Proxy Statement on Schedule 14A for our annual meeting of stockholders held on May 22, 2024, filed with the SEC on April 26, 2024; |
|
● |
our registration statement on Form 8-A filed with the SEC on September 9, 2014, including any amendments or reports filed for the purpose of updating such description (including our Current Report on Form 8-K filed with the SEC on June 2, 2023) and (ii) Exhibit 4.1 — Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on April 15, 2022. |
We also incorporate by reference into this prospectus
additional documents we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act: (i) on or after the date of
the initial filing of the registration statement of which this prospectus is a part and prior to effectiveness of the registration statement,
and (ii) on or after the date of this prospectus but before the completion or termination of this offering (excluding any information
not deemed “filed” with the SEC). Any statement contained in a previously filed document is deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained in this prospectus or in a subsequently filed document incorporated
by reference herein modifies or supersedes the statement, and any statement contained in this prospectus is deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained in a subsequently filed document incorporated by reference herein
modifies or supersedes the statement.
We will provide, without charge, to each person
to whom a copy of this prospectus is delivered, including any beneficial owner, upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference herein, but not delivered with such prospectus. Requests should be directed to:
LogicMark, Inc.
2801 Diode Lane
Louisville, KY 40299
(502) 442-7911
info@LogicMark.com
Copies of these filings are also available on
our website at www.logicmark.com. For other ways to obtain a copy of these filings, please refer to “Where You Can Find More
Information” above.
UP TO 12,306,610 Units
Each
Unit Consisting of One Share of Common Stock, ONE SERIES A WARRANT TO
PURCHASE
ONE SHARE OF COMMON STOCK and
One
SERIES B Warrant to Purchase One Share of Common Stock
UP TO 12,306,610 PRE-FUNDED
UNITS
EACH UNIT CONSISTING OF
ONE PRE-FUNDED WARRANT TO PURCHASE
ONE SHARE OF COMMON STOCK, ONE SERIES A
WARRANT TO PURCHASE ONE SHARE OF COMMON STOCK
AND
ONE SERIES B WARRANT TO PURCHASE ONE
SHARE OF COMMON STOCK
UP TO 36,919,830 SHARES OF COMMON STOCK
UNDERLYING THE SERIES A WARRANTS, THE
SERIES B WARRANTS AND THE PRE-FUNDED WARRANTS
LOGICMARK, INC.
PROSPECTUS
The date of this prospectus is ,
2024
Sole Placement Agent
Roth Capital Partners
PART II – INFORMATION NOT REQUIRED IN
THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth an estimate of
the fees and expenses relating to the issuance and distribution of the securities being registered hereby, all of which shall be borne
by the registrant. All of such fees and expenses, except for the U.S. Securities and Exchange Commission (“SEC”) registration
and the Financial Industry Regulatory Authority, Inc. (“FINRA”) filing fee, are estimated:
SEC registration fee | |
$ | 3,130.60 | * |
FINRA filing fee | |
$ | 3,681.50 | |
Legal fees and expenses | |
$ | 233,000 | |
Printing fees and expenses | |
$ | 75,000 | |
Accounting fees and expenses | |
$ | 35,000 | |
Miscellaneous fees and expenses | |
$ | 38,318.50 | |
Total | |
$ | 388,130.60 | |
* | Fee of $3,130.60 previously paid. |
Item 14. Indemnification of Directors and Officers.
Section 78.138 of the NRS provides that, subject
to certain exceptions under Nevada law, unless the articles of incorporation or an amendment thereto provides for greater individual liability,
a director or officer is not individually liable to the Company or its stockholders or creditors for any damages as a result of any act
or failure to act in his or her capacity as a director or officer unless it is proven that (i) the director’s or officer’s
act or failure to act constituted a breach of his or her fiduciary duties as a director or officer and (ii) the breach of those duties
involved intentional misconduct, fraud or a knowing violation of law. The Company’s articles of incorporation further provide that
the personal liability of the directors of the Company is eliminated to the fullest extent permitted by the NRS.
Section 78.7502 of the NRS provides, in general,
that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation,
by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with the action, suit or proceeding if the person acted in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was unlawful.
NRS Section 78.7502 also provides, in general,
that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was
a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid
in settlement and attorneys’ fees actually and reasonably incurred by the person in connection with the defense or settlement of
the action or suit if the person acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the
best interests of the corporation; provided, however, that indemnification may not be made for any claim, issue or matter as to which
such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation
or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought
or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
Any indemnification pursuant to the above provisions
may be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances. The determination must be made: (a) by the stockholders; (b) by the board of directors
by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding; (c) if a majority vote of
a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written
opinion; or (d) if a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent
legal counsel in a written opinion. The Company’s articles of incorporation and bylaws comply with Nevada law as set forth above.
As permitted by Section 78.138 of the NRS, Article
VII of the Company’s articles of incorporation provides:
“To the full extent permitted by the ACT
and any other applicable law currently or hereafter in effect, no director or officer of the Company will be personally liable to the
Company or its stockholders for or with respect to any breach of fiduciary duty or other act or omission as a director.”
Pursuant to an employment agreement, entered into
on November 2, 2022 and effective as of June 14, 2022, with Chia-Lin Simmons, the Company’s Chief Executive Officer (the “Employment
Agreement”), and which the Company has assumed as successor to its predecessor Delaware corporation, the Company has agreed to defend,
indemnify, and hold Ms. Simmons harmless from and against any and all claims, damages, penalties or expenses arising from or in connection
with the performance of Ms. Simmons’ job duties thereunder to the fullest extent required by law. Pursuant to an agreement, effective
July 15, 2021, entered into with FLG Partners, LLC, as amended in February 2022 (the “FLG Agreement”), of which Mark Archer,
the Company’s Chief Financial Officer, is a partner, the Company, as successor to its predecessor Delaware corporation, has agreed
to indemnify Mr. Archer and FLG Partners, LLC in connection with Mr. Archer’s services to the Company. The foregoing descriptions
of the Employment Agreement and FLG Agreement are not complete and are qualified in their entirety by reference to the full text of the
Employment Agreement and FLG Agreement, which are attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with
the SEC on November 4, 2022 (with respect to the Employment Agreement), and Exhibits 10.15 and 10.16 to the Company’s Annual Report
on Form 10-K, filed with the SEC on April 15, 2022 (with respect to the FLG Agreement).
The indemnification rights set forth above shall
not be exclusive of any other right which an indemnified person may have or hereafter acquire under any bylaw provision, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in
another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent
and shall inure to the benefit of the heirs, executors, and administrators of such person.
The Company has entered into indemnification agreements
with each of its directors and executive officers, pursuant to which the Company has agreed to indemnify such persons against all expenses
and liabilities incurred or paid by such persons in connection with any proceeding arising from the fact that such persons are or were
officers or directors of the Company, and to advance expenses as incurred by or on behalf of such persons in connection therewith.
In addition, in connection with the Company’s
reincorporation from the State of Delaware to the State of Nevada effective as of June 1, 2023, the Company intends to continue to maintain
general liability insurance policy that covers liabilities of its directors and officers arising out of claims based on acts or omissions
in their respective capacities as such directors or officers.
See “Item 17. Undertakings” for a
description of the SEC’s position regarding such indemnification provisions.
We plan to enter into a placement agency agreement
that provides that we are to indemnify the placement agent under certain circumstances and the placement agent is obligated, under certain
circumstances, to indemnify our directors, officers and controlling persons against specified liabilities, including liabilities under
the Securities Act of 1933, as amended (the “Securities Act”).
Item 15. Recent Sales of Unregistered Securities
The following is a summary of all of our securities
sold by us within the past three years which were not registered under the Securities Act:
In connection with our entry into an employment
agreement, effective June 14, 2021, with Chia-Lin Simmons and as a material inducement to Ms. Simmons’s acceptance of employment
with the Company as its Chief Executive Officer, the Company offered Ms. Simmons 13,328 shares of restricted stock of the Company, which
issuance was approved by the compensation committee of the Company’s board of directors and occurred in accordance with Nasdaq Listing
Rule 5635(c)(4) outside of the Company’s 2017 Stock Incentive Plan and 2013 Long-Term Stock Incentive Plan. Such shares vest over
a four-year period commencing on October 15, 2021, with a quarter to vest on the anniversary of that date, and thereafter in quarterly
amounts until such award has fully vested, so long as Ms. Simmons remains in the service of the Company.
On January 3, 2022, the Company granted Ms. Simmons
10,208 shares of restricted Common Stock under the Company’s 2013 Long-Term Stock Incentive Plan in accordance with the terms of
her employment agreement with the Company that vest over three years commencing on January 3, 2022, with 1,702 shares having vested
on July 3, 2022, and thereafter, 850 shares to vest on the first day of each subsequent quarter until the entire award has vested, so
long as Ms. Simmons remains in the service of the Company for each such quarter. On August 7, 2023, the Company granted Ms. Simmons 62,000
shares of restricted Common Stock under the Company’s 2023 Stock Incentive Plan, in accordance with the terms of her employment
agreement with the Company. Such shares vest over four years commencing July 3, 2023, with a quarter of such shares to vest on July
3, 2024, and thereafter, 1/16 of such shares to vest on the first day of each subsequent three-month period until the entire award has
vested, so long as Ms. Simmons remains in the service of the Company for each such quarter. On April 3, 2024, the Company granted Ms.
Simmons 46,200 shares of restricted Common Stock pursuant to the Company’s 2023 Stock Incentive Plan, in accordance with the terms
of her employment agreement with the Company. Such shares vest over a period commencing on April 3, 2024, with 1/4 of such shares to vest
on April 3, 2025, and thereafter, 1/16 of such shares to vest on the first day of each subsequent three-month period until the entire
award has vested, so long as Ms. Simmons remains in the service of the Company for each such quarter.
On February 15, 2022, the Company granted 6,470
shares of restricted Common Stock to Mr. Archer and 341 shares of restricted Common Stock to FLG Partners, of which Mr. Archer is a partner,
in accordance with Nasdaq Listing Rule 5635(c)(4) outside of the Company’s 2017 Stock Incentive Plan and 2013 Long-Term Stock Incentive
Plan, which vest over a period of 48 months, with one quarter on the anniversary of the grant and 1/16 each subsequent quarter until all
shares have vested, so long as Mr. Archer remains in the service of the Company. On August 7, 2023, the Company granted Mr. Archer and
FLG Partners an aggregate of 22,000 shares of restricted Common Stock under the Company’s 2023 Stock Incentive Plan. Such shares vest
over which vest commencing on July 3, 2023, with 1/4 of such shares to vest on July 3, 2024, and thereafter, 1/16 of such shares to vest
on the first day of each subsequent three-month period until the entire award has vested, so long as such grantee’s provide their
applicable services to the Company for each such quarter.
On August 16, 2021, we closed a private placement
offering (the “August Offering”), which was conducted pursuant to a securities purchase agreement, dated as of August 13,
2021, (the “August Purchase Agreement”), whereby we issued to certain institutional investors (i) an aggregate of 1,333,333
shares of Series F Convertible Preferred Stock, par value $0.0001 per share (the “Series F Preferred Stock”), initially convertible
into shares of Common Stock at a conversion price of $3.75 per share, which conversion price was subsequently adjusted to $4.50 per share
in accordance with the terms of the Certificate of Designation of the Series F Preferred Stock and (ii) warrants exercisable for up to
666,667 shares of Common Stock at an exercise price of $7.80 per share, subject to customary adjustments thereunder, which became exercisable
on February 16, 2022 and have terms of five and a half (5.5) years. The August Offering resulted in gross proceeds of approximately $4
million, before deducting any offering expenses. Pursuant to the August Purchase Agreement, such unregistered warrants, shares of Series
F Preferred Stock and the shares of Common Stock underlying such securities were issued to such investors in a private placement transaction
pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or
Regulation D promulgated thereunder. As of the date of this registration statement, holders of an aggregate of 1,160,000 shares of Series
F Preferred Stock have converted such shares into shares of Common Stock, and 173,333 shares of Series F Preferred Stock are outstanding.
We issued such shares of Common Stock to such holders in a private placement transaction pursuant to an exemption from the registration
requirements of the Securities Act provided in Section 3(a)(9) of the Securities Act, as the Common Stock was issued to existing stockholders
and no remuneration was provided in consideration of the issuance.
On November 21, 2023, the Company entered into
each of the inducement agreements with certain of its warrant holders (the “Inducement Agreements”), pursuant to which the
Company induced such holders to exercise for cash their warrants to purchase up to approximately 909,059 shares of Common Stock, at a
lower exercise price of (x) $2.00 per share (for the common stock purchase warrants issued pursuant to a firm commitment public offering
by the Company that closed on September 15, 2021 (the “Existing September 2021 Warrants”)) and (y) $2.00 per one and one-half
share (for the common stock purchase warrants issued pursuant to a firm commitment public offering by the Company that closed on January
25, 2023 (the “Existing January 2023 Warrants” and together with the Existing September 2021 Warrants, the “Existing
Warrants”)), during the period from the date of the Inducement Agreements until December 20, 2023. In consideration therefore and
upon exercise by such holders of their respective Existing Warrants, the Company agreed to issue such holders new common stock purchase
warrants as follows: (A) Series A Warrants to purchase up to a number of shares of Common Stock equal to 200% of the number of shares
of Common Stock issued upon exercise of the Existing September 2021 Warrants (up to 80,732 shares), at an exercise price of $2.00 per
Series A Warrant Share; and (B) Series B Warrants to purchase up to a number of shares of Common Stock equal to 200% of the number of
shares of Common Stock issued upon exercise of the Existing January 2023 Warrants (up to 1,382,058 shares), at an exercise price of $2.00
per one and one-half Series B Warrant Share. Of the Series A Warrants issued, 50% consisted of Series A-1 Warrants, which are immediately
exercisable and expire on the Termination Date (as defined in the Existing September 2021 Warrants) and 50% consisted of Series A-2 Warrants,
which are exercisable at any time on or after the Stockholder Approval Date (as defined in the Inducement Agreements) and have a term
of exercise of five and a half years from the date of the initial closing of the Inducement Agreement transactions. Of the Series B Warrants
issued, 50% consisted of Series B-1 Warrants, which are immediately exercisable and expire on the Termination Date (as defined in the
Existing January 2023 Warrants) and 50% consist of Series B-2 Warrants, which are exercisable at any time on or after the Stockholder
Approval Date and have a term of exercise of five and a half years from the date of the initial closing.
With respect to the availability of an exemption
from registration, relating to the sale and unregistered issuances of such securities described above, we made these determinations based
on the representations of each investor which included, in pertinent part, that each such investor was either (a) an “accredited
investor” within the meaning of Rule 501 of Regulation D or (b) a “qualified institutional buyer” within the meaning
of Rule 144A under the Securities Act and upon such further representations from each investor that (i) such investor acquired the securities
for his, her or its own account for investment and not for the account of any other person and not with a view to or for distribution,
assignment or resale in connection with any distribution within the meaning of the Securities Act, (ii) such investor agreed not to sell
or otherwise transfer the purchased securities unless they are registered under the Securities Act and any applicable state securities
laws, or an exemption or exemptions from such registration are available, (iii) such investor had knowledge and experience in financial
and business matters such that he, she or it was capable of evaluating the merits and risks of an investment in us, (iv) such investor
had access to all of our documents, records, and books pertaining to the investment and was provided the opportunity to ask questions
and receive answers regarding the terms and conditions of the offering and to obtain any additional information which we possessed or
were able to acquire without unreasonable effort and expense, and (v) such investor had no need for the liquidity in its investment in
us and could afford the complete loss of such investment. In addition, there was no general solicitation or advertising for securities
issued in reliance upon these exemptions.
Item 16. Exhibits.
The list of exhibits in the Exhibit Index to this
registration statement is incorporated herein by reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes that:
| (1) | For
purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the
time it was declared effective. |
| (2) | For
the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof. |
The undersigned registrant also hereby undertakes:
| (1) | To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | To
include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee”
table in the effective registration statement. |
| (iii) | To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided, however, that the undertakings set forth in paragraphs (1)(i),
(1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs
is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference in this registration statement or
is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement. |
| (2) | That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof. |
| (3) | To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering. |
| (4) | That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b)
as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use. |
| (5) | That,
for the purpose of determining liability of the registrant under the Securities Act of 1933, as amended, to any purchaser in the initial
distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such securities to such purchaser: |
|
(i) |
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
|
(ii) |
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
|
(iii) |
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
|
(iv) |
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (6) | That,
for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrant’s annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable, each filing
of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended) that
is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (7) | Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of such issue. |
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Louisville, in the State of Kentucky on July 26, 2024.
|
LOGICMARK, INC. |
|
|
|
By: |
/s/ Mark Archer |
|
|
Name: |
Mark Archer |
|
|
Title: |
Chief Financial Officer |
Pursuant to the requirements of the Securities
Act of 1933, the following persons in the capacities and on the dates indicated have signed this registration statement below.
Signature |
|
Title |
|
Date |
|
|
|
|
|
* |
|
Chief Executive Officer
and Director |
|
July 26,
2024 |
Chia-Lin Simmons |
|
(Principal Executive Officer) |
|
|
|
|
|
|
|
* |
|
Chief Financial Officer |
|
July 26, 2024 |
Mark Archer |
|
(Principal Financial Officer and Principal Accounting
Officer) |
|
|
|
|
|
|
|
* |
|
Director |
|
July 26,
2024 |
Carine Schneider |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
July 26,
2024 |
John Pettitt |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
July 26,
2024 |
Barbara Gutierrez |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
July 26,
2024 |
Robert A. Curtis |
|
|
|
|
* By: |
/s/ Mark Archer |
|
Name: |
Mark Archer |
|
|
Attorney-in-fact |
|
EXHIBIT INDEX
Exhibit No. |
|
Description of Exhibit |
1.1** |
|
Form of Placement Agency Agreement, by and between the Company and Roth Capital Partners, LLC, as lead placement agent |
2.1 |
|
Agreement and Plan of Merger, dated as of May 19, 2017, by and among the Company, Fit Merger Sub, Inc., Fit Pay, Inc. and Michael Orlando (3) |
2.2 |
|
Agreement and Plan of Merger, dated as of June 1, 2023, by and between the Company and LogicMark, Inc., a Delaware corporation. (25) |
3.1(i)(a) |
|
Certificate of Incorporation, as amended (1) |
3.1(i)(b) |
|
Certificate of Amendment to Certificate of Incorporation (2) |
3.1(i)(c) |
|
Certificate of Amendment to Certificate of Incorporation (19) |
3.1(i)(d) |
|
Certificate of Amendment to Certificate of Incorporation (20) |
3.1(i)(e) |
|
Certificate of Designations for Series C Non-Convertible Preferred Stock (3) |
3.1(i)(f) |
|
Certificate of Amendment to the Certificate of Designations of Series C Non-Convertible Voting Preferred Stock (19) |
3.1(i)(g) |
|
Form of Certificate of Designations, Preferences and Rights of Series F Convertible Preferred Stock (17) |
3.1(i)(h) |
|
Certificate of Amendment to Certificate of Incorporation of LogicMark, Inc. (24) |
3.1(i)(i) |
|
Series C Certificate of Amendment to the Series C Certificate of Designations of LogicMark, Inc. (24) |
3.1(i)(j) |
|
Articles of Incorporation, filed with the Secretary of State of the State of Nevada on June 1, 2023 (25) |
3.1(i)(k) |
|
Certificate of Designations, Preferences and Rights of Series C Non-Convertible Voting Preferred Stock, filed with the Secretary of State of the State of Nevada on June 1, 2023 (25) |
3.1(i)(l) |
|
Certificate of Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock, filed with the Secretary of State of the State of Nevada on June 1, 2023 (25) |
3.1(ii) |
|
Bylaws (25) |
4.1 |
|
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (22) |
4.2 |
|
Form of Warrant for November 2017 Private Placement (4) |
4.3 |
|
Form of Warrant to Sagard Credit Partners, LP (5) |
4.4 |
|
Form of September 2018 New Warrant (7) |
4.5 |
|
Form of Warrant Amendment and Exercise Agreement (7) |
4.6 |
|
Form of Pre-Funded Warrant for July 2020 Private Placement (10) |
4.7 |
|
Form of Registered Warrant for July 2020 Private Placement (10) |
4.8 |
|
Form of Unregistered Warrant for July 2020 Private Placement (10) |
4.9 |
|
Form of Registered Warrant for December 2020 Private Placement (8) |
4.10 |
|
Form of Unregistered Warrant for December 2020 Private Placement (8) |
4.11 |
|
Form of New Warrant (11) |
4.12 |
|
Form of Series F Convertible Preferred Stock Certificate (22) |
4.13 |
|
Form of Registered Warrant for February 2021 Private Placement (9) |
4.14 |
|
Form of Unregistered Warrant for February 2021 Private Placement (9) |
4.15 |
|
Form of Unregistered Warrant for August 2021 Private Placement (17) |
4.16 |
|
Form of Warrant for September 2021 Public Offering (18) |
4.17 |
|
Form of Warrant for January 2023 Public Offering (23) |
4.18 |
|
Form of Pre-Funded Warrant for January 2023 Public Offering (23) |
4.19 |
|
Form of Series A-1 Warrant (27) |
4.20 |
|
Form of Series A-2 Warrant (27) |
4.21 |
|
Form of Series B-1 Warrant (27) |
4.22 |
|
Form of Series B-2 Warrant (27) |
4.23* |
|
Form of Series A Warrant |
4.24* |
|
Form of Series B Warrant |
4.25** |
|
Form of Pre-Funded Warrant |
4.26** |
|
Form of Placement Agent Warrant |
5.1* |
|
Opinion of Sullivan & Worcester LLP |
10.1† |
|
2013 Long Term Incentive Plan (1) |
10.2† |
|
Forms of Agreement Under 2013 Long Term Incentive Plan (1) |
10.3† |
|
2017 Stock Incentive Plan (6) |
10.4 |
|
Form of Securities Purchase Agreement for July 2020 Offering (10) |
10.5 |
|
Form of Securities Purchase Agreement for December 2020 Offering (8) |
10.6 |
|
Form of Warrant Amendment and Exercise Agreement, dated January 8, 2021 (11) |
10.7 |
|
Form of Securities Purchase Agreement for February 2021 Offering (9) |
10.8 |
|
Form of Securities Purchase Agreement for August 2021 Private Placement (17) |
10.9 |
|
Form of Voting Agreement by and between the Company and certain investors in the September 2021 Public Offering (18) |
10.10 |
|
Lease Agreement, dated June 2, 2020, by and between LogicMark LLC and Moorman Properties, LLC (13) |
10.11 |
|
Settlement Agreement, dated August 11, 2021, by and between the Company and Giesecke+Devrient Mobile Security America, Inc. (15) |
10.12† |
|
Employment Agreement, entered into on January 8, 2021, by and between the Company and Vincent S. Miceli (12) |
10.13 |
|
Letter Agreement, effective as of August 1, 2021, by and between the Company and Vincent S. Miceli. (16) |
10.14† |
|
Employment Agreement, dated as of June 8, 2021, by and between the Company and Chia-Lin Simmons (14) |
10.15† |
|
Executive Employment Agreement, dated as of November 2, 2022, by and between the Company and Chia-Lin Simmons (21) |
10.16 |
|
Agreement, dated as of July 15, 2021, by and between the Company and FLG Partners, LLC (16) |
10.17 |
|
First Amendment to Agreement, dated as of February 15, 2022, by and between the Company and FLG Partners, LLC (22) |
10.18 |
|
Form of Voting Agreement, dated January 25, 2023, by and between the Company and certain investors in the January 2023 Public Offering (23) |
10.19 |
|
Form of Warrant Agency Agreement, dated January 25, 2023, by and between the Company and Nevada Agency and Transfer Company (23) |
10.20 |
|
Form of Indemnification Agreement (25) |
10.21† |
|
LogicMark, Inc. 2023 Stock Incentive Plan (26) |
10.22† |
|
Form of Restricted Stock Award Agreement for LogicMark, Inc. 2023 Stock Incentive Plan (26) |
10.23† |
|
Form of Stock Option Agreement for LogicMark, Inc. 2023 Stock Incentive Plan (26) |
10.24 |
|
Form of 2021 Inducement Agreement by and between the Company and each holder (28) |
10.25 |
|
Form of 2023 Inducement Agreement by and between the Company and each holder (28) |
10.26** |
|
Form of Securities Purchase Agreement |
10.27** |
|
Form of Warrant Agency Agreement |
23.1* |
|
Consent of BPM LLP, Independent Registered Public Accounting Firm |
23.2* |
|
Consent of Sullivan & Worcester LLP (included in Exhibit 5.1) |
24.1** |
|
Power of Attorney (included on the signature page of the initial registration statement on Form S-1 (File No. 333-279133)) |
107* |
|
Filing Fee Table |
* |
Filed herewith. |
** |
Previously filed. |
† |
Management contract or compensatory plan or arrangement. |
(1) |
(Filed as an Exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-186331) with the SEC on January 31, 2013. |
(2) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on September 12, 2016. |
(3) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on May 30, 2017. |
(4) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on November 9, 2017. |
(5) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on May 30, 2018. |
(6) |
Filed as an Exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-226116) with the SEC on July 10, 2018. |
(7) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on September 20, 2018. |
(8) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on December 18, 2020. |
(9) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on February 1, 2021. |
(10) |
(Filed as an Exhibit to the Company’s Current Report on Form 8-K/A with the SEC on July 13, 2020. |
(11) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on January 8, 2021. |
(12) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on January 14, 2021. |
(13) |
Filed as an Exhibit to the Company’s Annual Report on Form 10-K with the SEC on April 15, 2021. |
(14) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on June 17, 2021. |
(15) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on August 13, 2021. |
(16) |
Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q with the SEC on August 16, 2021. |
(17) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on August 17, 2021. |
(18) |
Filed as an Exhibit to the Company’s Registration Statement on Form S-1/A (File No. 333-259105) with the SEC on September 14, 2021. |
(19) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on October 15, 2021. |
(20) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on March 2, 2022. |
(21) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on November 4, 2022. |
(22) |
Filed as an Exhibit to the Company’s Annual Report on Form 10-K with the SEC on April 15, 2022. |
(23) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on January 26, 2023. |
(24) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on April 27, 2023. |
(25) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on June 2, 2023. |
(26) |
Filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q with the SEC on August 11, 2023. |
(27) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K with the SEC on November 21, 2023. |
(28) |
Filed as an Exhibit to the Company’s Current Report on Form 8-K/A with the SEC on November 21, 2023. |
II-8
Exhibit 4.23
SERIES A WARRANT TO PURCHASE COMMON STOCK
LOGICMARK, INC.
Warrant Shares: [●] |
Issue Date: [●], 2024 |
CUSIP:
ISIN: |
|
THIS SERIES A WARRANT TO
PURCHASE COMMON STOCK (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 of Stockholder Approval (the “Initial Exercise Date”) and on or
prior to [●] p.m. (New York City time) on [●], 2029 (the “Termination Date”) but not thereafter,
to subscribe for and purchase from LogicMark, Inc., a Nevada corporation (the “Company”), up to [●] shares
(as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one (1) share
of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2.2. This Warrant shall initially
be issued and maintained in the form of a security held in book-entry form and the Depository Trust Company or its nominee (“DTC”)
shall initially be the sole registered holder of this Warrant, subject to a Holder’s right to elect to receive a Warrant in certificated
form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.
| 1. | Definitions. In addition to the terms defined
elsewhere in this Warrant or in the Securities Purchase Agreement, dated [●], 2024, the following terms have the meanings
indicated in this Section 1: |
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.
1.2. “Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed
or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Market (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by
the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
1.3. “Board of Directors”
means the board of directors of the Company.
1.4. “Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are
open for use by customers on such day.
1.5. “Commission”
means the United States Securities and Exchange Commission.
1.6. “Common Stock”
means the common stock of the Company, $0.0001 par value per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.
1.7. “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.
1.8. “Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.9. “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.
1.10.“Registration Statement”
means the Company’s registration statement on Form S-1, as amended (File No. 333-279133).
1.11. “Reset Price”
means the greater of (i) the lowest VWAP during the five (5)-Trading Day period immediately preceding the Reset Date and (ii) the Floor
Price (as adjusted for stock splits, stock dividends, recapitalizations, reorganizations, reclassification, combinations, reverse stock
splits or other similar events occurring after the date of issuance of this Warrant).
1.12 “Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.13. “Securities Purchase
Agreement” means the securities purchase agreement, dated as of [●], 2024, among the Company and the investors signatory
thereto, as amended, modified or supplemented from time to time in accordance with its terms.
1.14. “Stockholder Approval”
means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC (or any successor entity)
from the stockholders of the Company, or board of directors in lieu thereof, with respect to issuance of all of the Warrants and the Warrant
Shares upon the exercise thereof, including without limitation, (i) to give full effect to the adjustment in the exercise price and number
of Warrant Shares following a Dilutive Issuance pursuant to Section 3.1, (ii) to consent to any adjustment to the exercise price
or number of shares of Common Stock underlying the Warrants in the event of a Share Combination Event pursuant to Section 3.8 and
(iii) to consent to the voluntary adjustment, from time to time, of the Exercise Price of any and all currently outstanding Warrants pursuant
to Section 3.9.
1.15. “Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
1.16. “Trading Day”
means a day on which the Common Stock is traded on a Trading Market.
1.17. “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, any equities market maintained by
Cboe Global Markets, Inc., the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
1.18. “Transfer Agent”
means Nevada Agency and Transfer Company, the current transfer agent of the Company, with a mailing address of 50 West Liberty Street,
Suite 880, Reno NV 89501 and an email address of amanda@natco.com and any successor transfer agent of the Company.
1.19. “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
1.19. “Warrant Agency Agreement”
means that certain Warrant Agency Agreement, dated on or about the Issue Date, between the Company and the Warrant Agent.
1.20. “Warrant Agent”
means the Transfer Agent and any successor warrant agent of the Company.
1.21. “Warrants”
means this Warrant and other Series A Warrants to Purchase Common Stock issued by the Company pursuant to the Registration Statement.
2.1. Exercise of Warrant.
Subject to the provisions of Section 2.5 herein, 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 PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise substantially in the form attached hereto
as Exhibit 2.1 (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 2.4.1 herein) following the date of exercise
as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise
by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2.3
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) Trading 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.
Notwithstanding the foregoing in this
Section 2.1, a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held in
book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made pursuant
to this Section 2.1 by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form for
exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable),
subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement,
in which case this sentence shall not apply.
2.2. Exercise Price. The
exercise price per Warrant Share shall be $[●], subject to adjustment hereunder (the “Exercise Price”).
2.3. 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 issuance of the Warrant Shares to the Holder or 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 2.1
hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2.1 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.
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 2.1 hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered
pursuant to Section 2.1 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 registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2.3.
Notwithstanding
anything herein to the contrary and subject to Stockholder Approval, on the Termination Date, this Warrant shall be automatically exercised
via cashless exercise pursuant to this Section 2.3.
2.4. Mechanics
of Exercise.
2.4.1. Delivery
of Warrant Shares upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant
to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the
date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading
Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”).
Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of
the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares,
provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of
(i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice
of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder shall be deemed for
purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of the date of delivery
of the Warrant Shares. If the Company fails for any reason (other than the failure of the Holder to timely deliver the aggregate Exercise
Price, unless the Warrant is validly exercised by means of a cashless exercise) 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 (3rd) 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, 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.
2.4.2. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
2.4.3. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2.4.1
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however, that the Holder shall
be required to return any Warrant Shares subject to any such rescinded Notice of Exercise concurrently with the return to Holder of the
aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant
Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
2.4.4. 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
2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date (other than the failure of the Holder to timely
deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means of a cashless exercise), 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 and return any amount received by the Company in respect of the Exercise Price for those Warrant
Shares (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would
have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit
a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms hereof.
2.4.5. No
Fractional Shares or Scrip. The Company shall not issue fractions of this Warrant or distribute warrant certificates which evidence
fractional Warrants. Whenever any fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution
shall reflect a rounding of such fraction to the nearest whole Warrant (rounded down).
2.4.6. 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 as Exhibit 2.4.6 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.
2.4.7. 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.
2.5. 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, unexercised 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 unconverted 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 2.5, 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 2.5 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 2.5, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the
case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within
one (1) Trading 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 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 2.5, provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2.5 shall continue to apply.
Any increase in the Beneficial Ownership Limitation will not be effective until the 61st
day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2.5 to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
3.1. Subsequent Equity Sales.
If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall sell, enter into an agreement
to sell, or grant any option to purchase, or sell, enter into an agreement to sell, or grant any right to reprice, or otherwise dispose
of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any shares of Common Stock or Common Stock
Equivalents, at an effective price per share less than the Exercise Price then in effect (such lower price, the “Base Share
Price” and such issuances collectively, a “Dilutive Issuance”) (it being understood and agreed
that if the holder of the shares of Common Stock or share of Common Stock Equivalents or such other securities so issued shall at any
time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common
Stock at an effective price per share that is less than the Exercise Price, such issuance shall be deemed to have occurred for less than
the Exercise Price on such date of the Dilutive Issuance at such effective price), then simultaneously with the consummation (or, if earlier,
the announcement (provided such Dilutive Issuance occurs)) of each Dilutive Issuance the Exercise Price shall be reduced and only reduced
to equal the Base Share Price and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise
Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price
prior to such adjustment, provided that the Base Share Price shall not be less than (i) $[—]1
(the “Floor Price”) (subject to adjustment for reverse and forward stock splits, recapitalizations and similar
transactions following the date of the Securities Purchase Agreement). Notwithstanding the foregoing, no adjustments shall be made, paid
or issued under this Section 3.1 in respect of an Exempt Issuance (as defined in the Securities Purchase Agreement). The Company shall
notify the Holder, in writing, no later than the Trading Day following the issuance or deemed issuance of any shares of Common Stock or
share of Common Stock Equivalents subject to this Section 3.1, indicating therein the applicable issuance price, or applicable reset price,
exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For
purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3.1, upon the occurrence
of any Dilutive Issuance, the Holder is entitled to receive a number of Warrant Shares based upon the Base Share Price (which shall not
be lower than the Floor Price) regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. If
the Company enters into a Variable Rate Transaction, the Company shall be deemed to have issued shares of Common Stock or share of Common
Stock Equivalents at the lowest possible price, conversion price or exercise price at which such securities may be issued, converted or
exercised.
3.2. Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution
or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such event, and the number of Shares issuable upon exercise of this
Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3.2 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.
| 1 | NTD: No less than 20% of the “Minimum Price” (as
defined under the rules of The Nasdaq Stock Market LLC) of the Common Stock on the pricing date. |
3.3. Subsequent Rights Offerings.
In addition to any adjustments pursuant to Section 3.2 above, if at any time the Company grants, issues or sells any Common Stock
Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all (or substantially all) of 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).
3.4. Pro Rata Distributions.
During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to all (or substantially all) holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, 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). To the extent that this Warrant has not been partially or completely exercised at the
time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has
exercised this Warrant.
3.5. 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 or 50% or more
of the voting power of the common equity of the Company, (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 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common
equity of the Company (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 2.5 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 2.5 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/shares 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, L.P. (“Bloomberg”) determined as of the day
of consummation of the applicable contemplated 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
contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1) 100% and (2) the
100 day volatility as 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 contemplated 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 public announcement of the applicable contemplated 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
3.4 and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated
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 (5) Business Days after 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 in accordance with the provisions of this Section 3. 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 that 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 prior 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 be added to the
term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction,
each and every provision of this Warrant referring to the “Company” shall refer instead to each of the Company and the Successor
Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the
Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume
all of the obligations of the Company prior thereto under this Warrant with the same effect as if the Company and such Successor Entity
or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled
to the benefits of the provisions of this Section 3.5 regardless of (i) whether the Company has sufficient authorized shares of
Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
3.6. Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of
the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
3.7. Notice to Holder.
3.7.1. 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 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.
3.7.2. 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 email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 10 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 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.
3.8. Share Combination Event
Adjustment. In addition to the adjustments set forth in Section 3.2 above, if on the date on which the next share
split, share dividend, share combination recapitalization or other similar transaction involving the Common Stock on or after the
Issuance Date (the “Share Combination Event”, and such date thereof, the “Share Combination
Event Date”), the lowest VWAP during the period commencing five (5) consecutive Trading Days immediately preceding and
the five (5) consecutive Trading Days immediately following the Share Combination Event Date (the “Event Market
Price”) (provided if the Share Combination Event is effective after close of trading on the primary Trading Market,
then commencing on the next Trading Day, which eleven (11)-Trading Day period shall be the “Share Combination Adjustment
Period”) is less than the Exercise Price then in effect (after giving effect to the adjustment in Section 3.2
above), then at the close of trading on the primary Trading Market on the last day of the Share Combination Adjustment Period, the
Exercise Price then in effect on such fifth (5th) Trading Day shall be reduced (but in no event increased) to the Event Market Price
and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price payable hereunder,
after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price prior to such
adjustment. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an
increase in the Exercise Price hereunder, no adjustment shall be made, and if this Warrant is exercised, on any given Exercise Date
during the Share Combination Adjustment Period, solely with respect to such portion of this Warrant exercised on such applicable
Exercise Date, such applicable Share Combination Adjustment Period shall be deemed to have ended on, and included, the Trading Day
immediately prior to such Exercise Date and the Event Market Price on such applicable Exercise Date will be the lowest VWAP of the
Common Stock immediately during such the Share Combination Adjustment Period prior to such Exercise Date and ending on, and
including the Trading Day immediately prior to such Exercise Date. Notwithstanding the foregoing, in no event shall the Event Market
Price be less than the Floor Price (subject to adjustment for reverse and forward stock splits, recapitalizations and similar
transactions following the date of the Securities Purchase Agreement). Notwithstanding anything herein to the contrary, the
“aggregate Exercise Price” used in the determination of the increase in Warrant Shares above shall be based on the
aggregate Exercise Price on the Closing Date (reduced ratably for prior exercises), and shall not be based on an aggregate Exercise
Price resulting from a reduction in the Exercise Price without a proportional increase in the number of Warrant Shares (i.e.,
pursuant to Section 3.8 or otherwise).
3.9. Voluntary Adjustment by Company.
Subject to the rules and regulations of the Trading Market and the consent of the Holders of a majority in interest of the Warrants then
outstanding, the Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the Board of Directors.
3.10. Stockholder Approval.
The Company shall (a) hold a special meeting of stockholders (which may also be at the annual meeting of stockholders) at the earliest
practicable date after the date hereof, or (b) obtain by written consent the Stockholder Approval, but in no event later than one hundred
and eighty (180) days (which time period, for the avoidance of doubt, does not include the time required to file and mail an information
statement on Schedule 14C with respect to such written consent as required under the Exchange Act), after the Closing Date for the purpose
of obtaining Stockholder Approval, if required to effect the purpose thereof, with the recommendation of the Board that such proposal
be approved, and the Company shall, if applicable, solicit proxies from its stockholders in connection therewith in the same manner as
all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of
such proposal. The Company shall use its reasonable best efforts to obtain such Stockholder Approval, and officers, directors and stockholders
subject to Lock-Up Agreements pursuant to Section 2.2 of the Securities Purchase Agreement shall, if applicable, cast their proxies in
favor of such proposal. If the Company does not obtain Stockholder Approval at the first such meeting or by written consent, the Company
shall call a subsequent annual or special meeting every one hundred and eighty (180) days thereafter to seek Stockholder Approval until
the earlier of the date Stockholder Approval is obtained or the Warrants are no longer outstanding.
3.8. One Time Reset Adjustment.
In addition to the adjustments set forth in this Section 3, on the thirtieth (30th) Trading Day immediately following
the date of issuance of this Warrant. the Exercise Price then in effect shall be adjusted to the Reset Price.
4.1. Transferability.
Subject to compliance with any applicable securities laws, 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 as Exhibit 2.4.6 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.
4.2. New Warrants. If
this Warrant is not held in global form through DTC (or any successor depositary), this Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations
in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4.1, as
to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants
in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or
exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of
Warrant Shares issuable pursuant thereto.
4.3. Warrant Register.
The Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company and the Warrant Agent may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
5.1. 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 2.4.1, 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 2.3
or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein, in no event shall the Company be required to net cash
settle an exercise of this Warrant.
5.2. 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.
5.3. 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.
5.4. Authorized Shares.
5.4.1. Reservation
of Authorized and Unissued 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 of Common Stock to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may
be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable (which means that no further sums are
required to be paid by the holders thereof in connection with the issue thereof) 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).
5.4.2. Noncircumvention.
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may
be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality
of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
5.4.3. Authorizations,
Exemptions and Consents. Before taking any action that 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.
5.5. Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.
Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated
by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in
such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding the foregoing, nothing
in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities
laws.
5.6. 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.
5.7. Nonwaiver and Expenses.
No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right
or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrant
terminates on the Termination Date. No provision of this Warrant shall be construed as a waiver by the Holder of any rights which the
Holder may have under the federal securities laws and the rules and regulations of the Commission thereunder. Without limiting any other
provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
5.8. Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed
to the Company, at 2801 Diode Lane, Louisville, KY 40299, Attention: Mark Archer, Chief Financial Officer, email address: mark@logicmark.com,
or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent
by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing
on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest
of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
5.8 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 e-mail at the e-mail address set forth in this Section 5.8 on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any
Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.9. 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.
5.10. 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.
5.11. 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.
5.12. Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the majority of interest of all of the Purchasers, on the other hand.
5.13. 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.
5.14. 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.
5.15. Warrant
Agency Agreement. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject
to the Warrant Agency Agreement. To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agency
Agreement, the provisions of this Warrant shall govern and be controlling.
********************
[Signature Page Follows]
[Series A Warrant Signature Page]
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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By: |
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Name: |
Mark Archer |
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Title: |
Chief Financial Officer |
Exhibit 2.1
NOTICE OF EXERCISE
TO:LOGICMARK,
INC.
(1) The undersigned hereby elects
to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Series A Warrant to Purchase Common Stock (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.
☐ if permitted the
cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2.3, to
exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2.3.
(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: |
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Signature of Authorized Signatory of Investing Entity: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Date: |
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Name of Investing Individual: |
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Signature of Investing Individual: |
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Date: |
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Exhibit 2.4.6
ASSIGNMENT FORM
(To assign the foregoing Series
A Warrant to Purchase Common Stock, execute this form and supply required information. Do not use this form to exercise the Series A Warrant
to purchase shares of Common Stock.)
FOR VALUE RECEIVED, the foregoing
Series A Warrant to Purchase Common Stock and all rights evidenced thereby are hereby assigned to:
Name: |
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Address: |
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Phone Number: |
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Email Address: |
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Date: |
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Holder’s Signature: |
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Holder’s Address: |
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Exhibit 4.24
SERIES B WARRANT TO PURCHASE COMMON STOCK
LOGICMARK, INC.
Warrant Shares: [●] |
Issue Date: [●], 2024 |
CUSIP:
ISIN: |
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THIS SERIES B WARRANT TO
PURCHASE COMMON STOCK (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 of Stockholder Approval (the “Initial Exercise Date”) and on or
prior to [●] p.m. (New York City time) on [●], 20271
(the “Termination Date”) but not thereafter, to subscribe for and purchase from LogicMark, Inc., a Nevada corporation
(the “Company”), up to [●] shares (as subject to adjustment hereunder, the “Warrant Shares”)
of Common Stock. The purchase price of one (1) share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2.2. This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository
Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject
to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in
which case this sentence shall not apply.
| 1. | Definitions. In addition to the terms defined
elsewhere in this Warrant or in the Securities Purchase Agreement, dated [●], 2024, the following terms have the meanings indicated
in this Section 1: |
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.
1.2. “Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed
or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Market (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by
the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
1.3. “Board of Directors”
means the board of directors of the Company.
1.4. “Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are
open for use by customers on such day.
1.5. “Commission”
means the United States Securities and Exchange Commission.
| 1 | NTD: 2.5 years after the Issue Date. |
1.6. “Common Stock”
means the common stock of the Company, $0.0001 par value per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.
1.7. “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.
1.8. “Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.9. “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.
1.10. “Registration Statement”
means the Company’s registration statement on Form S-1, as amended (File No. 333-279133).
1.11. “Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.12. “Securities Purchase
Agreement” means the securities purchase agreement, dated as of [●], 2024, among the Company and the investors signatory
thereto, as amended, modified or supplemented from time to time in accordance with its terms.
1.13. “Stockholder Approval”
means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC (or any successor entity)
from the stockholders of the Company, or board of directors in lieu thereof, with respect to issuance of all of the Warrants and the Warrant
Shares upon the exercise thereof, including without limitation: (i) to consent to any adjustment to the exercise price or number of shares
of Common Stock underlying the Warrants in the event of a Share Combination Event pursuant to Section 3.8 and (ii) to consent to
the voluntary adjustment, from time to time, of the Exercise Price of any and all currently outstanding Warrants pursuant to Section 3.9.
1.14. “Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
1.15. “Trading Day”
means a day on which the Common Stock is traded on a Trading Market.
1.16. “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, any
equities market maintained by Cboe Global Markets, Inc., OTCQB or OTCQX (or any successors to any of the foregoing).
1.17. “Transfer Agent”
means Nevada Agency and Transfer Company, the current transfer agent of the Company, with a mailing address of 50 West Liberty Street,
Suite 880, Reno NV 89501 and an email address of amanda@natco.com and any successor transfer agent of the Company.
1.18. “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 shares of Common Stock or (ii)
enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company
may issue securities at a future determined price.
1.19. “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
1.20. “Warrant Agency Agreement”
means that certain Warrant Agency agreement, dated on or about the Issue Date, between the Company and the Warrant Agent.
1.21. “Warrant Agent”
means the Transfer Agent and any successor warrant agent of the Company.
1.22. “Warrants”
means this Warrant and other Series B Warrants to Purchase Common Stock issued by the Company pursuant to the Registration Statement.
2.1. Exercise of Warrant. Subject
to the provisions of Section 2.5 herein, 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 PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise substantially in the form attached hereto as Exhibit
2.1 (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 2.4.1 herein) following the date of exercise as
aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise
by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2.3
below is specified in the applicable Notice of Exercise. For the avoidance of doubt, any reference to cashless exercise herein shall include
a reference to alternative cashless 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) Trading 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.
Notwithstanding the foregoing
in this Section 2.1, a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant
held in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises
made pursuant to this Section 2.1 by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction
form for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable),
subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement,
in which case this sentence shall not apply.
2.2. Exercise Price. The
exercise price per Warrant Share shall be $[●], subject to adjustment hereunder (the “Exercise Price”).
2.3. 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 issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such
time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (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
2.1 hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2.1 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. 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 2.1 hereof or (iii) the VWAP
on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise
is both executed and delivered pursuant to Section 2.1 hereof after the close of “regular trading hours” on such Trading
Day; |
|
(B) |
= |
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 registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to
this Section 2.3.
The Holder may also effect an “alternative
cashless exercise” following the Stockholder Approval Date. In such event, the aggregate number of Warrant Shares issuable in such
alternative cashless exercise pursuant to any given Notice of Exercise electing to effect an alternative cashless exercise shall equal
the product of (i) the aggregate 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, multiplied by (ii) 2.0. Such
number of aggregate Warrant Shares issuable in such alternative cashless exercise shall be proportionally adjusted in the event of any
stock split, dividend, reclassification or any other adjustment provided in Section 3.2 hereof. Notwithstanding anything herein to the
contrary, on the Termination Date and subject to Stockholder Approval, this Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2.3 (including an alternative cashless exercise pursuant to this paragraph).
Notwithstanding anything herein to the
contrary, on the Termination Date and subject to Stockholder Approval, this Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2.3.
2.4. Mechanics of Exercise.
2.4.1. Delivery
of Warrant Shares upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, for
the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice
of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise,
(ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising
the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share
Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have
become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery
of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received
within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following
delivery of the Notice of Exercise. Notwithstanding anything herein to the contrary, upon delivery of the Notice of Exercise, the Holder
shall be deemed for purposes of Regulation SHO under the Exchange Act to have become the holder of the Warrant Shares irrespective of
the date of delivery of the Warrant Shares. If the Company fails for any reason (other than the failure of the Holder to timely deliver
the aggregate Exercise Price, unless the Warrant is validly exercised by means of a cashless exercise) 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 (3rd) 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, 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.
2.4.2. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
2.4.3. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2.4.1
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however, that the Holder shall
be required to return any Warrant Shares subject to any such rescinded Notice of Exercise concurrently with the return to Holder of the
aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant
Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
2.4.4. 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
2.4.1 above pursuant to an exercise on or before the Warrant Share Delivery Date (other than the failure of the Holder to timely
deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means of a cashless exercise), 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 and return any amount received by the Company in respect of the Exercise Price for those Warrant
Shares (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would
have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit
a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms hereof.
2.4.5. No
Fractional Shares or Scrip. The Company shall not issue fractions of this Warrant or distribute warrant certificates which evidence
fractional Warrants. Whenever any fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution
shall reflect a rounding of such fraction to the nearest whole Warrant (rounded down).
2.4.6. 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 as Exhibit 2.4.6 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.
2.4.7. 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.
2.5. 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, unexercised 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 unconverted 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 2.5, 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 2.5 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 2.5, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the
case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within
one (1) Trading 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 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 2.5, provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2.5 shall continue to apply.
Any increase in the Beneficial Ownership Limitation will not be effective until the 61st
day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2.5 to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
3.1. 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 Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance
of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares of capital stock
of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the
number of shares of Common Stock outstanding immediately after such event, and the number of Shares issuable upon exercise of this Warrant
shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 3.1 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.
3.2. [Reserved].
3.3. Subsequent Rights Offerings.
In addition to any adjustments pursuant to Section 3.1 above, if at any time the Company grants, issues or sells any Common Stock
Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all (or substantially all) of 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).
3.4. Pro Rata Distributions.
During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to all (or substantially all) holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, 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). To the extent that this Warrant has not been partially or completely exercised at the
time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has
exercised this Warrant.
3.5. 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 or 50% or more
of the voting power of the common equity of the Company, (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 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common
equity of the Company (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 2.5 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 2.5 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/shares 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, L.P. (“Bloomberg”) determined as of the day
of consummation of the applicable contemplated 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
contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of (1) 100% and (2) the
100 day volatility as 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 contemplated 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 public announcement of the applicable contemplated 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
3.5 and (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated
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 (5) Business Days after 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 in accordance with the provisions of this Section 3.7 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 that 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 prior 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 be added to the term “Company”
under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of
this Warrant referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor
Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise
every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations
of the Company prior thereto under this Warrant with the same effect as if the Company and such Successor Entity or Successor Entities,
jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits
of the provisions of this Section 3.5 regardless of (i) whether the Company has sufficient authorized shares of Common Stock for
the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
3.6. Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be
the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
3.7. Notice to Holder.
3.7.1. 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 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.
3.7.2. 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 email to the Holder at its last email address as it shall
appear upon the Warrant Register of the Company, at least 10 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 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.
3.8. Share
Combination Event Adjustment. In addition to the adjustments set forth in Section 3.1 above, if on the date on which the
next share split, share dividend, share combination recapitalization or other similar transaction involving the Common Stock on or after
the Issuance Date (the “Share Combination Event”, and such date thereof, the “Share Combination
Event Date”), the lowest VWAP during the period commencing five (5) consecutive Trading Days immediately preceding and
the five (5) consecutive Trading Days immediately following the Share Combination Event Date (the “Event Market Price”)
(provided if the Share Combination Event is effective after close of trading on the primary Trading Market, then commencing on the next
Trading Day, which eleven (11) Trading Day period shall be the “Share Combination Adjustment Period”) is less
than the Exercise Price then in effect (after giving effect to the adjustment in Section 3.1 above), then at the close of trading
on the primary Trading Market on the last day of the Share Combination Adjustment Period, the Exercise Price then in effect on such fifth
(5th) Trading Day shall be reduced (but in no event increased) to the Event Market Price and the number of Warrant Shares issuable hereunder
shall be increased such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price,
shall be equal to the aggregate Exercise Price prior to such adjustment. For the avoidance of doubt, if the adjustment in the immediately
preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made, and if this Warrant
is exercised, on any given Exercise Date during the Share Combination Adjustment Period, solely with respect to such portion of this
Warrant exercised on such applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed to have ended
on, and included, the Trading Day immediately prior to such Exercise Date and the Event Market Price on such applicable Exercise Date
will be the lowest VWAP of the Common Stock immediately during such the Share Combination Adjustment Period prior to such Exercise Date
and ending on, and including the Trading Day immediately prior to such Exercise Date. Notwithstanding the foregoing, in no event shall
the Event Market Price be less than $[●]2 (subject to adjustment for reverse and forward stock splits, recapitalizations
and similar transactions following the date of the Securities Purchase Agreement). Notwithstanding anything herein to the contrary, the
“aggregate Exercise Price” used in the determination of the increase in Warrant Shares above shall be based on the aggregate
Exercise Price on the Closing Date (reduced ratably for prior exercises), and shall not be based on an aggregate Exercise Price resulting
from a reduction in the Exercise Price without a proportional increase in the number of Warrant Shares (i.e., pursuant to Section 3.8
or otherwise).
3.9. Voluntary
Adjustment by Company. Subject to the rules and regulations of the Trading Market and the consent of the Holders of a majority
in interest of the Warrants then outstanding, the Company may at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board of Directors.
3.10. Stockholder Approval.
The Company shall (a) hold a special meeting of stockholders (which may also be at the annual meeting of stockholders) at the earliest
practicable date after the date hereof, or (b) obtain by written consent the Stockholder Approval, but in no event later than one hundred
and eighty (180) days (which time period, for the avoidance of doubt, does not include the time required to file and mail an information
statement on Schedule 14C with respect to such written consent as required under the Exchange Act), after the Closing Date for the purpose
of obtaining Stockholder Approval, if required to effect the purpose thereof, with the recommendation of the Board that such proposal
be approved, and the Company shall, if applicable, solicit proxies from its stockholders in connection therewith in the same manner as
all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of
such proposal. The Company shall use its reasonable best efforts to obtain such Stockholder Approval, and officers, directors and stockholders
subject to Lock-Up Agreements pursuant to Section 2.2 of the Securities Purchase Agreement shall, if applicable, cast their proxies in
favor of such proposal. If the Company does not obtain Stockholder Approval at the first such meeting or by written consent, the Company
shall call a subsequent annual or special meeting every one hundred and eighty (180) days thereafter to seek Stockholder Approval until
the earlier of the date Stockholder Approval is obtained or the Warrants are no longer outstanding.
| 2 | NTD: No less than 20% of the “Minimum Price” (as
defined under the rules of The Nasdaq Stock Market LLC) of the Common Stock on the pricing date. |
4.1. Transferability.
Subject to compliance with any applicable securities laws, 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 as Exhibit 2.4.6 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.
4.2. New Warrants. If
this Warrant is not held in global form through DTC (or any successor depositary), this Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations
in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4.1, as
to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants
in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or
exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of
Warrant Shares issuable pursuant thereto.
4.3. Warrant Register.
The Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company and the Warrant Agent may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
5.1. 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 2.4.1, 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 2.3
or to receive cash payments pursuant to Section 2.4.1 and Section 2.4.4 herein, in no event shall the Company be required to net cash
settle an exercise of this Warrant.
5.2. 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.
5.3. 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.
5.4. Authorized Shares.
5.4.1. Reservation
of Authorized and Unissued 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 of Common Stock to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may
be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable (which means that no further sums are
required to be paid by the holders thereof in connection with the issue thereof) 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).
5.4.2. Noncircumvention.
Except and to the extent as waived or consented to by the Holder the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
5.4.3. Authorizations,
Exemptions and Consents. Before taking any action that 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.
5.5. Governing Law. All
questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.
Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated
by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in
such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding the foregoing, nothing
in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities
laws.
5.6. 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.
5.7. Nonwaiver and Expenses.
No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right
or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the right to exercise this Warrant
terminates on the Termination Date. No provision of this Warrant shall be construed as a waiver by the Holder of any rights which the
Holder may have under the federal securities laws and the rules and regulations of the Commission thereunder. Without limiting any other
provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
5.8. Notices. Any and
all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of
Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed
to the Company, at 2801 Diode Lane, Louisville, KY 40299, Attention: Mark Archer, Chief Financial Officer, email address: mark@logicmark.com,
or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent
by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing
on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest
of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
5.8 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 e-mail at the e-mail address set forth in this Section 5.8 on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any
Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.9. 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.
5.10. 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.
5.11. 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.
5.12. Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the majority
of interest of all of the Purchasers, on the other hand.
5.13. 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.
5.14. 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.
5.15. Warrant Agency Agreement.
If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject to the Warrant Agency
Agreement. To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agency Agreement, the provisions
of this Warrant shall govern and be controlling.
********************
[Signature Page Follows]
[Series B Warrant Signature Page]
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.
|
LOGICMARK, INC. |
|
|
|
By: |
|
|
Name: |
Mark Archer |
|
Title: |
Chief Financial Officer |
Exhibit 2.1
NOTICE OF EXERCISE
To: LOGICMARK,
INC.
(1) The undersigned hereby elects
to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Series B Warrant to Purchase Common Stock (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. |
|
☐ |
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2.3, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2.3. |
|
|
|
|
☐ |
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the provisions of subsection 2.3, to exercise this Warrant pursuant to the “alternative cashless exercise” procedure set forth in subsection 2.3. |
(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: |
|
|
|
Name of Investing Individual: |
|
Signature of Investing Individual: |
|
Date: |
|
Exhibit 2.4.6
ASSIGNMENT FORM
(To assign the foregoing Series
B Warrant to Purchase Common Stock, execute this form and supply required information. Do not use this form to exercise the Series B Warrant
to purchase shares of Common Stock.)
FOR VALUE RECEIVED, the foregoing
Series B Warrant to Purchase Common Stock and all rights evidenced thereby are hereby assigned to:
Name: |
|
Address: |
|
Phone Number: |
|
Email Address: |
|
Date: |
|
Holder’s Signature: |
|
Holder’s Address: |
|
Exhibit 5.1
![](https://www.sec.gov/Archives/edgar/data/1566826/000101376224001682/ex5-1_001.jpg)
July 26, 2024
LogicMark, Inc.
2801 Diode Lane
Louisville, KY 40299
Ladies and Gentlemen:
We have acted as special counsel to LogicMark,
Inc., a Nevada corporation (the “Company”), in connection with its preparation of a Registration Statement on
Form S-1, as amended (File No. 333-279133) (the “Registration Statement”), initially filed with the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities
Act”) on May 6, 2024, related to the proposed public offering of (i) up to 12,306,610 units (the “Units”),
consisting of (x) 12,306,610 shares (the “Shares”) of common stock of the Company, par value $0.0001 per share
(the “Common Stock”), (y) Series A warrants to purchase Common Stock (the “Series A Warrants”)
exercisable for the purchase of up to 12,306,610 shares of Common Stock (the “Series A Warrant Shares”) and
(z) Series B warrants to purchase Common Stock (the “Series B Warrants” and, together with the Series A Warrants,
the “Warrants”) exercisable for the purchase of up to 12,306,610 shares of Common Stock (the “Series
B Warrant Shares” and, together with the Series A Warrant Shares, the “Warrant Shares”), and (ii)
up to 12,306,610 pre-funded units (the “Pre-Funded Units”) in lieu of the Units that would otherwise result
in ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%) of outstanding Common Stock, consisting of (x) pre-funded
warrants (the “Pre-Funded Warrants”), exercisable for the purchase of up to 12,306,610 shares of Common Stock
(the “Pre-Funded Warrant Shares”), (y) Series A Warrants exercisable for the purchase of up to 12,306,610 shares
of Common Stock and (z) Series B Warrants exercisable for the purchase of up 12,306,610 shares of Common Stock. The Units, the Shares,
Warrants, the Warrant Shares, the Pre-Funded Units, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Placement Agent Warrants
(as defined below) and the Placement Agent Warrant Shares (as defined below) are collectively referred to herein as the “Securities”.
The Securities will be sold pursuant to the Registration Statement, one or more securities purchase agreements (the “Agreements”)
by and among the Company and certain accredited investors or qualified institutional buyers identified on the signature pages thereto
(collectively, the “Investors”), and a placement agency agreement between the Company and Roth Capital Partners,
LLC (the “Placement Agency Agreement”), to use its reasonable best efforts to solicit offers to purchase the
Securities in this offering (the “Placement Agent”). Pursuant to the Placement Agency Agreement, subject to
the satisfaction of certain conditions set forth therein, the Company may be obligated to issue the Placement Agent a number of common
stock purchase warrants (the “Placement Agent Warrants”) exercisable for up to 369,198 shares of Common Stock
(the “Placement Agent Warrant Shares”) in the event that all 12,306,610 Units are sold. As noted in the Registration
Statement, for each Pre-Funded Unit sold, the number of Units sold will be decreased on a one-for-one basis.
As counsel to the Company in connection with the
proposed potential issuance and sale of the Securities, we have examined: (i) the Company’s articles of incorporation and bylaws,
each as currently in effect; (ii) certain resolutions of the Company’s board of directors relating to the issuance and sale of the
Securities (the “Resolutions”); (iii) the form of Agreement; (iv) the form of Series A Warrant; (v) the form
of Series B Warrant, (vi) the form of Pre-Funded Warrant; (vii) the form of Placement Agent Warrant, (viii) the form of Placement Agency
Agreement, (ix) the form of warrant agency agreement between the Company and Nevada Agency and Transfer Company (the “Warrant
Agency Agreement”); (x) the Registration Statement; and (xi) such other proceedings, documents, and records as we have deemed
necessary to enable us to render this opinion. In all such examinations, we have assumed the genuineness of all signatures, the authenticity
of all documents, certificates, and instruments submitted to us as originals, and the conformity with the originals of all documents,
certificates, and instruments submitted to us as copies. We have also assumed the due execution and delivery of all documents where due
execution and delivery are prerequisite to the effectiveness thereof. With respect to the Warrants, Warrant Shares, Placement Agent Warrants
and Placement Agent Warrant Shares, we express no opinion to the extent that, notwithstanding the Company’s current reservation
of shares of Common Stock, future issuances of securities of the Company, including the Shares and/or anti-dilution adjustments to outstanding
securities of the Company, including the Warrants and Placement Agent Warrants, may cause each of the Warrants and/or Placement Agent
Warrants to be exercisable for more shares of Common Stock than the number that then remain authorized but unissued.
Our opinions set forth below with respect to the
validity or binding effect of any security or obligation may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
marshaling, moratorium or other similar laws affecting the enforcement generally of the rights and remedies of creditors and secured parties
or the obligations of debtors, (ii) general principles of equity (whether considered in a proceeding in equity or at law), including but
not limited to principles limiting the availability of specific performance or injunctive relief, and concepts of materiality, reasonableness,
good faith and fair dealing, (iii) the possible unenforceability under certain circumstances of provisions providing for indemnification,
contribution, exculpation, release or waiver that may be contrary to public policy or violative of federal or state securities laws, rules
or regulations, and (iv) the effect of course of dealing, course of performance, oral agreements or the like that would modify the terms
of an agreement or the respective rights or obligations of the parties under an agreement.
Based upon, subject to and limited by the foregoing
we are of the opinion that following (i) execution and delivery by the Company and each of the Investors of the Agreements and each of
the Warrants, as applicable, (ii) effectiveness of the Registration Statement, (iii) issuance of the Securities pursuant to the terms
of the Agreements, the Warrant Agency Agreement and the Placement Agency Agreement, as applicable, and (iv) receipt by the Company of
the applicable consideration for the Securities:
(i) each of the Units and
the Pre-Funded Units will be duly authorized for issuance and, when issued, delivered and paid for in accordance with the terms of the
Agreements and the Placement Agency Agreement, and in accordance with and in the manner described in the Registration Statement, each
of the Units and the Pre-Funded Units will be validly issued, fully paid and non-assessable;
(ii) the Shares will be duly
authorized for issuance and, when issued, delivered and paid for in accordance with the terms of the Agreements and the Placement Agency
Agreement, and in accordance with and in the manner described in the Registration Statement, will be validly issued, fully paid and nonassessable shares
of Common Stock;
(iii) provided that each of
the Warrants and Pre-Funded Warrants have been duly executed and delivered by the Company against payment therefor pursuant to their respective
terms, and pursuant to the Agreements and the Warrant Agency Agreement, such Warrants and Pre-Funded Warrants, when each sold and issued
as contemplated in the Registration Statement, will be valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms;
(iv) each of the Warrant Shares
and the Pre-Funded Warrant Shares issuable upon payment to the Company of the required consideration, when issued and sold by the Company
and paid for in accordance with the terms of the Agreements, the Warrant Agency Agreement and the terms of the applicable Warrants and
Pre-Funded Warrants, as described in the Registration Statement, will be validly issued, fully paid and non-assessable shares of Common
Stock;
(v) provided that the Placement
Agent Warrants have been duly executed and delivered by the Company against payment therefor pursuant to their terms, and pursuant to
the Placement Agency Agreement, such Placement Agent Warrants, when sold and issued as contemplated in the Registration Statement, will
be valid and binding obligations of the Company enforceable against the Company in accordance with their terms; and
(vi) the Placement Agent Warrant
Shares issuable upon payment to the Company of the required consideration, when issued and sold by the Company and paid for in accordance
with the terms of the Placement Agency Agreement, and the terms of the Placement Agent Warrants, as described in the Registration Statement,
will be validly issued, fully paid and non-assessable shares of Common Stock;
It is understood that this opinion is to be used
only in connection with the offer, sale, and issuance of the Securities while the Registration Statement is in effect.
This opinion speaks only as of the date hereof
and we assume no obligation to update or supplement this opinion if any applicable laws change after the date of this opinion or if we
become aware after the date of this opinion of any facts, whether existing before or arising after the date hereof, that might change
the opinions expressed above. This opinion is furnished in connection with the filing of the Registration Statement and may not be relied
upon for any other purpose without our prior written consent in each instance. Further, no portion of this opinion may be quoted, circulated
or referred to in any other document for any other purpose without our prior written consent.
We hereby consent to the filing of this opinion
with the SEC as Exhibit 5.1 to the Registration Statement and to the use of our name under the caption “Legal Matters” in
the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent
is required under Section 7 of the Securities Act or the rules and regulations of the SEC promulgated thereunder.
|
Very truly yours, |
|
|
|
/s/ Sullivan & Worcester LLP |
|
Sullivan & Worcester LLP |
Exhibit 23.1
Consent
of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference
in this Amendment No. 3 to the Registration Statement on Form S-1 of our report dated April 16, 2024, relating to the financial statements
of LogicMark, Inc., which appears in the Annual Report on Form 10-K of LogicMark, Inc. for the year ended December 31, 2023. We also consent
to the reference to us under the heading “Experts” in such Registration Statement.
/s/ BPM LLP
BPM LLP
Walnut Creek, California
July 26, 2024
Exhibit 107
Calculation of Filing Fee Tables
Form S-1
(Form Type)
LogicMark, Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward
Securities
| |
Security
Type | |
Security
Class Title | |
Fee
Calculation or Carry Forward Rule | |
Amount
To Be
Registered (1) | | |
Maximum
Offering Price Per Share (2) | | |
Maximum
Aggregate Offering Price | | |
Fee
Rate | | |
Amount
of Registration Fee | | |
Carry
Forward Form Type | | |
Carry
Forward File Number | | |
Carry
Forward Initial Effective Date | | |
Filing
Fee Previously Paid in Connection with Unsold Securities to be Carried Forward | |
Newly Registered
Securities |
Fees
to be Paid | |
Equity | |
Units
consisting of: (3) | |
Rule
457(o) | |
| — | | |
| — | | |
$ | 7,000,000 | | |
| 0.0001476 | | |
$ | 1,033.20 | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
(i) Common
stock, $0.0001 par value per share (4) | |
Rule
457(o) and Rule 457(g) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
(ii) Series
A Warrants to purchase shares of common stock (4) | |
Rule
457(o) and Rule 457(g) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
(iii) Series
B Warrants to purchase shares of common stock (4) | |
Rule
457(o) and Rule 457(g) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
Common
stock, $0.0001 par value per share, issuable upon the exercise of the Series A Warrants included in the units and pre-funded units (3)(5) | |
Rule
457(o) | |
| — | | |
| — | | |
$ | 7,000,000 | | |
| 0.0001476 | | |
$ | 1,033.20 | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
Common
stock, $0.0001 par value per share, issuable upon the exercise of the Series B Warrants included in the units and pre-funded units (3)(5) | |
Rule
457(o) | |
| — | | |
| — | | |
$ | 7,000,000 | | |
| 0.0001476 | | |
$ | 1,033.20 | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
Pre-funded
units consisting of: (3) | |
Rule
457(o) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
(i) Pre-funded
common stock purchase warrants to purchase shares of common stock (4) | |
Rule
457(o) and 457(g) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
(ii) Series
A Warrants to purchase shares of common stock (4) | |
Rule
457(o) and 457(g) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
(iii) Series
B Warrants to purchase shares of common stock (4) | |
Rule
457(o) and 457(g) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
Common
stock, $0.0001 par value per share, issuable upon the exercise of the pre-funded common stock purchase warrants (3)(5) | |
Rule
457(o) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
Placement
agent warrants to purchase shares of common stock (4) | |
Rule
457 (o) and Rule 457(g) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
to be Paid | |
Equity | |
Common
stock, $0.0001 par value per share, issuable upon the exercise of the placement agent warrants to purchase shares of common stock (6) | |
Rule
457(o) | |
| — | | |
| — | | |
$ | 210,000 | | |
| 0.0001476 | | |
$ | 31.00 | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees
Previously Paid | |
— | |
— | |
— | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Carry Forward
Securities |
Carry
Forward Securities | |
— | |
— | |
— | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Total Offering
Amounts | |
| | | |
| | | |
$ | 21,210,000 | | |
| | | |
$ | 3,130.60 | | |
| | | |
| | | |
| | | |
| | |
Total Fees Previously
Paid | |
| | | |
| | | |
| | | |
| | | |
$ | 3,130.60 | | |
| | | |
| | | |
| | | |
| | |
Total Fee Offset | |
| | | |
| | | |
| | | |
| | | |
| — | | |
| | | |
| | | |
| | | |
| | |
Net
Fee Due | |
| | | |
| | | |
| | | |
| | | |
$ | — | | |
| | | |
| | | |
| | | |
| | |
| (1) | Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”). |
| (2) | Pursuant to Rule 416(a) under
the Securities Act of 1933, this registration statement shall also cover an indeterminate number of shares of common stock, par value
$0.0001 per share, of the registrant (the “Common Stock”) that may become issuable to prevent dilution resulting from stock
splits, stock combinations, stock dividends, recapitalizations or similar transactions with respect to the Common Stock. |
| (3) | The proposed maximum offering price of the units of the registrant
proposed to be sold in the offering will be reduced on a dollar-for-dollar basis based on the offering price of any pre-funded units of
the registrant offered and sold in the offering, and as such, the proposed aggregate maximum offering price of the units together with
the pre-funded units (as well as the shares of Common Stock included in the units and issuable upon exercise of the Series A warrants
to purchase Common Stock, Series B warrants to purchase Common Stock and pre-funded common stock warrants included in such units and pre-funded
units, as applicable), if any, is $7,000,000. |
| (4) | No separate fee is required pursuant to Rule 457(g) under the Securities
Act. |
| (5) | As estimated solely for the purpose of calculating the amount of
the registration fee pursuant to Rule 457(o) under the Securities Act, the proposed maximum offering price of the shares of Common Stock
issuable upon exercise of each of such Series A warrants and Series B warrants included in the units or pre-funded units, as applicable,
proposed to be sold in the offering is $7,000,000, which is equal to 100% of $7,000,000, as each share of Common Stock included in each
unit of the registrant to be sold in this offering (and each pre-funded common stock purchase warrant included in each pre-funded unit
of the registrant to be sold in this offering) will receive a Series A warrant to purchase one share of Common Stock and a Series B warrant
to purchase one share of Common Stock |
| (6) | Estimated solely for the purposes of calculating the registration
fee pursuant to Rule 457(g) under the Securities Act, the proposed maximum offering price of the shares of Common Stock issuable upon
exercise of such placement agent warrants proposed to be sold in the offering is $210,000, which is equal to 3% of the public offering
price of the units offered hereby. The registrant has agreed to issue to the placement agent for this offering, in the event that the
aggregate value of the securities sold in connection with this offering equals or exceeds $5 million, placement agent warrants entitling
such placement agent to purchase up to 3% of the aggregate shares of Common Stock included in the units sold. Such placement agent warrants
are exercisable at a per share price equal to 100% of the public offering price of the units offered hereby. |
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