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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): October 5, 2023
OMNIQ
CORP.
(Exact
name of registrant as specified in charter)
Delaware |
|
001-40768 |
|
20-3454263 |
(State
or other jurisdiction |
|
(Commission |
|
(IRS
Employer |
of
incorporation) |
|
File
Number) |
|
Identification
No.) |
1865
West 2100 South, Salt Lake City, UT 84119
(Address
of Principal Executive Offices) (Zip Code)
(714)
899-4800
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(Former
Name or Former Address, If Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Ticker
symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, par value $0.001 |
|
OMQS |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mart if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 |
Entry
into a Material Definitive Agreement. |
On
October 5, 2023, OmniQ Corp. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”)
with ThinkEquity LLC, as representatives (the “Representatives”) of the several underwriters named therein (collectively,
the “Underwriters”), relating to the issuance and sale (the “Offering”) of 2,775,000 shares of the Company’s
common stock, par value $0.001 per share, at a price to the public of $1.00 per share (the “Underwritten Shares”) and pre-funded
warrants (the “Pre-Funded Warrants”) to purchase 225,000 shares of the Company’s common stock at a price to the public
of $0.999 per Pre-Funded Warrant. Under the terms of the Underwriting Agreement, the Underwriters have agreed to purchase the
Underwritten Shares from the Company at a price of $1.00 per share and the Pre-Funded Warrants at a price of $0.999 per Pre-Funded
Warrant. The Company also granted the Underwriters an option exercisable for 45 days from the date of the Underwriting Agreement
to purchase up to an additional 450,000 shares of common stock solely for the purpose of covering over-allotments (together with the
Underwritten Shares, the “Shares”). All of the Shares and Pre-Funded Warrants in the Offering are being sold by the Company.
The Company also issued warrants to the Representative (the “Representative’s Warrants”), exercisable to purchase
140,000 shares of common stock, at an exercise price of $1.25 per share.
The
gross proceeds from the Offering are expected to be approximately $3.0 million before deducting underwriting discounts and commissions
and other offering expenses payable by the Company and assuming no exercise of the Underwriters’ option to purchase additional
shares. The Offering closed on October 11, 2023.
The
Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing,
indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended,
other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting
Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such
agreement and may be subject to limitations agreed upon by such parties.
The
Offering was made pursuant to the Company’s effective registration statement on Form S-3 (File No. 333-272877) (the “Registration
Statement”) and a related prospectus and prospectus supplement, in each case filed with the Securities and Exchange Commission.
Each
Pre-Funded Warrant will have an exercise price per share of common stock equal to $0.001 per share as
the purchase price of $0.999 has already been paid.. The
exercise price and the number of shares of common stock issuable upon exercise of each Pre-Funded Warrant is subject to appropriate adjustments
in the event of certain stock dividends, stock
splits, stock
combination or similar events affecting the common stock. Each Pre-Funded Warrant will be exercisable on or after the date of issuance
until the date the Pre-Funded Warrant is exercised in full. Each Pre-Funded Warrant will be exercisable, in the holder’s discretion,
by (i) payment in full in immediately available funds for the number of shares of common stock purchased upon such exercise or (ii) a
cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according
to the formula set forth in the Pre-Funded Warrant. Under the Pre-Funded Warrants, the Company may not effect the exercise of any Pre-Funded
Warrant, and a holder will not be entitled to exercise any portion of any Pre-Funded Warrant that, upon giving effect to such exercise,
would cause: (i) the aggregate number of shares of common stock beneficially owned by such holder (together with its affiliates) to exceed
4.99% of the total number of shares of common stock outstanding immediately after giving effect to the exercise; or (ii) the combined
voting power of the Company’s securities beneficially owned by such holder (together with its affiliates) to exceed 4.99% of the
combined voting power of all of the Company’s securities immediately outstanding after giving effect to the exercise, as such percentage
ownership is determined in accordance with the terms of the Pre-Funded Warrant, which percentage may be changed at the holder’s
election to a higher or lower percentage not in excess of 9.99% upon at least 61 days’ notice to the Company.
In
the event of certain fundamental transactions, a holder of Pre-Funded Warrants will be entitled to receive, upon exercise of the Pre-Funded
Warrants, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Pre-Funded
Warrants immediately prior to the fundamental transaction without regard to any limitations on exercise contained in the Pre-Funded Warrants.
The
foregoing descriptions of the terms of the Underwriting Agreement, the Pre-Funded Warrants and Representative’s Warrants,
do not purport to be complete and are each qualified in their entirety by reference to the Underwriting Agreement, the Pre-Funded
Warrant and Representative’s Warrant, respectively, which are filed as Exhibit 1.1, Exhibit 4.1 and Exhibit 4.2
hereto, and are incorporated herein by reference.
A
copy of the opinion of Sichenzia Ross Ference Carmel LLP relating to the validity of the Shares, the Pre-Funded Warrants and the shares
underlying the Pre-Funded Warrants is filed as Exhibit 5.1 hereto and is incorporated by reference into the Registration Statement.
Item 7.01 |
Regulation
FD Disclosure. |
On
October 5, 2023, the Company issued a press release announcing the offering (“Launch PR”), as well as a press release
pricing of the offering (“Pricing PR”). Copies of the Launch PR and Pricing PR are attached hereto as Exhibit
99.1 and Exhibit 99.2, respectively, and are each incorporated by reference herein.
On October 11, 2023, the Company
issued a press release announcing the closing of the offering (“Closing PR”). A copy of the press release is attached hereto
as Exhibit 99.3 and incorporated by reference herein.
The
information in this Item 7.01, including Exhibits 99.1, 99.2 and 99.3 attached hereto, is being furnished and shall not
be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Forward-Looking
Statements
Certain
of the statements made in this report are forward looking, such as those, among others, relating to the Company’s expectations
regarding the timing and completion of the Offering. Actual results or developments may differ materially from those projected or implied
in these forward-looking statements. Factors that may cause such a difference include risks and uncertainties related to completion of
the public offering on the anticipated terms or at all, market conditions and the satisfaction of customary closing conditions related
to the Offering. More information about the risks and uncertainties faced by the Company is contained under the caption “Risk Factors”
in the Company’s preliminary prospectus supplement on Form 424B5 filed with the SEC on October 5, 2023. The Company disclaims any
intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or
otherwise.
Item 9.01 |
Financial
Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
|
OMNIQ Corp. |
|
|
|
Date:
October 11, 2023 |
By: |
/s/
Shai S. Lustgarten |
|
|
Shai
S. Lustgarten |
|
|
President
and CEO |
Exhibit
1.1
UNDERWRITING
AGREEMENT
between
OMNIQ
Corp.
and
ThinkEquitY
LLC
as
Representative of the Several Underwriters
OMNIQ
Corp.
UNDERWRITING
AGREEMENT
New
York, New York
October 5, 2023
ThinkEquity
LLC
As
Representative of the several Underwriters named on Schedule 1 attached hereto
17
State Street, 41st Floor
New
York, New York 10004
Ladies
and Gentlemen:
The
undersigned, OMNIQ Corp., a corporation formed under the laws of the State of Delaware (collectively with its subsidiaries and affiliates,
including, without limitation, all entities disclosed or described in the Registration Statement (as hereinafter defined) as being subsidiaries
or affiliates of OMNIQ Corp., the “Company”), hereby confirms its agreement (this “Agreement”)
with ThinkEquity LLC (hereinafter referred to as “you” (including its correlatives) or the “Representative”),
and with the other underwriters named on Schedule 1 hereto for which the Representative is acting as representative (the Representative
and such other underwriters being collectively called the “Underwriters” or, individually, an “Underwriter”)
as follows:
1.
Purchase and Sale of Shares.
1.1
Firm Securities.
1.1.1
Nature and Purchase of Firm Securities.
(i)
On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the several Underwriters, an aggregate of 2,775,000 shares (each a “Firm Share”, and in
the aggregate, the “Firm Shares”) of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), and an aggregate of 225,000 pre-funded warrants (each, a “Pre-Funded Warrant”, and in the aggregate,
the “Firm Pre-Funded Warrants”; and together with the Firm Shares, the “Firm Securities”) to purchase
one share of Common Stock at an exercise price of $0.001 until such time as the Pre-Funded Warrant is exercised in full, subject to adjustment
as provided in the Pre-Funded Warrant.
(ii)
The Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares and Firm Pre-Funded Warrants
set forth opposite their respective names on Schedule 1 attached hereto and made a part hereof at a purchase price of $0.93 per
Firm Share (93% of the per Firm Share offering price) and $0.929 per Firm Pre-Funded Warrant (93% of the per Firm Share offering price
minus $0.001). The Firm Securities are to be offered initially to the public at the offering price set forth on the cover page of the
Prospectus (as defined in Section 2.1.1 hereof).
1.1.2
Shares Payment and Delivery.
(i)
Delivery and payment for the Firm Securities shall be made at 10:00 a.m., Eastern time, on the second (2nd) Business Day following
the effective date (the “Effective Date”) of the Registration Statement (as defined in Section 2.1.1 below) pursuant
to Rule 430B(f)(2) of the Securities Act of 1933, as amended (the “Securities Act”) (or the third (3rd)
Business Day following the Effective Date if the pricing for the Offering (as defined in Section 2.1.1 below) occurs after 4:01 p.m.,
Eastern time on the Effective Date), or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices
of Dentons US LLP, 1221 Avenue of the Americas, New York, New York 10020 (“Representative Counsel”), or at such other
place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and the Company. The
hour and date of delivery and payment for the Firm Securities is called the “Closing Date.”
(ii)
Payment for the Firm Securities shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order
of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Securities
(or through the facilities of the Depository Trust Company (“DTC”)) for the account of the Representative. The Firm
Securities shall be registered in such name or names and in such authorized denominations as the Representative may request in writing
at least two (2) full Business Days prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Securities
except upon tender of payment by the Representative for all of the Firm Securities. The term “Business Day” means
any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized or obligated by law
to close in New York, New York.
1.2
Over-allotment Option.
1.2.1
Option Securities. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Securities,
the Company hereby grants to the Representative an option (the “Over-allotment Option”) to purchase, in the aggregate,
up to 450,000 additional shares of Common Stock and/or Pre-Funded Warrants, representing 15% of the Firm Shares and Firm Pre-Funded Warrants
sold in the offering from the Company (the “Option Shares” or “Option Pre-Funded Warrants,” as
applicable). The purchase price to be paid per Option Share shall be equal to the price per Firm Share set forth in Section 1.1.1(ii)
hereof and the purchase price to be paid per Option Pre-Funded Warrant shall be equal to the price per Firm Pre-Funded Warrant set forth
in Section 1.1.1(ii) hereof. The Over-allotment Option is, at the Underwriters’ sole discretion, for Option Shares and Option Pre-Funded
Warrants together, solely Option Shares or solely Option Pre-Funded Warrants, or any combination thereof (each, an “Option Security”
and collectively, the “Option Securities”). The Firm Securities and the Option Securities are collectively referred
to as the “Securities.” The Securities and the Underlying Shares (as defined below), are collectively referred to
as the “Public Securities.” The Public Securities shall be issued directly by the Company and shall have the rights and privileges
described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The certificate (the “Pre-Funded
Warrant Certificate”) evidencing the Firm Pre-Funded Warrants and the Option Pre-Funded Warrants, if any, will be in the form
attached hereto as Exhibit A. The offering and sale of the Public Securities is herein referred to as the “Offering.”
1.2.2
Exercise of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative
as to all (at any time) or any part (from time to time) of the Option Securities within 45 days after the Closing Date. The Underwriters
shall not be under any obligation to purchase any Option Securities prior to the exercise of the Over-allotment Option. The Over-allotment
Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in
writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Securities to be purchased
and the date and time for delivery of and payment for the Option Securities (the “Option Closing Date”), which shall
not be later than two (2) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and
the Representative, at the offices of Representative Counsel or at such other place (including remotely by facsimile or other electronic
transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Securities does
not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of the Over-allotment Option
with respect to all or any portion of the Option Securities, subject to the terms and conditions set forth herein, (i) the Company shall
become obligated to sell to the Underwriters the number of Option Securities specified in such notice and (ii) each of the Underwriters,
acting severally and not jointly, shall purchase that portion of the total number of Option Securities then being purchased as set forth
in Schedule 1 opposite the name of such Underwriter bears to the total number of Firm Securities, subject, in each case, to such
adjustments as the Representative, in its sole discretion, shall determine.
1.2.3
Payment and Delivery. Payment for the Option Securities shall be made on the Option Closing Date by wire transfer in Federal (same
day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory to the Underwriters)
representing the Option Securities (or through the facilities of DTC) for the account of the Underwriters. The Option Securities shall
be registered in such name or names and in such authorized denominations as the Representative may request in writing at least two (2)
full Business Days prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Option Securities except
upon tender of payment by the Representative for applicable Option Securities. The Option Closing Date may be simultaneous with, but
not earlier than, the Closing Date; and in the event that such time and date are simultaneous with the Closing Date, the term “Closing
Date” shall refer to the time and date of delivery of the Firm Securities and Option Securities.
1.3
Representative’s Warrants.
1.3.1
Purchase Warrants. The Company hereby agrees to issue and sell to the Representative (and/or its designees) on the Closing Date
and Option Closing Date, as applicable, a warrant (“Representative’s Warrant”) for the purchase of an aggregate
number of shares of Common Stock representing 5% of the Public Securities purchased on such Closing Date or Option Closing Date, for
an aggregate purchase price of $100.00. The Representative’s Warrant agreement, in the form attached hereto as Exhibit B
(the “Representative’s Warrant Agreement”), shall be exercisable, in whole or in part, commencing on a date
which is one hundred eighty (180) days after the Effective Date and expiring on the five-year anniversary of the Effective Date at an
initial exercise price per share of Common Stock of $1.25, which is equal to 125% of the initial public offering price of the Firm Shares.
The Representative’s Warrant Agreement and the shares of Common Stock issuable upon exercise thereof are hereinafter referred to
together as the “Representative’s Securities.” The Representative understands and agrees that there are significant
restrictions pursuant to FINRA Rule 5110 against transferring the Representative’s Warrant Agreement and the underlying shares
of Common Stock during the one hundred eighty (180) days immediately following the date of effectiveness or commencement of sales of
the offering and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative’s
Warrant Agreement, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would
result in the effective economic disposition of such securities for a period of one hundred eighty (180) days immediately following the
date of effectiveness or commencement of sales of the offering to anyone other than (i) an Underwriter or a selected dealer in connection
with the Offering, or (ii) an officer, partner, registered person or affiliate of the Representative or of any such Underwriter or selected
dealer; and only if any such transferee agrees to the foregoing lock-up restrictions
1.3.2
Delivery. Delivery of the Representative’s Warrant shall be made on the Closing Date and any Option Closing Date and shall
be issued in the name or names and in such authorized denominations as the Representative may request.
2.
Representations and Warranties of the Company.
The Company represents and warrants to the Underwriters as of the Applicable Time (as defined below), as of the Closing Date and as of
the Option Closing Date, if any, as follows:
2.1
Filing of Registration Statement.
2.1.1
Pursuant to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”)
a “shelf” registration statement on Form S-3 (File No. 333-272877), including any related prospectus or prospectuses, for
the registration of the Public Securities under the Securities Act, which registration statement was prepared by the Company in all material
respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities
Act (the “Securities Act Regulations”) and contains and will contain all material statements that are required to
be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except as the context may otherwise require,
such registration statement on file with the Commission at any given time, including any amendments thereto to such time, exhibits and
schedules thereto at such time, documents filed as a part thereof or incorporated pursuant to Item 12 of Form S-3 under the Securities
Act at such time and the documents and information otherwise deemed to be a part thereof or included therein pursuant to Rule 430B of
the Securities Act Regulations (the “Rule 430B Information”) or otherwise pursuant to the Securities Act Regulations
at such time, is referred to herein as the “Registration Statement.” The Registration Statement at the time it originally
became effective is referred to herein as the “Initial Registration Statement.” If the Company files any registration
statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term “Registration Statement”
shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement was declared effective by the Commission
on July 5, 2023.
The
prospectus in the form in which it was filed with the Commission in connection with the Initial Registration Statement is herein called
the “Base Prospectus.” Each preliminary prospectus supplement to the Base Prospectus (including the Base Prospectus
as so supplemented) that described the Public Securities and the Offering and omitted the Rule 430B Information and that was used prior
to the filing of the final prospectus supplement referred to in the following paragraph is herein called a “Preliminary Prospectus.”
Promptly
after the execution and delivery of this Agreement, the Company will prepare and file with the Commission a final prospectus supplement
to the Base Prospectus relating to the Public Securities and the Offering in accordance with the provisions of Rule 430B and Rule 424(b)
of the Securities Act Regulations. Such final prospectus supplement (including the Base Prospectus as so supplemented), in the form filed
with the Commission pursuant to Rule 424(b) under the Securities Act is herein called the “Prospectus.” Any reference
herein to the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of the date of such prospectus.
“Applicable
Time” means 7:30 p.m., Eastern time, on October 5, 2023.
“Disclosure
Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Preliminary Prospectus
dated October 5, 2023 and the information included on Schedule 2-A hereto, all considered together.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act
Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule
405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed with the Commission by the
Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required
to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a
description of the Public Securities or of the Offering that does not reflect the final terms, in each case in the form filed or required
to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule
433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to
prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433), as evidenced by its
being specified in Schedule 2-B hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
2.1.2
Pursuant to the Exchange Act. The Company has filed with the Commission a Form 8-A (File No. 001-40768) providing for the registration
pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the shares
of Common Stock. The registration of the shares of Common Stock under the Exchange Act has been declared effective by the Commission
prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration
of the shares of Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating
terminating such registration.
2.2
Stock Exchange Listing. The shares of Common Stock have been approved for listing on The Nasdaq Capital Market (the “Exchange”)
under the symbol “OMQS”, and the Company has taken no action designed to, or likely to have the effect of, delisting the
shares of Common Stock from the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating
such listing except as described in the Registration Statement, the Disclosure Package and the Prospectus. The Company has submitted
the Listing of Additional Shares Notification Form with the Exchange with respect to the Offering of the Public Securities. Except as
disclosed in the Company’s Form 10-Q for the period ended June 30, 2023, the Company has not, in the 12 months preceding the date
hereof, received notice from the Exchange that the Company is not in compliance with the listing or maintenance requirements of the Exchange.
Except as disclosed in the Company’s Form 10-Q for the period ended June 30, 2023, the Company is, and has no reason to believe
that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common
Stock is currently eligible for electronic transfer through the DTC and the Company is current in payment of the fees to the DTC in connection
with such electronic transfer.
2.3
No Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any
order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted
or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied
with each request (if any) from the Commission for additional information.
2.4
Disclosures in Registration Statement.
2.4.1
Compliance with Securities Act and 10b-5 Representation.
(i)
Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective (including each deemed effective
date with respect to the Underwriters pursuant to Rule 430B or otherwise under the Securities Act) complied and will comply in all material
respects with the requirements of the Securities Act and the Securities Act Regulations. The conditions for use of Form S-3, set forth
in the General Instructions thereto, including, but not limited to, General Instruction I.B.6 and other conditions related to the offer
and sale of the Public Securities, have been satisfied. Pursuant to General Instruction I.B.6 of Form S-3, in no event will the Company
sell securities pursuant to the Registration Statement with a value of more than one-third of the aggregate market value of its common
stock held by non-affiliates in any 12-month period, so long as the aggregate market value of its common stock held by non-affiliates
is less than $75,000,000. Each Preliminary Prospectus, including the prospectus filed as part of the Registration Statement as originally
filed or as part of any amendment or supplement thereto, and the Prospectus, at the time each was or will be filed with the Commission,
complied and will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each
Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the Prospectus was or will be identical
to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(ii)
Neither the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or
at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits or
will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(iii)
The Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does not and
will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; and any Issuer Limited Use Free Writing Prospectus hereto
does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus or the Prospectus, and each
such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with the Prospectus as of the Applicable Time,
did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading; provided, however, that this representation and
warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished
to the Company with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Disclosure
Package or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided
by or on behalf of any Underwriter consists solely of the following statements concerning the Underwriters contained in the “Underwriting”
section of the Prospectus (the “Underwriters Information”): (i) the second sentence of the subsection entitled “Discounts
and Commissions” related to concessions; (ii) the first three paragraphs under the subsection entitled “Price Stabilization,
Short Positions and Penalty Bids”; and (iii) the subsection entitled “Electronic Distribution.”
(iv)
Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time
of any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or will
include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that
this representation and warranty shall not apply to the Underwriters’ Information.
(v)
The documents incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus, when they became effective
or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and none of such documents contained any
untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated
by reference in the Registration Statement, the Disclosure Package and the Prospectus, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission thereunder, and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
2.4.2
Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Disclosure Package and the
Prospectus conform in all material respects to the descriptions thereof contained or incorporated by reference therein and there are
no agreements or other documents required by the Securities Act and the Securities Act Regulations to be described in the Registration
Statement, the Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement or
to be incorporated by reference in the Registration Statement, the Disclosure Package or the Prospectus, that have not been so described
or filed or incorporated by reference. Each agreement or other instrument (however characterized or described) to which the Company is
a party or by which it is or may be bound or affected and (i) that is referred to or incorporated by reference in the Registration Statement,
the Disclosure Package and the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly
executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s
knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the
best of the Company’s knowledge, any other party is in default thereunder and, to the best of the Company’s knowledge, no
event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the Company’s
knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of
any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses (each, a “Governmental Entity”), including, without
limitation, those relating to environmental laws and regulations.
2.4.3
Prior Securities Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit
of, any person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration
Statement, the Disclosure Package and the Preliminary Prospectus.
2.4.4
Regulations. The disclosures in the Registration Statement, the Disclosure Package and the Prospectus concerning the effects of
federal, state, local and all foreign regulation on the Offering and the Company’s business as currently contemplated are correct
in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Disclosure Package
and the Prospectus which are not so disclosed.
2.4.5
No Other Distribution of Offering Materials. The Company has not, directly or indirectly, distributed and will not distribute
any offering material in connection with the Offering other than any Preliminary Prospectus, the Disclosure Package, the Prospectus and
other materials, if any, permitted under the Securities Act and consistent with Section 3.2 below.
2.5
Changes After Dates in Registration Statement.
2.5.1
No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Disclosure
Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the financial
position or results of operations of the Company, nor any change or development that, singularly or in the aggregate, would involve a
material adverse change or a prospective material adverse change, in or affecting the condition (financial or otherwise), results of
operations, business, assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material
transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of
the Company has resigned from any position with the Company.
2.5.2
Recent Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred any liability or obligation,
direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its
capital stock.
2.6
Disclosures in Commission Filings. Since August 30, 2021, (i) none of the Company’s filings with the Commission contained
any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and (ii) the Company has made all filings with the Commission
required under the Exchange Act and the rules and regulations of the Commission promulgated thereunder (the “Exchange Act Regulations”).
2.7
Independent Accountants. To the knowledge of the Company, Haynie & Company (the “Auditors”), whose report
is filed with the Commission and included or incorporated by reference in the Registration Statement, the Disclosure Package and the
Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Securities Act Regulations
and the Public Company Accounting Oversight Board. The Auditors have not, during the periods covered by the financial statements included
or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus, provided to the Company any non-audit
services, as such term is used in Section 10A(g) of the Exchange Act.
2.8
Financial Statements, etc. The financial statements, including the notes thereto and supporting schedules included or incorporated
by reference in the Registration Statement, the Disclosure Package and the Prospectus, fairly present the financial position and the
results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared
in conformity with U.S. generally accepted accounting principles (“GAAP”), consistently applied throughout the periods
involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be
material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included or incorporated by
reference in the Registration Statement present fairly the information required to be stated therein. No other historical or pro forma
financial statements or supporting schedules are required to be included in the Registration Statement, the Disclosure Package or the
Prospectus by the Securities Act or the Securities Act Regulations. The pro forma financial statements and the related notes, if any,
included or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus have been properly compiled
and prepared in accordance with the applicable requirements of the Securities Act, the Securities Act Regulations, the Exchange Act or
the Exchange Act Regulations and present fairly the information shown therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.
All disclosures contained in the Registration Statement, the Disclosure Package or the Prospectus, or incorporated or deemed incorporated
by reference therein, regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the
Commission), if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent
applicable. Each of the Registration Statement, the Disclosure Package and the Prospectus discloses all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or
other persons that may have a material current or future effect on the Company’s financial condition, changes in financial condition,
results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except
as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, (a) neither the Company nor any of its direct
and indirect subsidiaries, including each entity disclosed or described in the Registration Statement, the Disclosure Package and the
Prospectus as being a subsidiary of the Company (each, a “Subsidiary” and, collectively, the “Subsidiaries”),
has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the
ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect
to its capital stock, (c) there has not been any change in the capital stock of the Company or any of its Subsidiaries, or, other than
in the course of business or any grants under any stock compensation plan, and (d) there has not been any Material Adverse Change in
the Company’s long-term or short-term debt.
2.9
Authorized Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Disclosure
Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions
stated in the Registration Statement, the Disclosure Package and the Prospectus, the Company will have on the Closing Date the adjusted
stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Disclosure Package
and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any Option Closing Date, there will
be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued shares of Common Stock of
the Company or any security convertible or exercisable into shares of Common Stock of the Company, or any contracts or commitments to
issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.
2.10
Valid Issuance of Securities, etc.
2.10.1
Outstanding Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by
this Agreement have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights
of rescission or similar rights with respect thereto or put rights, and are not subject to personal liability by reason of being such
holders; and none of such securities were issued in violation of the preemptive rights, rights of first refusal or rights of participation
of any holders of any security of the Company or similar contractual rights granted by the Company. The authorized shares of Common Stock
conform in all material respects to all statements relating thereto contained in the Registration Statement, the Disclosure Package and
the Prospectus. The offers and sales of the outstanding shares of Common Stock were at all relevant times either registered under the
Securities Act and the applicable state securities or “blue sky” laws or, based in part on the representations and warranties
of the purchasers of such shares, exempt from such registration requirements.
2.10.2
Securities Sold Pursuant to this Agreement. The Public Securities and Representative’s Securities have been duly authorized
for issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not
and will not be subject to personal liability by reason of being such holders; the Public Securities and Representative’s Securities
are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights
granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public Securities
and Representative’s Securities has been duly and validly taken. The Public Securities and Representative’s Securities conform
in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package
and the Prospectus. All corporate action required to be taken for the authorization, issuance and sale of the Representative’s
Warrant Agreement has been duly and validly taken; the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants and the
Representative’s Warrant (the “Underlying Shares”) have been duly authorized and reserved for issuance by all
necessary corporate action on the part of the Company and when paid for and issued in accordance with the Pre-Funded Warrant Certificate
and the Representative’s Warrant Agreement, as the case may be, such Underlying Shares will be validly issued, fully paid and non-assessable;
the holders thereof are not and will not be subject to personal liability by reason of being such holders; and such shares of Common
Stock are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights
granted by the Company.
2.11
Registration Rights of Third Parties. No holders of any securities of the Company or any rights exercisable for or convertible
or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under
the Securities Act or to include any such securities in a registration statement to be filed by the Company.
2.12
Validity and Binding Effect of Agreements. This Agreement and the Representative’s Warrant Agreement have been duly and
validly authorized by the Company, and, when executed and delivered, will constitute, the valid and binding agreements of the Company,
enforceable against the Company in accordance with its terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought.
2.13
No Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Pre-Funded Warrant Certificates
and the Representative’s Warrant Agreement and all ancillary documents, the consummation by the Company of the transactions herein
and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions of,
or constitute a material default under, or result in the creation, modification, termination or imposition of any lien, charge, mortgage,
pledge, security interest, claim, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever
or encumbrance upon any property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, note, lease,
loan agreement or any other agreement or instrument, franchise, license or permit to which the Company is a party or as to which any
property of the Company is a party; (ii) result in any violation of the provisions of the Company’s Articles of Incorporation (as
the same may be amended or restated from time to time, the “Charter”) or the by-laws of the Company (as the same may
be amended or restated from time to time); or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree
of any Governmental Entity as of the date hereof (including, without limitation, those promulgated by the Food and Drug Administration
of the U.S. Department of Health and Human Services (the “FDA”) or by any foreign, federal, state or local regulatory
authority performing functions similar to those performed by the FDA).
2.14
No Defaults; Violations. Except as otherwise disclosed in the Registration Statement, the Disclosure Package and the Prospectus,
no material default exists in the due performance and observance of any term, covenant or condition of any material license, contract,
indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for
borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or
to which any of the properties or assets of the Company is subject. The Company is not in violation of any term or provision of its Charter
or by-laws, or in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree of any Governmental
Entity.
2.15
Corporate Power; Licenses; Consents.
2.15.1
Conduct of Business. The Company has all requisite corporate power and authority, and has all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date
hereof to conduct its business purpose as described in the Registration Statement, the Disclosure Package and the Prospectus.
2.15.2
Transactions Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement, the Pre-Funded
Warrant Certificates and the Representative’s Warrant Agreement and to carry out the provisions and conditions hereof, and all
consents, authorizations, approvals and orders required in connection therewith have been obtained. No consent, authorization or order
of, and no filing with, any court, government agency or other body is required for the valid issuance, sale and delivery of the Public
Securities and the consummation of the transactions and agreements contemplated by this Agreement, the Pre-Funded Warrant Certificates
and the Representative’s Warrant Agreement and as contemplated by the Registration Statement, the Disclosure Package and the Prospectus,
except with respect to applicable federal and state securities laws and the rules and regulations of the Exchange and the Financial Industry
Regulatory Authority, Inc. (“FINRA”).
2.16
D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”),
as supplemented by all information concerning the Company’s directors, officers and principal shareholders as described in the
Registration Statement, the Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined in Section 2.27 below)
provided to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information which
would cause the information disclosed in the Questionnaires to become materially inaccurate and incorrect.
2.17
Litigation; Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or
governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Disclosure Package and the
Prospectus, or in connection with the Company’s listing application for the listing of the Public Securities on the Exchange, and
which is required to be disclosed.
2.18
Good Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under the
laws of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction
in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to be so
qualified or in good standing, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse
Change.
2.19
Insurance. The Company carries or is entitled to the benefits of insurance, with reputable insurers, in such amounts and covering
such risks which the Company believes are adequate, including, but not limited to, directors and officers insurance coverage at least
equal to $5,000,000 and all such insurance is in full force and effect. The Company has no reason to believe that it will not be able
(i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse
Change.
2.20
Transactions Affecting Disclosure to FINRA.
2.20.1
Finder’s Fees. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, there are no
claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee
by the Company or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements or understandings
of the Company or, to the Company’s knowledge, any of its shareholders that may affect the Underwriters’ compensation, as
determined by FINRA.
2.20.2
Payments Within Twelve Months. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, the
Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee,
consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who
raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation
or association with any FINRA member, within the twelve months prior to the date of this Agreement, other than the payment to the Underwriters
as provided hereunder in connection with the Offering.
2.20.3
Use of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein.
2.20.4
FINRA Affiliation. There is no (i) officer or director of the Company, (ii) beneficial owner of 10% or more of any class of the
Company’s securities or (iii) beneficial owner of the Company’s unregistered equity securities which were acquired during
the 180-day period immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA
member participating in the Offering (as determined in accordance with the rules and regulations of FINRA). Except as disclosed in the
Registration Statement, the Disclosure Package and the Prospectus, the Company (i) does not have any material lending or other relationship
with any bank or lending affiliate of any Underwriter and (ii) does not intend to use any of the proceeds from the sale of the Public
Securities to repay any outstanding debt owed to any affiliate of any Underwriter.
2.20.5
Information. All information provided by the Company in its FINRA questionnaire to Representative Counsel specifically for use
by Representative Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct
and complete in all material respects.
2.21
Foreign Corrupt Practices Act. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries,
has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of
any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection
with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Change; (iii) if not continued in the future,
might adversely affect the assets, business, operations or prospects of the Company. The Company has taken reasonable steps to ensure
that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”) or employee;
(iv) violated or is in violation of any provision of the FCPA or any applicable non-U.S. anti-bribery statute or regulation; (v) made
any bribe, rebate, payoff, influence payment, kickback or other unlawful payment; or (vi) received notice of any investigation, proceeding
or inquiry by any Governmental Entity regarding any of the matters in clauses (i)-(v) above; and the Company and, to the knowledge of
the Company, the Company’s affiliates have conducted their respective businesses in compliance with the FCPA and have instituted
and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance
therewith.
2.22
Compliance with OFAC. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”),
and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
2.23
Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act) contained in either the Registration Statement, Disclosure Package or Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
2.24
Money Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”);
and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect to the Money Laundering Laws
is pending or, to the best knowledge of the Company, threatened.
2.25
Regulations; Compliance.
(a)
Export and Import Controls. The Company and, to the Company’s knowledge, each of its affiliates and each director, officer,
agent or employee of, or other person associated with or acting on behalf of the Company, has acted at all times in compliance in all
material respects with applicable Export and Import Laws (as defined below) and there are no claims, complaints, charges, investigations
or proceedings pending or expected or, to the knowledge of the Company, threatened between the Company or any of its Subsidiaries and
any governmental authority under any Export or Import Laws. The term “Export and Import Laws” means the Export Administration
Regulations (15 C.F.R. 730 et seq.), the Customs Laws of the United States (19 U.S.C. § 1 et seq.), any executive orders or regulations
issued pursuant to the foregoing or by the agencies listed in Part 730 of the Export Administration Regulations , and all other laws
and regulations of the United States government regulating the provision of services to non-U.S. parties or the export and import of
articles or information from and to the United States of America, and all similar laws and regulations of any foreign government regulating
the provision of services to parties not of the foreign country or the export and import of articles and information from and to the
foreign country to parties not of the foreign country.
(b)
Regulatory Filings and Permits. The Company and its Subsidiaries have such permits, licenses, clearances, registrations, exemptions,
patents, franchises, certificates of need and other approvals, consents and other authorizations (“Permits”) issued
by the appropriate domestic or foreign regional, federal, state, or local regulatory agencies or bodies necessary to conduct the business
of the Company (collectively, the “Regulatory Permits”), except for any of the foregoing that would not reasonably
be expected to, individually or in the aggregate, have a Material Adverse Change; the Company is in compliance in all material respects
with the requirements of the Regulatory Permits, and all of such Regulatory Permits are valid and in full force and effect; the Company
has not received any notice of proceedings relating to the revocation, termination, modification or impairment of rights of any of the
Regulatory Permits that, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably
be expected to result in a Material Adverse Change; the Company has not failed to make any submission or filing necessary to conduct
the business of the Company, any such filings that were required to be made were in material compliance with applicable laws when filed,
and no material deficiencies have been asserted with respect to any such filings or submissions that were made.
(c)
Cybersecurity. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks,
hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and
perform in all material respects as required in connection with the operation of the business of the Company and its Subsidiaries as
currently conducted, and, to the knowledge of the Company, free and clear of all material bugs, errors, defects, Trojan horses, time
bombs, malware and other corruptants. The Company and its Subsidiaries have implemented commercially reasonable physical, technical and
administrative controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the
integrity, continuous operation, redundancy and security of all IT Systems and data, including “Personal Data,” used in connection
with their businesses. “Personal Data” means (i) a natural person’s name, street address, telephone number, e-mail
address, photograph, social security number or tax identification number, driver’s license number, passport number, credit card
number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information”
under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR; (iv) any information which
would qualify as “protected health information” under the Health Insurance Portability and Accountability Act of 1996, as
amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”); and (v) any other
piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis
of any data related to an identified person’s health or sexual orientation. Except as disclosed in the Registration Statement,
the Pricing Disclosure Package or the Prospectus, there have been no breaches, violations, outages or unauthorized uses of or accesses
to same, except for those that have been remedied without material cost or liability or the duty to notify any other person, nor any
incidents under internal review or investigations relating to the same. The Company and its Subsidiaries are presently in material compliance
with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory
authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to
the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.
(d)
Compliance with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in material compliance with
all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA (to the extent applicable),
and the Company and its Subsidiaries are in compliance with the European Union General Data Protection Regulation (“GDPR”)
(EU 2016/679) (collectively, the “Privacy Laws”). To ensure compliance with the Privacy Laws, the Company and its Subsidiaries
have in place, comply with, and take appropriate steps reasonably designed to ensure compliance in all material respects with their policies
and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of Personal
Data (the “Policies”). The Company and its Subsidiaries have, to the knowledge of the Company, at all times made all disclosures
to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures made or contained
in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory rules or requirements
in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has received notice of any actual or potential
liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition
that would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for, in whole or in part, any
investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement
that imposes any obligation or liability under any Privacy Law.
2.26
Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative
Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.27
Lock-Up Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers and directors (or
securities convertible into or exercisable for shares of Common Stock) (collectively, the “Lock-Up Parties”). The
Company has caused each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement, in the form attached hereto
as Exhibit C (the “Lock-Up Agreement”), prior to the execution of this Agreement.
2.28
Subsidiaries. All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the
place of organization or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease
of property or the conduct of business requires such qualification, except where the failure to qualify would not have a Material Adverse
Change. The Company’s ownership and control of each Subsidiary is as described in the Registration Statement, the Disclosure Package
and the Prospectus.
2.29
Related Party Transactions.
2.29.1
Business Relationships. There are no business relationships or related party transactions involving the Company or any other person
required to be described in the Registration Statement, the Disclosure Package and the Prospectus that have not been described as required.
2.29.2
No Relationships with Customers and Suppliers. No relationship, direct or indirect, exists between or among the Company on the
one hand, and the directors, officers, 5% or greater stockholders, customers or suppliers of the Company or any of the Company’s
affiliates on the other hand, which is required to be described in the Disclosure Package and the Prospectus or a document incorporated
by reference therein and which is not so described.
2.29.3
No Unconsolidated Entities. There are no transactions, arrangements or other relationships between and/or among the Company, any
of its affiliates (as such term is defined in Rule 405 of the Securities Act) and any unconsolidated entity, including, but not limited
to, any structure finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company’s
liquidity or the availability of or requirements for its capital resources required to be described in the Disclosure Package and the
Prospectus or a document incorporated by reference therein which have not been described as required.
2.29.4
No Loans or Advances to Affiliates. There are no outstanding loans, advances (except normal advances for business expenses in
the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors
of the Company, any other affiliates of the Company or any of their respective family members, except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus.
2.30
Board of Directors. The Board of Directors of the Company is comprised of the persons disclosed in the Registration Statement,
the Disclosure Package and the Prospectus. The qualifications of the persons serving as board members and the overall composition of
the board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder
(the “Sarbanes-Oxley Act”) applicable to the Company and the listing rules of the Exchange. At least one member of
the Audit Committee of the Board of Directors of the Company qualifies as an “audit committee financial expert,” as such
term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on
the Board of Directors qualify as “independent,” as defined under the listing rules of the Exchange.
2.31
Sarbanes-Oxley Compliance.
2.31.1
Disclosure Controls. The Company has developed and currently maintains disclosure controls and procedures that will comply with
Rule 13a-15 or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material
information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s
Exchange Act filings and other public disclosure documents.
2.31.2
Compliance. The Company is, at the Applicable Time and on the Closing Date will be, in compliance with the provisions of the Sarbanes-Oxley
Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s future
compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the Sarbanes-Oxley
Act.
2.32
Accounting Controls. The Company and its Subsidiaries maintain systems of “internal control over financial reporting”
(as defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply with the requirements of the Exchange Act and
have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company
is not aware of any material weaknesses in its internal controls. The Company’s auditors and the Audit Committee of the Board of
Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting which are known to the Company’s management and that have adversely affected or are
reasonably likely to adversely affect the Company’ ability to record, process, summarize and report financial information; and
(ii) any fraud known to the Company’s management, whether or not material, that involves management or other employees who have
a significant role in the Company’s internal controls over financial reporting. Since the date of the latest audited financial
statements included in the Disclosure Package, there has been no change in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
2.33
No Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Disclosure Package and the Prospectus, will not be, required to register as an
“investment company,” as defined in the Investment Company Act of 1940, as amended.
2.34
No Labor Disputes. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Change. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Change.
2.35
Intellectual Property Rights. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents,
patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses,
inventions, trade secrets and similar rights (“Intellectual Property Rights”) necessary for the conduct of the business
of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Disclosure Package and
the Prospectus. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries necessary for the conduct
of its business as currently carried on and as described in the Registration Statement and the Prospectus will involve or give rise to
any infringement of, or license or similar fees for any Intellectual Property Rights of others. Neither the Company nor any of its Subsidiaries
has received any notice alleging any such infringement of, license or similar fees for, or conflict with, any asserted Intellectual Property
Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change,
(i) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of the Intellectual
Property Rights owned by the Company; (ii) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding
or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights, and the Company is unaware of
any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together with any other
claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; (iii) the Intellectual Property Rights owned
by the Company and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged
by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property
Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in
the aggregate, together with any other claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; (iv)
there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes,
misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received
any written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim
that would, individually or in the aggregate, together with any other claims in this Section 2.35, reasonably be expected to result in
a Material Adverse Change; and (v) to the Company’s knowledge, no employee of the Company is in or has ever been in violation in
any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition
agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis
of such violation relates to such employee’s employment with the Company, or actions undertaken by the employee while employed
with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s
knowledge, all material technical information developed by and belonging to the Company which has not been disclosed in a filed patent
application has been kept confidential. The Company is not a party to or bound by any options, licenses or agreements with respect to
the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement, the Disclosure
Package and the Prospectus and are not described therein. The Registration Statement, the Disclosure Package and the Prospectus contain
in all material respects the same description of the matters set forth in the preceding sentence. None of the technology employed by
the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to
the Company’s knowledge, any of its officers, directors or employees, or otherwise in violation of the rights of any persons.
All
licenses for the use of the Intellectual Property described in the Registration Statement, the Disclosure Package and the Prospectus
are in full force and effect in all material respects and are enforceable by the Company and, to the Company’s knowledge, the other
parties thereto, in accordance with their terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor
may be brought. None of such agreements or instruments has been assigned by the Company, and the Company has not, and to the Company’s
knowledge, no other party is in default thereunder and no event has occurred that, with the lapse of time or the giving of notice, or
both, would constitute a default thereunder.
2.36
No Disagreements. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise,
between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect
to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of its obligations under
this Agreement.
2.37
Taxes. Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing
authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each of the Company and its Subsidiaries
has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed
against the Company or such respective Subsidiary. The provisions for taxes payable, if any, shown on the financial statements filed
with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods
to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters, (i) no issues
have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from
the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have
been given by or requested from the Company or its Subsidiaries. The term “taxes” means all federal, state, local,
foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service,
service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties
or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or
additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements and
other documents required to be filed in respect to taxes.
2.38
ERISA Compliance. The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security
Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established
or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material respects with
ERISA. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations described in
Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder
(the “Code”) of which the Company is a member. No “reportable event” (as defined under ERISA) has occurred
or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company or
any of its ERISA Affiliates. No “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates,
if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as
defined under ERISA). Neither the Company nor any of its ERISA Affiliates has incurred or reasonably expects to incur any material liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections
412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company or any of its
ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and, to the knowledge of the Company,
nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.
2.39
Compliance with Laws. The Company: (i) is and at all times has been in compliance with all statutes, rules, or regulations applicable
to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale,
offer for sale, storage, import, export storage or disposal of any product manufactured or distributed by the Company (“Applicable
Laws”), except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change; (ii)
has not received any notice of adverse finding, warning letter, untitled letter or other correspondence or written notice from any governmental
authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations,
permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (iii) possesses
all material Authorizations and such Authorizations are valid and in full force and effect and are not in material violation of any term
of any such Authorizations; (iv) has not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from any governmental authority or third party alleging that any product operation or activity is in violation
of any Applicable Laws or Authorizations and has no knowledge that any such governmental authority or third party is considering any
such claim, litigation, arbitration, action, suit, investigation or proceeding; (v) has not received written notice that any governmental
authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge
that any such governmental authority is considering such action; (vi) has filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws
or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or
amendments were complete and correct on the date filed (or were corrected or supplemented by a subsequent submission); and (vii) has
not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall,
market withdrawal or replacement, safety alert, post-sale warning, “dear doctor” letter, or other notice or action relating
to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the Company’s knowledge,
no third party has initiated, conducted or intends to initiate any such notice or action.
2.40
Environmental Laws. The Company and its Subsidiaries are in compliance with all foreign, federal, state and local rules, laws
and regulations relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health
and safety or the environment which are applicable to their businesses (“Environmental Laws”), except where the failure
to comply would not, singularly or in the aggregate, result in a Material Adverse Change. There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances
by, due to, or caused by the Company or any of its Subsidiaries (or, to the Company’s knowledge, any other entity for whose acts
or omissions the Company or any of its Subsidiaries is or may otherwise be liable) upon any of the property now or previously owned or
leased by the Company or any of its Subsidiaries, or upon any other property, in violation of any law, statute, ordinance, rule, regulation,
order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule of common law), regulation,
order, judgment, decree or permit, give rise to any liability; and there has been no disposal, discharge, emission or other release of
any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances
with respect to which the Company has knowledge. In the ordinary course of business, the Company and its Subsidiaries conduct periodic
reviews of the effect of Environmental Laws on their business and assets, in the course of which they identify and evaluate associated
costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or governmental permits issued thereunder, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of such reviews, the Company and its Subsidiaries have reasonably concluded
that such associated costs and liabilities would not have, singularly or in the aggregate, a Material Adverse Change.
2.41
Real Property. Except as set forth in the Registration Statement, the Disclosure Package and the Prospectus, the Company and each
of its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real
or personal property which are material to the business of the Company and its Subsidiaries taken as a whole, in each case free and clear
of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect the value
of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries;
and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties described in the Registration Statement, the Disclosure Package and the
Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has received any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
2.42
Contracts Affecting Capital. There are no transactions, arrangements or other relationships between and/or among the Company,
any of its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including,
but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially
affect the Company’s or any of its Subsidiaries’ liquidity or the availability of or requirements for their capital resources
required to be described or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus which
have not been described or incorporated by reference as required.
2.43
Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness
of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Public Securities and at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination
by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.
2.44
Smaller Reporting Company. As of the time of filing of the Registration Statement, the Company was a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act Regulations.
2.45
Industry Data. The statistical and market-related data included in each of the Registration Statement, the Disclosure Package
and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate
or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.46
Margin Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be
used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any
of the shares of Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal
Reserve Board.
2.47
Exchange Act Reports. The Company has filed in a timely manner all reports required to be filed pursuant to Sections 13(a), 13(e),
14 and 15(d) of the Exchange Act during the preceding 12 months (except to the extent that Section 15(d) requires reports to be filed
pursuant to Sections 13(d) and 13(g) of the Exchange Act, which shall be governed by the next clause of this sentence); and the Company
has filed in a timely manner all reports required to be filed pursuant to Sections 13(d) and 13(g) of the Exchange Act since August 30,
2021, except where the failure to timely file could not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Change.
2.48
Minute Books. The minute books of the Company have been made available to the Underwriters and counsel for the Underwriters, and
such books (i) contain a complete summary of all meetings and actions of the board of directors (including each board committee) and
stockholders of the Company (or analogous governing bodies and interest holders, as applicable), and each of its Subsidiaries since the
time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) accurately in all material
respects reflect all transactions referred to in such minutes. There are no material transactions, agreements, dispositions or other
actions of the Company that are not properly approved and/or accurately and fairly recorded in the minute books of the Company, as applicable.
2.49
Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering
to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of any such
securities under the Securities Act.
2.50
No Stabilization. Neither the Company nor, to its knowledge, any of its employees, directors or stockholders (without the consent
of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the Public Securities.
2.51
Confidentiality and Non-Competition. To the Company’s knowledge, no director, officer, key employee or consultant of the
Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer
or prior employer that could reasonably be expected to materially affect his ability to be and act in his respective capacity of the
Company or be expected to result in a Material Adverse Change.
2.52
Testing-the-Waters Communications. The Company has not engaged in any Testing-the-Waters Communications and has not authorized
anyone to engage in Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communication.
“Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in
reliance on Section 5(d) of the Securities Act. “Written Testing-the-Waters Communication” means any Testing-the-Waters
Communication that is a written communication within the meaning of Rule 405 under the Securities Act.
2.53
Loans to Directors or Officers. There are no outstanding loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees or indebtedness by the Company or its subsidiaries to or for the benefit of any of the officers
or directors of the Company, its Subsidiaries or any of their respective family members.
2.54
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly,
five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
2.55
Application of Takeover Procedures. The Company and the Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company
fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of
the Company’s issuance of the Shares and the Purchasers’ ownership of the Shares.
3.
Covenants of the Company. The Company covenants
and agrees as follows:
3.1
Amendments to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement
to the Registration Statement, Preliminary Prospectus, Disclosure Package or Prospectus proposed to be filed after the Effective Date
and not file any such amendment or supplement to which the Representative shall reasonably object in writing.
3.2
Federal Securities Laws.
3.2.1
Compliance. The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 424(b) and Rule 430B of the Securities
Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment
to the Registration Statement or any amendment or supplement to any Preliminary Prospectus, the Disclosure Package or the Prospectus
shall have been filed and when any post-effective amendment to the Registration Statement shall become effective; (ii) of the receipt
of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment
or supplement to any Preliminary Prospectus, the Disclosure Package or the Prospectus or for additional information; (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of
any order preventing or suspending the use of any Preliminary Prospectus, the Disclosure Package or the Prospectus, or of the suspension
of the qualification of the Public Securities and Representative’s Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities
Act concerning the Registration Statement; and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities
Act in connection with the Offering of the Public Securities and Representative’s Securities. The Company shall effect all filings
required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without
reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted
for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such
prospectus. The Company shall use its best efforts to prevent the issuance of any stop order, prevention or suspension and, if any such
order is issued, to obtain the lifting thereof at the earliest possible moment.
3.2.2
Continued Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the
Exchange Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement,
the Pre-Funded Warrant Certificates and in the Registration Statement, the Disclosure Package and the Prospectus. If at any time when
a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule
172”), would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any event
shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii)
amend or supplement the Disclosure Package or the Prospectus in order that the Disclosure Package or the Prospectus, as the case may
be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration
Statement or amend or supplement the Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements
of the Securities Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event;
(B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement,
the Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing
or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such amendment
or supplement; provided, however, that the Company shall not file or use any such amendment or supplement to which the
Representative or counsel for the Underwriters shall reasonably object. The Company will furnish to the Underwriters such number of copies
of such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representative notice of any filings
made pursuant to the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give
the Representative notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date and the
exercise in full or expiration of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative with
copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or
use any such document to which the Representative or counsel for the Underwriters shall reasonably object.
3.2.3
Exchange Act Registration. Until the later of (i) three (3) years after the date of this Agreement and (ii) the date that all
of the Pre-Funded Warrants have been exercised, the Company shall use its best efforts to maintain the registration of the shares of
Common Stock under the Exchange Act. The Company shall not deregister the shares of Common Stock under the Exchange Act without the prior
written consent of the Representative.
3.2.4
Free Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall
not make any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or
retained by the Company under Rule 433; provided, however, that the Representative shall be deemed to have consented to
each Issuer General Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning
of Rule 433(d)(8)(i) that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will
treat each such free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,”
as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including
timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
existing at that subsequent time, not misleading, the Company will promptly notify the Underwriters and will promptly amend or supplement,
at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
3.2.5
[Reserve].
3.3
Delivery to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make
available to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally
filed and each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver
to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
3.4
Delivery to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to
each Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule
172, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented)
as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
3.5
Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement to remain
effective with a current prospectus through and including the date that all of the Pre-Funded Warrants have been exercised, and shall
notify the Representative immediately and confirm the notice in writing: (i) of the issuance by the Commission of any stop order or of
the initiation, or the threatening, of any proceeding for that purpose; (ii) of the issuance by any state securities commission of any
proceedings for the suspension of the qualification of the Public Securities for offering or sale in any jurisdiction or of the initiation,
or the threatening, of any proceeding for that purpose; (iii) of the mailing and delivery to the Commission for filing of any amendment
or supplement to the Registration Statement or Prospectus; (iv) of the receipt of any comments or request for any additional information
from the Commission; and (v) of the happening of any event during the period described in this Section 3.5 that, in the judgment of the
Company, makes any statement of a material fact made in the Registration Statement, the Disclosure Package or the Prospectus untrue or
that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading, or
(b) in the Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances under which they
were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification
at any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.
3.6
Review of Financial Statements. For a period of five (5) years after the date of this Agreement, the Company, at its expense,
shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial
statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.7
Listing. The Company shall use its best efforts to maintain the listing of the shares of Common Stock (including the Public Securities)
on the Exchange until the later of (i) three years from the date of this Agreement and (ii) the date that all Pre-Funded Warrants have
been exercised.
3.8
Financial Public Relations Firm. The Company has retained a financial public relations firm reasonably acceptable to the Representative
and the Company, which firm shall be experienced in assisting issuers in public offerings of securities and in their relations with their
security holders, and shall retain such firm or another firm reasonably acceptable to the Representative for a period of not less than
two (2) years after the Effective Date.
3.9
Reports to the Representative.
3.9.1
Periodic Reports, etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish or make available
to the Representative copies of such financial statements and other periodic and special reports as the Company from time to time furnishes
generally to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each periodic report
the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy of every
press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy
of each Form 8-K prepared and filed by the Company; (iv) five copies of each registration statement filed by the Company under the Securities
Act; (v) a copy of each report or other communication furnished to stockholders and (vi) such additional documents and information with
respect to the Company and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably
request; provided, however, the Representative shall sign, if requested by the Company, a Regulation FD compliant confidentiality
agreement which is reasonably acceptable to the Representative and Representative Counsel in connection with the Representative’s
receipt of such information. Documents filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered
to the Representative pursuant to this Section 3.9.1.
3.9.2
Transfer Agent; Transfer Sheets. Until the later of (i) three (3) years after the date of this Agreement and (ii) the date that
all Pre-Funded Warrants have been exercised, the Company shall retain a transfer agent and registrar acceptable to the Representative
(the “Transfer Agent”) and shall furnish to the Representative at the Company’s sole cost and expense such transfer
sheets of the Company’s securities as the Representative may reasonably request, including the daily and monthly consolidated transfer
sheets of the Transfer Agent and DTC. Equity Stock Transfer LLC, Inc. is acceptable to the Representative to act as Transfer Agent for
the shares of Common Stock.
3.9.3
Trading Reports. During such time as the Public Securities are listed on the Exchange, the Company shall provide to the Representative,
at the Company’s expense, such reports published by Exchange relating to price trading of the Public Securities, as the Representative
shall reasonably request.
3.10
Payment of Expenses
3.10.1
General Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company
under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the
Public Securities with the Commission; (b) all Public Filing System filing fees associated with the review of the Offering by FINRA;
(c) all fees and expenses relating to the listing of such Public Securities on the Exchange and such other stock exchanges as the Company
and the Representative together determine; (d) all fees, expenses and disbursements relating to background checks of the Company’s
officers and directors in an amount not to exceed $7,500 in the aggregate; (e) all fees, expenses and disbursements relating to the registration
or qualification of the Public Securities under the “blue sky” securities laws of such states and other jurisdictions as
the Representative may reasonably designate (including, without limitation, all filing and registration fees); (f) all fees, expenses
and disbursements relating to the registration, qualification or exemption of the Public Securities under the securities laws of such
foreign jurisdictions as the Representative may reasonably designate; (g) the costs of all mailing and printing of the underwriting documents
(including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters,
Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and
all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably
deem necessary; (h) the costs and expenses of a public relations firm; (i) the costs of preparing, printing and delivering certificates
representing the Public Securities; (j) fees and expenses of the transfer agent for the shares of Common Stock; (k) stock transfer and/or
stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (l) the costs associated with post-Closing
advertising the Offering in the national editions of the Wall Street Journal and New York Times; (m) the costs associated with bound
volumes of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee
shall provide within a reasonable time after the Closing Date in such quantities as the Representative may reasonably request, in an
amount not to exceed $3,000; (n) the fees and expenses of the Company’s accountants; (o) the fees and expenses of the Company’s
legal counsel and other agents and representatives; (p) fees and expenses of the Representative’s legal counsel not to exceed $125,000;
(q) the $29,500 cost associated with the Underwriter’s use of Ipreo’s book-building, prospectus tracking and compliance software
for the Offering; (r) up to $10,000 of the Underwriters’ actual accountable “road show” expenses; (s) up to $10,000
for data services and communication expenses, and (s) up to $30,000 of the Representative’s market making and trading, and clearing
firm settlement expenses for the Offering. The Representative may deduct from the net proceeds of the Offering payable to the Company
on the Closing Date, or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters,
provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse the Representative pursuant to
Section 8.3 hereof.
3.10.2
Non-Accountable Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on
the Closing Date it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable
expense allowance equal to one percent (1.0%) of the gross proceeds received by the Company from the sale of the Firm Securities, presuming
exercise of any Pre-Funded Warrants issued, less the Advance (as such term is defined in Section 8.3 hereof), provided, however, that
in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 8.3 hereof.
3.11
Application of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent
with the application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Disclosure
Package and the Prospectus.
3.12
Delivery of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon
as practicable, but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement,
an earnings statement (which need not be certified by an independent registered public accounting firm unless required by the Securities
Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act)
covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.13
Stabilization. Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent
of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the Public Securities.
3.14
Internal Controls. The Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded
as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
3.15
Accountants. As of the date of this Agreement, the Company shall continue to retain a nationally recognized independent registered
public accounting firm for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that
Haynie & Company is acceptable to the Representative.
3.16
FINRA. The Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware
that (i) any officer or director of the Company, (ii) any beneficial owner of 5% or more of any class of the Company’s securities
or (iii) any beneficial owner of the Company’s unregistered equity securities which were acquired during the one hundred eighty
(180) days immediately preceding the filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA
member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
3.17
No Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary
capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other
transactions contemplated by this Agreement.
3.18
Restriction on Continuous Offerings. Notwithstanding the restrictions contained in Section 3.18, the Company, on behalf of itself
and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 24 months
after the date of this Agreement, directly or indirectly in any “at-the-market” or continuous equity transaction, offer to
sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for shares of capital stock of the Company.
3.19
Company Lock-Up Agreements. The Company, on behalf of itself and any successor entity, agrees that, without the prior written
consent of the Representative, it will not for a period of ninety (90) days after the date of this Agreement (the “Lock-Up Period”),
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock
of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file
or cause to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; or (iii) complete any offering
of debt securities of the Company, other than entering into a line of credit with a traditional bank or (iv) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company,
whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of capital stock
of the Company or such other securities, in cash or otherwise.
The
restrictions contained in this Section 3.19 shall not apply to (i) the shares of Common Stock to be sold hereunder, (ii) the issuance
by the Company of shares of Common Stock upon the exercise of a stock option or warrant or the conversion of a security outstanding on
the date hereof, which is disclosed in the Registration Statement, Disclosure Package and Prospectus, provided that such options, warrants,
and securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities or to extend the term of such securities, (iii) the issuance by the Company
of stock options, shares of capital stock of the Company or other awards under any equity compensation plan of the Company, provided
that in each of (ii) and (iii) above, the underlying shares shall be restricted from sale during the entire Lock-Up Period.
3.20
Release of D&O Lock-up Period. If the Representative, in its sole discretion, agrees to release or waive the restrictions
set forth in the Lock-Up Agreements described in Section 2.27 hereof for an officer or director of the Company and provide the Company
with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver, the
Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C hereto through
a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.21
Blue Sky Qualifications. The Company shall use its best efforts, in cooperation with the Underwriters, if necessary, to qualify
the Public Securities and Representative’s Securities for offering and sale under the applicable securities laws of such states
and other jurisdictions (domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long
as required to complete the distribution of the Public Securities; provided, however, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction
in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
3.22
Reporting Requirements. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the
exception afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed
with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations. Additionally,
the Company shall report the use of proceeds from the issuance of the Public Securities as may be required under Rule 463 under the Securities
Act Regulations.
3.23
Press Releases. Prior to the Closing Date and any Option Closing Date, the Company shall not issue any press release or other
communication directly or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise,
or earnings, business affairs or business prospects (except for routine oral marketing communications in the ordinary course of business
and consistent with the past practices of the Company and of which the Representative is notified), without the prior written consent
of the Representative, which consent shall not be unreasonably withheld, unless in the judgment of the Company and its counsel, and after
notification to the Representative, such press release or communication is required by law.
3.24
Sarbanes-Oxley. Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company shall
at all times comply with all applicable provisions of the Sarbanes-Oxley Act in effect from time to time.
3.25
Smaller Reporting Company Status. The Company shall promptly notify the Representative if the Company ceases to be a Smaller Reporting
Company at any time prior to the later of (i) completion of the distribution of the Public Securities within the meaning of the Securities
Act and (ii) fifteen (15) days following the completion of the Lock-Up Period.
4.
Conditions of Underwriters’ Obligations.
The obligations of the Underwriters to purchase and pay for the Public Securities, as provided herein, shall be subject to (i) the continuing
accuracy of the representations and warranties of the Company as of the date hereof and as of each of the Closing Date and the Option
Closing Date, if any; (ii) the accuracy of the statements of officers of the Company made pursuant to the provisions hereof; (iii) the
performance by the Company of its obligations hereunder; and (iv) the following conditions:
4.1
Regulatory Matters.
4.1.1
Commission Actions; Required Filings. At each of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto shall have been issued under the Securities Act, no order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus shall have been issued and no proceedings for any of those purposes
shall have been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission. The Company has complied
with each request (if any) from the Commission for additional information. A prospectus containing the Rule 430B Information shall have
been filed with the Commission in the manner and within the time frame required by Rule 424(b) under the Securities Act Regulations (without
reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared effective
by, the Commission in accordance with the requirements of Rule 430B under the Securities Act Regulations.
4.1.2
FINRA Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the
amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3
Exchange Stock Market Clearance. On the Closing Date, the Company’s shares of Common Stock, including the Firm Shares, the
Option Shares and the Underlying Shares, shall have been approved for listing on the Exchange, subject only to official notice of issuance.
On the first Option Closing Date (if any), the Company’s shares of Common Stock, including the Option Shares and Underlying Shares,
shall have been approved for listing on the Exchange, subject only to official notice of issuance.
4.2
Company Counsel Matters.
4.2.1
Closing Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion , and a written
statement providing certain “10b-5” negative assurances, from Sichenzia Ross Ference Carmel LLP, , counsel to the Company,
dated the Closing Date and addressed to the Representative, in a form reasonably satisfactory to the Representative.
4.2.2
Opinion of Special Intellectual Property Counsel for the Company. On the Closing Date, the Representative shall have received
the opinion, and a written statement providing certain “10b-5” negative assurances from Bochner PLLC, special intellectual
property counsel to the Company, dated the Closing Date and addressed to the Representative, in a form reasonably acceptable to the Representative.
4.2.3
Option Closing Date Opinions of Counsel. On the Option Closing Date, if any, the Representative shall have received the favorable
opinions of each counsel listed in Sections 4.2.1 and 4.2.2, dated the Option Closing Date, addressed to the Representative and in form
and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made by such counsels
in their respective opinions delivered on the Closing Date.
4.2.4
Reliance. In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the
laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of other
counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the extent
they deem proper, on certificates or other written statements of officers of the Company and officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or good standing of the Company; provided that copies of any such
statements or certificates shall be delivered to Representative Counsel if requested. The opinions of Sichenzia Ross Ference Carmel LLP
and Bochner PLLC, and any opinion relied upon by Sichenzia Ross Ference Carmel LLP and Bochner PLLC, shall include a statement to the
effect that it may be relied upon by Representative Counsel in its opinion delivered to the Underwriters.
4.3
Comfort Letters.
4.3.1
Cold Comfort Letter. At the time this Agreement is executed you shall have received cold comfort letters from the Auditors containing
statements and information of the type customarily included in accountants’ comfort letters with respect to the financial statements
and certain financial information contained or incorporated or deemed incorporated by reference in the Registration Statement, the Disclosure
Package and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to you and to the
Auditors, dated as of the date of this Agreement.
4.3.2
Bring-down Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received
from the Auditors a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditors reaffirm
the statements made in their letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date not
more than three (3) business days prior to the Closing Date or the Option Closing Date, as applicable.
4.4
Officers’ Certificates.
4.4.1
Officers’ Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and
any Option Closing Date (if such date is other than the Closing Date), of its Chief Executive Officer and its Chief Financial Officer
stating that (i) such officers have carefully examined the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus
and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and as of
the Closing Date (or any Option Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material
fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading,
and the Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than
the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date
is other than the Closing Date), and the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as
of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date
of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration
Statement, the Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing
Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company in this
Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions on its part to be performed
or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and
(iv) there has not been, subsequent to the date of the most recent audited financial statements included or incorporated by reference
in the Disclosure Package, any material adverse change in the financial position or results of operations of the Company, or any change
or development that, singularly or in the aggregate, would involve a material adverse change or a prospective material adverse change,
in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of the Company, except as
set forth in the Prospectus.
4.4.2
Secretary’s Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have
received a certificate of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case
may be, respectively, certifying: (i) that each of the Charter and Bylaws is true and complete, has not been modified and is in full
force and effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Offering are in full force and
effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel
and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall
be attached to such certificate.
4.4.3
Chief Financial Officer’s Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Chief Financial Officer of the Company, dated the Closing Date or the Option Date, as the case
may be, respectively, with respect to the accuracy of certain information contained in the Registration Statement, the Disclosure Package
and the Prospectus, in a form reasonably acceptable to the Representative.
4.5
No Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been
no material adverse change or development involving a prospective material adverse change in the condition or prospects or the business
activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration
Statement and no change in the capital stock or debt of the Company, the Disclosure Package and the Prospectus; (ii) no action, suit
or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Insider before or by any court or
federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely
affect the business, operations, prospects or financial condition or income of the Company, except as set forth in the Registration Statement,
the Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor
shall have been initiated or threatened by the Commission; (iv) no action shall have been taken and no law, statute, rule, regulation
or order shall have been enacted, adopted or issued by any Governmental Entity which would prevent the issuance or sale of the Public
Securities or materially and adversely affect or potentially materially and adversely affect the business or operations of the Company;
(v) no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have
been issued which would prevent the issuance or sale of the Public Securities or materially and adversely affect or potentially materially
and adversely affect the business or operations of the Company and (vi) the Registration Statement, the Disclosure Package and the Prospectus
and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance
with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities
Act and the Securities Act Regulations, and neither the Registration Statement, the Disclosure Package, the Prospectus nor any amendment
or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4.6
Corporate Proceedings. All corporate proceedings and other legal matters incident to the authorization, form and validity of each
of this Agreement, the Public Securities, the Registration Statement, the Disclosure Package and the Prospectus and all other legal matters
relating to this Agreement and the transactions contemplated hereby and thereby shall be reasonably satisfactory in all material respects
to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
4.7
Delivery of Agreements.
4.7.1
Lock-Up Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies
of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.
4.7.2
Representative’s Warrant Agreement. On the Closing Date, the Company shall have delivered to the Representative executed
copies of the Representative’s Warrant Agreement.
4.7.3
Pre-Funded Warrant Certificates. On or before each of the Closing Date and any Option Closing Date, the Company shall deliver
to the Representative executed copies of the Pre-Funded Warrant Certificates.
4.8
Additional Documents. At the Closing Date and at each Option Closing Date (if any) Representative Counsel shall have been furnished
with such documents and opinions as they may require for the purpose of enabling Representative Counsel to deliver an opinion to the
Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public Securities and the
Representative’s Securities as herein contemplated shall be satisfactory in form and substance to the Representative and Representative
Counsel.
5.
Indemnification.
5.1
Indemnification of the Underwriters.
5.1.1
General. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter, its affiliates
and each of its and their respective directors, officers, members, employees, representatives, partners, shareholders, affiliates, counsel
and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and each an “Underwriter Indemnified
Party”), against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all
legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened,
or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between
any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the
Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries (a “Claim”),
arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement,
the Disclosure Package, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or in any Written Testing-the-Waters
Communication (as from time to time each may be amended and supplemented); (ii) any materials or information provided to investors by,
or with the approval of, the Company in connection with the marketing of the Offering, including any “road show” or investor
presentations made to investors by the Company (whether in person or electronically); (iii) any application or other document or written
communication (in this Section 5, collectively called “application”) executed by the Company or based upon written
information furnished by the Company in any jurisdiction in order to qualify the Public Securities and Representative’s Securities
under the securities laws thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other
national securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, the Underwriters’ Information, or (iv) otherwise arising in connection
with or allegedly in connection with the Offering. The Company also agrees that it will reimburse each Underwriter Indemnified Party
for all fees and expenses (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any
of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or
otherwise) (collectively, the “Expenses”), and further agrees wherever and whenever possible to advance payment of Expenses
as they are incurred by an Underwriter Indemnified Party in investigating, preparing, pursuing or defending any Claim.
5.1.2
Procedure. If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against
the Company pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution
of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the
approval of such Underwriter Indemnified Party) and payment of actual expenses if an Underwriter Indemnified Party requests that the
Company do so. Such Underwriter Indemnified Party shall have the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company, and shall be advanced by the Company. The Company shall not be liable
for any settlement of any action effected without its consent (which shall not be unreasonably withheld). In addition, the Company shall
not, without the prior written consent of the Underwriters, settle, compromise or consent to the entry of any judgment in or otherwise
seek to terminate any pending or threatened action in respect of which advancement, reimbursement, indemnification or contribution may
be sought hereunder (whether or not such Underwriter Indemnified Party is a party thereto) unless such settlement, compromise, consent
or termination (i) includes an unconditional release of each Underwriter Indemnified Party, acceptable to such Underwriter Indemnified
Party, from all liabilities, expenses and claims arising out of such action for which indemnification or contribution may be sought and
(ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Underwriter
Indemnified Party.
5.2
Indemnification of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company,
its directors, its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the
foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to untrue statements or omissions
made in the Registration Statement, any Preliminary Prospectus, the Disclosure Package or Prospectus or any amendment or supplement thereto
or in any application, in reliance upon, and in strict conformity with, the Underwriters’ Information. In case any action shall
be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the
Disclosure Package or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be
sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other
person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of Section 5.1.2. The Company
agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers,
directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, in connection with the issuance and sale of the Public Securities or in connection with the Registration Statement, the
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication.
5.3
Contribution.
5.3.1
Contribution Rights. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient
to hold harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters,
on the other, from the Offering of the Public Securities, or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect to such Offering shall
be deemed to be in the same proportion as the total net proceeds from the Offering of the Public Securities purchased under this Agreement
(before deducting expenses) received by the Company, as set forth in the table on the cover page of the Prospectus, on the one hand,
and the total underwriting discounts and commissions received by the Underwriters with respect to the shares of the Common Stock purchased
under this Agreement, as set forth in the table on the cover page of the Prospectus, on the other hand. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 5.3.1 were to be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action
in respect thereof, referred to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal
or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.3.1 in no event shall an Underwriter be required to contribute any amount in excess
of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the Offering of
the Public Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
5.3.2
Contribution Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice
of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made
against another party (“contributing party”), notify the contributing party of the commencement thereof, but the failure
to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or
its representative of the commencement thereof within the aforesaid fifteen (15) days, the contributing party will be entitled to participate
therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable
to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution
on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent
of such contributing party. The contribution provisions contained in this Section 5.3.2 are intended to supersede, to the extent permitted
by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available. Each Underwriter’s obligations
to contribute pursuant to this Section 5.3.2 are several and not joint.
6.
Default by an Underwriter.
6.1
Default Not Exceeding 10% of Firm Securities or Option Securities. If any Underwriter or Underwriters shall default in its or
their obligations to purchase the Firm Securities or the Option Securities, if the Over-allotment Option is exercised hereunder, and
if the number of the Firm Securities or Option Securities with respect to which such default relates does not exceed in the aggregate
10% of the number of Firm Securities or Option Securities that all Underwriters have agreed to purchase hereunder, then such Firm Securities
or Option Securities to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective
commitments hereunder.
6.2
Default Exceeding 10% of Firm Securities or Option Securities. In the event that the default addressed in Section 6.1 relates
to more than 10% of the Firm Securities or Option Securities, you may in your discretion arrange for yourself or for another party or
parties to purchase such Firm Securities or Option Securities to which such default relates on the terms contained herein. If, within
one (1) Business Day after such default relating to more than 10% of the Firm Securities or Option Securities, you do not arrange for
the purchase of such Firm Securities or Option Securities, then the Company shall be entitled to a further period of one (1) Business
Day within which to procure another party or parties satisfactory to you to purchase said Firm Securities or Option Securities on such
terms. In the event that neither you nor the Company arrange for the purchase of the Firm Securities or Option Securities to which a
default relates as provided in this Section 6, this Agreement will automatically be terminated by you or the Company without liability
on the part of the Company (except as provided in Sections 3.9 and 5 hereof) or the several Underwriters (except as provided in Section
5 hereof); provided, however, that if such default occurs with respect to the Option Securities, this Agreement will not
terminate as to the Firm Securities; and provided, further, that nothing herein shall relieve a defaulting Underwriter
of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default hereunder.
6.3
Postponement of Closing Date. In the event that the Firm Securities or Option Securities to which the default relates are to be
purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall
have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business
Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Disclosure Package or the
Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration Statement,
the Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made necessary. The term “Underwriter”
as used in this Agreement shall include any party substituted under this Section 6 with like effect as if it had originally been a party
to this Agreement with respect to such shares of Common Stock.
7.
Additional Covenants.
7.1
Board Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as members
of the Board of Directors and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act, with the Exchange
Act and with the listing rules of the Exchange or any other national securities exchange, as the case may be, in the event the Company
seeks to have any of its securities listed on another exchange or quoted on an automated quotation system, and (ii) if applicable, at
least one member of the Audit Committee of the Board of Directors qualifies as an “audit committee financial expert,” as
such term is defined under Regulation S-K and the listing rules of the Exchange.
7.2
Prohibition on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity,
without the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1st)
Business Day following the forty-fifth (45th) day after the Closing Date, other than normal and customary releases issued
in the ordinary course of the Company’s business.
7.3
Right of First Refusal. Provided that the Firm Securities are sold in accordance with the terms of this Agreement, the Representative
shall have an irrevocable right of first refusal (the “Right of First Refusal”), for a period of twelve (12) months
after the date the Offering is completed, to act as sole and exclusive investment banker, sole and exclusive book-runner, sole and exclusive
financial advisor, sole and exclusive underwriter and/or sole and exclusive placement agent, at the Representative’s sole and exclusive
discretion, for each and every future public and private equity and debt offering, including all equity linked financings (each, a “Subject
Transaction”), during such twelve (12) month period, of the Company, or any successor to or subsidiary of the Company, on terms
and conditions customary to the Representative for such Subject Transactions. For the avoidance of any doubt, the Company shall not retain,
engage or solicit any additional investment banker, book-runner, financial advisor, underwriter and/or placement agent in a Subject Transaction
without the express written consent of the Representative.
The
Company shall notify the Representative of its intention to pursue a Subject Transaction, including the material terms thereof, by providing
written notice thereof by registered mail or overnight courier service addressed to the Representative. If the Representative fails to
exercise its Right of First Refusal with respect to any Subject Transaction within ten (10) Business Days after the mailing of such written
notice, then the Representative shall have no further claim or right with respect to the Subject Transaction. The Representative may
elect, in its sole and absolute discretion, not to exercise its Right of First Refusal with respect to any Subject Transaction; provided
that any such election by the Representative shall not adversely affect the Representative’s Right of First Refusal with respect
to any other Subject Transaction during the twelve (12) month period agreed to above.
8.
Effective Date of this Agreement and Termination
Thereof.
8.1
Effective Date. This Agreement shall become effective when both the Company and the Representative have executed the same and
delivered counterparts of such signatures to the other party.
8.2
Termination. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if
any domestic or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially
disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange or the Nasdaq Stock Market
LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction;
or (iii) if the United States shall have become involved in a new war or an increase in major hostilities; or (iv) if a banking moratorium
has been declared by a New York State or federal authority; or (v) if a moratorium on foreign exchange trading has been declared which
materially adversely impacts the United States securities markets; or (vi) if the Company shall have sustained a material loss by fire,
flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have
been insured, will, in your opinion, make it inadvisable to proceed with the delivery of the Firm Securities or Option Securities; or
(vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative
shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such
adverse material change in general market conditions as in the Representative’s judgment would make it impracticable to proceed
with the offering, sale and/or delivery of the Public Securities or to enforce contracts made by the Underwriters for the sale of the
Public Securities.
8.3
Expenses. Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant
to Section 6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified
herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual
and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees and disbursements
of Representative’s Counsel) up to $100,000 (inclusive of the $25,000 advance for out-of-pocket accountable expenses previously
paid by the Company to the Representative (the “Advance”)), and upon demand the Company shall pay the full amount
thereof to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs the
indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, any advance received by the Representative
will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(g)(4)(A).
8.4
Survival of Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any
termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in
full force and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this
Agreement or any part hereof.
8.5
Representations, Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter,
its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9.
Miscellaneous.
9.1
Notices. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed
(registered or certified mail, return receipt requested), personally delivered or sent by electronic mail transmission and confirmed
and shall be deemed given when so delivered and confirmed or if mailed, two (2) days after such mailing.
If
to the Representative:
ThinkEquity
LLC
17
State Street, 41st Floor
New
York, New York 10004
Attention:
Head of Investment Banking
Notices@think-equity.com
with
a copy (which shall not constitute notice) to:
Dentons
US LLP
1221
Avenue of the Americas
New
York, New York 10020
Attn:
Rob Condon, Esq.
Fax
No.: (212) 768-6800
If
to the Company:
OMNIQ
Corp.
1865
West 2100 South
Salt
Lake City, UT 84119
Attention:
Shai Lustgarten, Chief Executive Officer
Fax
No:
with
a copy (which shall not constitute notice) to:
Sichenzia
Ross Ference Carmel LLP
1185
Avenue of the Americas, 31st Floor
New
York, NY 10036
Attention:
Arthur Marcus, Esq.
Fax
No: (212) 930-9725
9.2
Research Analyst Independence. The Company acknowledges that each Underwriter’s research analysts and research departments
are required to be independent from its investment banking division and are subject to certain regulations and internal policies, and
that such Underwriter’s research analysts may hold views and make statements or investment recommendations and/or publish research
reports with respect to the Company and/or the Offering that differ from the views of their investment banking division. The Company
acknowledges that each Underwriter is a full service securities firm and as such from time to time, subject to applicable securities
laws, rules and regulations, may effect transactions for its own account or the account of its customers and hold long or short positions
in debt or equity securities of the Company; provided, however, that nothing in this Section 9.2 shall relieve the Underwriter
of any responsibility or liability it may otherwise bear in connection with activities in violation of applicable securities laws, rules
or regulations.
9.3
Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this Agreement.
9.4
Amendment. This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.5
Entire Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection
with this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Notwithstanding
anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that
certain engagement letter between the Company and ThinkEquity LLC dated July 31, 2023, shall remain in full force and effect.
9.6
Binding Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors, legal
representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors and assigns”
shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
9.7
Governing Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that
any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced in
the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting
a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in
Section 9.1 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding
or claim. The Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies)
all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the
preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates)
and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial
by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
9.8
Execution in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the
same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall
constitute valid and sufficient delivery thereof.
9.9
Waiver, etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not
be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision
hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance
or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
[Signature
Page Follows]
If
the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding agreement between us.
|
Very truly yours, |
|
|
|
|
OMNIQ CORP. |
|
|
|
|
By: |
/s/
Shai Lustgarten |
|
Name: |
Shai
Lustgarten |
|
Title: |
CEO |
Confirmed
as of the date first written above mentioned, on behalf of itself and as Representative of the several Underwriters named on Schedule
1 hereto: |
|
|
|
THINKEQUITY LLC |
|
|
|
|
By: |
/s/ Kevin Mangan |
|
Name: |
Kevin Mangan |
|
Title: |
Managing Director, Head of Equity Syndicate |
|
SCHEDULE
1
Underwriter | |
Total Number of Firm Shares to be Purchased | | |
Total Number of Firm Pre-Funded Warrants to be Purchased | | |
Number of Option Shares and/or Option Pre-Funded Warrants to be Purchased if the Over-Allotment Option is Fully Exercised by the Representative | |
ThinkEquity LLC | |
| 2,775,000 | | |
| 225,000 | | |
| 450,000 | |
| |
| | | |
| | | |
| | |
TOTAL | |
| 2,775,000 | | |
| 225,000 | | |
| 450,000 | |
SCHEDULE
2-A
Pricing
Information
Number
of Firm Shares: 2,775,000
Number
of Firm Pre-Funded Warrants: 225,000
Number
of Option Shares and/or Option Pre-Funded Warrants: 450,000
Public
Offering Price per Share: $1.00
Public
Offering Price per Pre-Funded Warrant: $0.999
Underwriting
Discount per Share: $0.07
Underwriting
Discount per Pre-Funded Warrant: $0.07
Underwriting
non-accountable expense allowance per Share: $0.01
Underwriting
non-accountable expense allowance per Pre-Funded Warrant: $0.01
Proceeds
to Company per Share (before expenses): $0.93
Proceeds
to Company per Pre-Funded Warrant (before expenses): $0.929
SCHEDULE
2-B
Issuer
General Use Free Writing Prospectuses
None.
SCHEDULE
3
List
of Lock-Up Parties
Shai
Lustgarten
Yaron
Shalem
Neev
Nissenson
Itzhak
Almog
Guy
Elhanani
Carlos
Nissensohn
EXHIBIT
A
PRE-FUNDED
COMMON STOCK PURCHASE WARRANT
OMNIQ
Corp.
Warrant
Shares: _______ |
|
|
Issue
Date: [_], 2023 |
THIS
PRE-FUNDED COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its
assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the Issue Date and until this Warrant is exercised in full (the “Termination Date”)
but not thereafter, to subscribe for and purchase from OMNIQ Corp., a Delaware corporation (the “Company”), up to
______ shares of Common Stock (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one
share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated
in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“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.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Registration
Statement” means the Company’s registration statement on Form S-3 (File No. 333-272877).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the OTCQB, OTCQX or Pink Open Market operated by OTC Markets Group, the NYSE American, the Nasdaq Capital Market, the Nasdaq
Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).
“Transfer
Agent” means Equity Stock Transfer LLC, 237 W 37th St #602, New York, NY 10018, phone number (212) 575-5757 and any successor
transfer agent of the Company.
“Warrants”
means this Warrant and other Pre-Funded Common Stock Purchase Warrants issued by the Company pursuant to the Registration Statement.
Section
2. Exercise.
a)
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 Issue
Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy (or e-mail attachment) of the
Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the
date of exercise as aforesaid, the Holder shall deliver to the Company 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(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form 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 in connection with such partial exercise. 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.
b)
Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.001 per Warrant Share,
was pre-funded to the Company on or prior to the Issue Date and, consequently, no additional consideration (other than the nominal exercise
price of $0.001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The
Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance
or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining
unpaid exercise price per share of Common Stock under this Warrant shall be $0.001, subject to adjustment hereunder (the “Exercise
Price”).
c)
Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise”
in which the Holder shall be entitled to receive a number of Warrant Shares for the deemed surrender of the Warrant in whole or in part
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
|
(A)
= |
as
applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Notice
of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a
Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular
trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading
Day, (ii) at the option of the Holder, either (x) the VWAP on the Trading Day immediately preceding the date of the applicable Notice
of Exercise or (y) the Bid Price of the Common Stock 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 pursuant to Section 2(a) hereof (including until two (2) hours after the close of “regular trading hours”
on a Trading Day), or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Notice of Exercise if the date
of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof
after the close of “regular trading hours” on such Trading Day; |
|
|
|
|
(B)
= |
the
Exercise Price of this Warrant, as adjusted hereunder; and |
|
|
|
|
(X)
= |
the
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise. |
The
issue price for each such Warrant Share to be issued pursuant to the cashless exercise of a Warrant will be equal to (B), as defined
above, and the total issue price for the aggregate number of Warrant Shares issued pursuant to the cashless exercise of a Warrant will
be deemed paid and satisfied in full by the deemed surrender to the Company of the portion of such Warrant being exercised in accordance
with this Section 1(c). Notwithstanding anything herein to the contrary, the Company shall not be required to make any cash payments
or net cash settlement to the Holder in lieu of delivery of the Warrant Shares. If Warrant Shares are issued in such a cashless exercise,
the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the
registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
“Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Trading Market
as reported by Bloomberg as of such time of determination, or, if the Trading Market is not the principal securities exchange or trading
market for such security, the bid price of such security on the principal securities exchange or trading market where such security is
listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price of such
security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such time of
determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of the bid
prices of any market makers for such security as reported on the Pink Open Market as of such time of determination. If the Bid Price
cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security
as of such time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company
and the Holder are unable to agree upon the fair market value of such security, then such fair market value shall be determined pursuant
to the provisions set forth in clause (d) of the definition of VWAP. All such determinations to be appropriately adjusted for any stock
dividend, share split, share consolidation, reclassification or other similar transaction during the applicable calculation period.
“Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Trading Market, as
reported by Bloomberg, or, if the Trading Market begins to operate on an extended hours basis and does not designate the closing trade
price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Trading
Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal
securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply,
the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers
for such security as reported on the in the OTC Link or on the Pink Open Market. If the Closing Sale Price cannot be calculated for a
security on a particular date on any of the foregoing bases, Closing Sale Price of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such fair market value shall be determined pursuant to the provisions set forth in clause (d) of the definition
of VWAP. All such determinations to be appropriately adjusted for any stock dividend, share split, share consolidation, reclassification
or other similar transaction during the applicable calculation period.
“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 for trading on a Trading Market other than the OTCQB, OTCQX or Pink Open Market operated by OTC Markets Group, 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 the Common Stock is then quoted for trading on the OTCQB or OTCQX operated by OTC Markets Group, the volume
weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, or (c) 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.
d)
Mechanics of Exercise.
i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (the “DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery
of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by
the date that is the earlier of (i) two (2) Trading Days and (ii) 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 after the delivery to the Company of the Notice of Exercise and (ii) the number of Trading Days comprising the Standard Settlement
Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares
subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages
and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of
the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant
Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered to said Holder
or the Holder rescinds such exercise. The Company agrees to maintain a Transfer Agent that is a participant in the Fast Automated Securities
Transfer or 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 Issue Date, which may be delivered at any time
after the time of execution of the Underwriting Agreement, dated October 5, 2023 between the Company and ThinkEquity LLC, the Company
agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Issue Date.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x)
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue by (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at
the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise
of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
vi.
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii.
Closing of Books. The Company shall not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, non-exercised 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
non-converted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d)
of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on
the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed
with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of
a Holder, the Company shall within two Trading Days 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 Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the
Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance
of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any
increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to
the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to
such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any 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 or consolidation) outstanding Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common
Stock any shares of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result
of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (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, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
d)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or amalgamation or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender
or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding
shares of 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 shares of Common Stock or any
compulsory share exchange pursuant to which shares of Common Stock are 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 share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common
Stock or more of the outstanding Common Stock or 50% or more of the voting power of the common equity of the Company (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant
Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option
of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock
of the successor or acquiring corporation or of the Company, if it is the surviving corporation or is otherwise the continuing corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of shares of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance
with the provisions of this Section 3(d) pursuant to written agreements prior to such Fundamental Transaction and shall, at the option
of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares or other securities
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 or other securities (but taking into account the relative value of
the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares or securities, such number of shares
or securities and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction). Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named
as the Company herein.
e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the shares of Common Stock rights or warrants to subscribe for or purchase any
shares of the Company 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, amalgamation or arrangement to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder
at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days
prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, amalgamation, arrangement, 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, amalgamation, arrangement 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 its
subsidiaries (the “Subsidiaries”), the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of
such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section
4. Transfer of Warrant.
a)
Transferability. This Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at
the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant
or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant
shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant
to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this
Warrant in full. This Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.
b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date of this
Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
a)
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section
3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event, including
if the Company is for any reason unable to issue and deliver Warrant Shares upon exercise of this Warrant as required pursuant to the
terms thereof, shall the Company be required to net cash settle an exercise of this Warrant.
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which shall in no event include the
posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company shall make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading
Day.
d)
Authorized Shares.
The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common
Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under
this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
shall 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
or quoted for trading. 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 non-assessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, amalgamation, arrangement
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 shall (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 non-assessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
e)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict
of laws thereof. Each party agrees that all legal Proceedings concerning the interpretation, enforcement and defense of this Warrant
shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).
Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any provision hereunder), 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 such New York Courts, or such New York Courts are improper or inconvenient venue
for such Proceeding. If any party shall commence an action or Proceeding to enforce any provisions of this Warrant, then the prevailing
party in such action or Proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such action or Proceeding.
f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of appellate Proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h)
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or by e-mail, or sent by a nationally
recognized overnight courier service, addressed to the Company, at [ADDRESS], Attention: [NAME], email address: [●] 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 facsimile, email or sent by a
nationally recognized overnight courier service addressed to each Holder at the facsimile number, email address or address of such Holder
appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective
on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or
e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day
after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail at the e-mail
address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given.
i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on
the one hand, and the Holder on the other hand.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n)
No Expense Reimbursement. The Holder shall in no way be required the pay, or to reimburse the Company for, any fees or expenses
of the Company’s transfer agent in connection with the issuance or holding or sale of the Common Stock, Warrant and/or Warrant
Shares. The Company shall solely be responsible for any and all such fees and expenses.
o)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
(Signature
Page Follows)
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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NOTICE
OF EXERCISE
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
☐
in lawful money of the United States; or
☐
the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise
this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in
subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The
Warrant Shares shall be delivered to the following DWAC Account Number:
[SIGNATURE
OF HOLDER]
Name
of Investing
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of Authorized Signatory: |
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ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
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EXHIBIT B
Form
of Representative’s Warrant Agreement
THE
REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT
EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR
HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER
THAN (I) THINKEQUITY LLC OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER
OF THINKEQUITY LLC OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS
PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO [________________] [DATE THAT IS [180 DAYS OR ONE YEAR] FROM THE COMMENCEMENT OF SALES
OF THE OFFERING]. VOID AFTER 5:00 P.M., EASTERN TIME, [___________________] [DATE THAT IS FIVE YEARS FROM THE COMMENCEMENT OF
SALES OF THE OFFERING].
WARRANT
TO PURCHASE COMMON STOCK
OMNIQ
CORP.
Warrant
Shares: _______ |
Initial
Exercise Date: ______, 2024 |
THIS
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 ____, 2024 (the “Initial Exercise Date”) and, in accordance with FINRA Rule 5110(g)(8)(A),
prior to at 5:00 p.m. (New York time) on the date that is five (5) years following the Effective Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from OMNIQ Corp., a Delaware corporation (the “Company”), up to
______ shares of common stock, par value $0.001 per share (the “Common Stock”), of the Company (the “Warrant
Shares”), as subject to adjustment hereunder. The purchase price of one share of Common Stock under this Warrant shall be equal
to the Exercise Price, as defined in Section 2(b).
Section
1. Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated
in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Commission”
means the United States Securities and Exchange Commission.
“Effective
Date” means the effective date of the registration statement on Form S-3 (File No. 333-272877), including any related prospectus
or prospectuses, for the registration of the Company’s Common Stock and the Warrant Shares under the Securities Act, that the Company
has filed with the Commission, pursuant to Rule 430B(f)(2) of the Securities Act.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Trading
Day” means a day on which the New York Stock Exchange is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock
Exchange (or any successors to any of the foregoing).
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock 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 a share of Common Stock for such date (or the nearest preceding date) on the OTCQB or OTCQX as applicable, (c) if the Common
Stock is not then listed or quoted for trading on the OTCQB or OTCQX and if the prices for the Common Stock are then reported in the
“Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of the Common
Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
Section
2. Exercise.
a)
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 (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly
executed facsimile copy (or e-mail attachment) of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days 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(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form 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 five (5) Trading Days of the date 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 Form within two (2) Business Days of receipt
of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions
of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on the face hereof.
b)
Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $_______1, subject
to adjustment hereunder (the “Exercise Price”).
c)
Cashless Exercise. In lieu of exercising this Warrant by delivering the aggregate Exercise Price by wire transfer or cashier’s
check, at the election of the Holder 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 the number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:
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(A)
= |
the
VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless
exercise,” as set forth in the applicable Notice of Exercise; |
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(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, and the
holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to
take any position contrary to this Section 2(c).
1
125% of the public offering price per share of common stock and warrant in the offering.
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
d)
Mechanics of Exercise.
i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
its 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 and, in either case, the Warrant Shares have been sold by the Holder prior to the Warrant Share Delivery Date (as
defined below), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of
the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address
specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice
of Exercise (such date, the “Warrant Share Delivery Date”). If the Warrant Shares can be delivered via DWAC, the transfer
agent shall have received from the Company, at the expense of the Company, any legal opinions or other documentation required by it to
deliver such Warrant Shares without legend (subject to receipt by the Company of reasonable back up documentation from the Holder, including
with respect to affiliate status) and, if applicable and requested by the Company prior to the Warrant Share Delivery Date, the transfer
agent shall have received from the Holder a confirmation of sale of the Warrant Shares (provided the requirement of the Holder to provide
a confirmation as to the sale of Warrant Shares shall not be applicable to the issuance of unlegended Warrant Shares upon a cashless
exercise of this Warrant if the Warrant Shares are then eligible for resale pursuant to Rule 144(b)(1)). The Warrant Shares shall be
deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise
Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior
to the issuance of such shares, having been paid. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject
to a Notice of Exercise by the second (2nd) Trading Day following the Warrant Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of
the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth
(5th)Trading Day after such liquidated damages begin to accrue) for each Trading Day after the second (2nd) Trading Day following such
Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause its transfer agent to deliver to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however,
that the Holder shall be required to return any Warrant Shares or Common Stock subject to any such rescinded exercise notice 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).
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause its transfer agent to transmit to the Holder the Warrant Shares pursuant to an exercise on
or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction
of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number
of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price
at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall
be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving
rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to
pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
vi.
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all transfer agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
viii.
Signature. This Section 2 and the exercise form attached hereto set forth the totality of the procedures required of the Holder
in order to exercise this Warrant. Without limiting the preceding sentences, no ink-original exercise form shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any exercise form be required in order to exercise this Warrant.
No additional legal opinion, other information or instructions shall be required of the Holder to exercise this Warrant. The Company
shall honor exercises of this Warrant and shall deliver Shares underlying this Warrant in accordance with the terms, conditions and time
periods set forth herein.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates), 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 shall include the number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon
(i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any other Common Stock equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates) and 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 of which
portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the
case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Company’s
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 two (2) Trading Days 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 since the date as of which such number of outstanding
shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this
Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section
2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions
of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st
day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder
of this Warrant.
Section
3. Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification. For the purposes of clarification, the Exercise Price
of this Warrant will not be adjusted in the event that the Company or any subsidiary thereof, as applicable, sells or grants any option
to purchase, or 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 Common Stock or Common Stock equivalents, at an effective price per share less than the Exercise
Price then in effect.
b)
[RESERVED]
c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other
than cash dividends) or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way
of return of capital or otherwise (including, without limitation, any distribution of shares or other securities, property or options
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation). 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.
e)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock,
(iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock
or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each
a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right
to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number
of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable by holders of Common Stock as a result of such Fundamental
Transaction for each share of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without
regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance
with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver
to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity
(or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard
to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant
to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor
Entity had been named as the Company herein.
f)
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.
g)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the
number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be mailed a notice to the Holder at its last address as it shall appear
upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified,
stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer
or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to provide such notice or any defect
therein shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice
provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.
Section
4. Transfer of Warrant.
a)
Transferability. Pursuant to FINRA Rule 5110(e)(1), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant
shall be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call
transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately
following the date of effectiveness or commencement of sales of the offering pursuant to which this Warrant is being issued, except the
transfer of any security:
i.
by operation of law or by reason of reorganization of the Company;
ii.
to any FINRA member firm participating in the offering and the officers or partners thereof, if all securities so transferred remain
subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;
iii.
if the aggregate amount of securities of the Company held by the Holder or related person do not exceed 1% of the securities being offered;
iv.
that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages
or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the
fund; or
v.
the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this Section 4(a)
for the remainder of the time period.
Subject
to the foregoing restriction, any applicable securities laws and the conditions set forth in Section 4(d), this Warrant and all rights
hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant
or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant
shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant
to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant
full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.
b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of
this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
d)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to
or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
Section
5. Registration Rights.
5.1 Demand
Registration.
5.1.1
Grant of Right. The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least 51% of the Warrants and/or
the underlying Warrant Shares, agrees to register, on one occasion, all or any portion of the Warrant Shares underlying the Warrants
(collectively, the “Registrable Securities”). On such occasion, the Company will file a registration statement with the Commission
covering the Registrable Securities within sixty (60) days after receipt of a Demand Notice and use its reasonable best efforts to have
the registration statement declared effective promptly thereafter, subject to compliance with review by the Commission; provided, however,
that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect
to which the Holder is entitled to piggyback registration rights pursuant to Section 5.2 hereof and either: (i) the Holder has elected
to participate in the offering covered by such registration statement or (ii) if such registration statement relates to an underwritten
primary offering of securities of the Company, until the offering covered by such registration statement has been withdrawn or until
thirty (30) days after such offering is consummated. The demand for registration may be made at any time beginning on the Initial Exercise
Date and expiring on the fifth anniversary of the date of the Underwriting Agreement (as defined below) in accordance with FINRA Rule
5110(g)(8)(c). The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other
registered Holders of the Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand
Notice.
5.1.2
Terms. The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 5.1.1,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent
them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts to cause the filing
required herein to become effective promptly and to qualify or register the Registrable Securities in such States as are reasonably requested
by the Holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a State
in which such registration would cause: (i) the Company to be obligated to register or license to do business in such State or submit
to general service of process in such State, or (ii) the principal shareholders of the Company to be obligated to escrow their shares
of capital stock of the Company. The Company shall cause any registration statement filed pursuant to the demand right granted under
Section 5.1.1 to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders of the Registrable
Securities covered by such registration statement are first given the opportunity to sell all of such securities. The Holders shall only
use the prospectuses provided by the Company to sell the Warrant Shares covered by such registration statement, and will immediately
cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due
to a material misstatement or omission. Notwithstanding the provisions of this Section 5.1.2, the Holder shall be entitled to a demand
registration under Section 5.1.1 on only one (1) occasion and such demand registration right shall terminate on the fifth (5th) anniversary
of the date of the Underwriting Agreement (as defined below) in accordance with FINRA Rule and 5110(g)(8)(C).
5.2 “Piggy-Back” Registration.
5.2.1
Grant of Right. In addition to the demand right of registration described in Section 5.1 hereof, the Holder shall have the right, for
a period of no more than five (5) years from the Initial Exercise Date in accordance with FINRA Rule 5110(g)(8)(D), to include the Registrable
Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated
by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form); provided, however, that if, solely
in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall,
in its reasonable discretion, impose a limitation on the number of Warrant Shares which may be included in the Registration Statement
because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public
distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable
Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of
Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number
of Registrable Securities sought to be included by such Holders; provided, however, that the Company shall not exclude any Registrable
Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such
securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.
5.2.2
Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 5.2.1 hereof,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent
them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish
the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to the proposed date
of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed
by the Company during the two (2) year period following the Initial Exercise Date until such time as all of the Registrable Securities
have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for
herein by giving written notice within ten (10) days of the receipt of the Company’s notice of its intention to file a registration
statement. Except as otherwise provided in this Warrant, there shall be no limit on the number of times the Holder may request registration
under this Section 5.2.2; provided, however, that such registration rights shall terminate on the second (2nd)anniversary of the Initial
Exercise Date.
5.3
General Terms
5.3.1
Indemnification. The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement
hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20 (a)
of the Exchange Act against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses
reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under
the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the
same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the
Underwriting Agreement dated August [_], 2023 by and between the Company and ThinkEquity LLC, as representatives of the underwriters
set forth therein (the “Underwriting Agreement”). The Holder(s) of the Registrable Securities to be sold pursuant
to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all
loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise,
arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion
in such registration statement to the same extent and with the same effect as the provisions contained in Section 5.2 of the Underwriting
Agreement pursuant to which the Underwriters have agreed to indemnify the Company.
5.3.2
Exercise of Warrants. Nothing contained in this Warrant shall be construed as requiring the Holder(s) to exercise their Warrants prior
to or after the initial filing of any registration statement or the effectiveness thereof.
5.3.3
Documents Delivered to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each
underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel
to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter
dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter
dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has
issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially
the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’
letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s
counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall
also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to
the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder
and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the
registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation
shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.
5.3.4
Underwriting Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by
any Holders whose Registrable Securities are being registered pursuant to this Section 5, which managing underwriter shall be reasonably
satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such
managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily
contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating
to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties
and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such
Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except
as they may relate to such Holders, their Warrant Shares and their intended methods of distribution.
5.3.5
Documents to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company
a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.
5.3.6
Damages. Should the registration or the effectiveness thereof required by Sections 5.1 and 5.2 hereof be delayed by the Company or the
Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available
to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened
breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity
of posting bond or other security.
Section
6. Miscellaneous.
a)
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any certificate relating to the Warrant Shares, and
in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading
Day.
d)
Authorized Shares.
The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined
in accordance with the provisions of the Underwriting Agreement.
f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant or the Underwriting Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Underwriting Agreement.
i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holder.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
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OMNIQ
Corp. |
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NOTICE
OF EXERCISE
TO:OMNIQ
Corp.
_________________________
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
☐
in lawful money of the United States; or
☐
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3)
Please register and 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 or by physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4)
Accredited Investor. If the Warrant is being exercised via cash exercise, the undersigned is an “accredited investor”
as defined in Regulation D promulgated under the Securities Act of 1933, as amended
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: ___________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity: _____________________________________________________
Name
of Authorized Signatory: _______________________________________________________________________
Title
of Authorized Signatory: ________________________________________________________________________
Date:
___________________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR
VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated:
______________, _______
Holder’s
Signature: _____________________________
Holder’s
Address: _____________________________
_____________________________
NOTE:
The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement
or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant.
EXHIBIT
C
Form
of Lock-Up Agreement
[•],
2023
ThinkEquity
LLC
17 State Street, 41st Floor
New
York, NY 10004
As
Representative of the several Underwriters named on Schedule 1 to the Underwriting Agreement referenced below.
Ladies
and Gentlemen:
The
undersigned understands that ThinkEquity LLC (the “Representative”) proposes to enter into an Underwriting Agreement
(the “Underwriting Agreement”) with OMNIQ Corp., a Delaware corporation (collectively with its subsidiaries and affiliates,
the “Company”), providing for the public offering (the “Public Offering”) of shares of Class A
common stock, par value $0.001 per share, of the Company (the “Shares”).
To
induce the Representative to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without
the prior written consent of the Representative, the undersigned will not, during the period commencing on the date hereof and ending
on the date which is (i) 180 days after the date of the Underwriting Agreement if the undersigned is a director or officer of the Company
and (ii) 90 days after the date of the Underwriting Agreement if the undersigned is a 5% or greater holder of Common Stock and is not
a director or officer of the Company (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, grant, lend,
or otherwise transfer or dispose of, directly or indirectly, any Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition (collectively, the “Lock-Up Securities”); (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any
such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make
any demand for or exercise any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention
to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up
Securities. Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without
the prior written consent of the Representative in connection with (a) transactions relating to Lock-Up Securities acquired in open market
transactions after the completion of the Public Offering; provided that no filing under Section 16(a) or Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or other public announcement shall be required or shall be
voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of
Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of the undersigned
or a family member (for purposes of this lock-up agreement, “family member” means any relationship by blood, marriage or
adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; or (d) if
the undersigned, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any
transfers of Lock-Up Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned, as
the case may be; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer
shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially
in the form of this lock-up agreement and (iii) no filing under Section 16(a) or Section 13 of the Exchange Act shall be required or
shall be voluntarily made. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s
transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with this lock-up
agreement.
If
(i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating
to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results
or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up
Period, the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning
on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative
waives, in writing, such extension.
The
undersigned agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up
agreement during the period from the date hereof to and including the 34th day following the expiration of the initial Lock-Up
Period, the undersigned will give notice thereof to the Company and will not consummate any such transaction or take any such action
unless it has received written confirmation from the Company that the Lock-Up Period (as may have been extended pursuant to the previous
paragraph) has expired.
If
the undersigned is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally
applicable to any issuer-directed or “friends and family” Shares that the undersigned may purchase in the Public Offering;
(ii) the Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the foregoing
restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending release
or waiver; and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release
through a major news service at least two (2) business days before the effective date of the release or waiver. Any release or waiver
granted by the Representative hereunder to any such officer or director shall only be effective two (2) business days after the publication
date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit
a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described
in this lock-up agreement to the extent and for the duration that such terms remain in effect at the time of such transfer.
No
provision in this agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities
exercisable or exchangeable for or convertible into Shares, as applicable; provided that the undersigned does not transfer the
Shares acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted pursuant to the terms
of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into or modification of
a so-called “10b5-1” plan at any time (other than the entry into or modification of such a plan in such a manner as to cause
the sale of any Lock-Up Securities within the Lock-Up Period).
The
undersigned understands that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation
of the Public Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the
undersigned’s heirs, legal representatives, successors and assigns.
The
undersigned understands that, if the Underwriting Agreement is not executed by July 31, 2024, or if the Underwriting Agreement (other
than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common
Stock to be sold thereunder, then this lock-up agreement shall be void and of no further force or effect.
Whether
or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.
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(Name of
Signatory, in the case of entities - Please Print) |
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(Title of Signatory,
in the case of entities - Please Print) |
EXHIBIT
D
Form
of Press Release
OMNIQ
Corp.
[Date]
OMNIQ
Corp. (the “Company”) announced
today that ThinkEquity LLC, acting as representative for the underwriters in the Company’s recent public offering of _______ shares
of the Company’s common stock, is [waiving] [releasing] a lock-up restriction with respect to _________ shares of the Company’s
common stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect
on _________, 20___, and the shares may be sold on or after such date.
This
press release is not an offer or sale of the securities in the United States or in any other jurisdiction where such offer or sale is
prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration
under the Securities Act of 1933, as amended.
Exhibit
5.1
October
11, 2023
OmniQ
Corp.
1865
West 2100 South
Salt
Lake City, UT 84119
Re:
Registered Public Offering Pursuant to Registration Statement on Form S-3
Ladies
and Gentlemen:
We
have acted as counsel to OmniQ Corp., a Delaware corporation (the “Company”), in connection with the Undewriting Agreement
dated October 5, 2023 (the “Underwriting Agreement”), by and between the Company and ThinkEquity LLC, acting
as the representative of the underwriters named therein (the “Representative”), relating to the issuance and sale by the
Company of 2,775,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 225,000 shares of Common Stock (the “Pre-Funded
Warrant Shares”), and warrants to be issued to the Representative (the “Representative’s Warrants” and together
with the Pre-Funded Warrants, the “Warrants”) to purchase up 140,000 shares of Common Stock (the “Representative’s
Warrant Shares” and together with the Pre-Funded Warrant Shares, the “Warrant Shares”) Herein, we refer to the Shares,
Warrants, and t Shares as the “Securities.”
This
opinion is being delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933,
as amended (the “Securities Act”).
In
connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following:
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1. |
The
Certificate of Incorporation of the Company, as amended; |
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2. |
The
Amended and Restated Bylaws of the Company; |
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3. |
The
Underwriting Agreement; |
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4. |
The
Form of Pre-Funded Warrant; |
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5. |
Registration
Statement on Form S-3 ((File No. 333-020314487) filed by the Company with the Securities and Exchange Commission (the
“Commission”) on June 23, 2023, in the form in which it became effective on July 5, 2023 (the “Registration
Statement”) pursuant to the Securities Act; |
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6. |
A
draft of the prospectus supplement dated October 5, 2023, filed with the Commission pursuant to Rule 424(b)(5) promulgated under the
Securities Act (the “Prospectus Supplement”), together with the base prospectus dated July 5, 2023; |
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7. |
Written
consent of the Board of Directors of the Company approving the Underwriting Agreement; and |
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8.
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The
Form of Representative’s Warrant. |
1185
AVENUE OF THE AMERICAS | 31ST FLOOR | NEW YORK, NY | 10036
T (212) 930-9700 | F (212) 930-9725 | WWW.SRFC.LAW
We
have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such
agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others,
and such other documents as we have deemed necessary or appropriate as a basis for the opinions stated below.
In
our examination, we have assumed the genuineness of all signatures, including endorsements, the legal capacity and competency of all
natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents
submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies. In making
our examination of executed documents, we have assumed (i) that the parties thereto, other than the Company, had the power, corporate
or other, to enter into and perform all obligations thereunder and (ii) the due authorization by all requisite action, corporate or other,
and the execution and delivery by such parties of such documents, and the validity and binding effect thereof on such parties.
The
opinion expressed below is limited to the federal securities laws of the United States of America and the corporate laws of the State
of Delaware and we express no opinion as to the effect on the matters covered by the laws of any other jurisdiction.
Based
upon and subject to the foregoing, we are of the opinion that (i) when the Shares have been delivered to and paid for by the underwriters
as contemplated by the Underwriting Agreement, the Shares will be duly authorized, validly issued, fully paid and non-assessable, (ii)
the Warrants as described in the Prospectus Supplement have been duly authorized, and, provided that the Warrants have been duly executed
by the Company and delivered to and paid for by as contemplated by the Underwriting Agreement, will be valid and legally binding obligations
of the Company, enforceable against the Company in accordance with their terms, and (iii) the Warrant Shares have been duly authorized
and when issued and delivered by the Company against payment therefor in accordance with the terms of such Warrants, will be duly authorized,
validly issued, fully paid and non-assessable.
We
hereby consent to the filing of this opinion with the Commission as an exhibit to the Company’s Current Report on Form 8-K being
filed on the date hereof and incorporated by reference into the Registration Statement. We also hereby consent to the reference to our
firm under the caption “Legal Matters” in the Prospectus Supplement. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of
the Commission promulgated thereunder. This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim
any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable
laws.
Very
truly yours, |
|
|
|
/s/
Sichenzia Ross Ference Carmel LLP |
|
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Sichenzia
Ross Ference Carmel LLP |
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1185
AVENUE OF THE AMERICAS | 31ST FLOOR | NEW YORK, NY | 10036
T (212) 930-9700 | F (212) 930-9725 | WWW.SRFC.LAW
Exhibit 99.1
OMNIQ Corp. Announces Proposed Public Offering
of Common Stock
Salt Lake City, Utah – October 5, 2023
– OMNIQ Corp. (Nasdaq: OMQS) (“OMNIQ Corp.” or the “Company”) today announced that it intends to offer to
sell shares of its common stock (and/or pre-funded warrants (“Pre-Funded Warrants”) in lieu thereof) in an underwritten public
offering. All of the shares of common stock (and/or Pre-Funded Warrants) are to be sold by the Company.
ThinkEquity is acting as sole book-running manager
for the offering.
The Company expects to grant the underwriter a 45-day
option to purchase up to an additional 15% of the number of shares of common stock and/or Pre-Funded Warrants sold in this offering to
cover over-allotments, if any. The offering is subject to market conditions and there can be no assurance as to whether or when the offering
may be completed, or as to the actual size or terms of the offering.
The Company intends to use the net proceeds from the
offering primarily for working capital and general corporate purposes.
The securities will be offered and sold pursuant to
a shelf registration statement on Form S-3 (File No. 333-272877), including a base prospectus, filed with the U.S. Securities and Exchange
Commission (the “SEC”) on June 6, 2023 and declared effective on July 5, 2023. The offering will be made only by means of
a written prospectus. A preliminary prospectus supplement and accompanying prospectus describing the terms of the offering has been or
will be filed with the SEC on its website at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus
relating to the offering may also be obtained from the offices of ThinkEquity, 17 State Street, 41st Floor, New York, New York
10004. Before investing in this offering, interested parties should read in their entirety the preliminary prospectus supplement and the
accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such preliminary
prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.
This press release shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
About OMNIQ Corp.:
OMNIQ Corp. provides computerized and machine vision
image processing solutions that use patented and proprietary AI technology to deliver data collection, real-time surveillance and monitoring
for supply chain management, homeland security, public safety, traffic & parking management, and access control applications. The
technology and services provided by the Company help clients move people, assets, and data safely and securely through airports, warehouses,
schools, national borders, and many other applications and environments. OMNIQ’s customers include government agencies and leading
Fortune 500 companies from several sectors, including manufacturing, retail, distribution, food and beverage, transportation and logistics,
healthcare, oil, gas, and chemicals. The Company currently addresses several billion-dollar markets, including the Global Safe City market,
forecast to grow to $67.1 billion by 2028, and the Ticketless Safe Parking market, forecast to grow to $33.5 billion by 2032 and the fast
casual restaurant sector expected to reach $209 billion by 2027.
For more information please visit www.omniq.com.
Forward-Looking Statements:
“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995. Statements in this press release relating to plans, strategies, economic performance and trends,
projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
This release contains “forward-looking statements”
that include information relating to future events and future financial and operating performance. The words “anticipate”,
“may,” “would,” “will,” “expect,” “estimate,” “can,” “believe,”
“potential” and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking
statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the
times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available
at the time they are made and/or management’s good faith belief as of that time with respect to future events and are subject to
risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the
forward-looking statements. Examples of forward-looking statements include, among others, statements made in this press release regarding
the proposed public offering and the use of proceeds received in the proposed public offering. Important factors that could cause these
differences include, but are not limited to: fluctuations in demand for the Company’s products particularly during the current
health crisis, the introduction of new products, the Company’s ability to maintain customer and strategic business relationships,
the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company’s liquidity and financial
strength to support its growth, the Company’s ability to manage credit and debt structures from vendors, debt holders and secured
lenders, the Company’s ability to successfully integrate its acquisitions, and other information that may be detailed from time-to-time
in OMNIQ Corp.’s filings with the United States Securities and Exchange Commission. Examples of such forward looking statements
in this release include, among others, statements regarding revenue growth, driving sales, operational and financial initiatives, cost
reduction and profitability, and simplification of operations. For a more detailed description of the risk factors and uncertainties
affecting OMNIQ Corp., please refer to the Company’s recent Securities and Exchange Commission filings, which are available at
https://www.sec.gov. OMNIQ Corp. undertakes no obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, unless otherwise required by law.
Investor Relations:
IR@omniq.com
Exhibit
99.2
OMNIQ
Corp. Announces Pricing of Public Offering
Salt
Lake City, October 5, 2023 — OmniQ Corp. (Nasdaq: OMQS), (“OMNIQ Corp.” or the “Company”), a provider
of Artificial Intelligence (AI)-based solutions, today announced the pricing of its underwritten public offering of an aggregate of 3,000,000
shares of its common stock (or pre-funded warrants (“Pre-Funded Warrants”) in lieu thereof). Each share of common stock (or
Pre-Funded Warrant) is being sold at a public offering price of $1.00 per share (inclusive of the Pre-Funded Warrant exercise price).
All of the shares and Pre-Funded Warrants in the offering are being sold by the Company. Total gross proceeds from the offering, before
deducting underwriting discounts and commissions and other offering expenses, are expected to be approximately $3,000,000. In addition,
the Company has granted the underwriters a 45-day option to purchase up to an additional 450,000 shares of its common stock and/or Pre-Funded
Warrants at the public offering price less discounts and commissions, to cover over-allotments. The offering is expected to close on
October 11, 2023, subject to satisfaction of customary closing conditions.
The
Company intends to use the net proceeds from the offering primarily for working capital and general corporate purposes.
ThinkEquity
is acting as sole book-running manager for the offering.
The
securities will be offered and sold pursuant to a shelf registration statement on Form S-3 (File No. 333-272877), including a base prospectus,
filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 6, 2023 and declared effective on July 5, 2023.
The offering will be made only by means of a written prospectus. A prospectus supplement and accompanying prospectus describing the terms
of the offering will be filed with the SEC on its website at www.sec.gov. Copies of the prospectus supplement and the accompanying prospectus
relating to the offering may also be obtained, when available, from the offices of ThinkEquity, 17 State Street, 41st Floor,
New York, New York 10004.
This
press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities
in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction.
About
OmniQ Corp.:
OMNIQ
Corp. provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver
data collection, real-time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking
management, and access control applications. The technology and services provided by the Company help clients move people, assets, and
data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments. OMNIQ’s
customers include government agencies and leading Fortune 500 companies from several sectors, including manufacturing, retail, distribution,
food and beverage, transportation and logistics, healthcare, oil, gas, and chemicals. The Company currently addresses several billion-dollar
markets, including the Global Safe City market, forecast to grow to $67.1 billion by 2028, and the Ticketless Safe Parking market, forecast
to grow to $33.5 billion by 2032 and the fast casual restaurant sector expected to reach $209 billion by 2027.
For
more information please visit www.omniq.com.
Forward
Looking Statements:
“Safe
Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Statements in this press release relating to plans,
strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that
are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
This
release contains “forward-looking statements” that include information relating to future events and future financial and
operating performance. The words “anticipate”, “may,” “would,” “will,” “expect,”
“estimate,” “can,” “believe,” “potential” and similar expressions and variations thereof
are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance
or results and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved.
Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as
of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results
to differ materially from those expressed in or suggested by the forward-looking statements. Examples of forward-looking statements include,
among others, statements made in this press release regarding the closing of the public offering and the use of proceeds received in
the public offering. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for
the Company’s products particularly during the current health crisis, the introduction of new products, the Company’s ability
to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets,
the adequacy of the Company’s liquidity and financial strength to support its growth, the Company’s ability to manage credit
and debt structures from vendors, debt holders and secured lenders, the Company’s ability to successfully integrate its acquisitions,
and other information that may be detailed from time-to-time in OMNIQ Corp.’s filings with the United States Securities and Exchange
Commission. Examples of such forward looking statements in this release include, among others, statements regarding revenue growth, driving
sales, operational and financial initiatives, cost reduction and profitability, and simplification of operations. For a more detailed
description of the risk factors and uncertainties affecting OMNIQ Corp., please refer to the Company’s recent Securities and Exchange
Commission filings, which are available at https://www.sec.gov. OMNIQ Corp. undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law.
Investor
Relations:
IR@omniq.com
Exhibit
99.3
OMNIQ
Corp. Announces Closing of Public Offering
Salt
Lake City, Utah - October 11, 2023 ([Media Company]) – OMNIQ Corp. (Nasdaq: OMQS), a
provider of Artificial Intelligence (AI)-based solutions, today announced the closing of its previously
announced public offering of 3,000,000 shares of its common stock (or Pre-Funded Warrants (“Pre-Funded Warrants”)
in lieu thereof) at a public offering price of $1.00 per share (inclusive of the Pre-Funded
Warrant exercise price), for gross proceeds of approximately $3,000,000, before deducting underwriting
discounts and offering expenses. In addition, OMNIQ Corp. has granted the underwriters a 45-day option to purchase up to an additional
450,000 shares of common stock and/or Pre-Funded Warrants to cover over-allotments, if any,
at the public offering price, less the underwriting discount.
The
Company intends to use the proceeds from the offering for working
capital and general corporate purposes.
ThinkEquity
acted as sole book-running manager for the offering.
The
offering is being made pursuant to an effective shelf registration statement that has been filed with the U.S. Securities and Exchange
Commission (the “SEC”). The final prospectus supplement relating to the offering was filed with the SEC and is available
on the SEC’s website at http://www.sec.gov.
Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained from ThinkEquity,
17 State Street, 41st Floor, New York, New York 10004.
This
press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale
of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or other jurisdiction.
About
OMNIQ Corp.:
OMNIQ
Corp. provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver
data collection, real-time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking
management, and access control applications. The technology and services provided by the Company help clients move people, assets, and
data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments. OMNIQ’s
customers include government agencies and leading Fortune 500 companies from several sectors, including manufacturing, retail, distribution,
food and beverage, transportation and logistics, healthcare, oil, gas, and chemicals. The Company currently addresses several billion-dollar
markets, including the Global Safe City market, forecast to grow to $67.1 billion by 2028, and the Ticketless Safe Parking market, forecast
to grow to $33.5 billion by 2032 and the fast casual restaurant sector expected to reach $209 billion by 2027.
For
more information please visit www.omniq.com.
Forward
Looking Statements:
“Safe
Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Statements in this press release relating to plans,
strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that
are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
This
release contains “forward-looking statements” that include information relating to future events and future financial and
operating performance. The words “anticipate”, “may,” “would,” “will,” “expect,”
“estimate,” “can,” “believe,” “potential” and similar expressions and variations thereof
are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance
or results and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved.
Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as
of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results
to differ materially from those expressed in or suggested by the forward-looking statements. Examples of forward-looking statements include,
among others, statements made in this press release regarding the closing of the public offering and the use of proceeds received in
the public offering. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for
the Company’s products particularly during the current health crisis, the introduction of new products, the Company’s ability
to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets,
the adequacy of the Company’s liquidity and financial strength to support its growth, the Company’s ability to manage credit
and debt structures from vendors, debt holders and secured lenders, the Company’s ability to successfully integrate its acquisitions,
and other information that may be detailed from time-to-time in OMNIQ Corp.’s filings with the United States Securities and Exchange
Commission. Examples of such forward looking statements in this release include, among others, statements regarding revenue growth, driving
sales, operational and financial initiatives, cost reduction and profitability, and simplification of operations. For a more detailed
description of the risk factors and uncertainties affecting OMNIQ Corp., please refer to the Company’s recent Securities and Exchange
Commission filings, which are available at https://www.sec.gov. OMNIQ Corp. undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law.
Investor
Relations:
IR@omniq.com
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