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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 2, 2023 (September 29, 2023)
__________________________
Volcon, Inc.
(Exact Name of Registrant as Specified in its Charter)
__________________________
Delaware |
001-40867 |
84-4882689 |
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(I.R.S. Employer
Identification Number) |
3121
Eagles Nest Street, Suite 120
Round Rock, TX 78665
(Address of principal executive offices and zip
code)
(512) 400-4271
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-14(c)). |
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
Common Stock, par value $0.00001 per share |
|
VLCN |
|
NASDAQ |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01. Entry
into a Material Definitive Agreement.
On
September 29, 2023, Volcon, Inc. (the “Company”) entered into an inducement offer letter agreement (the “Inducement
Letter”) with three holders (each, a “Holder”) of the Company’s existing warrants amended and restated on May
24, 2023 (the “Existing Warrants”). Pursuant to the Inducement Letter, the Company reduced the exercise price for a portion
of the Existing Warrants to $0.35 per share (“Reduced Warrant Exercise Price”). In addition, pursuant to the Inducement Letter,
the Holders who agreed to exercise for cash their Existing Warrants would receive a new warrant (“New Warrant”) to purchase
a number of shares of common stock equal to the number of shares of common stock exercised under the Existing Warrants with an exercise
price of $0.50 per share. The Holders agreed to purchase up to an aggregate of 1,535,000 shares of Company common stock at the Reduced
Warrant Exercise Price under the Existing Warrants in consideration of the Company’s agreement to issue New Warrants to purchase
up to an aggregate of 1,535,000 shares of Company common stock (the “New Warrant Shares”) at an exercise price of $0.50 per
share. The Company received aggregate gross proceeds of approximately $537,250 from the exercise of the Existing Warrants by the Holders.
The New Warrants are identical to the Existing Warrants. The issuance of the New Warrants occurred on September 29, 2023.
The
resale of the shares of common stock underlying the Existing Warrants have been registered pursuant to an existing registration statement
on Form S-1 (File No. 333-272564), declared effective by the Securities and Exchange Commission (the “SEC”) on June 27, 2023.
The forms of the New Warrants
and Inducement Letter are filed as Exhibits 4.1 and 10.1, respectively, to this Current Report on Form 8-K and are incorporated herein
by reference. The description of the terms of the New Warrants and Inducement Letter are not intended to be complete and are qualified
in its entirety by reference to such exhibits. The Inducement Letter contains customary representations, warranties and covenants by the
Company which were made only for the purposes of such agreements and as of specific dates, were solely for the benefit of the parties
to such agreements and may be subject to limitations agreed upon by the contracting parties.
Item 3.02. Unregistered
Sales of Equity Securities.
The
description of the New Warrants under Item 1.01 of this Form 8-K is incorporated by reference herein.
The
Company issued the New Warrants pursuant to the exemption from the registration requirements of the Securities Act available under Section
4(a)(2) and Regulation D issued thereunder. Neither the issuance of the New Warrants nor the New Warrant Shares have been registered under
the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration
under the Securities Act and any applicable state securities laws.
Item 9.01. Financial
Statements and Exhibits.
SIGNATURES
Pursuant to the requirements of
the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
Volcon, Inc. |
|
(Registrant) |
|
|
Date: October 2, 2023 |
/s/ Greg Endo |
|
Greg Endo
Chief Financial Officer |
Exhibit 4.1
[FORM OF WARRANT]
NEITHER THIS SECURITY NOR THE
SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
VOLCON,
INC.
Warrant Shares: _______ |
Initial Exercise Date: September 29,
2023 |
THIS COMMON STOCK PURCHASE WARRANT
(the "Warrant") certifies that, for value received, _____________ or its assigns (the "Holder") is entitled,
upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof
(the "Initial Exercise Date") and on or prior to 5:00 p.m. (New York City time) on August 24, 2027 (the "Termination
Date") but not thereafter, to subscribe for and purchase from Volcon, Inc., a Delaware corporation (the "Company"),
up to [•] shares (as subject to adjustment hereunder, the "Warrant Shares") of Common Stock. The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the "Purchase Agreement"), dated May 19, 2023, among the Company and the purchasers signatory thereto.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any
time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the "Notice of Exercise"). Within
the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section
2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified
in the applicable Notice of Exercise by wire transfer or cashier's check drawn on a United States bank unless the cashless exercise procedure
specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within 5 Trading Days of the date on which the final Notice of Exercise is delivered
to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and
the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of
such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of
this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $0.50, subject to adjustment hereunder
(the "Exercise Price").
c) Cashless Exercise. If at the time of exercise hereof on or after the date that is six (6) months immediately following the
Initial Exercise Date there is no effective registration statement registering, or the prospectus contained therein is not available for
the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of
a "cashless exercise" in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained
by dividing [(A-B) (X)] by (A), where:
(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 2(a) hereof on a Trading Day prior to the opening of "regular trading hours" (as defined in Rule 600(b) of Regulation
NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. ("Bloomberg") as of the time of the Holder's execution of the applicable Notice
of Exercise if such Notice of Exercise is executed during "regular trading hours" on a Trading Day and is delivered within two
(2) hours thereafter (including until two (2) hours after the close of "regular trading hours" on a Trading Day) pursuant to
Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading
Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of "regular trading
hours" on such Trading Day;
(B) = the Exercise
Price of this Warrant, as adjusted hereunder; and
(X) = the number
of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were
by means of a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The
Company agrees not to take any position contrary to this Section 2(c).
"Bid Price"
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted
for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d)
in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the reasonable
fees and expenses of which shall be paid by the Company.
"VWAP"
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the
Company, the reasonable fees and expenses of which shall be paid by the Company.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted
by the Transfer Agent to the Holder by crediting the account of the Holder's or its designee's balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system ("DWAC") if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the resale of the Warrant Shares by the Holder or (B) the Warrant
Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise
of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company's share register in the name of the Holder
or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by
the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of
the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of
Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the "Warrant
Share Delivery Date"). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have
become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery
of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received
within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following
delivery of the Notice of Exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long
as this Warrant remains outstanding and exercisable. As used herein, "Standard Settlement Period" means the standard
settlement period, expressed in a number of Trading Days, on the Company's primary Trading Market with respect to the Common Stock as
in effect on the date of delivery of the Notice of Exercise.
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new
Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise
(a "Buy-In"), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder's total
purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate
sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall
be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder's
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company's failure to timely deliver shares of Common Stock upon exercise of the
Warrant as required pursuant to the terms hereof.
v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and
the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.
The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of
the Warrant Shares.
vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
e) Holder's
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder's Affiliates, and any other Persons acting as
a group together with the Holder or any of the Holder's Affiliates (such Persons, "Attribution Parties")), would beneficially
own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by
the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned
by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the
sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder's determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties)
and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall
have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For
purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company's most recent periodic or annual report filed with the Commission, as the case
may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall
within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number
of outstanding shares of Common Stock was reported. The "Beneficial Ownership Limitation" shall be 4.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise
of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this
Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder
and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective
until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
holder of this Warrant.
Section 3. Certain
Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise
of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way
of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares
of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this
Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the "Purchase Rights"), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the
extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend
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, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or
any Subsidiary), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all
or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding
Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one
or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v)
the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another
Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or
more of the voting power of the common equity of the Company (each a "Fundamental Transaction"), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in
Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration (the "Alternate Consideration") receivable
as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).
For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the
event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder's or the Successor Entity's
option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later,
the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the
Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the
date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not
within the Company's control, including not approved by the Company's Board of Directors, the Holder shall only be entitled to receive
from the Company or any Successor Entity, upon or following the date of consummation of such Fundamental Transaction, the same type or
form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being
offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration
be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from
among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders
of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock
will be deemed to have received common stock of the Successor Entity (which Entity may be the Company following such Fundamental Transaction)
in such Fundamental Transaction. "Black Scholes Value" means the value of this Warrant based on the Black-Scholes Option
Pricing Model obtained from the "OV" function on Bloomberg determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal
to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date,
(B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated
Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price
per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction
and (ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the public announcement of the applicable
contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading
Day of the earlier of the Holder's or the Successor Entity's request pursuant to this Section 3(d) and (D) a remaining option time equal
to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date
and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or
such other consideration) within the later of (i) five Business Days of the earlier of the Holder's or the Successor Entity's election
and (ii) the date of consummation of the Fundamental Transaction. Unless the Holder or the Successor
Entity has elected for this Warrant to be purchased for its Black Scholes Value on or prior to the consummation of a Fundamental Transaction
as contemplated hereby, the Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the "Successor Entity") to assume in writing all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at
the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares
of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall succeed and be substituted for the term "Company" under this
Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant
and the other Transaction Documents referring to the "Company" shall refer instead to each of the Successor Entity or Successor
Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally, may exercise every right and
power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior
thereto under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity or Successor Entities,
jointly and severally, had been named as the Company herein.
e) Adjustment Upon Issuance of Shares of Common Stock. If, at any time from and after the Nasdaq Stockholder Approval Date
and while this Warrant is outstanding (the "Adjustment Period"), the Company issues or sells, or, in accordance with
this Section 3(e), is deemed to have issued or sold, any shares of Common Stock (excluding any Excluded Securities (as defined below)
issued or sold or deemed to have been issued or sold) for a consideration per share (the "New Issuance Price") less than
a price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (such Exercise Price
then in effect is referred to as the "Applicable Price") (the foregoing a "Dilutive Issuance"), then
immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the greater of (i)
the New Issuance Price and (ii) the applicable Floor Price. "Excluded Securities" means any issuance of Common Stock,
restricted stock units, Options and/or Convertible Securities (each as defined in the Notes) (i) under the Company's current or future
equity incentive plans or issued to employees, consultants, service providers, directors or officers as compensation or consideration
in the ordinary course of business, including any issuance of Options (and the underlying shares of Common Stock) in exchange for Options
issued under the Company's equity incentive plans; provided, that the issuances to consultants and service providers shall be limited
to Common Stock and Options and the aggregate number of shares of Common Stock issued, and/or issuable upon exercise of Options, shall
not exceed 1,000,000 shares (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction
relating to the Common Stock after the Amendment and Exchange Date), in any twelve month period, (ii) issued pursuant to agreements, Options,
restricted stock units, Convertible Securities or Adjustment Rights (as defined below) existing as of the date hereof, provided that such
agreements, Options, Convertible Securities or Adjustment Rights have not been amended since the initial issuance date of this Warrant
to increase the number of such securities or decrease the exercise price, exchange price or conversion price of such securities, (iii)
issued pursuant to acquisitions (whether by merger, consolidation, purchase of equity, purchase of assets, reorganization or otherwise),
mergers, consolidations, reorganizations or strategic transactions approved by a majority of the disinterested directors of the Company,
provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its Subsidiaries,
an operating company or an owner of an asset in a business complementary with the business of the Company and shall provide to the Company
additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, or (iv) to which the Holder
consents in writing. "Adjustment Right" means any right granted with respect to any securities issued in connection with,
or with respect to, any issuance or sale (or deemed issuance or sale in accordance with this Section 3(e)) of Common Stock (other than
rights of the type described in Sections 3(a) and (b)) that could result in a decrease in the net consideration received by the Company
in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or
other similar rights). "Floor Price" means, (i) prior to the Nasdaq Stockholder Approval Date, $0.22. For all purposes
of the foregoing, the following shall be applicable:
i. Issuance
of Options. If, during the Adjustment Period, the Company in any manner grants or sells any Options (other than Excluded Securities)
and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option (such shares of Common Stock issuable upon
such exercise of any Option or upon conversion, exercise or exchange of any Convertible Securities, the "Convertible Securities
Shares") is less than the Applicable Price, then such Common Stock shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 3(e)(i),
the "lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option" shall be equal to (A) the sum of (1)
the lowest amount of consideration (if any) received or receivable by the Company (without duplication) with respect to the granting or
sale of such Option (relating to one Convertible Securities Share) or with respect to any one Convertible Securities Share upon the granting
or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon
exercise of such Option and (2) the lowest exercise price set forth in such Option for which one Convertible Securities Share is issuable
upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of
any such Option, minus (B) the sum of all amounts paid or payable to the holder of such Option (or any other Person), with respect to
any one Convertible Securities Share, upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise
or exchange of any Convertible Security issuable upon exercise of such Option plus the value of any other consideration received or receivable
by, or benefit conferred on, the holder of such Option (or any other Person), with respect to any one Convertible Securities Share. Except
as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible Securities
Share or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such Convertible Securities Share
upon conversion, exercise or exchange of such Convertible Securities.
ii. Issuance
of Convertible Securities. If, during the Adjustment Period, the Company in any manner issues or sells any Convertible Securities
(other than Excluded Securities) and the lowest price per share for which one Convertible Securities Share is issuable upon the conversion,
exercise or exchange thereof is less than the Applicable Price, then such Convertible Securities Share shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per
share. For the purposes of this Section 3(e)(ii), the "lowest price per share for which one Convertible Securities Share is issuable
upon the conversion, exercise or exchange thereof" shall be equal to (A) the sum of (1) the lowest amount of consideration (if any)
received or receivable by the Company (without duplication) with respect to the issuance or sale of such Convertible Security (relating
to one Convertible Securities Share) or with respect to one Convertible Securities Share upon the issuance or sale of the Convertible
Security and upon conversion, exercise or exchange of such Convertible Security and (2) the lowest conversion price set forth in such
Convertible Security for which one Convertible Securities Share is issuable upon conversion, exercise or exchange thereof, minus (B) the
sum of all amounts paid or payable to the holder of such Convertible Security (or any other Person), with respect to any one Convertible
Securities Share, upon the issuance or sale of such Convertible Security plus the value of any other consideration received or receivable
by, or benefit conferred on, the holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities
Share. Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible
Securities Share upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustment of the Exercise Price has been or is to be made pursuant to other
provisions of this Section 3(e), except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of
such issue or sale.
iii. Change
in Option Price or Rate of Conversion. If, during the Adjustment Period, the purchase or exercise price provided for in any Options,
the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate
at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases
at any time, the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would
have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes
of this Section 3(e)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance of this
Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security
and the Convertible Securities Shares deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued
as of the date of such increase or decrease. No adjustment pursuant to this Section 3(e) shall be made if such adjustment would result
in an increase of the Exercise Price then in effect.
iv. Calculation
of Consideration Received. If any Option or Convertible Security is issued in connection with the issuance or sale or deemed issuance
or sale of any other securities of the Company (the "Primary Security", and such Option or Convertible Security, the
"Secondary Securities" and together with the Primary Security, each a "Unit"), together comprising one
integrated transaction, the aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to
be the lowest of (x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security, the lowest
price per share for which one share of Common Stock is at any time issuable upon the exercise or conversion of the Primary Security in
accordance with Section 3(e)(i) or 3(e)(ii) above and (z) arithmetic average of the VWAPs of the Common Stock during the five Trading
Day period immediately following the public announcement of such Dilutive Issuance (for the avoidance of doubt, if such public announcement
is released prior to the opening of the Principal Market on a Trading Day, such Trading Day shall be the first Trading Day in such five
Trading Day period). If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor will be deemed to be the net amount of cash received by the Company therefor. If
any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such
consideration received by the Company will be the fair value of such consideration, except where such consideration consists of publicly
traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average
of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common
Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the
Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair market value of such portion of the
net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities
(as the case may be). The fair market value of any consideration other than cash or publicly traded securities will be determined jointly
by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring
valuation (the "Valuation Event"), the fair market value of such consideration will be determined within five (5) Trading
Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company
and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and
expenses of such appraiser shall be borne by the Company.
v. Record
Date. If, during the Adjustment Period, the Company takes a record of the holders of the Common Stock for the purpose of entitling
them (A) to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities or (B) to subscribe
for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issue or sale of shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or purchase (as the case may be).
vi. Floor
Price. Notwithstanding anything to the contrary contained herein, if one or more Dilutive Issuances occurred prior to the Nasdaq Stockholder
Approval Date and the adjustment pursuant to this Section 3(e) was limited by clause (i) of the definition of Floor Price, once the Stockholder
Approval is obtained, the Exercise Price will automatically and retroactively be reduced to equal the greater of (x) the New Issuance
Price and (y) and the price determined by reference to clause (ii) of the definition of Floor Price.
vii. No
Adjustment to Warrant Shares. For the avoidance of doubt, in no event shall the operation of this Section 3(e) result in any adjustment
to the number of Warrant Shares hereunder.
f) Stock
Combination Event Adjustment. In addition to the adjustments set forth in Section 3(a) above, if at any time and from time to time
on or after the Amendment and Restatement Date there occurs any stock split, reverse stock split, stock dividend, stock combination,
recapitalization or other similar transaction involving the Common Stock (each, a "Stock Combination Event", and such
date thereof, the "Stock Combination Event Date") and the lowest VWAP of the Common Stock (the "Event Market
Price") during the 5 consecutive Trading Days commencing on the Stock Combination Event Date (such period, the "Stock
Combination Adjustment Period" provided if the Stock Combination Event is effective after close of trading on the Principal
Market (or other Eligible Market on which the Common Stock is then listed for trading), the Stock Combination Adjustment Period shall
then commence on the immediately following Trading Day) is less than the Exercise Price then in effect (after giving effect to the adjustment
in Section 3(a) above), then at the close of trading on the Principal Market (or other Eligible Market on which the Common Stock is then
listed for trading) on the last day of the Stock Combination Adjustment Period, the Exercise Price then in effect on such 5th Trading
Day shall be reduced (but in no event increased) to the greater of (i) the Event Market Price and (ii) the applicable Floor Price. For
the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase in the Exercise
Price hereunder, no adjustment shall be made, and if the Holder delivers a Notice of Exercise during the Stock Combination Adjustment
Period, solely with respect to such portion of this Warrant exercised on such applicable exercise date, such applicable Stock Combination
Adjustment Period shall be deemed to have ended on, and included, the Trading Day immediately prior to such exercise date and the Event
Market Price on such applicable exercise date will be the lowest VWAP of the Common Stock immediately prior to the Stock Combination
Event Date and ending on, and including the Trading Day immediately prior to such exercise date. Notwithstanding anything to the contrary
contained herein, if one or more Stock Combination Events occurred prior to the Nasdaq Stockholder Approval Date and the adjustment pursuant
to this Section 3(f) was limited by clause (i) of the definition of Floor Price, upon the Nasdaq Stockholder Approval Date, the Exercise
Price will automatically and retroactively be reduced to equal the greater of (x) the Event Market Price and (y) and the price determined
by reference to clause (ii) of the definition of Floor Price.
g) 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.
h) 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 email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any
sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into
other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its email address
as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such
notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
i) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market on which the Common Stock is
then listed, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, which shall
not unreasonably be withheld, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the
board of directors of the Company.
Section 4. Transfer
of Warrant.
a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d)
hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company
or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by
the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee
or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days
of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned
in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and
shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the "Warrant Register"), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant,
the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act
and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current
public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder
or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.
e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to
or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a "cashless exercise" pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a 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 Purchase 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 Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by
the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices. Any 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 Purchase 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; provided, that the provisions of Section 2(e) of this Warrant may not be amended, modified or waived.
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.
volcon, INC.
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By: __________________________________________
Name:
Title:
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NOTICE OF EXERCISE
To: volcon,
INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.
(2)
Payment shall take the form of (check applicable box):
[ ] in lawful money
of the United States; or
[ ] if permitted the
cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise
this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in
subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following
DWAC Account Number:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor.
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: _______________________________________________________________________________________
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this
form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to
Name: |
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Address: |
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(Please Print)
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Phone Number: |
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Email Address: |
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Dated: _______________ __, ______ |
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Holder's Signature: |
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Exhibit 10.2
VOLCON, INC.
September 29, 2023
Holder of Common Stock Purchase Warrant
Re: Inducement
Offer to Exercise Common Stock Purchase Warrants
Dear Holder:
Volcon, Inc. (the “Company”)
is pleased to offer to you the opportunity to exercise ______ of the Amended and Restated Common Stock Purchase Warrants set forth on
the signature page hereto (the “Applicable Warrants”) currently held by you (the “Holder”). The
Applicable Warrants and the shares underlying the Applicable Warrants (“Warrant Shares”) have been registered for resale
pursuant to registration statement Form S-1 (File No. 333-272564) (the “Registration Statement”). The Registration
Statement is currently effective and, upon exercise of the Applicable Warrants pursuant to this letter agreement, will be effective for
the issuance or sale, as the case may be, of the Warrant Shares. Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Applicable Warrants.
In consideration for exercising
______of the Applicable Warrants held by you and as set forth on the signature page hereto (the “Warrant Exercise”)
at an exercise price of $0.35 per share, the Company hereby offers to issue you or your designee a new Common Stock Purchase Warrant (“New
Warrant”) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”) to purchase
up to a number of shares of Common Stock (“New Warrant Shares”) equal to 100% of the maximum number of Warrant
Shares issued pursuant to the Warrant Exercise hereunder, which New Warrant shall be in the form attached hereto as Annex B. The original
New Warrant certificate(s) will be delivered within three Business Days following the date hereof.
Expressly subject to the paragraph
immediately preceding this paragraph, Holder may accept this offer by signing this letter below, with such acceptance constituting Holder's
exercise of the Applicable Warrants for an aggregate exercise price set forth on the Holder’s signature page hereto (the “Warrants
Exercise Price”). By acceptance of this offer, Holder agrees that the reduction of the exercise price of the Applicable Warrants
and the issuance of the New Warrant shall not be deemed to be a Dilutive Issuance pursuant to the notes and warrants issued to Holder
or amended and restated, on May 24, 2023.
Additionally, the Company agrees
to the representations, warranties and covenants set forth on Annex A attached hereto. Holder represents and warrants that it
is an “accredited investor” as defined in Rule 501 of the Securities Act, and agrees that the New Warrants will contain restrictive
legends when issued, and neither the New Warrants nor the shares of Common Stock issuable upon exercise of the New Warrants will be registered
under the Securities Act, except in the discretion of the Company.
The Holder understands that the New Warrants and the shares of Common
Stock underlying New Warrants are not, and may never be, registered under the Securities Act, or the securities laws of any state and,
accordingly, each certificate, if any, representing such securities shall bear a legend substantially similar to the following:
“NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH
THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.”
Certificates evidencing shares of Common Stock
underlying the New Warrants shall not contain any legend (including the legend set forth above), (i) while a registration statement covering
the resale of such Common Stock is effective under the Securities Act, (ii) following any sale of such Common Stock pursuant to Rule
144 under the Securities Act (assuming cashless exercise of the New Warrants), (iii) if such Common Stock may be sold under Rule 144
(assuming cashless exercise of the New Warrants) and the Company is then in compliance with the current public information required under
Rule 144 as to such Common Stock, or (iv) if such legend is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the Securities and Exchange Commission (the “Commission”)
and the earliest of clauses (i) through (iv), the “Delegend Date”)). The Company shall cause its counsel to issue
a legal opinion to the transfer agent promptly after the Delegend Date if required by the Company and/or the transfer agent to effect
the removal of the legend hereunder or if requested by the Holder, which opinion shall be in form and substance reasonably acceptable
to the Holder. Upon the occurrence of any of the events set forth in any of clauses (i) through (iv) above, upon the exercise of the
New Warrants, then the New Warrant Shares shall be issued free of all legends. The Company agrees that following the Delegend Date or
at such time as such legend is no longer required under this Section, it will, no later than the earlier of (i) two (2) Trading Days
and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case following the delivery by the Holder to the
Company or the transfer agent of a certificate representing the Common Stock underlying the New Warrants issued with a restrictive legend
(such second Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to the Holder a certificate
representing such shares that is free from all restrictive and other legends or, at the request of the Holder shall credit the account
of the Holder’s prime broker with the Depository Trust Company System as directed by the Holder. 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 a certificate representing Underlying Shares,
as applicable, issued with a restrictive legend. In addition to the Holder’s other available remedies, the Company shall
pay to a Holder, in cash, (i) as partial liquidated damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based
on the VWAP of the Common Stock on the date such Warrant Shares are submitted to the Transfer Agent) delivered for removal of the restrictive
legend, $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each
Trading Day after the Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue
and deliver (or cause to be delivered) to the Holder by the Legend Removal Date a certificate representing the Securities so delivered
to the Company by the Holder that is free from all restrictive and other legends and (b) if after the Legend Removal Date the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all
or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of
the number of shares of Common Stock that the Holder anticipated receiving from the Company without any restrictive legend, then, an
amount equal to the excess of the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses,
if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In
Price”) over the product of (A) such number of Warrant Shares that the Company was required to deliver to the Holder by
the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing
on the date of the delivery by the Holder to the Company of the applicable Warrant Shares (as the case may be) and ending on the date
of such delivery and payment under this clause (ii).
On or before 9:15 am ET on October
2, 2023, the Company shall file a Current Report on Form 8-K with the SEC disclosing all material terms of the transactions contemplated
hereunder. The Company represents, warrants and covenants that, upon acceptance of this offer, the shares underlying the Applicable Warrants
shall be issued free of any legends or restrictions on resale by Holder and all of the Warrant Shares shall be delivered electronically
through the Depository Trust Company within 1 Business Day of the date the Company receives the Warrants Exercise Price (or, with respect
to Warrant Shares that would otherwise be in excess of the Beneficial Ownership Limitation, within 2 Business Days of the date the Company
is notified by Holder that its ownership is less than the Beneficial Ownership Limitation). The terms of the Applicable Warrants, including
but not limited to the obligations to deliver the Warrant Shares, shall otherwise remain in effect as if the acceptance of this offer
were a formal Notice of Exercise (including but not limited to any liquidated damages and compensation in the event of late delivery of
the Warrant Shares).
***************
Within one business day from the
Holder’s execution of this letter, the Holder shall make available for wire to the Company immediately available funds equal to
the number of Applicable Warrants being exercised multiplied by $0.35 and the Company shall deliver the Warrant Shares via DWAC to the
Holder and shall deliver the New Warrants registered in the name of the Holder.
To accept this offer, Holder must
counter execute this letter agreement and return the fully executed agreement to the Company by e-mail at: greg@volcon.com.
Please do not hesitate to call
me if you have any questions.
Sincerely yours,
VOLCON, INC.
By: _______________________
Name:
Title:
Accepted and Agreed to:
Name of Holder: ______________________________
Signature of Authorized Signatory of Holder:
_________________________________
Name of Authorized Signatory: ____________________________________________
Title of Authorized Signatory: _________________________________
Applicable
Warrant Shares: _________________________________
Aggregate
Exercise Price: _________________________________
New
Warrants: _________________________________
DWAC Instructions:
Annex A
Representations, Warranties
and Covenants of the Company. The Company hereby makes the following representations and warranties to the Holder:
(a)
Affirmation of Prior Representations, Warranties and Covenants. The Company hereby represents and warrants to the Holder
that the Company’s representations and warranties as set forth in Article III and the Company’s covenants listed in Article
IV of that certain Securities Purchase Agreement, dated August 22, 2022, between the Company and the investors listed thereto (the “SPA”),
together with any updates in the Company’s public reports filed with the SEC subsequent to the SPA, are true and correct as of the
date hereof and have been fully performed as of the date hereof.
(b)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this letter agreement and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this letter agreement by the Company and the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of
directors or its stockholders in connection therewith. This letter agreement has been duly executed by the Company and, when delivered
in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
(c)
No Conflicts. The execution, delivery and performance of this letter agreement by the Company and the consummation by the
Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or charter documents; or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any liens,
claims, security interests, other encumbrances or defects upon any of the properties or assets of the Company in connection with, or give
to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material
agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other material understanding to
which such Company is a party or by which any property or asset of the Company is bound or affected; or (iii) conflict with or result
in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the
Company is bound or affected, except, in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected
to result in a material adverse effect upon the business, prospects, properties, operations, condition (financial or otherwise) or results
of operations of the Company, taken as a whole, or in its ability to perform its obligations under this letter agreement.
(d)
Nasdaq Corporate Governance. The transactions contemplated under this letter agreement, comply with all rules of the Nasdaq
Capital Market.
ANNEX B
FORM OF NEW WARRANT
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