As
filed with the Securities and Exchange Commission on January 14, 2025
Registration
Statement No. 333-284052
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
Amendment
No. 1
to
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
Hepion
Pharmaceuticals, Inc.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
2834 |
|
46-2783806 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(Primary
Standard Industrial
Classification
Code Number) |
|
(I.R.S.
Employer
Identification
Number) |
c/o
Clementi Associates
919
Conestoga Road
Building
3, Suite 115
Rosemont,
PA 19010
(973)
214-3273
(Address
and telephone number of registrant’s principal executive offices)
John
Brancaccio
Interim
Chief Executive Officer
Hepion
Pharmaceuticals, Inc.
c/o
Clementi Associates
919
Conestoga Road
Building
3, Suite 115
Rosemont,
PA 19010
(973)
214-3273
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
| Jeffrey
J. Fessler, Esq. |
Ron
Ben-Bassat, Esq. |
| Seth
A. Lemings, Esq. |
Eric
Victorson, Esq. |
| Sheppard,
Mullin, Richter & Hampton LLP |
Sullivan
& Worcester LLP |
| 30
Rockefeller Plaza |
1251
Avenue of the Americas |
| New
York, NY 10112 |
New
York, NY 10020 |
| Tel:
(212) 653-8700 |
Phone:
(212) 660-5003 |
| Fax:
(212) 653-8701 |
|
Approximate
date of commencement of proposed sale to the public:
As
soon as practicable after the effective date of this registration statement becomes effective.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box: ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large
accelerated filer ☐ |
|
Accelerated
filer ☐ |
|
Non-accelerated
filer ☒ |
|
Smaller
reporting company ☒ |
| |
|
|
|
|
|
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 to Section 7(a)(2)(B) of the Securities Act. ☐
The
registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933, or until the Registration Statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may determine.
The
information in this preliminary prospectus is not complete and may be changed. We may not sell these securities nor may we accept
offers to buy these securities pursuant to this preliminary prospectus until the registration statement filed with the Securities
and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer
to buy these securities in any state or jurisdiction where the offer or sale is not permitted.
|
PRELIMINARY
PROSPECTUS |
Subject
to Completion, Dated January 14, 2025 |
|
Hepion
Pharmaceuticals, Inc.
Up
to 14,285,714 Shares of Common Stock
Up
to 14,285,714 Pre-Funded Warrants to Purchase 14,285,714 Shares of Common Stock
Up
to 14,285,714 Series A Warrants to Purchase up to 14,285,714 Shares of Common Stock
Up
to 14,285,714 Series B Warrants to Purchase up to 14,285,714 Shares of Common Stock
Up
to 42,857,142 Shares of Common Stock Underlying the Pre-Funded Warrants, Series A Warrants and Series B Warrants
This
is a reasonable best efforts offering of up to 14,285,714
shares of our common stock, $0.0001 par value per share (“Common Stock”), together with Series A common stock purchase
warrants to purchase up to 14,285,714 shares of Common Stock (“Series A Warrants”) and Series B common stock purchase
warrants to purchase up to 14,285,714 shares of Common Stock (“Series B Warrants” and together with the Series A Warrants,
the “Common Warrants”). Each share of our Common Stock or a Pre-Funded Warrant (as defined below) in lieu thereof, is being
sold together with a Series A Warrant to purchase one share of our Common Stock and a Series B Warrant to purchase one share of Common
Stock. The shares of Common Stock and Common Warrants are immediately separable and will be issued separately in this offering, but must
be purchased together in this offering. The assumed combined public offering price for each share of Common Stock and accompanying Common
Warrants is $0.56, which was the closing price of our Common Stock on The Nasdaq Capital Market on January 8, 2025. Each
Series A Warrant will have an exercise price of $ per share of Common Stock and will be exercisable
beginning on the date on which Stockholder Approval (as defined below) is received and deemed effective (the “Initial Exercise
Date” or the “Stockholder Approval Date”). Each Series B Warrant will have an exercise price of $
per share of Common Stock and will be exercisable on the Initial Exercise Date. The Series A Warrants will expire on the five year
anniversary of the Initial Exercise Date and the Series B Warrants will expire on the two and one-half anniversary of the Initial Exercise
Date.
Because
a purchaser’s purchase of shares of Common Stock in this offering could otherwise result in the purchaser, together with its affiliates
and certain related parties, beneficially owning more than 4.99% (or at the election of the purchaser, 9.99%) of our outstanding Common
Stock immediately following consummation of this offering, we are offering to the purchasers pre-funded warrants to purchase up to 14,285,714
shares of Common Stock (the “Pre-Funded Warrants”) in lieu of shares of Common Stock. Each Pre-Funded Warrant will be
exercisable for one share of our Common Stock. The purchase price of each Pre-Funded Warrant is $ ,
which is equal to the price per share at which the shares of Common Stock are being sold to the public in this offering, minus $0.0001
per share, and the exercise price of each Pre-Funded Warrant will be $0.0001 per share. For each Pre-Funded Warrant that we sell, the
number of shares of our Common Stock offered will be decreased on a one-for-one basis. This offering also relates to the shares of Common
Stock issuable upon exercise of the Common Warrants (the “Common Warrant Shares”), and the shares of Common Stock issuable
upon exercise of the Pre-Funded Warrants (the “Pre-Funded Warrant Shares”).
The
issuance of Common Warrant Shares upon exercise of the Common Warrants is subject to stockholder approval under applicable rules and
regulations of The Nasdaq Stock Market LLC (“Nasdaq”) (“Stockholder Approval” and the date on which Stockholder
Approval is received and deemed effective, the “Stockholder Approval Date”). We intend to hold a meeting to obtain Stockholder
Approval as soon as reasonably practicable following the closing of this offering.
Our
Common Stock is listed for trading on the Nasdaq Capital
Market under the symbol “HEPA”. The last reported sale price of our Common Stock on the Nasdaq Capital Market on January
8, 2025 was $0.56 per share. All share, Common Warrant and Pre-Funded Warrant numbers are based on an assumed combined public
offering price of $0.56 per share and the accompanying Common Warrants and $0.01 per Pre-Funded Warrant and the accompanying
Common Warrants, based on the closing price of the Company’s Common Stock on January 8, 2025 as reported on the Nasdaq Capital
Market. The actual combined public offering price per share of Common Stock and accompanying Common Warrants, and per Pre-Funded Warrant
and accompanying Common Warrants, will be fixed for the duration of this offering and will be determined between us and the purchasers
based on market conditions at the time of pricing, and may be at a discount to the then current market price of our Common Stock. The
recent market price used throughout this prospectus may not be indicative of the actual combined public offering price. The actual combined
public offering price may be based upon a number of factors, including our history and our prospects, the industry in which we operate,
our past and present operating results, the previous experience of our executive officers and the general condition of the securities
markets at the time of this offering. There is no established public trading market for the Common Warrants or Pre-Funded Warrants, and
we do not expect a market for the Common Warrants or the Pre-Funded Warrants to develop. We do not intend to list the Common Warrants
or Pre-Funded Warrants on the Nasdaq Capital Market, any other national securities exchange or any other trading system. Without an active
trading market, the liquidity of the Common Warrants and the Pre-Funded Warrants will be limited. We anticipate that the shares of our
Common Stock to be issued upon exercise of the Common Warrants and the Pre- Funded Warrants will trade on The Nasdaq Capital Market.
We
have engaged Laidlaw & Company (UK) Ltd. (the “Placement Agent”) to act as the placement agent in connection with this
offering. The Placement Agent has agreed to use its reasonable best efforts to arrange for the sale of the securities offered by this
prospectus. The Placement Agent is not purchasing or selling any of the securities we are offering and the Placement Agent is not required
to arrange the purchase or sale of any specific number or dollar amount of securities. There is no required minimum number of securities
that must be sold as a condition to closing this offering, and there are no arrangements to place the funds in an escrow, trust,
or similar account. We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds
received by us, and investors in this offering will not receive a refund if we do not sell all of the securities offered hereby. This
offering will terminate on January 31, 2025, unless we decide to terminate the offering (which we may do at any time in our discretion)
prior to that date. We will have one closing for all the securities purchased in this offering. We have agreed to pay the Placement Agent
the Placement Agent fees as set forth in the table below, which assumes we sell all of the securities offered by this prospectus. See
“Plan of Distribution” on page 21 of this prospectus for more information regarding these arrangements.
INVESTING
IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES IN THE SECTION ENTITLED “RISK
FACTORS” BEGINNING ON PAGE 5 OF THIS PROSPECTUS AND IN THE OTHER DOCUMENTS THAT ARE INCORPORATED BY REFERENCE BEFORE PURCHASING
ANY OF THE SECURITIES OFFERED BY THIS PROSPECTUS.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
| | |
Per
Share of Common Stock and Accompanying Common Warrants | | |
Per
Pre-Funded Warrant and Accompanying Common Warrants | | |
Total | |
| Public offering price | |
$ | | | |
$ | | | |
$ | | |
| Placement Agent Fees(1) | |
$ | | | |
$ | | | |
$ | | |
| Proceeds to us, before expenses(2)
(3) | |
$ | | | |
$ | | | |
$ | | |
| (1) |
We
have agreed to pay the Placement Agent a cash fee equal to 8% of the aggregate gross proceeds raised in this offering. We have also
agreed to pay the Placement Agent a non-accountable expense allowance of up to $10,000 and to reimburse the Placement Agent for certain
of its offering related expenses, including reimbursement for reasonable and documented out-of-pocket accountable legal fees in the
amount of up to $75,000. For a description of the compensation to be received by the Placement Agent, see “Plan of Distribution”
starting on page 21 for more information. |
| |
|
| (2) |
Because
there is no minimum number of securities or amount of proceeds required as a condition to closing in this offering, the actual public
offering amount, Placement Agent fees, and proceeds to us, if any, are not presently determinable and may be substantially less than
the total maximum offering amounts set forth above. For more information, see “Plan of Distribution.” |
| |
|
| (3) |
The
amount of offering proceeds to us presented in this table does not give effect to any exercise of the Common Warrants or the Pre-Funded
Warrants. |
The
delivery to purchasers of the securities against payment is expected to be made on or about
[ ], 2025, subject to satisfaction of customary closing conditions.
Sole
placement agent
LAIDLAW
& COMPANY (UK) LTD.
The
date of this prospectus is , 2025
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we have filed with the SEC. You should rely only on the information contained in
this prospectus or any related prospectus supplement. We have not authorized anyone to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it. The information contained in this prospectus is accurate
only on the date of this prospectus. Our business, financial condition, results of operations and prospects may have changed since such
date. Other than as required under the federal securities laws, we undertake no obligation to publicly update or revise such information,
whether as a result of new information, future events or any other reason. This prospectus contains summaries of certain provisions contained
in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries
are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be
filed, or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may
obtain copies of those documents as described below under “Where You Can Find More Information.”
We
have not, and the Placement Agent has not, authorized anyone to provide any information or to make any representations other than those
contained in this prospectus or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We
take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The
information contained in this prospectus or contained in any applicable free writing prospectus is current only as of its date, regardless
of its time of delivery or any sale of our securities. Our business, financial condition, results of operations and prospects may have
changed since that date.
This
prospectus does not constitute an offer to sell or the solicitation of an offer to buy any of our securities other than the securities
covered hereby, nor does this prospectus constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction
to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. Persons who come into possession of this
prospectus in jurisdictions outside the United States are required to inform themselves about, and to observe, any restrictions as to
the offering and the distribution of this prospectus applicable to those jurisdictions.
This
prospectus and the information incorporated by reference herein and therein contains references to trademarks, trade names and service
marks belonging to us or other entities. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus
may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable owner will
not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display
of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us
by, any other companies. All trademarks, trade names, and service marks included or incorporated by reference into this prospectus are
the property of their respective owners.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements, which reflect the views of our management with respect to future events and financial
performance. We make such forward-looking statements pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are subject
to a number of uncertainties and other factors that could cause actual results to differ materially from such statements. Forward-looking
statements are identified by words such as “anticipates,” “believes,” “estimates,” “expects,”
“intends,” “plans,” “projects,” “targets,” and similar expressions. Such forward-looking
statements may be contained in the sections “Risk Factors,” and “Business,” among other places in this prospectus.
Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on the information available to
management at this time and which speak only as of this date. We undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. For a discussion of some of the factors that may cause actual results
to differ materially from those suggested by the forward-looking statements, please read carefully the information under “Risk
Factors.”
The
identification in this document of factors that may affect future performance and the accuracy of forward-looking statements is meant
to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent
uncertainty. You may rely only on the information contained in this prospectus.
We
have not authorized anyone to provide information different from that contained in this prospectus. Neither the delivery of this prospectus
nor the sale of our common stock means that information contained in this prospectus is correct after the date of this prospectus. This
prospectus is not an offer to sell or solicitation of an offer to buy these securities in any circumstances under which the offer or
solicitation is unlawful.
PROSPECTUS
SUMMARY
The
following summary highlights certain of the information contained elsewhere in or incorporated by reference into this prospectus. Because
this is only a summary, however, it does not contain all the information you should consider before investing in our securities and it
is qualified in its entirety by, and should be read in conjunction with, the more detailed information included elsewhere in or incorporated
by reference into this prospectus. Before you make an investment decision, you should read this entire prospectus carefully, including
the risks of investing in our securities discussed under the section of this prospectus entitled “Risk Factors” and similar
headings in the other documents that are incorporated by reference into this prospectus. You should also carefully read the information
incorporated by reference into this prospectus, including our financial statements, and the exhibits to the registration statement of
which this prospectus is a part.
Unless
the context otherwise requires, references to “we,” “our,” “us,” “Hepion” or the “Company”
in this prospectus mean Hepion Pharmaceuticals, Inc.
Business
Overview
We
are a biopharmaceutical company headquartered in Edison, New Jersey, focused on the development of drug therapy for treatment of chronic
liver diseases. This therapeutic approach targets fibrosis, inflammation, and shows potential for the treatment of hepatocellular carcinoma
associated with non-alcoholic steatohepatitis (“NASH”), viral hepatitis, and other liver diseases. Our cyclophilin inhibitor,
rencofilstat (formerly CRV431), was being developed to offer benefits to address multiple complex pathologies related to the progression
of liver disease.
In
December 2023, our board of directors approved a strategic restructuring plan to preserve capital by reducing operating costs. We incurred
a one-time restructuring charge of approximately $0.7 million in the fourth quarter of 2023. Additionally, we have initiated a process
to explore a range of strategic and financing alternatives focused on maximizing stockholder value within the current financial environment
and NASH drug development landscape. On April 19, 2024, we announced that we have begun wind-down activities in our ASCEND- NASH clinical
trial. We did not have access to sufficient funding to complete the study, as designed. The wind-down activities were implemented to
halt further clinical activities other than those which would allow for an orderly and patient safety manner that would meet the minimum
FDA requirements for safely closing a clinical trial. All clinical trial activities were completed
and the trial was closed in August 2024.
Recent
Developments
Merger
and Financing Transaction
As
previously disclosed on July 19, 2024, Hepion, Pharma Two B Ltd., a company organized under the laws of the State of Israel (“Parent”),
and Pearl Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent (“Merger Sub”), entered
into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, among other things, on the terms and subject
to the conditions set forth therein, Merger Sub was to merge with and into Hepion (the “Merger”), with Hepion surviving the
Merger as an indirect wholly owned subsidiary of Parent.
Concurrently
with the Merger, on July 19, 2024, we entered into a Securities Purchase Agreement (the “SPA”) with certain purchasers pursuant
to which we sold an aggregate of $2.9 million in principal amount of our Original Issue Discount Senior Unsecured Nonconvertible Notes
(the “Notes”). The Notes were due on the earlier of: (i) December 31, 2024, (ii) the date of the closing of the Merger, (iii)
the date that the Merger was terminated pursuant to the terms of the Merger Agreement, or (iv) such earlier date as the Notes were required
or permitted to be repaid as provided in the Notes, as may be extended at the option of the holders of the Notes as described in the
Notes.
Pursuant
to the SPA, we delivered to each purchaser (i) a Note with a principal amount equal to such purchaser’s subscription amount multiplied
by 1.16, and (ii) a number of shares of Common Stock equal to 19.99% of the total outstanding shares of Common Stock, multiplied by such
purchaser’s subscription amount, divided by $2,500,000.
On
December 10, 2024, Parent informed us that Nasdaq would not exclude historical losses of Hepion from its burn rate calculation and
as a result on December 10, 2024, Hepion, Pharma Two B and Merger Sub entered into an agreement to terminate the Merger Agreement
(the “Termination Agreement”). Pursuant to the Termination Agreement, the Merger Agreement was terminated and the Notes
became due and payable. We intend on paying the principal amount of the Notes and accrued interest in the amount of approximately $24,000 through December 31, 2024
with a portion of the net proceeds from this offering.
Nasdaq
Listing Status
On
September 3, 2024, we received written notice from Nasdaq indicating that the bid price for our Common Stock for the last 30
consecutive business days, had closed below the minimum $1.00 per share and, as a result, we were not in compliance with the $1.00
minimum bid price requirement for the continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule
5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a period of 180 calendar days, or until March 3, 2025, to
regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Common Stock must meet
or exceed $1.00 per share for a minimum of 10 consecutive business days during this 180 day period. If we are not in compliance by
March 3, 2025, we may qualify for a second 180 calendar day compliance period. If we do not qualify for, or fail to regain
compliance during the second compliance period, then Nasdaq will notify us of its determination to delist our Common Stock, at which
point we would have an option to appeal the delisting determination to a Nasdaq hearings panel.
On
November 20, 2024, we received written notice from Nasdaq indicating that since our Form 10-Q for the period ended September 30, 2024
reported a stockholders’ deficit of ($406,685) and we did not meet the alternatives of minimum of $35 million market value of listed
securities or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three
most recently completed fiscal years (the “Listing Rule”), we no longer complied with the Listing Rule. Under the Listing
Rule, we have 45 days to submit a plan to regain compliance. On January 3, 2025, we submitted a plan to regain compliance. If
the plan is accepted, Nasdaq can grant an extension of up to 180 calendar days from the date of the November Notice to evidence compliance.
In the event Nasdaq does not accept our plan, we will have the opportunity to appeal to a hearings panel. There can be no assurance that
we will be successful in maintaining our listing of our common stock on the Nasdaq Capital Market.
Implications
of Being a Smaller Reporting Company
We
are a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act. We may take advantage of certain of the scaled
disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our
stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or our annual
revenue is less than $100 million during the most recently completed fiscal year and our common stock held by non-affiliates is less
than $700 million measured on the last business day of our second fiscal quarter.
Corporate
History and Information
We
were incorporated under the laws of the State of Delaware in May 2013. Our principal executive offices are located at c/o Clementi Associates,
919 Conestoga Road, Building 3, Suite 115, Rosemont, PA 19010. Our telephone number is (973) 214-3273.
THE
OFFERING
| Common
Stock Offered by Us |
|
Up
to 14,285,714 shares of Common Stock, based on an assumed combined public offering price of $0.56 per share of Common
Stock and accompanying Series A Warrant and Series B Warrant, which is the last reported sale price of our Common Stock on The Nasdaq
Capital Market on January 8, 2025. |
| |
|
|
| Pre-Funded
Warrants Offered by Us |
|
We
are also offering to those purchasers, if any, whose purchase of the Common Stock in this
offering would result in the purchaser, together with its affiliates and certain related
parties, beneficially owning more than 4.99% (or at the election of the purchaser, 9.99%)
of our outstanding Common Stock immediately following consummation of this offering, the
opportunity to purchase, if they so choose, Pre-Funded Warrants in lieu of the Common Stock
that would otherwise result in ownership in excess of 4.99% (or 9.99% as applicable) of our
Common Stock.
The
purchase price of each Pre-Funded Warrant and accompanying Common Warrant will equal the price per share of Common Stock and accompanying
Common Warrant being sold to the public in this offering, minus $0.0001, and the exercise price of each Pre-Funded Warrant will be
$0.0001 per share.
Each
Pre-Funded Warrant will be immediately exercisable and may be exercised at any time until exercised in full. There is no expiration
date for the Pre-Funded Warrants. There is no established trading market for the Pre-Funded Warrants, and we do not expect a market
to develop. We do not intend to apply for a listing for the Pre-Funded Warrants on any securities exchange or other nationally recognized
trading system. Without an active trading market, the liquidity of the Pre-Funded Warrants will be limited.
To
better understand the terms of the Pre-Funded Warrants, you should carefully read the “Description of Securities We Are
Offering” section of this prospectus. |
| |
|
|
Series
A Warrants Offered by Us
|
|
Each
share of our Common Stock and each Pre-Funded Warrant to purchase one share of our Common
Stock is being sold together with a Series A Warrant to purchase one share of our Common
Stock. Each Series A Warrant will have an exercise price of $
per share, will be exercisable at any time beginning on the Stockholder Approval Date
(the “Initial Exercise Date”) and will expire on the five year anniversary of
the Initial Exercise Date.
This
prospectus also relates to the offering of the shares of Common Stock issuable upon exercise of the Series A Warrants. Because we
will issue a Series A Common Warrant for each share of Common Stock and for each Pre-Funded Warrant sold in this offering, the number
of Series A Common Warrants sold in this offering will not change as a result of a change in the mix of the shares of our Common
Stock and Pre-Funded Warrants sold. |
| |
|
|
| Series
B Warrants Offered by Us |
|
Each
share of our Common Stock and each Pre-Funded Warrant to purchase one share of our Common
Stock is being sold together with a Series B Warrant to purchase one share of our Common
Stock. Each Series B Warrant will have an exercise price of $
per share, will be exercisable at any time beginning on the Initial Exercise Date and
will expire on the two and one-half (2.5) year anniversary of the Initial Exercise Date.
This
prospectus also relates to the offering of the shares of Common Stock issuable upon exercise of the Series B Common Warrants. Because
we will issue a Series B Common Warrant for each share of Common Stock and for each Pre-Funded Warrant sold in this offering, the
number of Common Warrants sold in this offering will not change as a result of a change in the mix of the shares of our Common Stock
and Pre-Funded Warrants sold.
|
| Common
Stock Outstanding Prior to this Offering |
|
6,958,371
shares of Common Stock |
| |
|
|
| Common
Stock to be Outstanding After this Offering |
|
21,244,085
shares of Common Stock, assuming no sale of
any Pre-Funded Warrants and no exercise of the Common Warrants being offered in this offering. To the extent that Pre-Funded Warrants
are sold, the number of shares of Common Stock sold in this offering will be reduced on a one-for-one basis. |
| |
|
|
| Use
of Proceeds |
|
We
estimate that the net proceeds from this offering will be approximately $7.1 million, at an assumed public offering price of $0.56
per share of Common Stock and accompanying Series A Warrant and Series B Warrant, which was the closing price of our Common Stock on
The Nasdaq Capital Market on January 8, 2025, after deducting the Placement Agent
fees and estimated offering expenses payable by us. We intend to use the net proceeds from this offering to repay the Notes
in the principal amount of $2.9 million plus accrued interest of approximately $24,000 through December 31, 2024 and for general
corporate purposes, including working capital, operating expenses, and capital expenditures. We may also use a portion of the net
proceeds to in-license, acquire or invest in complementary products, technologies or businesses, however, we have no current
commitments or obligations to do so. See “Use of Proceeds” on page 8 for a more complete description of the
intended use of proceeds from this offering. |
| |
|
|
| Risk
factors |
|
See
“Risk Factors” beginning on page 5 of this prospectus, as well as other information included in this prospectus, for
a discussion of factors you should read and consider carefully before investing in our securities. |
| |
|
|
Reasonable
best efforts offering
|
|
We have agreed to offer and sell the securities offered
hereby to the purchasers through the Placement Agent. The Placement Agent is not required to buy or sell any specific number or dollar
amount of the securities offered hereby but will use its reasonable best efforts to solicit offers to purchase the securities offered
by this prospectus. See “Plan of Distribution” on page 21 of this prospectus. |
| |
|
|
| Nasdaq
Capital Market symbol |
|
Our
Common Stock is listed on The Nasdaq Capital Markets under the symbol “HEPA”. There is no established trading market
for the Pre-Funded Warrants, Series A Warrants or Series B Warrants and we do not expect a trading market to develop. We do not intend
to list the on any securities exchange or other trading market. Without a trading market, the liquidity of the Warrants will be extremely
limited. |
The
number of shares of our common stock to be outstanding after this offering as shown above is based on 6,958,371 shares outstanding as
of December 31, 2024 and excludes as of that date:
| ● |
390,667
shares of our common stock issuable upon exercise
of outstanding options at a weighted average price of $7.64 per share; |
| |
|
| ● |
50,000
restricted stock units; |
| |
|
| ● |
2,450,983
shares of our common stock issuable upon exercise
of outstanding warrants with a weighted-average exercise price of $1.91 per share; |
| |
|
| ● |
89,750 of placement agent warrants from 2020 and 2021
with strike prices ranging from $37.50- $50.00 each, and the expiration dates are in 2025 and 2026. |
| |
|
| ● |
159
shares of our common stock issuable upon conversion of outstanding shares of Series A Convertible Preferred Stock; |
| |
|
| ● |
788
shares of our common stock issuable upon conversion of outstanding shares of Series C Convertible Preferred Stock; and |
| |
|
| ● |
73,000
shares of our common stock that are reserved
for equity awards that may be granted under our equity incentive plans. |
RISK
FACTORS
An
investment in our securities involves a high degree of risk. This prospectus contains a discussion of the risks applicable to an investment
in our securities. Prior to deciding about investing in our securities, you should carefully consider the specific factors discussed
within this prospectus. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial may also affect our operations. The occurrence of any of these known or
unknown risks might cause you to lose all or part of your investment in the offered securities.
Risks
Related to Our Business
We
may not be able to repay the Notes and accrued interest which would have a material adverse effect on our business and financial condition.
On
December 11, 2024, we mutually terminated the Merger Agreement with Pharma Two B and the Notes in the principal amount of $2.9 million
and accrued interest became due and payable. As of the date of filing of this registration statement, we have not repaid the Notes and
we intend to use a portion of the net proceeds from this offering to repay the Notes. If we do not repay the Notes, the effect
would have a material adverse effect on our business and financial condition.
Risks
Related to This Offering
You
may experience future dilution as a result of future equity offerings.
In
order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into
or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares or
other securities in any other offering at a price per share that is less than the price per share paid by any investors in this offering,
and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per
share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future
transactions may be higher or lower than the price per share paid by any investors in this offering.
Sales
of a substantial number of our shares of common stock in the public markets, or the perception that such sales could occur, could cause
our stock price to fall.
We
may issue and sell additional shares of commons stock in the public markets, including during this offering. As a result, a substantial
number of our shares of common stock may be sold in the public market. Sales of a substantial number of our shares of common stock in
the public markets, including during this offering, or the perception that such sales could occur, could depress the market price of
our common stock and impair our ability to raise capital through the sale of additional equity securities.
Because
we do not currently intend to declare cash dividends on our shares of common stock in the foreseeable future, stockholders must rely
on appreciation of the value of our common stock for any return on their investment.
We
have never paid cash dividends on our common stock and do not plan to pay any cash dividends in the near future. We currently intend
to retain all of our future earnings, if any, to finance the operation, development and growth of our business. Furthermore, any future
debt agreements may also preclude us from paying or place restrictions on our ability to pay dividends. As a result, capital appreciation,
if any, of our common stock will be your sole source of gain with respect to your investment for the foreseeable future.
The
exercise of our outstanding options and warrants will dilute stockholders and could decrease our stock price.
The
exercise of our outstanding options and warrants may adversely affect our stock price due to sales of a large number of shares or the
perception that such sales could occur. These factors also could make it more difficult to raise funds through future offerings of our
securities, and could adversely impact the terms under which we could obtain additional equity capital. Exercise of outstanding options
and warrants or any future issuance of additional shares of common stock or other securities, including, but not limited to preferred
stock, options, warrants, restricted stock units or other derivative securities convertible into our common stock, may result in significant
dilution to our stockholders and may decrease our stock price.
We
have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
Our
management will have broad discretion in the application of the net proceeds from this offering, including for any of the currently intended
purposes described in the section entitled “Use of Proceeds.” Because of the number and variability of factors that will
determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use.
Our management may not apply our cash from this offering in ways that ultimately increases the value of any investment in our securities
or enhances stockholder value. The failure by our management to apply these funds effectively could harm our business. Pending their
use, we may invest the net proceeds from this offering in a variety of capital preservation investments, including short-term, investment-grade,
interest-bearing instruments and government securities. These investments may not yield a favorable return to our stockholders. If we
do not invest or apply our cash in ways that enhance stockholder value, we may fail to achieve expected financial results, which may
result in a decline in the price of our shares of Common Stock, and, therefore, may negatively impact our ability to raise capital, invest
in or expand our business, acquire products or licenses, commercialize our products and services, or continue our operations. See “Use
of Proceeds” on page 8 for a more complete description of the intended use of proceeds from this offering.
As
the assumed public offering price is substantially higher than our net tangible book value per share, you will experience immediate and
substantial dilution.
If
you purchase Common Stock in this offering, you will pay more for your shares of Common Stock than the amount paid by our existing stockholders
for their shares on a per share basis. As a result, you will experience immediate and substantial dilution in net tangible book value
per share in relation to the price that you paid per share of Common Stock. We expect the dilution as a result of the offering to be
$0.24 per share to new investors purchasing our shares of Common Stock and Series A Warrants and Series B Warrants in this offering.
In addition, you will experience further dilution to the extent that we issue shares of our Common Stock upon the exercise of any warrants,
including the Series A Warrants and Series B Warrants, issued in this offering, or exercise of stock options under any stock incentive
plans. See “Dilution” for a more complete description of how the value of your investment in our shares will be diluted upon
completion of this offering.
There
is no public market for the Series A Warrants or Series B Warrants being offered in this offering.
There
is no established public trading market for the Series A Warrants or Series B Warrants being offered in this offering, and we do not
expect a market to develop. In addition, we do not intend to apply to list the Pre-Funded Warrants, Series A Warrants or Series B Warrants
on any securities exchange or nationally recognized trading system, including The Nasdaq Capital Market. Without an active market, the
liquidity of the Series A Warrants and Series B Warrants will be limited.
Holders
of Series A Warrants and Series B Warrants purchased in this offering will have no rights as common stockholders until such holders exercise
such warrants and acquire our Common Stock.
Until
holders of Series A Warrants and Series B Warrants acquire shares of our Common Stock upon exercise of such warrants, holders of Series
A Warrants and Series B Warrants will have no rights with respect to the shares of our Common Stock underlying such warrants. Upon exercise
of the Series A Warrants and Series B Warrants, as applicable, the holders will be entitled to exercise the rights of a common stockholder
only as to matters for which the record date occurs after the exercise date.
The
Pre-Funded Warrants, Series A Warrants and Series B Warrants are speculative in nature.
The
Pre-Funded Warrants, Series A Warrants and Series B Warrants do not confer any rights of Common Stock ownership on their respective holders,
such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of Common Stock at a
fixed price.
Purchasers
who purchase our securities in this offering pursuant to a securities purchase agreement may have rights not available to purchasers
that purchase without the benefit of a securities purchase agreement.
In
addition to rights and remedies available to all purchasers in this offering under federal securities and state law, the purchasers that
enter into a securities purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue
a claim for breach of contract provides those investors with the means to enforce the covenants uniquely available to them under the
securities purchase agreement including, but not limited to: (i) timely delivery of securities; (ii) agreement to not enter into variable
rate financings for six months from closing, subject to exceptions; (iii) agreement to not enter into any financings for 60 days from
closing; and (iv) indemnification for breach of contract.
The
Series A Warrants and Series B Warrants may not have value.
The
Series A Warrants being offered by us in this offering have an exercise price of $ per share of Common Stock,
and expire on the five year anniversary of the Initial Exercise Date. The Series B Warrants being offered by us in this offering have
an exercise price of $ per share of Common Stock, and expire on the two and one-half of the Initial
Exercise Date. In the event that our Common Stock does not exceed the exercise price of the Series A Warrants or Series B Warrants, as
applicable, during the period when such warrants are exercisable, such warrants may not have any value.
This
is a best efforts offering, no minimum amount of securities is required to be sold, and we may not raise the amount of capital we believe
is required for our business plans, including our near-term business plans.
The
Placement Agent has agreed to use its reasonable best efforts to solicit offers to purchase the securities in this offering. The Placement
Agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar
amount of the securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering.
Because there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, Placement
Agent fees and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth above.
We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and
investors in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to support our
continued operations, including our near-term continued operations. Thus, we may not raise the amount of capital we believe is required
for our operations in the short-term and may need to raise additional funds, which may not be available or available on terms acceptable
to us.
We
are selling a substantial number of shares of our Common Stock in this offering, which could cause the price of our Common Stock to decline.
In
this offering, we are offering up to 14,285,714 shares of Common Stock, 14,285,714 Pre-Funded Warrants to purchase up to
14,285,714 shares of Common Stock, Series A Warrants to purchase up to 14,285,714 shares of Common Stock and Series B Warrants
to purchase up to 14,285,714 shares of Common Stock, based on an assumed combined public offering price of $0.56 per share
of Common Stock and accompanying Series A Warrant and Series B Warrant, which is the last reported sale price of our Common Stock on
The Nasdaq Capital Market on January 8, 2025. The existence of the potential additional shares of our Common Stock in the public
market, or the perception that such additional shares may be in the market, could adversely affect the price of our Common Stock. We
cannot predict the effect, if any, that market sales of those shares of Common Stock or the availability of those shares of Common Stock
for sale will have on the market price of our Common Stock.
Our
common stock may be delisted if we fail to comply with continued listing standards.
If
we fail to meet any of the continued listing standards of The Nasdaq Capital Market, our common stock could be delisted from The Nasdaq
Capital Market. These continued listing standards include specifically enumerated criteria, such as:
| |
● |
a
$1.00 minimum closing bid price; |
| |
● |
stockholders’
equity of $2.5 million; |
| |
● |
500,000
shares of publicly-held common stock with a market value of at least $1 million; |
| |
● |
300
round-lot stockholders; and |
| |
● |
compliance
with Nasdaq’s corporate governance requirements, as well as additional or more stringent criteria that may be applied in the
exercise of Nasdaq’s discretionary authority. |
If
we fail to comply with Nasdaq’s continued listing standards, we may be delisted and our common stock will trade, if at all, only
on the over-the-counter market, such as the OTC Bulletin Board, or OTCQX market, and then only if one or more registered broker-dealer
market makers comply with quotation requirements. In addition, delisting of our common stock could depress our stock price, substantially
limit liquidity of our common stock and materially adversely affect our ability to raise capital on terms acceptable to us, or at all.
Finally, delisting of our common stock could result in our common stock becoming a “penny stock” under the Exchange Act.
On
September 3, 2024, we received written notice from Nasdaq indicating that the bid price for our Common Stock for the last 30 consecutive business days, had closed below the minimum $1.00 per
share and, as a result, we were not in compliance with the $1.00 minimum bid price requirement for the continued listing on the Nasdaq
Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a period
of 180 calendar days, or until March 3, 2025, to regain compliance with the minimum bid price requirement. To regain compliance, the
closing bid price of the Common Stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days during this 180
day period. If we are not in compliance by March 3, 2025, we may qualify for a second 180 calendar day compliance period. If we do not
qualify for, or fails to regain compliance during the second compliance period, then Nasdaq will notify us of its determination to delist
our Common Stock, at which point we would have an option to appeal the delisting determination to a Nasdaq hearings panel. We intend
to actively monitor the closing bid price of its Common Stock and may, if appropriate, consider implementing available options to regain
compliance with the minimum bid price under the Nasdaq Listing Rules.
On
November 20, 2024, we received written notice from Nasdaq indicating that since our Form 10-Q for
the period ended September 30, 2024 reported a stockholders’ deficit of ($406,685) and we did not meet the alternatives of minimum
of $35 million market value of listed securities or net income from continuing operations of $500,000 in the most recently completed
fiscal year or in two of the last three most recently completed fiscal years, we no longer complied
with the Listing Rule. Under the Listing Rule, we have 45 days to submit a plan to regain compliance. On January 3, 2025 we submitted
a plan to regain compliance. If the plan is accepted, Nasdaq can grant an extension of up to 180 calendar
days from the date of the November Notice to evidence compliance. In the event Nasdaq does not accept our plan, we will have the opportunity
to appeal to a hearings panel. There can be no assurance that we will be successful in maintaining our listing of our common stock on
the Nasdaq Capital Market.
USE
OF PROCEEDS
We
estimate that the net proceeds from our issuance and sale of our securities in this offering, assuming all the securities we are offering
are sold, will be approximately $7.1 million, based on an assumed combined public offering price of $0.56 per share of
Common Stock and accompanying Series A Warrant and Series B Warrant, which was the closing price of our Common Stock on The Nasdaq Capital
Market on January 8, 2025 after deducting Placement Agent fees and estimated offering expenses payable by us assuming no sale
of any Pre-Funded Warrants and no exercise of the Common Warrants. Based on the assumed offering price set forth above, we
estimate that our net proceeds from the sale of 75%, 50%, and 25% of the securities offered in this offering would be approximately $5.3 million, $3.4 million and $1.6 million, respectively, after deducting the estimated placement agent fees and estimated offering expenses payable by us, and assuming
no issuance of any Pre-Funded Warrants and assuming no exercise of the common warrants.
However,
because this is a best efforts offering and there is no minimum offering amount required as a condition to the closing of this offering,
the actual offering amount, the Placement Agent fees and net proceeds to us are not presently determinable and may be substantially less
than the maximum amounts set forth on the cover page of this prospectus, and we may not sell any or all of the securities we are offering.
As a result, we may receive significantly less in net proceeds.
We
intend to use the net proceeds from this offering to repay the Notes in the principal amount of $2.9 million plus
accrued interest of approximately $24,000 through December 31, 2024 and for general corporate purposes, including working capital, operating expenses,
and capital expenditures. We may also use a portion of the net proceeds to in-license, acquire or invest in complementary products,
technologies or businesses, however, we have no current commitments or obligations to do so. The Notes have a maturity date of
December 31, 2024 and have been accruing interest at fourteen percent (14.0%) per annum since that date. As of the date of this
prospectus, we have not received an Event of Default Notice from any of the holders of the Notes.
This
expected use of the net proceeds from this offering and our existing cash represents our intentions based upon our current plans, financial
condition and business conditions. Predicting the cost necessary to develop our products and services can be difficult and the amounts
and timing of our actual expenditures may vary significantly depending on numerous factors. As a result, our management will retain broad
discretion over the allocation of the net proceeds from this offering and our existing cash.
Pending
our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments,
including short-term, investment-grade, interest-bearing instruments, and government securities.
DILUTION
If
you invest in our securities in this offering, your ownership interest will be diluted to the extent of the difference between the assumed
public offering price per share of our Common Stock (assuming the exercise for cash of all Pre-Funded Warrants) and the as adjusted net
tangible book value per share of our Common Stock immediately after this offering (assuming the exercise for cash of all Pre-Funded Warrants
issued in this offering).
As
September 30, 2024, we had a historical net tangible book value of $(406,685), or $(0.06) per share of common stock, based on 6,958,371
shares of Common Stock outstanding at September 30, 2024. Our historical net tangible book value per share is the amount of our total
tangible assets less our total liabilities at September 30, 2024, divided by the number of shares of Common Stock outstanding at September
30, 2024.
After
giving effect to the sale of up to 14,285,714 shares of Common Stock or up to 14,285,714 Pre-Funded Warrants in lieu of
shares of Common Stock (and the full exercise of those Pre-Funded Warrants), and accompanying Series A Warrants and Series B Warrants
in this offering at an assumed combined public offering price of $0.56 per share of Common Stock and accompanying Series A Warrant
and Series B Warrant, which was the closing price of our Common Stock on The Nasdaq Capital Market on January 8, 2025 and after
deducting the Placement Agent fees and estimated offering expenses payable by us, excluding the proceeds, if any, from the cash exercise
of the Series A Warrants and Series B Warrants issued in this offering, our as adjusted net tangible book value at September 30, 2024
would have been $6,708,315, or $0.32 per share of Common Stock. This represents an immediate increase in as adjusted net
tangible book value of $0.38 per share to existing stockholders and immediate dilution of $0.24 per share to new investors
purchasing securities in this offering. The final public offering price will be determined through negotiation between us, the Placement
Agent and the investors in the offering and may be at a discount to the current market price. Therefore, the assumed combined public
offering price used throughout this prospectus may not be indicative of the final public offering price.
The
following table illustrates this dilution on a per share basis:
| Assumed combined public offering
price per share of Common Stock and accompanying Series A Warrant and Series B Warrant | |
| | | |
$ | 0.56 | |
| Net tangible book value (deficit) per share
of common stock as of September 30, 2024 | |
$ | (0.06 | ) | |
| | |
| Increase
in net tangible book value per share of common stock attributable to new investors | |
| 0.38 | | |
| | |
| As adjusted net tangible book value per share
immediately after this offering | |
| | | |
| 0.32 | |
| | |
| | | |
| | |
| Dilution per share to
new investors in this offering | |
| | | |
$ | 0.24 | |
The
number of shares of our Common Stock to be outstanding after this offering is based on 6,958,371 shares of our Common Stock outstanding
as of September 30, 2024 and excludes as of such date:
| ● |
390,667
shares of our common stock issuable upon exercise
of outstanding options at a weighted average price of $7.64 per share; |
| ● |
50,000
restricted stock units; |
| |
|
| ● |
2,450,983
shares of our common stock issuable upon exercise
of outstanding warrants with a weighted-average exercise price of $1.91 per share; |
| |
|
| ● |
159
shares of our common stock issuable upon conversion of outstanding shares of Series A Convertible Preferred Stock; |
| |
|
| ● |
89,750 of placement agent warrants from 2020 and 2021
with strike prices ranging from $37.50- $50.00 each, and the expiration dates are in 2025 and 2026. |
| |
|
| ● |
788
shares of our common stock issuable upon conversion of outstanding shares of Series C Convertible Preferred Stock; and |
| |
|
| ● |
73,000
shares of our common stock that are reserved
for equity awards that may be granted under our equity incentive plans. |
To
the extent that stock options or warrants are exercised, new stock options are issued under our equity incentive plan, or we issue additional
common stock or common stock equivalents in the future, there will be further dilution to investors participating in this offering. In
addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that
we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible
debt securities, the issuance of these securities could result in further dilution to our stockholders.
MANAGEMENT
Set
forth below is certain information with respect to the individuals who are our directors and executive officers as of December 31, 2024:
| Name |
|
Age |
|
Position(s) |
| |
|
|
|
|
| John
P. Brancaccio |
|
76 |
|
Interim
Chief Executive Officer, Chief Financial Officer and Director |
| Timothy
Block, Ph.D. |
|
68 |
|
Director |
| Kaouthar
Lbiati, M.D. |
|
45 |
|
Director |
| Michael
Purcell |
|
67 |
|
Director |
John
P. Brancaccio, a retired CPA, has served as Interim Chief Executive Officer and Chief Financial
Officer since August 2024 and a director of our Company since May 15, 2013. Mr. Brancaccio was the Chief Financial Officer of Accelerated
Technologies, Inc., an incubator for medical device companies from April 2004 until May 2017. Mr. Brancaccio served as a director
for Callisto Pharmaceuticals, Inc. from April 2004 until its merger with Synergy Pharmaceuticals, Inc. in January 2013 and was formerly
a director of Tamir Biotechnology, Inc. (formerly Alfacell Corporation) since April 2004 until May 2020. He is also a director of Rasna
Therapeutics, Inc. since September 2016, OKYO Pharma Limited since June 2020 and Tiziana Life Sciences plc since July 2020. Mr.
Brancaccio’s chief financial officer experience provides him with valuable financial and accounting expertise which the Board believes
qualifies him to serve as a director of our Company.
Dr.
Timothy Block has served as a director of our Company since November 26, 2013. Dr. Block
is Professor of Microbiology and Immunology, Drexel University College of Medicine and Director of its Drexel Institute for Biotechnology
and Virology Research, and is also the Co-founder and President of the Hepatitis B Foundation (HBF) and its Baruch S. Blumberg Institute
(formerly called the Institute for Hepatitis and Virus Research). Dr. Block is also President and CEO of the Pennsylvania Biotechnology
Center. Dr. Block has been a member of medical school faculties as a professional researcher for more than 28 years, publishing more
than 180 papers, 12 U.S. patents, and since 2006, has led or “co-led” more than $50 million in research funding. Honors include
an honorary Medical Doctorate (Bulgarian Academy of Medicine); the Lifetime Achievement Award from the Centrals Bucks Chamber of Commerce;
named one of the regions 100 Most Outstanding People of the Century by the Daily Intelligencer; Distinguished Service Recognition from
the National Cancer Institute’s Early Detection Research Network; and a Special Citation from the U.S. House of Representatives
in recognition of “outstanding achievements.” Dr. Block has given frequent testimony to the U.S. Congress and State legislatures;
has served on U.S. FDA and numerous NIH panels as well as commercial boards including the Bristol Myers Squibb Entecavir Advisory Board.
In 2009, Dr. Block was named an elected Fellow of the American Association for the Advancement of Science (AAAS). Dr. Block’s experience
and expertise in the medical field with respect to Hepatitis B qualifies him to serve as a director of our Company.
Kaouthar
Lbiati, M.D. has served as a director of our Company since June 2022. Dr. Lbiati is an experienced business leader focusing on
value creation, value-inflection milestones and portfolio growth. Since November 2017, Dr Lbiati has been helping early and late stage
immune-oncology biotech companies such as, Cytovia Therapeutics, Steba Biotech and Immune Pharmaceuticals, better define their corporate
strategy, optimize technology platforms, prioritize their pipeline and portfolio, effectively pitching their value proposition to investors
and partners in order to secure funding and deals. Within Cytovia Therapeutics ; a biopharmaceutical company specializing in NK cell
therapies, Dr Lbiati held non-executive and executive roles. She started as Advisor to the CEO in May 2020 for (3) months then, Vice
President Product Strategy until July 2021 and Vice President, Strategy & Corporate Development until November 2022. Previously,
Dr. Lbiati served, for over a decade, in global and regional leadership roles at Amgen, Glaxo Smith Kline, and Sanofi, where she supported
the registration, launch and/or indication extension and reimbursement of several innovative cancer drugs such as – Blincyto®,
Jevtana® and Votrient® – in the U.S., EU and MENA regions, with a focus on medical affairs; strategic planning, health
economics and outcomes research; and market access across multiple countries. Dr. Lbiati received a Doctor of Medicine degree from Rabat,
Morocco’s Mohammed V University, a fellowship in oncology from the Gustave Roussy Institute in Paris, a Specialized Executive Master’s
degree in Strategy & Management from ESSEC Business School in Paris, and a Master of Science in International Policy and Health Economics
from the London School of Economics. In 2022, she was certified from Columbia Business School in Corporate Governance and from Harvard
Business School in finance. Dr. Lbiati’s experience at biopharmaceutical and biotechnology companies and background qualifies her
to be a director of our Company.
Michael
Purcell has served as a director of our company since March 2024. Mr. Purcell is a certified
public accountant and became an independent business consultant following retirement in 2015. Mr. Purcell spent more than 36 years with
Deloitte & Touche LLP (“Deloitte”), where he was an audit partner and the Philadelphia office leader of Deloitte’s
middle-market and growth enterprise services. Mr. Purcell has served on the boards of directors of numerous companies and organizations,
and currently serves as lead independent director of International Money Express, Inc. Mr. Purcell also serves as a director and a member
of the audit committee for each of CFG Bank and Hyperion Bank and as a director of several other for-profit and non-profit entities.
Mr. Purcell formerly served as chairman of the board, director and chair of the audit committee of publicly traded Tabula Rasa HealthCare,
Inc. from 2018 until 2023. He is a member of the American Institute of Certified Public Accountants and a former President of the Philadelphia
Chapter of the Pennsylvania Institute of Certified Public Accountants. Mr. Purcell holds a bachelor’s degree from Lehigh University
and a master’s degree in business administration from Drexel University. We believe that Mr. Purcell’s extensive public accounting
experience coupled with his experience serving on boards of directors make him well qualified to serve as a director.
Family
Relationships and Other Arrangements
There
are no family relationships among our directors and executive officers. There are no arrangements or understandings between or among
our executive officers and directors pursuant to which any director or executive officer was or is to be selected as a director or executive
officer.
Board
Leadership Structure and Role in Risk Oversight
Risk
is inherent with every business, and how well a business manages risk can ultimately determine its success. Management is
responsible for the day-to-day management of the risks we face, while the Board, as a whole and through its committees, has
responsibility for the oversight of risk management. In its risk oversight role, the Board is responsible for satisfying itself that
the risk management processes designed and implemented by management are adequate and functioning as designed. Our interim
CEO communicates frequently with members of the Board to discuss strategy and challenges facing our company.
Director
Independence
Our
Board has determined that a majority of the Board consists of members who are currently “independent” as that term is defined
under Nasdaq Listing Rule 5605(a)(2). The Board considers Drs. Bloc and Lbiati and Mr. Purcell to be “independent.”
Information
Regarding Board Committees
Our
Board has established standing Audit, Compensation and Corporate Governance/Nominating Committees to devote attention to specific subjects
and to assist it in the discharge of its responsibilities. All committees operate under a written charter adopted by our Board, each
of which is available on our Internet website at www.hepionpharma.com/investors/governance.
Audit
Committee
The
Audit Committee’s responsibilities include: (i) reviewing the independence, qualifications, services, fees, and performance of
the independent registered public accountants, (ii) appointing, replacing and discharging the independent registered public accounting
firm, (iii) pre-approving the professional services provided by the independent registered public accounting firm, (iv) reviewing the
scope of the annual audit and reports and recommendations submitted by the independent registered public accounting firm, and (v) reviewing
our financial reporting and accounting policies, including any significant changes, with management and the independent registered public
accounting firm. The Audit Committee also prepares the Audit Committee report that is required pursuant to the rules of the SEC.
The
Audit Committee currently consists of Mr. Purcell, chairman, Dr. Block and Dr. Lbiati. We believe that each of Mr. Purcell, Dr. Block
and Dr. Lbiati is “independent” as that term is defined under applicable SEC and Nasdaq rules. Mr. Purcell is our audit committee
financial expert. The Board has adopted a written charter setting forth the authority and responsibilities of the Audit Committee. The
charter is available on our website at www.hepionpharma.com.
Compensation
Committee
The
Compensation Committee has responsibility for assisting the Board in, among other things, (i) evaluating and making recommendations regarding
the compensation of the executive officers and directors of our company, (ii) assuring that the executive officers are compensated effectively
in a manner consistent with our stated compensation strategy, (iii) producing an annual report on executive compensation in accordance
with the rules and regulations promulgated by the SEC, (iv) periodically evaluating the terms and administration of our incentive plans
and benefit programs and (v) monitoring of compliance with the legal prohibition on loans to our directors and executive officers.
The
Compensation Committee currently consists of Mr. Purcell, Dr. Block and Dr. Lbiati. We believe that all of the members are “independent”
under the current listing standards of Nasdaq. The Board has adopted a written charter setting forth the authority and responsibilities
of the Compensation Committee which is available on our website at www.hepionpharma.com.
Compensation
Committee Interlocks and Insider Participation
None
of the members of our compensation committee was, during the year ended December 31, 2023, an officer or employee of ours, was formerly
an officer of ours or had any relationship requiring disclosure by us under Item 404 of Regulation S-K. No interlocking relationship
as described in Item 407(e)(4) of Regulation S-K exists between any of our executive officers or Compensation Committee members, on the
one hand, and the executive officers or compensation committee members of any other entity, on the other hand, nor has any such interlocking
relationship existed in the past.
Corporate
Governance/Nominating Committee
The
Corporate Governance/Nominating Committee has responsibility for assisting the Board in, among other things, (i) effecting board organization,
membership and function including identifying qualified board nominees, (ii) effecting the organization, membership and function of board
committees including composition and recommendation of qualified candidates, (iii) establishment of and subsequent periodic evaluation
of successor planning for the chief executive officer and other executive officers, (iv) development and evaluation of criteria for board
membership such as overall qualifications, term limits, age limits and independence and (v) oversight of compliance with the Corporate
Governance Guidelines. The Corporate Governance/Nominating Committee shall identify and evaluate the qualifications of all candidates
for nomination for election as directors. Potential nominees are identified by the Board based on the criteria, skills and qualifications
that have been recognized by the Corporate Governance/Nominating Committee. While our nomination and corporate governance policy does
not prescribe specific diversity standards, the Corporate Governance/Nominating Committee and its independent members seek to identify
nominees that have a variety of perspectives, professional experience, education, differences in viewpoints and skills, and personal
qualities that will result in a well-rounded Board.
The
Corporate Governance/Nominating Committee currently consists of Dr. Block, chairman, Dr. Lbiati and Mr. Purcell. We believe that all
of the members are “independent” under the current listing standards of Nasdaq. Our Board has adopted a written charter setting
forth the authority and responsibilities of the Corporate Governance/Nominating Committee which is available on our website at www.hepionpharma.com.
Code
of Business Conduct and Ethics
We
have adopted a Code of Business Conduct and Ethics to ensure that our business is conducted in a consistently legal and ethical manner.
All of our employees, including our executive officers and directors, are required to comply with our Code of Business Conduct and Ethics.
The
full text of the Code of Business Conduct and Ethics is posted on our website at http://www.hepionpharma.com/investors/governance. Any
waiver of the Code of Business Conduct and Ethics for directors or executive officers must be approved by our Audit Committee. We will
disclose future amendments to our Code of Business Conduct and Ethics, or waivers from our Code of Business Conduct and Ethics for our
principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions,
on our website within four business days following the date of the amendment or waiver. In addition, we will disclose any waiver from
our Code of Business Conduct and Ethics for our other executive officers and our directors on our website. A copy of our Code of Business
Conduct and Ethics will also be provided free of charge upon request to info@hepionbiopharma.com.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table contains compensation information for our Chief Executive Officer and certain other executives who were the most highly
compensated executive officers for the years ended December 31, 2024 and 2023.
| | |
| | |
| | |
| | |
Non-equity
incentive | | |
| |
| | |
| | |
| | |
| | |
plan | | |
| |
| Name & Principal | |
| | |
| | |
Options | | |
compensation | | |
| |
| position | |
Year | | |
Salary ($) | | |
granted ($) | | |
($) | | |
Total ($) | |
| | |
| | |
| | |
| | |
| | |
| |
| John Cavan | |
| 2024 | | |
| 538,889 | | |
| 0 | | |
| 0 | | |
| 538,889 | |
| Former Interim Chief Executive Officer and Chief Financial Officer(1) | |
| 2023 | | |
| 400,000 | | |
| 0 | | |
| 0 | | |
| 400,000 | |
| John Brancaccio (2) | |
| 2024 | | |
| 313,905 | | |
| 188,424 | | |
| 0 | | |
| 502,329 | |
| Interim Chief Executive Officer and Chief Financial | |
| | | |
| | | |
| | | |
| | | |
| | |
| (1) |
Mr.
Cavan left the Company in August 2024. His total compensation includes a severance payment of $272,222. |
| |
|
| (2) |
Mr.
Brancaccio was appointed Interim Chief Executive Officer and Chief Financial Officer in August 2024. He was appointed the Executive
Chairman effective March 2024, and served as a board member prior to that. |
Outstanding
Equity Awards as of December 31, 2024
| | |
Number
of Securities | | |
| | |
|
| | |
Underlying
Unexercised | | |
Option | | |
Option |
| | |
Options
(#) | | |
Exercise | | |
Expiration |
| Name | |
Exercisable | | |
Unexercisable | | |
Price
($) | | |
Date |
| John
Brancaccio | |
| 85,000 | | |
| — | | |
| 2.56 | | |
2/19/2034 |
| Interim
Chief Executive Officer and Chief Financial Officer | |
| 10,000 | | |
| — | | |
| 34 | | |
5/18/2031 |
| | |
| 1,500 | | |
| — | | |
| 74.4 | | |
8/19/2030 |
| | |
| 3,000 | | |
| — | | |
| 32.6 | | |
4/3/2030 |
| | |
| 49 | | |
| — | | |
| 64.8 | | |
7/24/2029 |
| | |
| 6 | | |
| — | | |
| 11,648 | | |
7/19/2026 |
Director
Compensation
During
year ended December 31, 2024, our non-employee directors received the following compensation for their services on the Board and its
committees:
| Name |
|
Cash
Fees |
|
|
Option
Awards(1) |
|
|
Total |
| Gary
S. Jacob (2) |
|
$ |
37,823 |
|
|
$ |
132,653 |
|
|
$ |
170,476 |
| Timothy
Block (3) |
|
|
86,193 |
|
|
|
188,424 |
|
|
|
274,617 |
| Kaouthar
Lbiati (4) |
|
|
85,543 |
|
|
|
188,424 |
|
|
|
273,967 |
| Anand
Reddi |
|
|
28,934 |
|
|
|
0 |
|
|
|
28,934 |
| Petrus
Wjjngaard |
|
|
13,985 |
|
|
|
0 |
|
|
|
13,985 |
| Michael
Purcell (5) |
|
|
59,563 |
|
|
|
114,500 |
|
|
|
174,063 |
| |
(1) |
Represents
the grant date fair value of the option awards and RSUs granted during the fiscal years ended December 31, 2024, calculated in
accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock
Compensation. |
| |
(2) |
As
of December 31, 2024, Dr. Gary Jacob held 102,055 option awards all of which are exercisable. |
| |
(3) |
As
of December 31, 2024, Dr. Block held 99,555 option awards all of which are exercisable. |
| |
(4) |
As
of December 31, 2024, Dr. Kaouthar Lbiati 88,000 options awards of which 87,000 are exercisable. |
| |
(5) |
As
of December 31, 2024, Mr. Purcell held 50,000 RSUs, which are currently unvested. |
PRINCIPAL
STOCKHOLDERS
The
following table sets forth certain information regarding beneficial ownership of shares of our common stock as of December 31, 2024,
based on 6,958,371 shares issued and outstanding by (i) each person known to beneficially own more than 5% of our outstanding common
stock, (ii) each of our directors, (iii) our executive officers and (iv) all directors and executive officers as a group. Shares are
beneficially owned when an individual has voting and/or investment power over the shares or could obtain voting and/or investment power
over the shares within 60 days of the Record Date. Except as otherwise indicated, the persons named in the table have sole voting and
investment power with respect to all shares beneficially owned, subject to community property laws, where applicable. Unless otherwise
indicated, the address of each beneficial owner listed below is c/o Hepion Pharmaceuticals, Inc., c/o Clementi Associates, 919 Conestoga
Road, Building 3, Suite 115, Rosemont, PA 19010.
| Beneficial
Owner |
|
Number
of
Shares
Beneficially
Owned |
|
|
Percentage
of
common stock
Beneficially
Owned |
|
| Directors
and Executive Officers |
|
|
|
|
|
|
|
|
| John
Cavan (1) |
|
|
- |
|
|
|
- |
|
| John
Brancaccio (2) |
|
|
99,906 |
|
|
|
1.4 |
|
| Dr.
Timothy Block (3) |
|
|
99,906 |
|
|
|
1.4 |
|
| Dr.
Kaouthar Lbiati (4) |
|
|
88,000 |
|
|
|
1.3 |
|
| Michael
Purcell (5) |
|
|
50,000 |
|
|
|
* |
|
| |
|
|
|
|
|
|
|
|
| All
current executive officers and directors as a group (4 persons) |
|
|
337,812 |
|
|
|
4.7 |
|
*
less than one percent.
| (1) | Mr. Cavan left Hepion as interim CEO in August 2024. |
| | |
| (2) | Consists
of 351 shares of Hepion Common Stock and 99,555 shares underlying options of Hepion Common Stock exercisable within 60 days
of December 31, 2024. |
| | |
| (3) | Consists
of 351 shares of Hepion Common Stock and 99,555 shares underlying options of Hepion Common
Stock exercisable within 60 days of December 31, 2024. |
| | |
| (4) | Consists
of options to purchase 87,000 shares of Hepion Common Stock exercisable within 60 days
of December 31, 2024. |
| | |
| (5) | Consists
of 50,000 restricted stock units (RSUs) which vest upon a change of control. Mr. Purcell joined the Board of Hepion in March 2024. |
RELATED
PARTIES
The
following is a description of transactions or series of transactions since January 1, 2023 or any currently proposed transaction, to
which we were or are to be a participant and in which the amount involved in the transaction or series of transactions exceeds $120,000,
and in which any of our directors, executive officers or persons who we know hold more than five percent of any class of our capital
stock, including their immediate family members, had or will have a direct or indirect material interest, other than compensation arrangements
with our directors and executive officers.
None
DESCRIPTION
OF CAPITAL STOCK
Authorized
Capitalization
Our
authorized capital stock consists of 120,000,000 shares of Common Stock and 20,000,000 shares of preferred stock, $0.0001 par value per
share (“Preferred Stock”) in one or more series. As of December 31, 2024, we had outstanding 6,958,371 shares of our
Common Stock, 85,851 shares of our Series A Convertible Preferred Stock and 1,688 shares of our Series C Convertible Preferred Stock.
Common
Stock
Holders
of our common stock are entitled to one vote per share. Our Certificate of Incorporation does not provide for cumulative voting. Holders
of our common stock are entitled to receive ratably such dividends, if any, as may be declared by our Board out of legally available
funds. However, the current policy of our Board is to retain earnings, if any, for the operation and expansion of our Company. Upon liquidation,
dissolution or winding-up, the holders of our common stock are entitled to share ratably in all of our assets which are legally available
for distribution, after payment of or provision for all liabilities. The holders of our common stock have no preemptive, subscription,
redemption or conversion rights.
Series
A Warrants
The
following summary of certain terms and provisions of the Series A Warrants that are being offered hereby is not complete and is subject
to, and qualified in its entirety by, the provisions of the Series A Common Warrant, the form of which will be filed as an exhibit to
the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions
of the form of Series A Common Warrant for a complete description of the terms and conditions of the Series A Common Warrants.
The
issuance of Common Warrant Shares upon exercise of the Series A Warrants is subject to Stockholder Approval under applicable rules and
regulations of Nasdaq.
The
following is a brief summary of the Series A Warrants and is still subject in all respect to the provisions contained in the form of
Series A Warrants.
Duration
and Exercise Price
Each
Series A Common Warrant will have an exercise price equal to $ per share, will become exercisable on the Stockholder Approval Date (the
“Initial Exercise Date”) and will expire on the fifth anniversary of the Initial Exercise Date. The exercise price and number
of shares of Common Stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits,
reorganizations or similar events affecting our Common Stock and the exercise price. The Series A Warrants will be issued separately
from the Common Stock and may be transferred separately immediately thereafter.
Exercisability
The
Series A Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise (except in the case of
a cashless exercise as discussed below). Generally, a holder (together with its affiliates) may not exercise any portion of such holder’s
Common Warrants to the extent that the holder would own more than 4.99% of the outstanding Common Stock (or at the election of a holder
prior to the date of issuance, 9.99%) immediately after exercise, except that upon at least 61 days’ prior notice from the holder
to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s warrants up to 9.99%
of the number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is determined in accordance with the terms of the common warrants.
Cashless
Exercise
If,
at the time a holder exercises its Series A Warrants, a registration statement registering the issuance of the shares of Common Stock
underlying the Series A Warrants under the Securities Act is not then effective or available for the issuance of such shares, then in
lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price,
the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined
according to a formula set forth in the Series A Warrant.
Fundamental
Transactions
In
the event we consummate a merger or consolidation with or into another person or other reorganization event in which our Common Stock
is converted or exchanged for securities, cash or other property, or we sell, lease, license, assign, transfer, convey or otherwise dispose
of all or substantially all of our assets or we or another person acquire 50% or more of our outstanding shares of Common Stock, then
following such event, the holders of the Warrants will be entitled to receive upon exercise of the Warrants the same kind and amount
of securities, cash or property which the holders would have received had they exercised the Warrants immediately prior to such fundamental
transaction. Any successor to us or surviving entity shall assume the obligations under the Warrants. Additionally, as more fully described
in the Series A Warrants, in the event of certain fundamental transactions, the holders of the warrants will be entitled to receive consideration
in an amount equal to the Black Scholes value of such warrants on the date of consummation of such transaction.
Exercise
Price Adjustments
In
addition, and subject to certain exemptions, if we sell, enter into an agreement to sell, or grant any option to purchase, or sell, enter
into an agreement to sell, or grant any right to reprice (excluding Exempt Issuances, as defined in the Placement Agency Agreement),
or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any shares of Common
Stock, at an effective price per share less than the exercise price of the Series A Warrants then in effect, the exercise price of the
Series A Warrants will be reduced to the lower of such price or the lowest VWAP during the five consecutive trading days immediately
following such dilutive issuance or announcement thereof (subject to a floor price of $ prior to the Stockholder Approval Date
and a floor price of $ beginning on the Stockholder Approval Date, each the “Floor Price”), and the number of shares
issuable upon exercise will be proportionately adjusted such that the aggregate exercise price will remain unchanged.
If
at any time on or after the date of issuance there occurs any share split, share dividend, share combination recapitalization or other
similar transaction involving our Common Stock and the lowest daily volume weighted average price during the period commencing five consecutive
trading days immediately preceding and the five consecutive trading days commencing on the date of such event is less than the exercise
price of the Series A Warrants then in effect, then the exercise price of the Series A Warrants will be reduced to the lowest daily volume
weighted average price during such period and the number of shares issuable upon exercise will be proportionately adjusted such that
the aggregate price will remain unchanged, subject to the applicable floor price.
On
the 11th trading day after Stockholder Approval (the “Reset Date”), the Series A Warrants’ exercise price will be adjusted
to equal the lowest of (i) the exercise price then in effect, (ii) the greater of (a) the lowest daily volume weighted average price
of the shares of Common Stock during the period commencing on the first trading day after the Stockholder Approval Date and ending following
the close of trading on the tenth trading day thereafter (the “Reset Period”), and (b) the Floor Price in effect as of the
Reset Date, and (iii) the lowest volume weighted average price during the period commencing five (5) consecutive trading days immediately
preceding the Reset Date, and the number of shares issuable upon exercise will be will be increased such that the aggregate exercise
price of the warrants on the issuance date for the shares of Common Stock underlying the warrants then outstanding shall remain unchanged.
The
exercise price and the number of shares issuable upon exercise of the Series A Warrants is subject to appropriate adjustment in the event
of stock splits, stock dividends, recapitalizations, reorganizations, schemes, arrangements or similar events affecting our Common Stock.
Any
reduction to the exercise prices of the Series A Warrants and resulting increase in the number of shares of Common Stock underlying the
Warrants will be subject to the Floor Price.
Transferability
Subject
to applicable laws, a Series A Warrant may be transferred at the option of the holder upon surrender of the Common Warrant to us together
with the appropriate instruments of transfer.
Fractional
Shares
No
fractional shares of Common Stock will be issued upon the exercise of the Common Warrants. Rather, the number of shares of Common Stock
to be issued will, at our election, either be rounded up to the next whole share or we will pay a cash adjustment in respect of such
final fraction in an amount equal to such fraction multiplied by the exercise price.
Trading
Market
There
is no established trading market for the Series A Warrants, and we do not expect an active trading market to develop. We do not intend
to apply to list the Common Warrants on any securities exchange or other trading market. Without a trading market, the liquidity of the
Series A Warrants will be extremely limited.
Right
as a Stockholder
Except
as otherwise provided in the Series A Warrants or by virtue of such holder’s ownership of our shares of Common Stock, the holder
of a Series A Warrant does not have the rights or privileges of a holder of our Common Stock, including any voting rights, until the
holder exercises the Common Warrant.
Waivers
and Amendments
The
Series A Warrants may be modified or amended, or the provisions thereof waived with the written consent of the Company and the respective
holder.
Series
B Warrants
The
following summary of certain terms and provisions of the Series B Warrants that are being offered hereby is not complete and is subject
to, and qualified in its entirety by, the provisions of the Series B Warrant, the form of which will be filed as an exhibit to the registration
statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the form of
Series B Warrant for a complete description of the terms and conditions of the Series B Warrants.
The
issuance of Common Warrant Shares upon exercise of the Series B Warrants is subject to Stockholder Approval under applicable rules and
regulations of Nasdaq.
Duration
and Exercise Price
Each
Series B Warrant will have an exercise price equal to $ per share, will become exercisable on the Initial Exercise Date and will expire
on the two and one-half (2.5) year anniversary of the Initial Exercise Date. The exercise price and number of shares of Common Stock
issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar
events affecting our Common Stock and the exercise price. The Series B Warrants will be issued separately from the Common Stock and may
be transferred separately immediately thereafter.
Exercisability
The
Series B Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise (except in the case of
a cashless exercise as discussed below). Generally, a holder (together with its affiliates) may not exercise any portion of such holder’s
Series B Warrants to the extent that the holder would own more than 4.99% of the outstanding Common Stock (or at the election of a holder
prior to the date of issuance, 9.99%) immediately after exercise, except that upon at least 61 days’ prior notice from the holder
to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s warrants up to 9.99%
of the number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is determined in accordance with the terms of the common warrants.
Cashless
Exercise & and Alternative Cashless Exercise
If,
at the time a holder exercises its Series B Warrants, a registration statement registering the issuance of the shares of Common Stock
underlying the Series B Warrants under the Securities Act is not then effective or available for the issuance of such shares, then in
lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price,
the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined
according to a formula set forth in the Series B Warrant.
Holders
may also effect an “alternative cashless exercise” at any time while the Series B Warrants are outstanding following the
Initial Exercise Date. Under the alternate cashless exercise option, the holder of the Series B Warrant, has the right to receive an
aggregate number of shares equal to the product of (i) the aggregate number of shares of Common Stock that would be issuable upon a cashless
exercise of the Series B Warrant and (ii) 3.0.
Fundamental
Transactions
In
the event we consummate a merger or consolidation with or into another person or other reorganization event in which our Common Stock
is converted or exchanged for securities, cash or other property, or we sell, lease, license, assign, transfer, convey or otherwise dispose
of all or substantially all of our assets or we or another person acquire 50% or more of our outstanding shares of Common Stock, then
following such event, the holders of the Series B Warrants will be entitled to receive upon exercise of the Series B Warrants the same
kind and amount of securities, cash or property which the holders would have received had they exercised the Series B Warrants immediately
prior to such fundamental transaction. Any successor to us or surviving entity shall assume the obligations under the Series B Warrants.
Additionally, as more fully described in the Series B Warrants, in the event of certain fundamental transactions, the holders of the
warrants will be entitled to receive consideration in an amount equal to the Black Scholes value of Series B Warrants on the date of
consummation of such transaction.
Exercise
Price Adjustments
If
at any time on or after the date of issuance there occurs any share split, share dividend, share combination recapitalization or other
similar transaction involving our Common Stock and the lowest daily volume weighted average price during the period commencing five consecutive
trading days immediately preceding and the five consecutive trading days commencing on the date of such event is less than the exercise
price of the Series B Common Warrants then in effect, then the exercise price of the Series B Warrants will be reduced to the lowest
daily volume weighted average price during such period and the number of shares issuable upon exercise will be proportionately adjusted
such that the aggregate price will remain unchanged, subject to the applicable floor price.
On
the 11th trading day after Stockholder Approval (the “Reset Date”), the Series B Warrants’ exercise price will be adjusted
to equal the lowest of (i) the exercise price then in effect, (ii) the greater of (a) the lowest daily volume weighted average price
of the shares of Common Stock during the period commencing on the first trading day after the Stockholder Approval Date and ending following
the close of trading on the tenth trading day thereafter (the “Reset Period”), and (b) the Floor Price in effect as of the
Reset Date, and (iii) the lowest volume weighted average price during the period commencing five (5) consecutive Trading Days immediately
preceding the Reset Date, and the number of shares issuable upon exercise will be will be increased such that the aggregate exercise
price of the warrants on the issuance date for the shares of Common Stock underlying the warrants then outstanding shall remain unchanged.
The
exercise price and the number of shares issuable upon exercise of the Series B Warrants is subject to appropriate adjustment in the event
of stock splits, stock dividends, recapitalizations, reorganizations, schemes, arrangements or similar events affecting our Common Stock.
Any
reduction to the exercise prices of the Series B Warrants and resulting increase in the number of shares of Common Stock underlying the
Series B Warrants will be subject to the Floor Price.
Transferability
Subject
to applicable laws, a Series B Warrant may be transferred at the option of the holder upon surrender of the Common Warrant to us together
with the appropriate instruments of transfer.
Fractional
Shares
No
fractional shares of Common Stock will be issued upon the exercise of the Series B Warrants. Rather, the number of shares of Common Stock
to be issued will, at our election, either be rounded up to the next whole share or we will pay a cash adjustment in respect of such
final fraction in an amount equal to such fraction multiplied by the exercise price.
Trading
Market
There
is no established trading market for the Series B Warrants, and we do not expect an active trading market to develop. We do not intend
to apply to list the Series B Warrants on any securities exchange or other trading market. Without a trading market, the liquidity of
the Series B Warrants will be extremely limited.
Right
as a Stockholder
Except
as otherwise provided in the Series B Warrants or by virtue of such holder’s ownership of our shares of Common Stock, the holder
of a Series B Warrant does not have the rights or privileges of a holder of our Common Stock, including any voting rights, until the
holder exercises the Series B Warrant.
Waivers
and Amendments
The
Series B Warrants may be modified or amended, or the provisions thereof waived with the written consent of the Company and the respective
holder.
Pre-Funded
Warrants
The
following summary of certain terms and provisions of the Pre-Funded Warrants that are being offered hereby is not complete and is subject
to, and qualified in its entirety by, the provisions of the Pre-Funded Warrant, the form of which will be filed as an exhibit to the
registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions
of the form of Pre-Funded Warrant for a complete description of the terms and conditions of the Pre-Funded Warrants.
Duration
and Exercise Price
Each
Pre-Funded Warrant offered hereby will have an initial exercise price per share of Common Stock equal to $0.0001. The Pre-Funded Warrants
will be immediately exercisable and will expire when exercised in full. The exercise price and number of shares of Common Stock issuable
upon exercise is subject to appropriate adjustment in the event of share dividends, share splits, reorganizations or similar events affecting
our shares of Common Stock and the exercise price. Subject to the rules and regulations of the applicable trading market, we may at any
time during the term of the Pre-Funded Warrant, subject to the prior written consent of the holders, reduce the then current exercise
price to any amount and for any period of time deemed appropriate by our board of directors. The Pre-Funded Warrants will be issued in
certificated form only.
Exercisability
The
Pre-Funded Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares of Common Stock purchased upon such exercise (except in the case of a
cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the Pre-Funded Warrant
to the extent that the holder would own more than 4.99% of the outstanding shares of Common Stock immediately after exercise, except
that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of beneficial ownership of outstanding
shares after exercising the holder’s Pre-Funded Warrants up to 9.99% of the number of our shares of Common Stock outstanding immediately
after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants.
Purchasers of Pre-Funded Warrants in this offering may also elect prior to the issuance of the Pre-Funded Warrants to have the initial
exercise limitation set at 9.99% of our outstanding shares of Common Stock.
Cashless
Exercise
The
Pre-Funded Warrants may also be exercised, in whole or in part, by means of a cashless exercise, in which case the holder would receive
upon such exercise the net number of shares of Common Stock determined according to the formula set forth in the Pre-Funded Warrant.
Fundamental
Transactions
In
the event of a fundamental transaction, as described in the Pre-Funded Warrants and generally including any reorganization, recapitalization
or reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or assets,
our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding Common Stock, or any person
or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the holders of the Pre-Funded
Warrants will be entitled to receive upon exercise of the Pre-Funded Warrants the kind and amount of securities, cash or other property
that the holders would have received had they exercised the Pre-Funded Warrants immediately prior to such fundamental transaction.
Transferability
Subject
to applicable laws, a Pre-Funded Warrant may be transferred at the option of the holder upon surrender of the Pre-Funded Warrants to
us together with the appropriate instruments of transfer.
Fractional
Shares
No
fractional shares of Common Stock will be issued upon the exercise of the Pre-Funded Warrants. Rather, the number of shares of Common
Stock to be issued will, at our election, either be rounded down to the nearest whole number or we will pay a cash adjustment in respect
of such final fraction in an amount equal to such fraction multiplied by the exercise price.
Trading
Market
There
is no established trading market for the Pre-Funded Warrants, and we do not expect a market to develop. We do not intend to apply for
a listing of the Pre-Funded Warrants on any securities exchange or other nationally recognized trading system. Without an active trading
market, the liquidity of the Pre-Funded Warrants will be limited. The Common Stock issuable upon exercise of the Pre-Funded Warrants
is currently listed on the Nasdaq Capital Market
Right
as a Stockholder
Except
as otherwise provided in the Pre-Funded Warrants or by virtue of such holder’s ownership of our shares of Common Stock, the holder
of a Pre-Funded Warrant does not have the rights or privileges of a holder of our Common Stock, including any voting rights, dividends
or other rights as a stockholder of us, until the holder exercises the Pre-Funded Warrant.
Warrant
Certificate
The
Pre-Funded Warrants will be issued in certificated form.
Waivers
and Amendments
The
Pre-Funded Warrants may be modified or amended, or the provisions thereof waived with the written consent of us and the respective holder.
Listing
Our
shares of common stock are listed on The Nasdaq Capital Market under the symbol “HEPA.”
Plan
of Distribution
Pursuant
to the terms and conditions contained in the placement agent agreement, dated January [*], 2025 (the “Placement Agent
Agreement”), we have engaged the Placement Agent to act as our exclusive placement agent to solicit offers to purchase the
shares of Common Stock, Series A Warrants and Series B Warrants. The Placement Agent is not purchasing or selling any such
securities, nor is it required to arrange for the purchase and sale of any specific number or dollar amount of such securities,
other than to use its “reasonable best efforts” to arrange for the sale of such securities by us. Therefore, we may not
sell all of the shares of Common Stock, the Series A Warrants and the Series B Warrants being offered. The terms of this offering
were subject to market conditions and negotiations between us, the Placement Agent and prospective investors. This is a reasonable
best efforts offering and there is no minimum offering amount required as a condition to the closing of this offering. The Placement
Agent may retain sub-agents and selected dealers in connection with this offering.
Investors
purchasing the securities offered hereby will have the option to execute a securities purchase agreement with us. Investors who do
not enter into a securities purchase agreement shall rely solely on this prospectus in connection with the purchase of our securities
in this offering. In addition to rights and remedies available to all purchasers in this offering under federal securities and state
law, the purchasers which enter into a securities purchase agreement will also be able to bring claims of breach of contract against
us. The ability to pursue a claim for breach of contract is material to larger purchasers in this offering as a means to enforce the
following covenants uniquely available to them under the securities purchase agreement: (i) a covenant to not enter into variable rate
financings for a period of six months following the closing of the offering, subject to certain exceptions; and (ii) a covenant to not
enter into any equity financings for 60 days from closing of the offering, subject to certain exceptions.
We negotiated
the offering price for the shares in this offering with prospective investors. The factors considered in determining the price included
the recent market price of our common stock, the general condition of the securities market at the time of this offering, the history
of, and the prospects for the industry in which we compete, our past and present operations and our prospects for future revenues.
The
nature of the representations, warranties and covenants in the securities purchase agreements shall include:
| |
● |
standard
issuer representations and warranties on matters such as organization, qualification, authorization, no conflict, no governmental
filings required, current in SEC filings, no litigation, labor or other compliance issues, environmental, intellectual property and
title matters and compliance with various laws such as the Foreign Corrupt Practices Act; and |
| |
|
|
| |
● |
covenants
regarding matters such as registration of warrant shares, no integration with other offerings, no shareholder rights plans, no material
nonpublic information, use of proceeds, indemnification of purchasers, reservation and listing of shares of Common Stock, no subsequent
equity sales for 60 days from the closing of this offering, subject to certain exceptions, and no variable rate financings for six
months from the closing of this offering, subject to certain exceptions. |
Delivery
of the shares of Common Stock, the Series A Warrants and the Series B Warrants offered hereby is expected to occur on or about , 2025,
subject to satisfaction of certain customary closing conditions.
Lock-Up
Agreements
Pursuant
to certain “lock-up” agreements, our executive officers, directors and holders of at least 5% of our common stock and securities
exercisable for or convertible into common stock outstanding immediately upon the closing of this offering, have agreed, subject to certain
exceptions, not to offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of or announce the intention to otherwise
dispose of, or enter into any swap, hedge or similar agreement or arrangement that transfers, in whole or in part, the economic risk
of ownership of, directly or indirectly, engage in any short selling of any shares of common stock or securities convertible into or
exchangeable or exercisable for any shares of common stock, whether currently owned or subsequently acquired, without the prior written
consent of the Placement Agent, for a period of sixty (60) days after the closing date of the offering.
The
Placement Agent, in its sole discretion, may release the common stock and other securities subject to the lock-up agreements described
above in whole or in part at any time. When determining whether or not to release common stock and other securities from lock-up agreements,
the Placement Agent will consider, among other factors, the holder’s reasons for requesting the release, the number of shares of
common stock and other securities for which the release is being requested and market conditions at the time.
Fees
and Expenses
We
have agreed to pay the Placement Agent a total cash fee equal to 8% of the aggregate gross proceeds received in the offering as well
as a non-accountable expense allowance of up to $10,000. We will also pay the Placement Agent for their reasonable and documented out-of-pocket
accountable legal expenses of up to $75,000. Under the Placement Agent Agreement, we agreed to bear the cost of the escrow agent and
the cost of such clearing agent settlement and financing, if any, of up to $7,000.
Pursuant to a
side letter between the Placement Agent and A.G.P./Alliance Global Partners (“A.G.P.”), dated December 20, 2024, A.G.P. agreed
to be a financial advisor for the offering. In connection with the services provided by A.G.P., the Placement Agent and A.G.P. agreed
to split equally to gross cash received in connection with the offering and the cash or warrants received pursuant to any right to participate
in any subsequent financing or securities offering of the Company as a lead, sole, or joint underwriter, financial advisor or placement
agent or pursuant to any tail provision that either A.G.P. or the Placement Agent may have with the Company.
| | |
Per
Share of Common Stock and Accompanying Series
A Warrant
and Series B Warrant | | |
Total | |
| Combined public offering price | |
| | | |
| | |
| Placement Agent’s fees | |
| | | |
| | |
| Proceeds to us, before expenses | |
| | | |
| | |
Indemnification
We
have agreed to indemnify the Placement Agent against certain liabilities, including liabilities under the Securities Act and liabilities
arising from breaches of representations and warranties contained in our Engagement Agreement with the Placement Agent. We have also
agreed to contribute to payments the Placement Agent may be required to make in respect of such liabilities.
In
addition, we will indemnify the purchasers of securities in this offering against liabilities arising out of or relating to (i) any breach
of any of the representations, warranties, covenants or agreements made by us in the securities purchase agreement or related documents
or (ii) any action instituted against a purchaser by a third party (other than a third party who is affiliated with such purchaser) with
respect to the securities purchase agreement or related documents and the transactions contemplated thereby, subject to certain exceptions.
Right
of First Refusal
We
have granted the Placement Agent a right of first refusal, subject to an exception, for a period of six (6) months following the
closing of this offering, to act as sole book-running manager, sole underwriter or sole placement agent for each and every future brokered,
placed, underwritten, or investment-bank-advised public and private equity or debt offering, including all equity linked financings,
during such six (6) month period for the Company, or any successor to or any subsidiary of the Company, on terms customary to the
Placement Agent and in compliance with FINRA Rule 5110(g)(6)(A).
Tail
We
have also agreed to pay the Placement Agent a tail fee equal to the cash and warrant compensation in this offering, if any investor,
subject to certain exceptions, who with our written approval was contacted or introduced to us by the Placement Agent during the term
of its engagement, provides us with capital in any public or private offering or other financing or capital raising transaction during
the twelve (12) month period following expiration or termination of the Placement Agent Agreement, subject to certain exceptions.
Other
Relationships
From
time to time, the Placement Agent may provide in the future various advisory, investment and commercial banking and other services to
us in the ordinary course of business, for which they have received and may continue to receive customary fees and commissions. However,
except as disclosed in this prospectus, we have no present arrangements with the Placement Agent for any further services.
In
addition, in the ordinary course of their business activities, the Placement Agent and its affiliates may make or hold a broad array
of investments and actively trade debt and equity securities (or related derivative securities) for their own account and for the accounts
of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The
Placement Agent and its affiliates may also make investment recommendations and/or publish or express independent research views in respect
of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such
securities and instruments.
Except
as disclosed in this prospectus, we have no present arrangements with the Placement Agent for any further services.
Regulation
M Compliance
The
Placement Agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions
received by it and any profit realized on the sale of our securities offered hereby by it while acting as principal might be deemed to
be underwriting discounts or commissions under the Securities Act. The Placement Agent will be required to comply with the requirements
of the Securities Act and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These
rules and regulations may limit the timing of purchases and sales of our securities by the Placement Agent. Under these rules and regulations,
the Placement Agent may not (i) engage in any stabilization activity in connection with our securities; and (ii) bid for or purchase
any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act,
until they have completed their participation in the distribution.
Listing
and Transfer Agent
Our
Common Stock is listed on Nasdaq and trades under the symbol “HEPA.” The transfer agent for our Common Stock is Pacific Stock
Transfer Company. There is no established public trading market for the Series A Warrants or the Series B Warrants, and we do not plan
on making an application to list the Series A Warrants or the Series B Warrants on Nasdaq, any national securities exchange or other
nationally recognized trading system. We will act as the registrar and transfer agent for the Series A Warrants and the Series B Warrants.
Electronic
Distribution
This
prospectus in electronic format may be made available on websites or through other online services maintained by the Placement Agent,
or by its affiliates. Other than this prospectus in electronic format, the information on the Placement Agent’s website and any
information contained in any other website maintained by the Placement Agent is not part of this prospectus or the registration statement
of which this prospectus forms a part, has not been approved and/or endorsed by us or the Placement Agent in its capacity as a placement
agent, and should not be relied upon by investors.
LEGAL
MATTERS
Sheppard,
Mullin, Richter & Hampton LLP, New York, New York, will pass upon the validity of the securities offered hereby. Sullivan & Worcester
LLP, New York, New York, is acting as counsel for the Placement Agent in connection with this offering.
EXPERTS
The
consolidated financial statements of Hepion Pharmaceuticals, Inc. (the “Company”) as of and for the year ended December 31,
2023 incorporated by reference in this prospectus and in the Registration Statement have been so incorporated in reliance on the report
of Grassi & Co., CPAs, P.C., an independent registered public accounting firm, given on the authority of said firm as experts in
auditing and accounting. The report on the consolidated financial statements contains an explanatory paragraph regarding the Company’s
ability to continue as a going concern.
The
consolidated financial statements of Hepion Pharmaceuticals, Inc. (the “Company”) as of and for the year ended December 31,
2022 incorporated by reference in this prospectus and in the Registration Statement have been so incorporated in reliance on the report
of BDO USA, P.C., an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The report on the consolidated financial statements contains an explanatory paragraph regarding the Company’s ability to continue
as a going concern.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities offered by this
prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth
in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations
of the SEC. For further information with respect to us and our securities, we refer you to the registration statement, including the
exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract
or any other document is not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement,
please see the copy of the contract or document that has been filed. Each statement is this prospectus relating to a contract or document
filed as an exhibit is qualified in all respects by the filed exhibit. We are subject to the informational requirements of the Exchange
Act and in accordance therewith file annual, quarterly and current reports, proxy statements and other information with the SEC. The
SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically
with the SEC. The address of that website is www.sec.gov. The registration statement and the documents referred to below under
“Incorporation of Documents By Reference” are also available on our website, www.hepionpharma.com. We have not incorporated
by reference into this prospectus the information on our website, and you should not consider it to be a part of this prospectus.
INCORPORATION
OF DOCUMENTS BY REFERENCE
This
prospectus is part of the registration statement but the registration statement includes and incorporates by reference additional information
and exhibits. The SEC permits us to “incorporate by reference” the information contained in documents we file with the SEC,
which means that we can disclose important information to you by referring you to those documents rather than by including them in this
prospectus. Information that is incorporated by reference is considered to be part of this prospectus and you should read it with the
same care that you read this prospectus and any subsequent prospectus supplement. Information that we file later with the SEC will automatically
update and supersede the information that is either contained, or incorporated by reference, in this prospectus, and will be considered
to be a part of this prospectus from the date those documents are filed.
We
incorporate by reference the documents listed below, all filings filed by us pursuant to the Exchange Act after the date of the registration
statement of which this prospectus forms a part, and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act prior to the time that all securities covered by this prospectus have been sold; provided, however, that we are not
incorporating any information furnished under either Item 2.02 or Item 7.01 of any Current Report on Form 8-K and exhibits furnished
on such form that relate to such items:
1.
The Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 16, 2024, the
Amended Annual Report on Form
10-K/A for the year ended December 31, 2023 filed with the SEC on June 25, 2024 and Amendment No. 2 to Form 10-K/A for the year
ended December 31, 2023 filed with the SEC on January 13, 2025;
2.
The Company’s Quarterly Reports on Form 10-Q filed with the SEC on May
21, 2024, August
13, 2024, and November
14, 2024;
3.
The Company’s Current Reports on Form 8-K filed with the SEC on January
3, 2024, February
7, 2024, February
16, 2024, February
20, 2024, March
6, 2024, July
22, 2024, August
7, 2024, September
5, 2024, November
21, 2024 and December
11, 2024; and
4.
The description of the Company’s common stock contained in the registration statement on Form
8-A filed with the SEC on February 24, 2015 pursuant to Section 12 of the Exchange Act, including any amendment or report filed for
the purpose of updating that description.
In
addition, all documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, prior to the termination of the offering (excluding any information furnished rather than filed) shall be deemed to be incorporated
by reference into this prospectus.
Notwithstanding
the statements in the preceding paragraphs, no document, report or exhibit (or portion of any of the foregoing) or any other information
that we have “furnished” to the SEC pursuant to the Securities Exchange Act of 1934, as amended shall be incorporated by
reference into this prospectus.
We
will provide to each person, including any beneficial holder, to whom a prospectus is delivered, at no cost, upon written or oral request,
a copy of any or all of the information that has been incorporated by reference in the prospectus but not delivered with the prospectus.
Requests for documents should be by writing to or telephoning us at the following address: Hepion Pharmaceuticals, Inc., c/o Clementi
Associates, 919 Conestoga Road, Building 3, Suite 115, Rosemont, PA 19010, (973) 214-3273. Exhibits to these filings will not be sent
unless those exhibits have been specifically incorporated by reference in such filings.
You
also may access these filings on our website at http://www.hepionpharma.com. We do not incorporate the information on our website into
this prospectus or any supplement to this prospectus and you should not consider any information on, or that can be accessed through,
our website as part of this prospectus or any supplement to this prospectus (other than those filings with the SEC that we specifically
incorporate by reference into this prospectus or any supplement to this prospectus).
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed modified,
superseded or replaced for purposes of this prospectus to the extent that a statement contained in this prospectus modifies, supersedes
or replaces such statement. Any statement contained herein or in any document incorporated or deemed to be incorporated by reference
shall be deemed to be modified or superseded for purposes of the registration statement of which this prospectus forms a part to the
extent that a statement contained in any other subsequently filed document which also is or is deemed to be incorporated by reference
modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed to constitute a part of the registration
statement of which this prospectus forms a part, except as so modified or superseded.
Up
to 14,285,714 Shares of Common Stock
Up
to 14,285,714 Pre-Funded Warrants to Purchase up to 14,285,714 Shares of Common Stock
Up
to 14,285,714 Series A Warrants to Purchase up to 14,285,714 Shares of Common Stock
Up
to 14,285,714 Series B Warrants to Purchase up to 14,285,714 Shares of Common Stock
Up
to 42,857,142 Shares of Common Stock Underlying the Pre-Funded Warrants, Series A Warrants and Series B Warrants
PRELIMINARY
PROSPECTUS
Sole
Placement agent
LAIDLAW
& COMPANY (UK) LTD.
,
2025
Part
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
We
estimate that expenses in connection with the distribution described in this registration statement (other than brokerage commissions,
discounts or other expenses relating to the sale of the shares in this offering) will be as set forth below. We will pay all of the expenses
with respect to the distribution, and such amounts, with the exception of the SEC registration fee, are estimates.
| SEC expenses | |
$ | 3,675 | |
| Legal fees and expenses | |
$ | 110,000 | |
| Accounting fees and expenses | |
$ | 125,000 | |
| Miscellaneous expenses | |
$ | 6,235 | |
| Total offering expenses | |
$ | 245,000 | |
Item
14. Indemnification of Directors and Officers
Section
102 of Delaware General Corporation Law (the “DGCL”) permits a corporation to eliminate the personal liability of directors
of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where
the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law,
authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal
benefit. Our amended and restated certificate of incorporation provides that no director of Hepion Pharmaceuticals shall be personally
liable to it or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of
law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for
breaches of fiduciary duty.
Section
145 of the DGCL provides that a corporation has the power to indemnify a director, officer, employee, or agent of the corporation, or
a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or other enterprise in
related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made a party
to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation,
no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable
to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the
adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity
for such expenses which the Court of Chancery or such other court shall deem proper.
Our
Certificate of Incorporation as amended and Bylaws provide indemnification for our directors and officers to the fullest extent permitted
by the DGCL.
Item
15. Recent Sales of Unregistered Securities
In
the three years preceding the filing of this registration statement, the Company has issued the following securities that were not registered
under the Securities Act.
November
2022 Purchase Agreement
On
November 4, 2022, we entered into a Securities Purchase Agreement (the “November 2022 Purchase Agreement”) with certain institutional
investors (the “Investors”), pursuant to which we agreed to issue and sell, in a private placement (the “Offering”),
1,900,000 shares of our Series F Convertible Redeemable Preferred Stock, par value $0.0001 per share (the “Series F Preferred Stock”),
and 100,000 shares of our Series G Convertible Redeemable Preferred Stock, par value $0.0001 per share (the “Series G Preferred
Stock,” and together with the Series F Preferred Stock, the “Preferred Stock”), at an offering price of $9.50 per share,
representing a 5% original issue discount (“OID”) to the stated value of $10.00 per share, for gross proceeds of $20 million
in the aggregate for the Offering, before the deduction of discounts, fees and offering expenses. The shares of Preferred Stock were
convertible, at a conversion price of $1.00 per share (subject in certain circumstances to adjustments), into shares of our common stock,
at the option of the holders and, in certain circumstances, by the Company. The Purchase Agreement contains customary representations,
warranties and agreements by the Company and customary conditions to closing. The Offering closed on November 8, 2022. The Preferred
Stock and the shares of common stock underlying the Preferred Stock have not been registered under the Securities Act and have been issued
in reliance on an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) thereof.
September
2023 Purchase Agreement
On
September 28, 2023, we entered into a securities purchase agreement (the “September 2023 Purchase Agreement”) with an institutional
investor, pursuant to which we agreed to issue and sell to such investor, in a registered direct offering (i) 400,000 shares (the “Shares”)
of our common stock at a purchase price of $5.10 per Share, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase
up to 580,393 shares of our common stock at an exercise price of $0.0001 per share at an offering price of $5.09 per share. The Shares
and Pre-Funded Warrants (and the shares of common stock underlying the Pre-Funded Warrants) were offered by the Company pursuant to its
shelf registration statement on Form S-3 (File No. 333-254996), which was filed with the Securities and Exchange Commission (the “SEC”)
on April 2, 2021 and declared effective by the SEC on November 24, 2021.
Concurrently
with the sale of the Shares and Pre-Funded Warrants, pursuant to the September 2023 Purchase Agreement in a concurrent private placement,
for each Share or Pre-Funded Warrant purchased by the investor, such investor received from the Company (i) an unregistered warrant (the
“Series A Warrant”) to purchase one share of Common Stock, and (ii) an unregistered warrant (the “Series B Warrant”)
to purchase one share of Common Stock. Each Series A Warrant will be exercisable for one share of our common stock at an exercise price
of $4.85 per share, will be exercisable immediately upon issuance, and will have a term of five years from the date of issuance. Each
Series B Warrant will be exercisable for one share of our common stock at an exercise price of $4.85 per share, will be exercisable immediately
upon issuance, and will have a term of 18 months from the date of issuance.
The
Warrants and the shares issuable upon exercise of the Warrants were sold without registration under the Securities Act of 1933 (the “Securities
Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering
and Rule 506 promulgated under the Securities Act as sales to accredited investors, and in reliance on similar exemptions under applicable
state laws.
February
2024 Warrant Inducement Transaction
On
February 15, 2024, the Company entered into a warrant inducement agreement (the “Warrant Inducement Agreement”) with the
holders of an aggregate of 980,393 of the Series B Warrants (the “Holders”), pursuant to which the Holders agreed to exercise
in cash 980,393 of the Series B Warrants at a reduced exercise price of $2.10 per Share (reduced from $4.85 per Share), for gross proceeds
to the Company of approximately $2.06 million. As an inducement to such exercise, the Company agreed to reduce the exercise price of
the Holder’s Series A Warrants to purchase up to an aggregate of 980,393 Shares from $4.85 to $1.91 per share and extend the expiration
date to February 21, 2029 (the “Amended Series A Warrants”) in an amendment to the Series A Warrant (“Amendment No.
1 to Series A Common Stock Purchase Warrant”). In addition, the Company issued to the Holders (i) unregistered warrants (the “Series
B-1 Warrants”) to purchase up to 735,295 Shares of the Company’s Common Stock at an exercise price of $1.91 for a term of
five years, and (ii) unregistered warrants (the “Series B-2 Warrants” and together with the Series B-1 Warrants, the “New
Warrants”) to purchase up to 735,295 Shares of the Company’s Common Stock at an exercise price of $1.91 for a term of eighteen
months.
The
shares of common stock issuable upon exercise of the Amended Series A Warrants are registered pursuant to the Company’s Registration
Statement on Form S-1 (File No. 333-275231), which was filed with the SEC on October 31, 2023 and declared effective by the SEC on November
8, 2023, and prospectus supplement related thereto.
Merger
Agreement and Related Transactions
On
July 19, 2024, the Company entered into a SPA with certain purchasers pursuant to which the Company sold an aggregate of $2.9 million
in principal amount of Notes. The Notes were due on the earlier of: (i) December 31, 2024, (ii) the date of the closing of the Merger,
(iii) the date that the Merger was terminated pursuant to the terms of the Merger Agreement, or (iv) such earlier date as the Notes were
required or permitted to be repaid as provided in the Notes, as may be extended at the option of the holders of the Notes as described
in the Notes.
Pursuant
to the SPA, the Company delivered to each purchaser (i) a Note with a principal amount equal to such purchaser’s subscription amount
multiplied by 1.16, and (ii) a number of shares of Common Stock equal to 19.99% of the total outstanding shares of Common Stock, multiplied
by such purchaser’s subscription amount, divided by $2,500,000.
The
Notes and the shares issued pursuant to the SPA were not registered under the Securities Act or the securities laws of any other jurisdiction.
The Notes and the shares may not be offered or sold in the United States absent registration or an applicable exemption from registration
under the Securities Act and any applicable state securities laws. The Notes and shares were offered and sold in transactions exempt
from registration under the Securities Act in reliance on Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder.
Item
16. Exhibits and Financial Statement Schedules.
(a)
Exhibits.
| Exhibit
Number |
|
Exhibit
Description |
| 1.1 |
|
Form
of Placement Agency Agreement** |
| 2.1 |
|
Agreement
and Plan of Merger, dated as of July 19, 2024, by and among the Company, Parent and Merger Sub (incorporated by reference to Exhibit
2.1 to Form 8-K filed on July 22, 2024). |
| 3.1(a) |
|
Certificate
of Incorporation of Hepion Pharmaceuticals, Inc. (filed as Exhibit 3.1 to the Company’s registration statement on Form 10-12G
which was filed with the Securities and Exchange Commission on August 8, 2013 and incorporated herein by reference). |
| 3.1(b) |
|
Certificate
of Designation, Preferences and Rights of the Series A Convertible Preferred Stock of Hepion Pharmaceuticals, Inc. filed with the
Secretary of State of the State of Delaware on October 14, 2014 (filed as Exhibit 3.1 to the Company’s Current Report on Form
8-K filed with the Securities and Exchange Commission on October 15, 2014 and incorporated herein by reference). |
| 3.1(c) |
|
Certificate
of Designation, Preferences and Rights of the Series B Convertible Preferred Stock of Hepion Pharmaceuticals, Inc. filed with the
Secretary of State of the State of Delaware on December 18, 2014 (filed as Exhibit 3.1 to the Company’s Current Report on Form
8-K filed with the Securities and Exchange Commission on December 18, 2014 and incorporated herein by reference). |
| 3.1(d) |
|
Certificate
of Amendment of Certificate of Incorporation of Hepion Pharmaceuticals, Inc. dated May 25, 2018 (filed as Exhibit 3.1 to the Company’s
Form 8-K which was filed with the Securities and Exchange Commission on May 29, 2018 and incorporated herein by reference). |
| 3.1(e) |
|
Certificate
of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (filed as Exhibit 3.1 to the Company’s
Form 8-K which was filed with the Securities and Exchange Commission on July 5, 2018 and incorporated herein by reference). |
| 3.1(f) |
|
Certificate
of Designation of Preference, Rights and Limitations of Series D Convertible Preferred Stock filed with the Secretary of the State
of Delaware on April 26, 2019 (incorporated by reference to Exhibit 3.1 to Form 8-K filed on May 8, 2019). |
| 3.1(g) |
|
Certificate
of Designation of Preference, Rights and Limitations of Series E Convertible Preferred Stock, filed with the Secretary of the State
of Delaware on June 18, 2019 (incorporated by reference to Exhibit 3.1 to Form 8-K filed June 20, 2019) |
| 3.1(h) |
|
Certificate
of Amendment to the Certificate of Incorporation, dated May 28, 2019 (incorporated by reference to Exhibit 3.1 to Form 8-K filed
May 31, 2019) |
| 3.1(i) |
|
Certificate
of Amendment to the Certificate of Incorporation, dated July 18, 2019 (incorporated by reference to Exhibit 3.1 to Form 8-K filed
July 23, 2019) |
| 3.1(j) |
|
Certificate
of Designation of Series F Convertible Redeemable Preferred Stock (incorporated by reference to Exhibit 3.1 to Form 8-K filed November
4, 2022) |
| 3.1(k) |
|
Certificate
of Designation of Series G Convertible Redeemable Preferred Stock (incorporated by reference to Exhibit 3.2 to Form 8-K filed November
4, 2022) |
| 3.1(l) |
|
Certificate
of Amendment to Certificate of Designation of Series F Convertible Redeemable Preferred Stock (incorporated by reference to Exhibit
3.3 to Form 8-K filed November 4, 2022) |
| 3.1(m) |
|
Certificate
of Amendment to Certificate of Designation of Series F Convertible Redeemable Preferred Stock (incorporated by reference to Exhibit
3.4 to Form 8-K filed November 4, 2022) |
| 3.1(n) |
|
Certificate
of Amendment to Certificate of Incorporation of Hepion Pharmaceuticals, Inc. (incorporated by reference to Exhibit 3.1 to Form 8-K
filed May 10, 2023) |
| 3.2(a) |
|
By-Laws
of Hepion Pharmaceuticals, Inc. (filed as Exhibit 3.2 to the Company’s registration statement on Form 10-12G which was filed
with the Securities and Exchange Commission on August 8, 2013 and incorporated herein by reference). |
| 3.2(b) |
|
Amendment
to the By-Laws of Hepion Pharmaceuticals, Inc. (incorporated by reference to Exhibit 3.1 to Form 8-K filed August 23, 2021) |
| 4.1 |
|
Form
of Series A Warrant (incorporated by reference to Exhibit 4.2 to Form 8-K filed October 3, 2023). |
| 4.2 |
|
Form
of Series B Warrant (incorporated by reference to Exhibit 4.3 to Form 8-K filed October 3, 2023). |
| 4.3 |
|
Form
of Series B-1 Warrant (incorporated by reference to Exhibit 4.1 to Form 8-K filed on February 16, 2024). |
| 4.4 |
|
Form
of Series B-2 Warrant (incorporated by reference to Exhibit 4.2 of Form 8-K filed on February 16, 2024). |
| 4.5 |
|
Form
of Senior Unsecured Nonconvertible Note (incorporated by reference to Exhibit 4.1 to Form 8-K filed on July 22, 2024). |
| 4.6 |
|
Form of Pre-Funded Warrant ** |
| 4.7 |
|
Form of Series A Warrant ** |
| 4.8 |
|
Form of Series B Warrant ** |
| 5.1 |
|
Opinion of Sheppard, Mullin, Richter & Hampton LLP ** |
| 10.1 |
|
2023 Omnibus Equity Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement filed on April 28, 2023) + |
| 10.2 |
|
Form
of Warrant Inducement Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K filed on February 16, 2024). |
| 10.3 |
|
Form
of Amendment No. 1 to Series A Common Stock Purchase Warrant (incorporated by reference to Exhibit 10.2 to Form 8-K filed on February
16, 2024). |
| 10.4 |
|
Form
of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K filed on July 22, 2024). |
| 10.5 |
|
Form
of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to Form 8-K filed on July 22, 2024). |
| 10.6 |
|
Termination
Agreement, dated as of December 10, 2024 by and between Hepion Pharmaceuticals, Inc., Pharma Two B Ltd. and Pearl Merger Sub, Inc
(incorporated by reference to Exhibit 10.1 to Form 8-K filed on December 11, 2024). |
| 10.7 |
|
Form of Securities Purchase Agreement** |
| 21.1 |
|
List
of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K, filed April 10, 2023) |
| 23.1 |
|
Consent of Grassi & Co., CPAs, P.C., Independent Registered Public Accounting Firm** |
| 23.2 |
|
Consent of BDO USA, P.C., Independent Registered Public Accounting Firm** |
| 23.3 |
|
Consent of Sheppard, Mullin, Richter & Hampton LLP (included in Exhibit 5.1)** |
| 24 |
|
Power of Attorney (included on signature page hereto) * |
| 107 |
|
Fee Filing Table* |
| |
|
|
+
*
** |
|
Compensation
Plan or Arrangement or Management Contract.
Previously
filed
Filed
herewith |
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
| |
1. |
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to: |
| |
i. |
Include
any prospectus required by Section 10(a)(3) of the Securities Act. |
| |
|
|
| |
ii. |
Reflect
in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement; and |
| |
|
|
| |
iii. |
Include
any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material
change to such information in the registration statement; |
provided,
however, that paragraphs (1)(i), (ii) and (iii) do not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended that are incorporated by reference in the registration statement, or is contained
in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
| |
2. |
That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to securities offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering thereof; |
| |
|
|
| |
3. |
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering; |
| |
|
|
| |
4. |
That,
for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b)
as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is
part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first
use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first use. |
| |
|
|
| |
5. |
That,
for the purpose of determining any liability under the Securities Act of 1933 to any purchaser in the initial distribution of the
securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| |
i. |
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424; |
| |
ii. |
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant; |
| |
iii. |
The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or our securities provided by or on behalf of the undersigned registrant; and |
| |
iv. |
Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
The
undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing
of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized in the Township of Rosemont, State of Pennsylvania, on the 14th
day of January 2025.
| |
Hepion
Pharmaceuticals, Inc. |
| |
|
|
| |
By: |
/s/
John Brancaccio |
| |
Name: |
John
Brancaccio |
| |
Title: |
Interim
Chief Executive Officer |
Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated below.
| Signature |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
John Brancaccio |
|
Interim
Chief Executive Officer, Interim Chief Financial Officer and Chairman of the Board |
|
January
14, 2025 |
| John
Brancaccio |
|
(Principal
Executive Officer and Principal Financial and Accounting Officer) |
|
|
| |
|
|
|
|
| * |
|
Director |
|
January
14, 2025 |
| Timothy
Block |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
January
14, 2025 |
| Kaouthar
Lbiati |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
January
14, 2025 |
| Michael
Purcell |
|
|
|
|
| *By: | /s/
John Brancaccio |
|
| | John
Brancaccio |
|
| | Attorney-in-Fact |
|
| | January
14, 2025 |
|
Exhibit 1.1
PLACEMENT
AGENCY AGREEMENT
Laidlaw
& Company (UK) Ltd.
521
5th Ave,
New
York, NY 10175
January
[__], 2025
Ladies
and Gentlemen:
This
letter (this “Agreement”) constitutes the agreement between Hepion Pharmaceuticals, Inc., a Delaware corporation (the
“Company”) and Laidlaw & Company (UK) Ltd. (“Laidlaw”) pursuant to which Laidlaw shall serve
(the “Services”) as the placement agent (the “Placement Agent”) for the Company, on a reasonable
“best efforts” basis, in connection with the proposed offer and placement (the “Offering”) by the Company
of its Securities (as defined Section 3 of this Agreement). The Company expressly acknowledges and agrees that Laidlaw’s obligations
hereunder are on a reasonable “best efforts” basis only and that the execution of this Agreement does not constitute a commitment
by Laidlaw to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the success
of Laidlaw placing the Securities.
Section
1. Appointment of Laidlaw & Company (UK) Ltd. as Exclusive Placement Agent.
On
the basis of the representations, warranties, covenants and agreements of the Company herein contained, and subject to all the terms
and conditions of this Agreement, the Company hereby appoints the Placement Agent as its exclusive placement agent in connection with
a distribution of its Securities to be offered and sold by the Company pursuant to a registration statement filed under the Securities
Act of 1933, as amended (the “Securities Act”) on Form S-1 (File No. 333- 284052), and Laidlaw agrees
to act as the Company’s exclusive Placement Agent. Pursuant to this appointment, the Placement Agent will solicit offers for the
purchase of or attempt to place all or part of the Securities of the Company in the proposed Offering. Until the final closing or earlier
upon termination of this Agreement pursuant to Section 5 hereof, the Company shall not, without the prior written consent of the
Placement Agent, solicit or accept offers to purchase the Securities other than through the Placement Agent. The Company acknowledges
that the Placement Agent will act as an agent of the Company and use its reasonable “best efforts” to solicit offers to purchase
the Securities from the Company on the terms, and subject to the conditions, set forth in the Prospectus (as defined below). The Placement
Agent shall use commercially reasonable efforts to assist the Company in obtaining performance by each Purchaser whose offer to purchase
Securities has been solicited by the Placement Agent, but the Placement Agent shall not, except as otherwise provided in this Agreement,
be obligated to disclose the identity of any potential purchaser or have any liability to the Company in the event any such purchase
is not consummated for any reason. Under no circumstances will the Placement Agent be obligated to underwrite or purchase any Securities
for its own account and, in soliciting purchases of the Securities, the Placement Agent shall act solely as an agent of the Company.
The Services provided pursuant to this Agreement shall be on an “agency” basis and not on a “principal” basis.
The
Placement Agent will solicit offers for the purchase of the Securities in the Offering at such times and in such amounts as the Placement
Agent deems advisable. The Company shall have the sole right to accept offers to purchase Securities and may reject any such offer, in
whole or in part. The Placement Agent may retain other brokers or dealers to act as sub-agents on its behalf in connection with the Offering
and may pay any sub-agent a solicitation fee with respect to any Securities placed by it. The Company and Placement Agent shall negotiate
the timing and terms of the Offering and acknowledge that the Offering and the provision of Placement Agent services related to the Offering
are subject to market conditions and the receipt of all required related clearances and approvals.
Section
2. Fees; Expenses; Other Arrangements.
A.
Placement Agent’s Fee. As compensation for services rendered, the Company shall pay to the Placement Agent in cash by wire
transfer in immediately available funds to an account or accounts designated by the Placement Agent an amount (the “Placement
Fee”) equal to eight percent (8.0%) of the aggregate gross proceeds received by the Company from the sale of the Securities,
at the closing (the “Closing” and the date on which the Closing occurs, the “Closing Date”). The
Placement Agent may deduct from the net proceeds of the Offering payable to the Company on the Closing Date the Placement Fee set forth
herein to be paid by the Company to the Placement Agent.
B. Offering
Expenses. The Company will be responsible for and will pay all expenses relating to the Offering, including, without limitation,
(a) all filing fees and expenses relating to the registration of the Securities with the Commission; (b) all FINRA Public Offering
filing fees; (c) all fees and expenses relating to the listing of the Company’s common stock on The Nasdaq Capital Market; (d)
all fees, expenses and disbursements relating to the registration or qualification of the Securities under the “blue
sky” securities laws of such states and other jurisdictions as Laidlaw may reasonably designate (including, without
limitation, all filing and registration fees, and the reasonable fees and disbursements of “blue sky” counsel); (e) all
fees, expenses and disbursements relating to the registration, qualification or exemption of the Securities under the securities
laws of such foreign jurisdictions as Laidlaw may reasonably designate; (f) the costs of all mailing and printing of the Offering
documents; (g) transfer and/or stamp taxes, if any, payable upon the transfer of Securities from the Company to Investors; (h) the
fees and expenses of the Company’s accountants; (i) reasonable and documented out-of-pocket legal expenses incurred by Laidlaw
in connection with the transaction in an amount of up to $75,000; (j) and non-accountable expenses (NAE) incurred by Laidlaw,
including, but not limited to, IPREO software-related expenses, background checks, tombstones, marketing-related expenses (e.g.,
roadshow, travel); (k) the cost of the escrow agent and the cost of such clearing agent settlement and financing, if any, of up to
$7,000, and other expenses related to the transaction, not to exceed $10,000. The Placement Agent may deduct from the net proceeds
of the Offering payable to the Company on the Closing Date the expenses set forth herein to be paid by the Company to the Placement
Agent, provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse the Placement Agent to
the extent required by Section 5 hereof.
C.
Right of First Refusal. The Company hereby grants to the Placement Agent an irrevocable right of first refusal for a period of
six (6) months from the Closing to act as sole investment banker, sole book-runner, and/or sole placement agent, at the Placement Agent’s
sole discretion, and in compliance with FINRA Rule 5110(g)(6)(A), for each and every future brokered, placed, underwritten, or investment-bank-advised
public or private equity or debt offering, including all equity-linked financings, undertaken by the Company, or any successor to or
subsidiary of the Company, during such six (6) month period. The Placement Agent shall have the sole discretion to determine
whether any other broker-dealer shall have the right to participate in any such offering and the economic terms of any such participation.
D.
Tail Fee. The Placement Agent shall be entitled to compensation under clauses (A) and (B) above, calculated in the manner set
forth therein, with respect to any public or private offering or other financing or capital-raising transaction of any kind (each, a
“Tail Financing”) to the extent that such financing is both (i) provided to the Company by investors that were, during the
Term, contacted by the Placement Agent or contacted the Placement Agent and (ii) such Tail Financing is consummated at any time within
the 12-month period following the expiration or termination of this Agreement. Notwithstanding the above, pursuant to
FINRA Rule 5110(g)(5), if the Company exercises its right to terminate the Agreement for cause, any obligations to pay a tail fee to
the Placement Agent under this Agreement will be nullified.
Section
3. Description of the Offering.
The
Securities to be offered directly to various investors (each, an “Investor” or “Purchaser” and,
collectively, the “Investors” or the “Purchasers”) in the Offering shall consist of: (a) shares
of the Company’s common stock (“Common Stock” or “Shares”) or (b) pre-funded warrants to purchase one share
of Common Stock (each, a “Pre-Funded Warrant”) in lieu of a Share, along with accompanying Series A warrants to purchase
one share of Common Stock (each, a “Series A Warrant”) and Series B warrants to purchase one share of Common Stock (each,
a “Series B Warrant” and together with the Shares, Pre-Funded Warrants, Series A Warrants, and Series B Warrants, the “Securities”).
Each Series A Warrant will have an exercise price of $[] per share, and each Series B Warrant will have an exercise price of $[] per
share.
If
the Company shall default in its obligations to deliver Securities to a Purchaser whose offer it has accepted and who has tendered payment,
the Company shall indemnify and hold the Placement Agent harmless against any loss, claim, damage or expense arising from or as a result
of such default by the Company under this Agreement.
Section
4. Delivery and Payment; Closing.
Settlement
of the Securities purchased by an Investor shall be made by 5:00 p.m. on the Closing Date by wire transfer from the Placement Agent in
federal (same day) funds, payable to the order of the Company after electronic delivery of the Shares via the DWAC system (or such other
method agreed to by the parties) in accordance with the Placement Agent’s instructions as requested in writing prior to the Closing
Date.
The
Closing shall occur at such place as shall be agreed upon by the Placement Agent and the Company. In the absence of an agreement to the
contrary, each Closing shall take place at the offices of Sullivan & Worcester LLP, 1251 Avenue of the Americas. 19th Floor. New
York, NY 10020. Deliveries of the documents with respect to the purchase of the Securities, if any, shall be made at the offices of Sullivan
& Worcester LLP, 1251 Avenue of the Americas. 19th Floor. New York, NY 10020 on the Closing Date. All actions taken at a Closing
shall be deemed to have occurred simultaneously.
Section
5. Term and Termination of Agreement.
The
term of this Agreement will commence upon the execution of this Agreement and will terminate on the earlier of (i) ninety (90) days after
the date hereof and (ii) the Closing of the Offering (the “Term”). Notwithstanding anything to the contrary contained herein,
any provision in this Agreement concerning or relating to confidentiality, indemnification, contribution, advancement, the Company’s
representations and warranties and the Company’s obligations to pay fees and reimburse expenses will survive any expiration or
termination of this Agreement. If any condition specified in Section 8 is not satisfied when and as required to be satisfied, this
Agreement may be terminated by the Placement Agent by notice to the Company at any time on or prior to a Closing Date, which termination
shall be without liability on the part of any party to any other party, except that those portions of this Agreement specified in Section
19 shall at all times be effective and shall survive such termination. Notwithstanding anything to the contrary in this Agreement, in
the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms herein, the Company shall be obligated to pay to the Placement Agent the expenses provided for in Section
2.B. above and upon demand the Company shall pay the full amount thereof to the Placement Agent.
Section
6. Permitted Acts.
Nothing
in this Agreement shall be construed to limit the ability of the Placement Agent, its officers, directors, employees, agents, associated
persons and any individual or entity “controlling,” “controlled by,” or “under common control” with
the Placement Agent (as those terms are defined in Rule 405 under the Securities Act) to conduct its business including without limitation
the ability to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business relationship
with any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
Section
7. Representations, Warranties and Covenants of the Company.
As
of the date and time of the execution of this Agreement, the Closing Date and the Initial Sale Time (as defined herein), the Company
represents, warrants and covenants to the Placement Agent, other than as disclosed in any of its filings with the Securities and Exchange
Commission (the “Commission”), that:
A.
Registration Matters.
i.
The Company has filed with the Commission a registration statement on Form S-1 (File No. 333-284052) including a related prospectus,
for the registration of the Securities under the Securities Act and the rules and regulations thereunder (the “Securities Act
Regulations”). The registration statement has been declared effective under the Securities Act by the Commission. The “Registration
Statement,” as of any time, means such registration statement as amended by any post-effective amendments thereto to such time,
including the exhibits and any schedules thereto at such time, the documents incorporated or deemed to be incorporated by reference therein
at such time pursuant to Form S-1 under the Securities Act and the documents otherwise deemed to be a part thereof as of
such time pursuant to Rule 430A (“Rule 430A”) or Rule 430B under the Securities Act Regulations (“Rule 430B”);
provided, however, that the “Registration Statement” without reference to a time means such registration statement as amended
by any post-effective amendments thereto as of the time of the first contract of sale for the Securities, which time shall be considered
the “new effective date” of such registration statement with respect to the Securities within the meaning of paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto as of such time, the documents incorporated or deemed incorporated by reference
therein at such time pursuant to Form S-1 under the Securities Act and the documents otherwise deemed to be a part thereof as of such
time pursuant to Rule 430A or Rule 430B. Any registration statement filed pursuant to Rule 462(b) of the Securities Act Regulations is
hereinafter called the “Rule 462(b) Registration Statement,” and after such filing the term “Registration Statement”
shall include the Rule 462(b) Registration Statement. The term “Preliminary Prospectus” means any preliminary form
of the Prospectus, including any preliminary prospectus supplement specifically related to the Securities filed with the Commission by
the Company with the consent of the Placement Agent.
ii.
All references in this Agreement to financial statements and schedules and other information which is “contained,” “included”
or “stated” (or other references of like import) in the Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to include all such financial statements and schedules and other information incorporated or deemed incorporated by reference
in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be, prior to the execution and delivery
of this Agreement; and all references in this Agreement to amendments or supplements to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to include the filing of any document under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the rules and regulations thereunder (the “Exchange Act Regulations”), incorporated or deemed
to be incorporated by reference in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be, at
or after the execution and delivery of this Agreement.
iii.
The term “Disclosure Package” means (i) the Preliminary Prospectus, as most recently amended or supplemented immediately
prior to the Initial Sale Time (as defined herein), and (ii) the Issuer Free Writing Prospectuses (as defined below), if any, identified
in Schedule I hereto. For purposes of clarity, the Company is not eligible to use a Free Writing Prospectus.
iv.
The term “Issuer Free Writing Prospectus” means any issuer free writing prospectus, as defined in Rule 433 of the
Securities Act Regulations. The term “Free Writing Prospectus” means any free writing prospectus, as defined in Rule
405 of the Securities Act Regulations.
v.
Any Preliminary Prospectus when filed with the Commission, and the Registration Statement as of each effective date and as of the date
hereof, complied or will comply, and the Prospectus and any further amendments or supplements to the Registration Statement, any Preliminary
Prospectus or the Prospectus will, when they become effective or are filed with the Commission, as the case may be, comply, in all material
respects, with the requirements of the Securities Act and the Securities Act Regulations; and the documents incorporated by reference
in the Registration Statement, any Preliminary Prospectus or the Prospectus complied, and any further documents so incorporated will
comply, when filed with the Commission, in all material respects to the requirements of the Exchange Act and Exchange Act Regulations.
vi.
The issuance by the Company of the Securities has been registered under the Securities Act. The Securities will be issued pursuant to
the Registration Statement and each of the Securities will be freely transferable and freely tradable by each of the Investors without
restriction, unless otherwise restricted by applicable law or regulation.
B.
Stock Exchange Listing. The Common Stock is approved for listing on The Nasdaq Capital Market (the “Exchange”)
and the Company has taken no action designed to, or likely to have the effect of, delisting the shares of Common Stock from the Exchange,
nor has the Company received any notification that the Exchange is contemplating terminating such listing.
C.
No Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any
order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted
or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied
with each request (if any) from the Commission for additional information.
D.
Subsidiaries. The Company’s subsidiaries have been duly incorporated and are validly existing as entities in good standing
under the laws of jurisdictions of their respective organization, with power and authority to own, lease and operate their respective
properties and conduct their respective businesses as described in the Preliminary Prospectus, and have been duly qualified as foreign
corporations for the transaction of business and are in good standing under the laws of each other jurisdictions in which they own or
lease properties or conduct any business so as to require such qualification, except where the failure so to qualify or be in good standing
would not have a Material Adverse Change (as defined below); all of the issued and outstanding capital stock (or other ownership interests)
of such subsidiaries has been duly and validly authorized and issued, is fully paid and non-assessable and is owned, directly and indirectly,
by the Company free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. Unless otherwise set forth,
all references in this Section 7 to the “Company” shall include references to all such subsidiaries.
E.
Disclosures in Registration Statement.
i.
Compliance with Securities Act and 10b-5 Representation.
(a)
Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material
respects with the requirements of the Securities Act and the Securities Act Regulations. The Preliminary Prospectus and the Prospectus,
at the time each was or will be filed with the Commission, complied or will comply in all material respects with the requirements of
the Securities Act and the Securities Act Regulations. The Preliminary Prospectus delivered to the Placement Agent for use in connection
with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(b)
None of the Registration Statement, any amendment thereto, or the Preliminary Prospectus, as of [___] p.m. (Eastern time) on January
[_], 2025 (the “Initial Sale Time”), and at the Closing Date, contained, contains or will contain an untrue statement
of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements omitted
in reliance upon and in conformity with written information furnished to the Company with respect to the Placement Agent by the Placement
Agent expressly for use in the Registration Statement or any amendment thereof or supplement thereto. The parties acknowledge and agree
that such information provided by or on behalf of any Placement Agent consists solely of the following disclosure contained in the following
paragraphs in the “Plan of Distribution” section of the Prospectus: (i) the name of the Placement Agent, and (ii) the information
under the subsection “Fees and Expenses” (the “Placement Agent’s Information”).
(c)
The Disclosure Package, as of the Initial Sale Time and at the Closing Date, did not, does not and will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and each Issuer Free Writing Prospectus does not conflict with the information contained
in the Registration Statement, any Preliminary Prospectus, or the Prospectus, and each such Issuer Free Writing Prospectus, as supplemented
by and taken together with the Preliminary Prospectus as of the Initial Sale Time, did not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements
omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Placement Agent by the
Placement Agent expressly for use in the Registration Statement, the Preliminary Prospectus or the Prospectus or any amendment thereof
or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Placement Agent consists
solely of the Placement Agent’s Information; and
(d)
Neither the Prospectus nor any amendment or supplement thereto, as of its issue date, at the time of any filing with the Commission pursuant
to Rule 424(b), or at the Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or
will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and warranty shall not apply to the Placement Agent’s Information.
ii.
Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Disclosure Package and the
Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents
required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Disclosure Package
and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed.
Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound
or affected and (i) that is referred to in the Registration Statement, the Disclosure Package and the Prospectus, and (ii) is material
to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material
respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with
its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities
laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in default thereunder
and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute
a default thereunder, except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus. To the Company’s
knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of
any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses (each, a “Governmental Entity”), including, without
limitation, those relating to environmental laws and regulations.
iii.
Regulations. The disclosures in the Registration Statement, the Disclosure Package and the Prospectus concerning the effects of
federal, state, local and all foreign regulation on the Offering and the Company’s business as currently contemplated are correct
in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Disclosure Package
and the Prospectus which are not so disclosed.
iv.
Changes After Dates in Registration Statement.
(a)
No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Disclosure
Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the financial
position or results of operations of the Company, nor any change or development that, singularly or in the aggregate, would involve a
material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects
of the Company (a “Material Adverse Change”); (ii) there have been no material transactions entered into by the Company,
other than as contemplated pursuant to this Agreement; and (iii) no officer or director of the Company has resigned from any position
with the Company.
(b)
Recent Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, the Company has not: (i) issued any securities (other than (a) grants under any
stock compensation plan and (b) shares of common stock issued upon exercise or conversion of option, warrants or convertible securities
described in the Registration Statement, the Disclosure Package and the Prospectus) or incurred any liability or obligation, direct or
contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital
stock.
F.
Independent Accountants. To the knowledge of the Company, Grassi & Co., CPAs, P.C., during such time as it was engaged by
the Company (the “Auditors”), has been an independent registered public accounting firm as required by the Securities
Act and the Securities Act Regulations and the Public Company Accounting Oversight Board. During such time period in which the Auditors
served as the Company’s independent registered public accounting firm the Auditors did not or have not, during the periods covered
by the financial statements included in the Registration Statement, the Disclosure Package and the Prospectus, provided to the Company
any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
G.
SEC Reports; Financial Statements, etc. The Company has complied in all material respects with requirements to file all reports,
schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise
specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal year-end audit adjustments that are not expected to be material in the aggregate. The financial statements, including
the notes thereto and supporting schedules included in the Registration Statement, the Disclosure Package and the Prospectus, fairly
present in all material respects the financial position and the results of operations of the Company at the dates and for the periods
to which they apply; and such financial statements have been prepared in conformity with GAAP, consistently applied throughout the periods
involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be
material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included in the Registration
Statement present fairly in all material respects the information required to be stated therein. Except as included therein, no historical
or pro forma financial statements are required to be included in the Registration Statement, the Disclosure Package or the Prospectus
under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the related
notes, if any, included in the Registration Statement, the Disclosure Package and the Prospectus have been properly compiled and prepared
in all material respects in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations and
present fairly in all material respects the information shown therein, and the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures
contained in the Registration Statement, the Disclosure Package or the Prospectus regarding “non-GAAP financial measures”
(as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act and Item
10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Disclosure Package and
the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and
other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on
the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement, the Disclosure Package
and the Prospectus, (a) the Company has not incurred any material liabilities or obligations, direct or contingent, or entered into any
material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any
distribution of any kind with respect to its capital stock, (c) there has not been any change in the capital stock of the Company (other
than (i) grants under any stock compensation plan and (ii) shares of common stock issued upon exercise or conversion of option, warrants
or convertible securities described in the Registration Statement, the Disclosure Package and the Prospectus), and (d) there has not
been any Material Adverse Change in the Company’s long-term or short-term debt.
H.
Authorized Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Disclosure
Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions
stated in the Registration Statement, the Disclosure Package and the Prospectus, the Company will have on the Closing Date the adjusted
stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Disclosure Package
and the Prospectus, on the Effective Date, as of the Initial Sale Time, on the Closing Date, there will be no stock options, warrants,
or other rights to purchase or otherwise acquire any authorized, but unissued shares of Common Stock of the Company or any security convertible
or exercisable into shares of Common Stock of the Company, or any contracts or commitments to issue or sell shares of Common Stock or
any such options, warrants, rights or convertible securities.
I.
Valid Issuance of Securities, etc.
i.
Outstanding Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by
this Agreement have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights
of rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and except as disclosed
in the Registration Statement, the Disclosure Package and the Prospectus, none of such securities were issued in violation of the preemptive
rights of any holders of any security of the Company or similar contractual rights granted by the Company. The authorized shares of Common
Stock, Company preferred stock and other outstanding securities conform in all material respects to all statements relating thereto contained
in the Registration Statement, the Disclosure Package and the Prospectus. The offers and sales of the outstanding shares of Common Stock
were at all relevant times either registered under the Securities Act and the applicable state securities or “blue sky” laws
or, based in part on the representations and warranties of the purchasers of such shares, exempt from such registration requirements.
ii.
Securities Sold Pursuant to this Agreement. The Securities have been duly authorized for issuance and sale and, when issued and
paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability
by reason of being such holders; the Securities are not and will not be subject to the preemptive rights of any holders of any security
of the Company or similar contractual rights granted by the Company. All corporate action required to be taken for the authorization,
issuance and sale of the Securities has been duly and validly taken; the Common Stock underlying the Pre-Funded Warrants, the Series
A Warrants, and the Series B Warrants has been duly authorized and reserved for issuance by all necessary corporate action on the part
of the Company and when paid for, if applicable, and issued in accordance with the Pre-Funded Warrants, the Series A Warrants, and the
Series B Warrants, as applicable, such Common Stock will be validly issued, fully paid and non-assessable; the holders thereof are not
and will not be subject to personal liability by reason of being such holders; and such shares of Common Stock are not and will not be
subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company.
The Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Disclosure
Package and the Prospectus.
J.
Registration Rights of Third Parties. No existing holders of any securities of the Company or any rights exercisable for or convertible
or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under
the Securities Act or to include any such securities in a registration statement to be filed by the Company.
K.
Validity and Binding Effect of Agreements. This Agreement, the Pre-Funded Warrants, the Series A Warrants, and the Series B Warrants
each has been duly and validly authorized by the Company, and, when executed and delivered, will constitute, the valid and binding agreement
of the Company, enforceable against the Company in accordance with its respective terms, except: (i) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any
indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
L.
No Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Pre-Funded Warrants, the Series
A Warrants, the Series B Warrants and all ancillary documents, the consummation by the Company of the transactions herein and therein
contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice
or the lapse of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute
a material default under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to the terms of any agreement or instrument to which the Company is a party; (ii) result
in any violation of the provisions of the Company’s Certificate of Incorporation (as the same may be amended or restated from time
to time, the “Charter”) or the by-laws of the Company (as the same may be amended or restated from time to time, the
“Bylaws”); or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any Governmental
Entity as of the date hereof.
M.
Reserved.
N.
No Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition of
any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which
the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not (i) in violation of
any term or provision of its Charter or Bylaws, or (ii) in violation of any franchise, license, permit, applicable law, rule, regulation,
judgment or decree of any Governmental Entity applicable to the Company.
O.
Corporate Power; Licenses; Consents.
i.
Except as described in the Registration Statement, the Disclosure Package and the Prospectus, the Company has all requisite corporate
power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental
regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose as described in the Registration
Statement, the Disclosure Package and the Prospectus.
ii.
The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions and conditions hereof,
and all consents, authorizations, approvals and orders required in connection therewith have been obtained. No consent, authorization
or order of, and no filing with, any court, government agency or other body is required for the valid issuance, sale and delivery of
the Securities and the shares of Common Stock underlying the Pre-Funded Warrants, the Series A Warrants, and the Series B Warrants, and
the consummation of the transactions and agreements contemplated by this Agreement and as contemplated by the Registration Statement,
the Disclosure Package and the Prospectus, except with respect to applicable federal and state securities laws and the rules and regulations
of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
P.
Litigation; Governmental Proceedings. There is no material action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Disclosure Package and the
Prospectus or in connection with the Company’s listing application for the additional listing of the Common Stock (including the
Common Stock underlying the Pre-Funded Warrants, the Series A Warrants, and the Series B Warrants) on the Exchange.
Q.
Good Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under the
laws of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction
in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify,
singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
R.
Insurance. The Company carries or is entitled to the benefits of insurance, with, to the Company’s knowledge, reputable
insurers, and in such amounts and covering such risks which the Company believes are reasonably adequate, and all such insurance is in
full force and effect. The Company has no reason to believe that it will not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material Adverse Change.
S.
Transactions Affecting Disclosure to FINRA.
i.
Finder’s Fees. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, there are no
claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee
by the Company or any executive officer or director of the Company with respect to the sale of the Securities hereunder or any other
arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect
the Placement Agent’s compensation, as determined by FINRA.
ii.
Payments Within Twelve (12 ) Months. Except as described in the Registration Statement, the Disclosure Package and
the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a
finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the
Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct
or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the date hereof, other than (A)
the payment to the Placement Agent as provided hereunder in connection with the Offering, and (B) other payments to the Placement Agent
under other engagement letters.
iii.
Use of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein.
iv.
FINRA Affiliation. There is no (i) officer or director of the Company, (ii) to the Company’s knowledge, beneficial owner
of 5% or more of any class of the Company’s securities or (iii) to the Company’s knowledge, beneficial owner of the Company’s
unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration Statement
that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules
and regulations of FINRA).
v.
Information. To the Company’s knowledge, all information provided by the Company’s officers and directors in their
FINRA Questionnaires to counsel to the Placement Agent specifically for use by counsel to the Placement Agent in connection with its
Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.
T.
Foreign Corrupt Practices Act. Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company or any other person acting on behalf of the Company, has, directly or indirectly, given or agreed to give
any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer,
supplier, employee or agent of a customer or supplier, or official or employee of any Governmental Entity or any political party or candidate
for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or
assist it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Change or (iii) if
not continued in the future, might adversely affect the assets, business, operations or prospects of the Company. The Company has taken
reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material
respects with the Foreign Corrupt Practices Act of 1977, as amended.
U.
Compliance with OFAC. Neither of the Company nor, to the Company’s knowledge, any director, officer, agent, employee or
affiliate of the Company or any other person acting on behalf of the Company, is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), and the Company will not,
directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available such proceeds to
any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
V.
Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”); and no action,
suit or proceeding by or before any Governmental Entity involving the Company with respect to the Money Laundering Laws is pending or,
to the knowledge of the Company, threatened.
W.
Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Placement
Agent Counsel shall be deemed a representation and warranty by the Company to the Placement Agent as to the matters covered thereby.
X.
Related Party Transactions. There are no business relationships or related party transactions involving the Company or any other
person required to be described in the Registration Statement, the Disclosure Package and the Prospectus that have not been described
as required.
Y.
Board of Directors. The qualifications of the persons serving as board members and the overall composition of the board comply
with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the “Sarbanes-Oxley
Act”) applicable to the Company and the listing rules of the Exchange. At least one member of the Audit Committee of the Board
of Directors of the Company qualifies as an “audit committee financial expert,” as such term is defined under Regulation
S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the Board of Directors qualify
as “independent,” as defined under the listing rules of the Exchange.
Z.
Sarbanes-Oxley Compliance.
i.
The Company has developed and currently maintains disclosure controls and procedures that will comply with Rule 13a-15
or 15d-15 under the Exchange Act Regulations applicable to it, and such controls and procedures are effective to ensure that all material
information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s
Exchange Act filings and other public disclosure documents.
ii.
The Company is, or at the Initial Sale Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley
Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s future
compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the Sarbanes-Oxley
Act.
AA.
Accounting Controls. The Company maintains systems of “internal control over financial reporting” (as defined under
Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply in all material respects with the requirements of the Exchange
Act and have been designed by, or under the supervision of, its principal executive and principal financial officers, or persons performing
similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to
any differences. Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company is not aware
of any material weaknesses in its internal controls. The Auditors and the Audit Committee of the Board of Directors of the Company have
been advised of: (i) all significant deficiencies and material weaknesses, if any, in the design or operation of internal controls over
financial reporting which are known to the Company’s management and that have adversely affected or are reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial information; and (ii) any fraud, if any, known
to the Company’s management, whether or not material, that involves management or other employees who have a significant role in
the Company’s internal controls over financial reporting.
BB.
No Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Disclosure Package and the Prospectus, will not be, required to register as an
“investment company,” as defined in the Investment Company Act of 1940, as amended.
CC.
No Labor Disputes. No labor dispute with the employees of the Company exists or, to the knowledge of the Company, is imminent,
except where such dispute would not be expected to have a Material Adverse Change.
DD.
Intellectual Property Rights. To the Company’s knowledge, the Company has, or can acquire on reasonable terms, ownership
of and/or license to, or otherwise has the right to use, all inventions, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures), patents and patent rights trademarks, service marks and
trade names, copyrights, (collectively “Intellectual Property”) material to carrying on its business as described
in the Prospectus. The Company has not received any correspondence relating to (A) infringement or misappropriation of, or conflict with,
any Intellectual Property of a third party; (B) asserted rights of others with respect to any Intellectual Property of the Company; or
(C) assertions that any Intellectual Property of the Company is invalid or otherwise inadequate to protect the interest of the Company,
that in each case (if the subject of any unfavorable decision, ruling or finding), individually or in the aggregate, would have or would
reasonably be expected to have a Material Adverse Change. There are no third parties who have been able to establish any material rights
to any Intellectual Property, except for the retained rights of the owners or licensors of any Intellectual Property that is licensed
to the Company. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others: (A)
challenging the validity, enforceability or scope of any Intellectual Property of the Company or (B) challenging the Company’s
rights in or to any Intellectual Property or (C) that the Company materially infringes, misappropriates or otherwise violates or conflicts
with any Intellectual Property or other proprietary rights of others. The Company has complied in all material respects with the terms
of each agreement described in the Registration Statement, Disclosure Package or Prospectus pursuant to which any Intellectual Property
is licensed to the Company, and all such agreements related to products currently made or sold by the Company, or to product candidates
currently under development, are in full force and effect. All patents issued in the name of, or assigned to, the Company, and all patent
applications made by or on behalf of the Company (collectively, the “Company Patents”) have been duly and properly
filed. The Company is not aware of any material information that was required to be disclosed to the United States Patent and Trademark
Office (the “PTO”) but that was not disclosed to the PTO with respect to any issued Company Patent, or that is required
to be disclosed and has not yet been disclosed in any pending application in the Company Patents and that would preclude the grant of
a patent on such application. To the Company’s knowledge, the Company is the sole owner of the Company Patents.
EE.
Taxes. The Company has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date
hereof or has duly obtained extensions of time for the filing thereof. The Company has paid all taxes (as hereinafter defined) shown
as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company, except for such exceptions
as could not be expected, individually or in the aggregate, to have a Material Adverse Change. The provisions for taxes payable, if any,
shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes,
whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. Except as disclosed
in writing to the Placement Agent, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with
any of the returns or taxes asserted as due from the Company, and (ii) no waivers of statutes of limitation with respect to the returns
or collection of taxes have been given by or requested from the Company. The term “taxes” mean all federal, state, local,
foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service,
service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties
or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or
additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements and other
documents required to be filed in respect to taxes.
FF.
Employee Benefit Laws. To the extent applicable, the operations of the Company and its subsidiaries are and have been conducted
at all times in material compliance with the Employee Retirement Income Security Act of 1974, as amended, the rules and regulations thereunder
and any applicable related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively,
the “Employee Benefit Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or its subsidiaries with respect to the Employee Benefit Laws is pending or, to the knowledge
of the Company, threatened.
GG.
Compliance with Laws. The Company: (A) is and at all times has been in compliance with all Applicable Laws, except as would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received any correspondence from
any Governmental Entity alleging or asserting noncompliance with any Applicable Laws or any Authorizations; (C) possesses all material
Authorizations and such Authorizations are valid and in full force and effect and the Company is not in material violation of any term
of any such Authorizations, in each case except as would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Change; (D) has not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration
or other action from any Governmental Entity or third party alleging that any product operation or activity is in violation of any Applicable
Laws or Authorizations and has no knowledge that any such Governmental Entity or third party is considering any such claim, litigation,
arbitration, action, suit, investigation or proceeding; (E) has not received written notice that any Governmental Entity has taken, is
taking or intends to take action to limit, suspend, modify or revoke any Authorizations; (F) has filed, obtained, maintained or submitted
all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required
by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented
by a subsequent submission); and (G) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated,
conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor” letter,
or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation
and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate any such notice or action.
HH.
Preclinical Tests, Clinical Tests and Regulatory Compliance. The preclinical tests and clinical trials, and other studies (collectively,
“Studies”) that are described in, or the results of which are referred to in, the Registration Statement or the Prospectus
were and, if still pending, are being conducted in all material respects in accordance with the protocols, procedures and controls designed
and approved for such Studies; each description of the results of such Studies is accurate in all material respects and fairly presents
the data derived from such Studies, and the Company and its subsidiaries have no knowledge of any other studies the results of which
are inconsistent with the results described or referred to in the Registration Statement or the Prospectus; the Company and its subsidiaries
have made all such filings and obtained all such clearances, approvals or exemptions as are required by the Food and Drug Administration
of the U.S. Department of Health and Human Services (“FDA”) or any committee thereof or from any other U.S. or foreign
medical device regulatory agency, or a health care facility Institutional Review Board (collectively, the “Regulatory Agencies”);
the Company has not committed any act, made any statement or failed to make any statement that would reasonably be expected to provide
a basis for the FDA or any other Regulatory Agencies to invoke its policy with respect to “Fraud, Untrue Statements of Material
Facts, Bribery, and Illegal Gratuities”, or similar policies, set forth in any applicable U.S. or foreign laws; and neither the
Company nor any of its subsidiaries has received any written notice of, or written correspondence from, any Regulatory Agency requiring
the termination, suspension or modification of any clinical trials that are described or referred to in the Registration Statement, the
Time of Sale Prospectus or the Prospectus.
II.
Compliance with Health Care Laws. The Company and its subsidiaries are, and at all times in the last five years have been, in
compliance in all material respects with all applicable Health Care Laws. For purposes of this Agreement, “Health Care Laws”
means the applicable provisions of the following: (i) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Section 301 et seq.), the Public
Health Service Act (42 U.S.C. Section 201 et seq.), and the regulations promulgated thereunder; (ii) all applicable federal, state, local
and foreign health care fraud and abuse laws, including, without limitation, the Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)),
the Civil False Claims Act (31 U.S.C. Section 3729 et seq.), the criminal false statements law (42 U.S.C. Section 1320a-7b(a)), 18 U.S.C.
Sections 286 and 287, the health care fraud criminal provisions under the U.S. Health Insurance Portability and Accountability Act of
1996 (“HIPAA”) (42 U.S.C. Section 1320d et seq.), the Stark Law (42 U.S.C. Section 1395nn), the civil monetary penalties
law (42 U.S.C. Section 1320a-7a), the exclusion law (42 U.S.C. Section 1320a-7), the U.S. Physician Payments Sunshine Act (42 U.S.C.
Section 1320a-7h), and applicable laws governing all government funded or sponsored healthcare programs; (iii) HIPAA, as amended by the
Health Information Technology for Economic and Clinical Health Act (42 U.S.C. Section 17921 et seq.); (iv) European Union Council Directive
93/42/EEC (the Medical Device Directive “MDD”) and European Union Regulation No. 2017/745 (the Medical Devices Regulation
“MDR”), in each case as applicable; (v) licensure, quality, safety and accreditation requirements under all applicable
federal, state, local or foreign laws or regulatory bodies; and all other local, state, federal, national, supranational and all other
applicable foreign laws, relating to the regulation of the Company or its subsidiaries, and (vi) the regulations promulgated pursuant
to such statutes and any state or non-U.S. counterpart thereof. Neither the Company nor any of its subsidiaries has received written
notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any U.S. or foreign
equivalent court or arbitrator or governmental or regulatory authority or third party alleging that any product operation or activity
is in violation of any Health Care Laws nor, to the Company’s knowledge, is any such claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action threatened. The Company and its subsidiaries have filed, maintained or submitted
all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required
to be filed, maintained or submitted by any Health Care Laws in connection with the development, manufacture and commercialization of
the Company’s products, and all such reports, documents, forms, notices, applications, records, claims, submissions and supplements
or amendments were complete and accurate on the date filed in all material respects (or were corrected or supplemented by a subsequent
submission). Neither the Company nor any of its subsidiaries is a party to any corporate integrity agreements, monitoring agreements,
consent decrees, settlement orders, or similar agreements with or imposed by any governmental or regulatory authority. Additionally,
neither the Company nor any of its subsidiaries or any of their respective employees, officers, directors, nor, to the knowledge of the
Company, agents has been excluded, suspended or debarred from participation in any U.S. federal health care program or human clinical
research or, to the knowledge of the Company, is subject to a governmental inquiry, investigation, proceeding, or other similar action
that would reasonably be expected to result in debarment, suspension, or exclusion.
JJ.
Healthcare Care Product Manufacturing Compliance. The manufacture of the Company’s and its subsidiaries’ products
and product candidates by or on behalf of the Company and its subsidiaries is being conducted in compliance in all material respects
with all applicable Health Care Laws, including, without limitation, (i) the FDA’s current good manufacturing practice regulations
at 21 CFR Part 820, (ii) ISO 13485:2016, MDD, or MDR, in each case to the extent applicable, and, (iii) to the extent applicable, all
the respective counterparts thereof promulgated by Regulatory Agencies in countries outside the United States. Neither the Company nor
any of its subsidiaries has had, to the extent applicable to the Company’s or its subsidiaries’ products and product candidates,
any manufacturing site (whether Company-owned, subsidiary-owned or, to the Company’s knowledge, that of a third party manufacturer
for the Company’s or its subsidiaries’ product candidates) subject to a Regulatory Agency’s (including the FDA or EMA)
shutdown or import or export prohibition, nor received any FDA, EMA or other Regulatory Agencies “warning letters,” or “untitled
letters” alleging or asserting material noncompliance with any applicable Health Care Laws, written requests to make material changes
to the Company’s or its subsidiaries’ product candidates, processes or operations, or other similar written correspondence
or notice from the FDA, EMA or other Regulatory Agencies alleging or asserting material noncompliance with any applicable Health Care
Laws, other than those that have been satisfactorily addressed and/or closed with the FDA, EMA or other Regulatory Agencies. To the knowledge
of the Company, neither the FDA, EMA nor any other Regulatory Agencies is considering such action.
KK.
Industry Data. The statistical and market-related data included in each of the Registration Statement, the Disclosure Package
and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate
or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
LL.
Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act) contained in the Registration Statement, the Disclosure Package or the Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
MM.
Margin Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be
used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any
of the shares of Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal
Reserve Board.
NN.
Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering
to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of any such
securities under the Securities Act.
OO.
Confidentiality and Non-Competition. To the Company’s knowledge, no director, officer, key employee or consultant of the
Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer
or prior employer that could reasonably be expected to materially affect his ability to be and act in his respective capacity of the
Company or be expected to result in a Material Adverse Change.
PP.
Restriction on Sales of Capital Stock.
(a)
From the date hereof until [sixty (60) days] after the [Shareholder Approval Date/the Closing Date], neither the Company nor any Subsidiary
shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Stock or Common Stock
Equivalents, or (ii) file any registration statement or amendment or supplement thereto, other than with respect to the Registration
Statement or a registration statement on Form S-8, except for the Securities issued pursuant hereto or otherwise in connection with the
Offering.
(b)
From the date hereof until [one hundred and eighty (180) days] after the [Shareholder Approval Date/the Closing Date], the Company shall
be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common
Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or
exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such debt or equity security (other than in connection with
a stock split or stock dividend or similar event) or upon the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement,
including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price regardless
of whether shares pursuant to such agreement have actually been issued and regardless of whether such agreement is subsequently canceled[;
provided, however, that commencing sixty (60) days after the Shareholder Approval Date/Closing Date,] the Company’s issuance of
Common Stock or Common Stock Equivalents pursuant to an at-the-market facility with the Placement Agent as sales agent shall not be deemed
a Variable Rate Transaction. The Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance,
which remedy shall be in addition to any right to collect damages.
(c)
Notwithstanding the foregoing, this Section (PP) shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction
shall be an Exempt Issuance.
QQ.
Lock-Up Agreements. The Company has caused each of its officers and directors to deliver to the Placement Agent an executed Lock-Up
Agreement, in such form as approved by the Placement Agent (the “Lock-Up Agreement”), prior to the execution of this
Agreement.
Section
8. Conditions of the Obligations of the Placement Agent.
The
obligations of the Placement Agent hereunder shall be subject to the accuracy of the representations and warranties on the part of the
Company set forth in Section 7 hereof, in each case as of the date hereof and as of the Closing Date as though then made, to the
timely performance by each of the Company of its covenants and other obligations hereunder on and as of such dates, and to each of the
following additional conditions:
A.
Regulatory Matters.
i.
Effectiveness of Registration Statement; Rule 424 Information. The Registration Statement is effective on the date of this Agreement,
and, on the Closing Date no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto
has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has
been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated
by the Commission. The Company has complied with each request (if any) from the Commission for additional information. All filings with
the Commission required by Rule 424 under the Securities Act to have been filed by the Closing Date, shall have been made within the
applicable time period prescribed for such filing by Rule 424.
ii.
FINRA Clearance. On or before the Closing Date of this Agreement, the Placement Agent shall have received clearance from FINRA
as to the amount of compensation allowable or payable to the Placement Agent as described in the Registration Statement.
iii.
Listing of Additional Shares. On or before the Closing Date of this Agreement, the Company shall have received clearance from
The Nasdaq Stock Market, Inc. with respect to the Company’s application for the additional listing of the securities sold in the
Offering.
B.
Company Counsel Matters.
i.
On the Closing Date, the Placement Agent shall have received the favorable opinion of Sheppard, Mullin, Richter & Hampton LLP, outside
counsel for the Company, dated the Closing Date and addressed to the Placement Agent, substantially in form and substance reasonably
satisfactory to the Placement Agent.
C.
Reserved.
D.
Officers’ Certificates.
i.
Officers’ Certificate. The Company shall have furnished to the Placement Agent a certificate, dated the Closing Date, of
its Chief Executive Officer and its Chief Financial Officer stating that (i) such officers have carefully examined the Registration Statement,
the Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each
amendment thereto, as of the Initial Sale Time and through the Closing Date did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the
Disclosure Package, as of the Initial Sale Time through the Closing Date, any Issuer Free Writing Prospectus as of its date and as of
the Closing Date, the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date,
did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not misleading, (ii) since the filing of the most recent Form 10-Q,
no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Disclosure Package
or the Prospectus, (iii) to their knowledge after reasonable investigation, as of the Closing Date, the representations and warranties
of the Company in this Agreement are true and correct, and the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the Closing Date, and (iv) there has not been, subsequent to the date
of the most recent audited financial statements included in the Disclosure Package, any Material Adverse Change in the financial position
or results of operations of the Company, or any change or development that, singularly or in the aggregate, would involve a Material
Adverse Change or a prospective Material Adverse Change, in or affecting the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company, except as set forth in the Prospectus.
ii.
Secretary’s Certificate. As of the Closing Date the Placement Agent shall have received a certificate of the Company signed
by the Secretary of the Company, dated the Closing Date, certifying: (i) that each of the Company’s Charter and Bylaws is true
and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company’s Board of Directors
relating to the Offering are in full force and effect and have not been modified; and (iii) the good standing of the Company and its
U.S. subsidiaries. The documents referred to in such certificate shall be attached to such certificate.
E.
No Material Changes. Prior to and on the Closing Date: (i) there shall have been no Material Adverse Change or development involving
a prospective Material Adverse Change in the condition or prospects or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the Registration Statement, the Disclosure Package and the Prospectus;
(ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any affiliates
of the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision,
ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company,
except as set forth in the Registration Statement, the Disclosure Package and the Prospectus; (iii) no stop order shall have been issued
under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration
Statement, the Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements
which are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in
all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement,
the Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
F.
Comfort Letter: On the date hereof and on the Closing Date, the Placement Agent shall have received a cold comfort letter from
the Company’s independent auditor, containing statements and information of the type customarily included in accountants’
comfort letters with respect to the financial statements and certain financial information contained in the Registration Statement, the
Preliminary Prospectus and the Prospectus, addressed to the Placement Agent and in form and substance satisfactory in all respects to
the Placement Agent.
G.
Delivery of Agreements.
i.
Lock-Up Agreements. On or before the date of this Agreement, the Company shall have delivered to the Placement Agent executed
copies of the Lock-Up Agreements from each of the Company’s officers and directors.
ii.
Reserved.
H.
Additional Documents. At the Closing Date, Placement Agent Counsel shall have been furnished with such documents and opinions
as they may require in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Placement Agent and Placement Agent Counsel.
Section
9. Indemnification and Contribution; Procedures.
A.
Indemnification of the Placement Agent. The Company agrees to indemnify and hold harmless the Placement Agent, its affiliates
and each person controlling such Placement Agent (within the meaning of Section 15 of the Securities Act), and the directors, officers,
agents and employees of the Placement Agent, its affiliates and each such controlling person (the Placement Agent, and each such entity
or person hereafter is referred to as an “Indemnified Person”) from and against any losses, claims, damages, judgments,
assessments, costs and other liabilities (collectively, the “Liabilities”), and shall reimburse each Indemnified Person
for all fees and expenses (including the reasonable fees and expenses of counsel for the Indemnified Persons, except as otherwise expressly
provided in this Agreement) (collectively, the “Expenses”) and agrees to advance payment of such Expenses as they
are incurred by an Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Indemnified
Person is a party thereto, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained
in (i) the Registration Statement, the Disclosure Package, the Preliminary Prospectus, the Prospectus or in any Issuer Free Writing Prospectus
(as from time to time each may be amended and supplemented); (ii) any materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the Offering, including any “road show” or investor presentations
made to investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication
(in this Section 9, collectively called “application”) executed by the Company or based upon written information furnished
by the Company in any jurisdiction in order to qualify the Securities under the securities laws thereof or filed with the Commission,
any state securities commission or agency, any national securities exchange; or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in reliance upon, and in conformity with, the Placement Agent’s
information. The Company also agrees to reimburse each Indemnified Person for all Expenses as they are incurred in connection with such
Indemnified Person’s enforcement of his or its rights under this Agreement. Each Indemnified Person is an intended third party
beneficiary with the same rights to enforce the indemnification that each Indemnified Person would have if he was a party to this Agreement.
B.
Procedure. Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with respect to
which indemnity may reasonably be expected to be sought under this Agreement, such Indemnified Person shall promptly notify the Company
in writing; provided that failure by any Indemnified Person so to notify the Company shall not relieve the Company from any obligation
or liability which the Company may have on account of this Section 9 or otherwise to such Indemnified Person, except to the extent
(and only to the extent) that its ability to assume the defense is actually impaired by such failure or delay. The Company shall, if
requested by the Placement Agent, assume the defense of any such action (including the employment of counsel and reasonably satisfactory
to the Placement Agent). Any Indemnified Person shall have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company
has failed promptly to assume the defense and employ counsel for the benefit of the Placement Agent and the other Indemnified Persons
or (ii) such Indemnified Person shall have been advised that in the opinion of counsel that there is an actual or potential conflict
of interest that prevents (or makes it imprudent for) the counsel engaged by the Company for the purpose of representing the Indemnified
Person, to represent both such Indemnified Person and any other person represented or proposed to be represented by such counsel, it
being understood, however, that the Company shall not be liable for the expenses of more than one separate counsel (together with local
counsel), representing the Placement Agent and all Indemnified persons who are parties to such action. The Company shall not be liable
for any settlement of any action effected without its written consent (which shall not be unreasonably withheld). In addition, the Company
shall not, without the prior written consent of the Placement Agent, settle, compromise or consent to the entry of any judgment in or
otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement, indemnification or contribution
may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement, compromise, consent or termination
(i) includes an unconditional release of each Indemnified Person, acceptable to such indemnified party, from all Liabilities arising
out of such action for which indemnification or contribution may be sought hereunder and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Person. The advancement, reimbursement, indemnification
and contribution obligations of the Company required hereby shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as every Liability and Expense is incurred and is due and payable, and in such amounts as fully satisfy
each and every Liability and Expense as it is incurred (and in no event later than 30 days following the date of any invoice therefor).
C.
Indemnification of the Company. The Placement Agent agrees to indemnify and hold harmless the Company, its directors, its officers
who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against any and all Liabilities, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Disclosure Package or Prospectus or
any amendment or supplement thereto, in reliance upon, and in strict conformity with, the Placement Agent’s Information. In case
any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration
Statement, the Disclosure Package or Prospectus or any amendment or supplement thereto, and in respect of which indemnity may be sought
against the Placement Agent, the Placement Agent shall have the rights and duties given to the Company, and the Company and each other
person so indemnified shall have the rights and duties given to the Placement Agent by the provisions of Section 9.B. The Company
agrees promptly to notify the Placement Agent of the commencement of any litigation or proceedings against the Company or any of its
officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, in connection with the issuance and sale of the Securities or in connection with the Registration Statement,
the Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, provided, that failure by the Company so to notify the
Placement Agent shall not relieve the Placement Agent from any obligation or liability which the Placement Agent may have on account
of this Section 9.C or otherwise to the Company, except to the extent the Placement Agent is materially prejudiced as a proximate
result of such failure.
D.
Contribution. In the event that a court of competent jurisdiction makes a finding that indemnity is unavailable to any indemnified
person, then each indemnifying party shall contribute to the Liabilities and Expenses paid or payable by such indemnified person in such
proportion as is appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to the Placement Agent and any
other Indemnified Person, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the
immediately preceding clause is not permitted by applicable law, not only such relative benefits but also the relative fault of the Company,
on the one hand, and the Placement Agent and any other Indemnified Person, on the other hand, in connection with the matters as to which
such Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided that in no event shall the Company
contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities
and Expenses in excess of the amount of commissions actually received by the Placement Agent pursuant to this Agreement. The relative
fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Placement
Agent on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Placement Agent agree that it would not be just and equitable if contributions pursuant to
this subsection (D) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (D). For purposes of this paragraph, the relative benefits to the Company, on the
one hand, and to the Placement Agent on the other hand, of the matters contemplated by this Agreement shall be deemed to be in the same
proportion as: (a) the total value received by the Company in the Offering, whether or not such Offering is consummated, bears to (b)
the commissions paid to the Placement Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of fraudulent
misrepresentation.
E.
Limitation. The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract
or tort or otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person
pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection
with any such advice, services or transactions, except to the extent that a court of competent jurisdiction has made a finding that Liabilities
(and related Expenses) of the Company have resulted primarily from such Indemnified Person’s gross negligence or willful misconduct
in connection with any such advice, actions, inactions or services.
F.
Survival. The advancement, reimbursement, indemnity and contribution obligations set forth in this Section 9 shall remain
in full force and effect regardless of any termination of, or the completion of any Indemnified Person’s services under or in connection
with, this Agreement. Each Indemnified Person is an intended third-party beneficiary of this Section 9, and has the right to enforce
the provisions of Section 9 as if he/she/it was a party to this Agreement.
Section
10. Limitation of Laidlaw’s Liability to the Company.
Laidlaw
and the Company further agree that neither Laidlaw nor any of its affiliates or any of their respective officers, directors, controlling
persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents shall have any
liability to the Company, its security holders or creditors, or any person asserting claims on behalf of or in the right of the Company
(whether direct or indirect, in contract or tort, for an act of negligence or otherwise) for any losses, fees, damages, liabilities,
costs, expenses or equitable relief arising out of or relating to this Agreement or the Services rendered hereunder, except for losses,
fees, damages, liabilities, costs or expenses that arise out of or are based on any action of or failure to act by Laidlaw and that are
finally judicially determined to have resulted solely from the gross negligence or willful misconduct of Laidlaw.
Section
11. Limitation of Engagement to the Company.
The
Company acknowledges that Laidlaw has been retained only by the Company, that Laidlaw is providing services hereunder as an independent
contractor (and not in any fiduciary or agency capacity) and that the Company’s engagement of Laidlaw is not deemed to be on behalf
of, and is not intended to confer rights upon, any shareholder, owner or partner of the Company or any other person not a party hereto
as against Laidlaw or any of its affiliates, or any of its or their respective officers, directors, controlling persons (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents. Unless otherwise expressly agreed in writing
by Laidlaw, no one other than the Company is authorized to rely upon any statement or conduct of Laidlaw in connection with this Agreement.
The Company acknowledges that any recommendation or advice, written or oral, given by Laidlaw to the Company in connection with Laidlaw’s
engagement is intended solely for the benefit and use of the Company’s management and directors in considering a possible Offering,
and any such recommendation or advice is not on behalf of, and shall not confer any rights or remedies upon, any other person or be used
or relied upon for any other purpose. Laidlaw shall not have the authority to make any commitment binding on the Company. The Company,
in its sole discretion, shall have the right to reject any investor introduced to it by Laidlaw. If any purchase agreement and/or related
transaction documents are entered into between the Company and the investors in the Offering, Laidlaw will be entitled to rely on the
representations, warranties, agreements and covenants of the Company contained in any such purchase agreement and related transaction
documents as if such representations, warranties, agreements and covenants were made directly to Laidlaw by the Company.
Section
12. Amendments and Waivers.
No
supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The
failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future.
No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless
of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.
Section
13. Confidentiality.
In
the event of the consummation or public announcement of any Offering, Laidlaw shall have the right to disclose its participation in such
Offering, including, without limitation, the placement at its cost of “tombstone” advertisements in financial and other newspapers
and journals. Laidlaw agrees not to use any confidential information concerning the Company provided to Laidlaw by the Company for any
purposes other than those contemplated under this Agreement.
Section
14. Headings.
The
headings of the various sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be
part of this Agreement.
Section
15. Counterparts.
This
Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.
Section
16. Severability.
In
case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby.
Section
17. Use of Information.
The
Company will furnish Laidlaw such written information as Laidlaw reasonably requests in connection with the performance of its services
hereunder. The Company agrees to make available to Laidlaw, upon reasonable request, the officers, directors, accountants, counsel, and
other advisors of the Company to assist in Laidlaw’s performance of its services The Company understands, acknowledges and agrees
that, in performing its services hereunder, Laidlaw will use and rely entirely upon such information as well as publicly available information
regarding the Company and other potential parties to an Offering and that Laidlaw does not assume responsibility for independent verification
of the accuracy or completeness of any information, whether publicly available or otherwise furnished to it, concerning the Company or
otherwise relevant to an Offering, including, without limitation, any financial information, forecasts or projections considered by Laidlaw
in connection with the provision of its services.
The
Company recognizes and confirms that Laidlaw does not assume responsibility for the accuracy or completeness of the Offering documents
(including any Purchase Agreements) or the information and such other information and will not make an appraisal of any of the assets
or liabilities of the Company. Upon reasonable request, the Company will meet with Laidlaw or its representatives to discuss all information
relevant for disclosure in the Offering Documents and will cooperate in any reasonable investigation undertaken by Laidlaw thereof, including
any document included or incorporated by reference therein.
At
each Offering, at the request of Laidlaw, the Company shall deliver such legal letters, comfort letters, and officer’s certificates,
all in form and substance reasonably satisfactory to Laidlaw and its counsel as is customary for such Offerings.
Laidlaw
shall be a third-party beneficiary of any representations, warranties, covenants, and closing conditions made by the Company in any Offering
documents, including representations, warranties, covenants, and closing conditions made to any investor in an Offering.
Section
18. Absence of Fiduciary Relationship.
The
Company acknowledges and agrees that: (a) the Placement Agent has been retained solely to act as Placement Agent in connection with the
sale of the Securities and that no fiduciary, advisory or agency relationship between the Company and the Placement Agent has been created
in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Placement Agent has advised or is advising
the Company on other matters; (b) the Purchase Price and other terms of the Securities set forth in this Agreement were established by
the Company following discussions and arms-length negotiations with the Placement Agent and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it
has been advised that the Placement Agent and its affiliates are engaged in a broad range of transactions that may involve interests
that differ from those of the Company and that the Placement Agent has no obligation to disclose such interest and transactions to the
Company by virtue of any fiduciary, advisory or agency relationship; and (d) it has been advised that the Placement Agent is acting,
in respect of the transactions contemplated by this Agreement, solely for the benefit of the Placement Agent, and not on behalf of the
Company and that the Placement Agents may have interests that differ from those of the Company. The Company waives to the full extent
permitted by applicable law any claims it may have against the Placement Agent arising from an alleged breach of fiduciary duty in connection
with the Offering.
Section
19. Survival of Indemnities, Representations, Warranties, etc.
The
respective indemnities, covenants, agreements, representations, warranties and other statements of the Company and Placement Agent,
as set forth in this Agreement or made by them respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Placement Agent, the Company, the Purchasers or any person controlling
any of them and shall survive delivery of and payment for the Securities. Notwithstanding any termination of this Agreement,
including without limitation any termination pursuant to Section 5, the payment, reimbursement, indemnity, contribution and
advancement agreements contained in Section 2, Section 9, Section 10, and Section 11, respectively, and the
Company’s covenants, representations, and warranties set forth in this Agreement shall not terminate and shall remain in full
force and effect at all times. The indemnity and contribution provisions contained in Section 9 and the covenants, warranties
and representations of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf of any Placement Agent, any person who controls any
Placement Agent within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or any affiliate of
any Placement Agent, or by or on behalf of the Company, its directors or officers or any person who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and (iii) the issuance and
delivery of the Securities.
Section
20. Governing Law.
This
Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to
be fully performed therein. Any disputes that arise under this Agreement, even after the termination of this Agreement, will be heard
only in the state or federal courts located in the City of New York, State of New York. The parties hereto expressly agree to submit
themselves to the jurisdiction of the foregoing courts in the City of New York, State of New York. The parties hereto expressly waive
any rights they may have to contest the jurisdiction, venue or authority of any court sitting in the City and State of New York.
Section
21. Notices.
All
communications hereunder shall be in writing and shall be mailed or hand delivered and confirmed to the parties hereto as follows:
If
to the Company:
Hepion
Pharmaceuticals, Inc.
c/o
Clementi Associates
919
Conestoga Road
Building
3, Suite 115
Rosemont,
PA 19010
Attention:
Interim Chief Executive Officer
If
to the Placement Agent:
Laidlaw
& Company (UK) Ltd.
Laidlaw
& Company (UK) Ltd.
521
5th Ave,
New
York, NY 10175
Attention:
Head of Capital Markets
Any
party hereto may change the address for receipt of communications by giving written notice to the others.
Section
22. Miscellaneous.
This
Agreement shall not be modified or amended except in writing signed by Laidlaw and the Company. This Agreement constitutes the entire
agreement of Laidlaw and the Company, and supersedes any prior agreements, with respect to the subject matter hereof. If any provision
of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any
other respect, and the remainder of this Agreement shall remain in full force and effect. This Agreement may be executed in counterparts
(including facsimile or .pdf counterparts), each of which shall be deemed an original but all of which together shall constitute one
and the same instrument.
Section
23. Successors.
This
Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and directors
and controlling persons referred to in Section 9 hereof, and to their respective successors, and personal representative, and, except
as set forth in Section 9 of this Agreement, no other person will have any right or obligation hereunder.
Section
24. Partial Unenforceability
The
invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability
of any other section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
[SIGNATURE
PAGE TO FOLLOW]
In
acknowledgment that the foregoing correctly sets forth the understanding reached by Laidlaw and the Company, and intending to be legally
bound, please sign in the space provided below, whereupon this letter shall constitute a binding Agreement as of the date executed.
Very
truly yours,
| HEPION
PHARMACEUTICALS, INC. |
|
| |
|
|
| By: |
|
|
| Name: |
|
|
| Title: |
|
|
Confirmed
as of the date first written above:
| LAIDLAW
& COMPANY (UK) LTD. |
|
| |
|
|
| By: |
|
|
| Name: |
|
|
| Title: |
|
|
SCHEDULE
I
Issuer
General Use Free Writing Prospectuses
None.
Exhibit
4.6
PRE-FUNDED
COMMON STOCK PURCHASE WARRANT
HEPION
PHARMACEUTICALS, INC.
| Warrant
Shares: [*] |
Issuance
Date: January [__], 2025 |
THIS
PRE-FUNDED COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [_______] or its assigns
(the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth at any time on or after the date hereof (such date, the “Initial Exercise Date”) until the date this Warrant
is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from Hepion Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), up to ______ shares (the “Warrant Shares”) of common
stock, par value $0.0001 per share, of the Company (“Common Stock”), subject to adjustment hereunder. The purchase
price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated
in this Section 1. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated [MONTH], [__], 2025, among the Company and the purchasers signatory
thereto.
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Alternate
Consideration” shall have the meaning set forth in Section 3(d).
“Attribution
Parties” shall have the meaning set forth in Section 2(e).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 2(e).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (i) 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, New York time) to 4:02 p.m. (New York, New York time)), (ii) 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, (iii) 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 (iv) in all other cases, the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
“Bloomberg”
means Bloomberg L.P., or any successor thereto.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday, or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.
“Buy-In”
shall have the meaning set forth in Section 2(d)(iv).
“Common
Stock” shall have the meaning set forth in the Preamble.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant, or other instrument that
is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company”
shall have the meaning set forth in the Preamble.
“Distribution”
shall have the meaning set forth in Section 3(c).
“DWAC”
shall have the meaning set forth in Section 2(d)(i).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exercise
Price” shall have the meaning set forth in Section 2(b).
“Fundamental
Transaction” shall have the meaning set forth in Section 3(d).
“Holder”
shall have the meaning set forth in the Preamble.
“Initial
Exercise Date” shall have the meaning set forth in the Preamble.
“Notice
of Exercise” shall have the meaning set forth in Section 2(a).
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof), or other entity of any kind.
“Placement
Agency Agreement” means the placement agency agreement, dated as of January [__], 2025, by and between the Company and the
Placement Agent.
“Purchase
Agreement” shall have the meaning set forth in Section 1.
“Purchase
Rights” shall have the meaning set forth in Section 3(b).
“Registration
Statement” means the Company’s registration statement on Form S-1, as amended (File No. 333-284052).
“SEC”
means the United States Securities and Exchange Commission.
“Securities
Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder.
“Standard
Settlement Period” shall have the meaning set forth in Section 2(d)(i).
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Successor
Entity” shall have the meaning set forth in Section 3(d).
“Termination
Date” shall have the meaning set forth in the Preamble.
“Trading
Day” means a day on which the Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market, the New York Stock Exchange, or the
NYSE American, (or any successors to any of the foregoing).
“Transfer
Agent” means Pacific Stock Transfer Company, the current transfer agent of the Company, with a mailing address of 6725 Via
Austin Pkwy Ste 300, Las Vegas, Nevada, 89119 and an email address of jclaiborne@pacificstocktransfer.com, and any successor transfer
agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (i) 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, New York time) to 4:02 p.m. (New York, New York time)), (ii) 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, (iii) 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 (iv) in all other cases, the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
“Warrants”
means this Warrant and other Pre-Funded Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
“Warrant
Register” shall have the meaning set forth in Section 4(c).
“Warrant
Share Delivery Date” shall have the meaning set forth in Section 2(d)(i).
“Warrant
Shares” shall have the meaning set forth in the Preamble.
Section
2. Exercise.
(a)
Exercise of Warrant. Subject to the terms and conditions hereof, exercise of the purchase rights represented by this Warrant may
be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery
to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise substantially
in the form attached hereto as Exhibit A (the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day
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 number of Warrant Shares specified in the applicable
Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified
in Section 2(c) below is applicable and specified in the attached Notice of Exercise. The Company shall have no obligation to inquire
with respect to or otherwise confirm the authenticity of the signature(s) contained on any Notice of Exercise nor the authority of the
person so executing such Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee
(or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant
Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the
Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall
have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the
date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such
notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at
any given time may be less than the amount stated on the face hereof.
(b)
Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share,
was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the
nominal exercise price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise
of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise
price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to
the Termination Date. The remaining unpaid exercise price per share of Common Stock under this Warrant shall be $0.0001, subject to adjustment
hereunder (the “Exercise Price”).
(c)
Cashless Exercise. This Warrant may 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)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the VWAP on the Trading Day
immediately preceding the date of the applicable Notice of Exercise or (iii) the VWAP on the date of the applicable Notice of Exercise
if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section
2(a) hereof after the close of “regular trading hours” on such Trading Day;
(B)
= the Exercise Price of this Warrant, as adjusted hereunder; and
(X)
= the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2(c).
(d)
Mechanics of Exercise.
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate,
registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is
the earliest of (i) one (1) Trading Day after the delivery of the Notice of Exercise to the Company, (ii) one (1) Trading Day after delivery
of the aggregate Exercise Price to the Company, and (iii) the number of days comprising the Standard Settlement Period after the delivery
to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”) provided that payment of the
aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company by such 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 by the Warrant Share Delivery Date. If the
Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery
Date, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company
by such date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares
subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day
(increasing to $20 per Trading Day on the fifth Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant
Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer
agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing,
with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York, NY time) on the Initial Exercise Date, which
may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver the Warrant Shares
subject to such notice(s) by 4:00 p.m. (New York, NY time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant
Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received by such Warrant Share Delivery Date.
(ii)
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares 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, (other than a failure caused by
incorrect or incomplete information provided by the Holder to the Company), 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 Warrants 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 as Exhibit B 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 and shall have no liability for exercises of the Warrant
that are not in compliance with the Beneficial Ownership Limitation, except to the extent the Holder relies on a number of outstanding
shares of Common Stock that was provided by the Company. 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, and the Company
shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant
that are not in compliance with the Beneficial Ownership Limitation, except to the extent the Holder relies on the number of outstanding
shares of Common Stock that was provided by the Company. 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 SEC, 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 request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number
of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution
Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon written
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the
Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving
effect to the issuance of 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 sixty-first (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.
If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration is owing
to the Holder.
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 while this Warrant
is outstanding the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or
other property pro rata to all of the record holders of any class of shares of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would result
in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right
to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the
Holder exceeding the Beneficial Ownership Limitation).
(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). To the extent that this Warrant has not been partially or completely exercised at the
time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder
has exercised this Warrant.
(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, 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 greater than 50% of the outstanding Common
Stock or greater than 50% 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 (other
than a stock split or stock dividend), 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 (other than a stock split or stock dividend)) with another Person or group of Persons whereby such other
Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% 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. The Company shall cause any successor entity in
a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all
of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) pursuant to written
agreements 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 be added to the
term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction,
the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each
of the Company and the Successor Entity, or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities,
jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor
Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with
the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company
herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(d) regardless
of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a
Fundamental Transaction occurs prior to the Initial Exercise Date.
(e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(f)
Notice to Holder.
(i)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment;
provided, however, that the Company may satisfy this notice requirement in this Section 3(f) by filing such notice with the SEC
pursuant to a Current Report on Form 8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K.
(ii)
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form other
than a stock split or stock dividend) 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 (excluding any granting or issuance of rights to
all of the Company’s shareholders pursuant to a shareholder rights plan), (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party,
any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the
Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least twenty (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 SEC pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise
this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except
as may otherwise be expressly set forth herein.
(g)
Voluntary Adjustment by Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during
the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board
of Directors.
Section
4. Transfer of Warrant.
(a)
Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office
of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto
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 of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
(a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except
as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in
no event shall the Company be required to net cash settle an exercise of this Warrant.
(b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
(c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding 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 (it being understood that this Warrant
shall not in any case prevent the Company from effecting any such amendment, reorganization, transfer, consolidation, merger, dissolution,
issuance or sale). 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)
Governing Law; Exclusive 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, and any action relating to this Warrant
shall only be brought as provided in 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, notwithstanding the fact that
the Holder’s right to exercise this Warrant terminates on the Termination Date. Without limiting any other provision of this Warrant,
if the Company willfully and knowingly fails to comply with any provision of this Warrant or the Purchase Agreement, 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 and Waiver. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the
Company, on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.
(m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(n)
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.
| |
HEPION
PHARMACEUTICALS, INC. |
| |
|
|
| |
By: |
|
| |
Name: |
John
Brancaccio |
| |
Title: |
Interim
Chief Executive Officer |
[Signature
page to Pre-funded Common Stock Purchase Warrant]
EXHIBIT
A
NOTICE
OF EXERCISE
| TO: | HEPION PHARMACEUTICALS,
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:
_______________________________
_______________________________
_______________________________
[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 exercise the Warrant to purchase
shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
|
|
| |
|
(Please
Print) |
| Address: |
|
|
| |
|
(Please
Print) |
| Phone
Number: |
|
|
| Email
Address: |
|
|
| Dated:
_______________ __, ______ |
|
|
| Holder’s
Signature: ___________________ |
|
|
| Holder’s
Address: ____________________ |
|
|
Exhibit
4.7
SERIES
A COMMON STOCK PURCHASE WARRANT
HEPION
PHARMACEUTICALS, INC.
| Warrant
Shares: [*] |
Issuance
Date: January [__], 2025 |
THIS
SERIES A COMMON STOCK PURCHASE WARRANT (“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 Shareholder Approval Date (as defined below) (such date, the “Initial Exercise Date”)
and on or prior to 5:00 p.m. (New York, New York time) on the five (5) year anniversary of the Initial Exercise Date, provided
that if such date is not a Trading Day, the immediately following Trading Day (the “Termination Date”) but not thereafter,
to subscribe for and purchase from Hepion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), up to [______]
shares of Common Stock, the (“Warrant Shares”), subject to adjustment hereunder. The purchase price of one share of
Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in
this Section 1. Capitalized word and terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated January, [__], 2025, among the Company and the purchasers signatory
thereto.
“Alternate
Consideration” shall have the meaning set forth in Section 3(d).
“Attribution
Parties” shall have the meaning set forth in Section 2(e).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (i) 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, New York time) to 4:02 p.m. (New York, New York time)), (ii) 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, (iii) 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 (iv) in all other cases, the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
“Black
Scholes Value” shall have the meaning set forth in Section 3(d).
“Bloomberg”
means Bloomberg L.P., or any successor thereto.
“Buy-In”
shall have the meaning set forth in Section 2(d)(iv).
“Bylaws”
means the Amended and Restated Bylaws of the Company.
“Certificate
of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company.
“Distribution”
shall have the meaning set forth in Section 3(c).
“Event
Market Price” shall have the meaning set forth in Section 4.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exercise
Price” shall have the meaning set forth in Section 2(b).
“Floor
Price” means (A) prior to the Shareholder Approval Date, a price equal to $[__], and (B) effective beginning on the Shareholder
Approval Date, a price equal to $[___]; which in each case shall be appropriately adjusted for any stock dividend, stock split, stock
combination, reclassification or similar event or transaction.
“Fundamental
Transaction” shall have the meaning set forth in Section 3(d).
“Holder”
shall have the meaning set forth in the Preamble.
“Initial
Exercise Date” shall have the meaning set forth in the Preamble.
“Issuance
Date” means the issuance date of this Warrant as set forth on the first page hereof.
“Notice
of Exercise” shall have the meaning set forth in Section 2(a).
“Purchase
Agreement” shall have the meaning set forth in Section 1.
“Purchase
Rights” shall have the meaning set forth in Section 3(b).
“Required
Holders” shall have the meaning set forth in Section 3(d).
“Reset
Date” means the eleventh (11th) Trading Day following the Shareholder Approval Date.
“Reset
Period” means the period commencing on the first Trading Day following the Shareholder Approval Date and ending following the
close of trading on the tenth (10th) Trading Day thereafter.
“Reset
Price” means the greater of (i) the lowest daily VWAP during the Reset Period and (ii) the Floor Price in effect as of the
Reset Date.
“Share
Combination Adjustment Period” shall have the meaning set forth in Section 4(i).
“Share
Combination Event Date” shall have the meaning set forth in Section 4.
“Shareholder
Approval” means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC (or
any successor entity) from the shareholders of the Company with respect to issuance of all of the Warrant Shares upon the exercise of
the Warrants, including, without limitation, (A) to render inapplicable clause (A) of the definition of the Floor Price, thereby giving
full effect to the adjustment to the Exercise Price and/or number of shares of Common Stock underlying the Warrants following any Share
Combination Event or Reset Date (as defined below) and (B) to consent to any adjustment to the exercise price or number of shares of
Common Stock underlying the Warrants in the event of a Share Combination Event (as defined below).
“Shareholder
Approval Date” means the first (1st) Trading Day following the Company’s notice to the Holder of Shareholder Approval,
which notice shall be provided in writing to the Holder on the date that the Company receives the Shareholder Approval in accordance
with SEC rules and regulations and applicable law and provisions of the Company’s Certificate of Incorporation and Bylaws.
“Standard
Settlement Period” shall have the meaning set forth in Section 2(d)(i).
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Successor
Entity” shall have the meaning set forth in Section 3(d).
“Termination
Date” shall have the meaning set forth in the Preamble.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market, the New York Stock Exchange, or the
NYSE American, (or any successors to any of the foregoing).
“Transfer
Agent” means Pacific Stock Transfer Company, the current transfer agent of the Company, with a mailing address of 6725 Via
Austin Pkwy Ste 300, Las Vegas, Nevada, 89119 and an email address of jclaiborne@pacificstocktransfer.com, and any successor transfer
agent of the Company.
“Trigger
Date” shall have the meaning set forth in Section 6(a).
“Warrant
Register” shall have the meaning set forth in Section 5(c).
“Warrant
Share Delivery Date” shall have the meaning set forth in Section 2(d)(i).
Section
2. Exercise.
(a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form attached hereto as Exhibit A
(the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) such earlier time 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 number of Warrant Shares specified in the applicable Notice of Exercise by wire transfer
or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below
is applicable and specified in the attached Notice of Exercise. The Company shall have no obligation to inquire with respect to or otherwise
confirm the authenticity of the signature(s) contained on any Notice of Exercise nor the authority of the person so executing such Notice
of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has
been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading
Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases
of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection
to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated
on the face hereof.
(b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $[___], subject to adjustment hereunder
(the “Exercise Price”).
(c)
Cashless Exercise. If and only if at the time of any exercise hereof there is no effective registration statement registering,
or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may 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) the Bid Price of the
Common Stock on the principal Trading Market as reported by 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 hours thereafter (including until two 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 Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2(c).
(d)
Mechanics of Exercise.
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery
of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by
the date that is the earlier of (i) one (1) Trading Day after delivery of the Notice of Exercise to the Company and (ii) the number of
days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise and the aggregate Exercise
Price (other than in the case of a cashless 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 by the Warrant Share Delivery Date. If the
Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery
Date following payment of the aggregate Exercise Price by the Holder (other than in the case of cashless exercise is received by the
Company by such date), the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading
Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after the Warrant Share Delivery Date) for each Trading Day after
such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain
a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein,
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
(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
(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise by delivering written notice to
the Company at any time prior to the delivery of such Warrant Shares.
(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 (i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than a failure caused by incorrect or
incomplete information provided by the Holder to the Company), 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) provided that if the Common Stock is then listed or quoted on the Trading Market or any over-the-counter
market (including OTC Pink or any successor) such price set forth in (y)(2) of this clause (A) is reasonably comparable to a market price
or prices in purchases and sales of the Common Stock occurring in the market on or close in time to the Trading Day on which the Holder’s
purchase occurred taking into account the volume of the Holder’s purchase, 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. The obligation of the Company to pay compensation
for Buy-In under this section (iv) is subject to delivery by the Holder of the aggregate Exercise Price in accordance with the terms
of Section 2(a).
(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 substantially in the form attached hereto as Exhibit B 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
and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership Limitation, except
to the extent the Holder relies on a number of outstanding shares of Common Stock that was provided by the Company. 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 SEC, 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 request
of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since
the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon written
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided
that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after
giving effect to the issuance of 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.
If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration is owing
to the Holder.
(f)
Reserved.
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 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 that this Warrant
is outstanding the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or
other property pro rata to all of the record holders of any class of shares of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent
(or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to
such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding
the Beneficial Ownership Limitation).
(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). To the extent that this Warrant has not been partially or completely exercised
at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the
Holder has exercised this Warrant.
(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, 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 greater than 50% of the outstanding Common
Stock or greater than 50% 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 (other
than a stock split or stock dividend), 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 (other than a stock split or stock dividend)) with another Person or group of Persons whereby such other
Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% 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 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 Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of
this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given
the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided,
further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction,
such holders of Common Stock will be deemed to have received shares of common stock of the Successor Entity (which Successor 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 (1) the 30 day volatility,
(2) the 100 day volatility or (3) the 365 day volatility, each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated
Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price
per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction
and (ii) the VWAP immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation
of the applicable Fundamental Transaction, if earlier), (D) the sum of the 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 Holder’s election and (ii) the date of consummation of the Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of
this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the holders of Warrants representing
at least a majority of the shares of Common Stock underlying the Warrants then outstanding without giving effect to any beneficial ownership
limitations (the “Required Holders”) and approved by the Required Holders (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 be added to the
term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction,
each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead
to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor
Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity
or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents
with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the
Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(d)
regardless of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii)
whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
(e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(f)
Notice to Holder.
(i)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly deliver to the Holder by 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 other
than a stock split or stock dividend) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock (excluding any granting or issuance of rights to all of the Company’s stockholders pursuant to a
stockholder rights plan), (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe
for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of
its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by
facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company,
at least ten (10) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of 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 and provided further
that no notice shall be required if the information is disseminated in a press release or document filed with the SEC. 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 SEC pursuant to a Current Report on Form 8-K. The Holder shall
remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.
(g)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during
the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Company’s
Board of Directors.
(h)
Shareholder Approval. After obtaining the Shareholder Approval, the Company shall comply with all information statement and mailing
and effective date requirements set by rules and regulations of the SEC (including the time periods provided for therein) and applicable
state laws and provisions of its Certificate of Incorporation and Bylaws with respect to the Shareholder Approval, and shall use its
best efforts to cause the minimal amount of time therefor to apply before the Shareholder Approval takes effect in accordance with such
rules and regulations, laws, and provisions. Without limiting the generality of the foregoing, immediately after obtaining such Shareholder
Approval the Company shall file with the SEC a written information statement containing the information specified in Schedule 14C with
respect to such Shareholder Approval and mail such information to shareholders of the Company as soon as practicable thereafter in accordance
with the rules and regulations of the SEC. The Company shall promptly provide responses (including filing an amended Schedule 14C) to
the SEC with respect to any comments received from the SEC on any information statement filed in accordance with this Section 3(h),
and the Company shall cause the definitive information statement to be mailed promptly after the staff of the SEC advises the Company
that it has no further comments thereon or that the Company may commence mailing the information statement, but in no ever later than
two (2) Trading Days thereafter.
Section
4. (i) Share 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 Issuance Date, there occurs any stock split, stock dividend, stock combination, or reverse stock
split, recapitalization, or other similar transaction involving the Common Stock (each, a “Share Combination Event,”
and such date thereof, the “Share Combination Event Date”) and the lowest VWAP during the period commencing five (5)
consecutive Trading Days immediately preceding and the five (5) consecutive Trading Days commencing on the Share Combination Event Date
(the “Event Market Price”) (provided if the Share Combination Event is effective after the close of trading
on the primary Trading Market, then commencing on the next Trading Day which period shall be the “Share Combination Adjustment
Period”) is less than the Exercise Price then in effect (after giving effect to the adjustment in Section 3(a) above),
then at the close of trading on the primary Trading Market on the last day of the Share Combination Adjustment Period, the Exercise Price
then in effect on such fifth (5th) Trading Day shall be reduced (but in no event increased) to the Event Market Price and the number
of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on the Issuance Date for
the Warrant Shares then outstanding shall remain unchanged. Notwithstanding the foregoing, the adjustment to the Exercise Price in this
Section 4(i) shall not reduce the Exercise Price below the Floor Price; provided further that notwithstanding the foregoing, if one or
more Share Combination Events occurred prior to the Shareholder Approval Date such that a reduction of the Exercise Price was limited
by clause (A) of the definition of the Floor Price, then effective on the Shareholder Approval Date, the Exercise Price will automatically
be reduced to equal the greater of (x) the lowest Event Market Price with respect to any Share Combination Event that occurred prior
to the Shareholder Approval Date, and (y) the Floor Price determined by reference to clause (B) of the definition of the Floor Price,
and in any such event the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this
Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged. For the avoidance of doubt, (i) if the adjustment
in the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made,
and if this Warrant is exercised, on any given Exercise Date during the Share Combination Adjustment Period, solely with respect to such
portion of this Warrant exercised on such applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed
to have ended on, and included, the Trading Day immediately prior to such Exercise Date and the Event Market Price on such applicable
Exercise Date will be the lowest VWAP of the Common Stock immediately during such the Share Combination Adjustment Period prior to such
Exercise Date and ending on, and including the Trading Day immediately prior to such Exercise Date and (ii) all adjustments pursuant
to this Section 4 shall also be subject to Section 3(a) above, including any Event Market Price. Notwithstanding anything herein
to the contrary, the “aggregate Exercise Price” used in the determination of the increase in Warrant Shares above shall be
based on the aggregate Exercise Price on the Closing Date (reduced ratably for prior exercises), and shall not be based on an aggregate
Exercise Price resulting from a reduction in the Exercise Price without a proportionate increase in the number of Warrant Shares (i.e.,
pursuant to this Section 4(i) or otherwise).
(a)
Reset. On the Reset Date, the Exercise Price shall be adjusted to equal the lowest of (i) the Exercise Price then in effect, (ii)
the Reset Price determined as of the date of determination and (iii) the lowest VWAP during the period commencing five (5) consecutive
Trading Days immediately preceding the Reset Date. Upon such reset of the Exercise Price pursuant to this Section 3(j), the number of
Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on the Issuance Date for
the Warrant Shares then outstanding shall remain unchanged following such reset. Notwithstanding the foregoing, if a Holder requests
to exercise this Warrant in whole or in part on any given date prior to the Reset Date, solely with respect to such portion of this Warrant
being exercised on such applicable Exercise Date, (a) such applicable Reset Date shall be deemed to mean the Exercise Date, (b) such
applicable Reset Period shall be deemed to have ended on the Trading Day immediately prior to the Exercise Date and (c) the applicable
Reset Price for such exercised Warrants shall be calculated pursuant to this Section 4. For the avoidance of doubt, following the calculation
of the Reset Price pursuant to this Section 4, the Company’s obligations with regard to such exercised Warrants shall be deemed
satisfied and no additional Reset Price shall apply to such exercised Warrants.
Section
5. Transfer of Warrant.
(a)
Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office
of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto
as Exhibit B 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 Issuance Date of this Warrant
and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
Section
6. Miscellaneous.
(a)
Reverse Stock Split. If at any time this Warrant is outstanding and the Company receives notice from the Trading Market that the
Company is failing to satisfy the Trading Market’s minimum bid price requirement (the “Trigger Date”), then
the Company shall take all necessary steps to obtain the necessary consents and approvals to undertake a reverse stock split after such
Trigger Date and shall, prior to the effectiveness of any delisting notice issued by the Trading Market, effect such reverse stock split.
(b)
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.
(c)
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.
(d)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.
(e)
Authorized Shares.
The
Company covenants that, from the Initial Exercise Date and thereafter 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 (it being understood that this Warrant
shall not in any case prevent the Company from effecting any such amendment, reorganization, transfer, consolidation, merger, dissolution,
issuance or sale). 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.
(f)
Governing Law; Exclusive 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, and any action relating to this Warrant
shall only be brought as provided in the Purchase Agreement.
(g)
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.
(h)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that
the right to exercise this Warrant terminates on the Termination Date. Without limiting any other provision of this Warrant, if the Company
willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the
Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto
or in otherwise enforcing any of its rights, powers or remedies hereunder.
(i)
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.
(j)
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.
(k)
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.
(l)
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 the 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.
(m)
Amendment and Waiver. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the
written consent of the Required Holders. Any such amendment shall apply to all Warrants outstanding and be binding upon all registered
holders of such Warrants.
(n)
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.
(o)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
| |
HEPION
PHARMACEUTICALS, INC. |
| |
|
|
| |
By: |
|
| |
Name: |
John
Brancaccio |
| |
Title: |
Interim
Chief Executive Officer |
[Signature
page to Series A Common Stock Purchase Warrant]
EXHIBIT
A
NOTICE
OF EXERCISE
| TO: | HEPION PHARMACEUTICALS,
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:
_______________________________
_______________________________
_______________________________
[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: |
|
|
| |
|
(Please
Print) |
| Address: |
|
|
| |
|
(Please
Print) |
| Phone
Number: |
|
|
| Email
Address: |
|
|
| Dated:
_______________ __, ______ |
|
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| Holder’s
Signature: _______________________ |
|
|
| Holder’s
Address: ________________________ |
|
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Exhibit
4.8
SERIES
B COMMON STOCK PURCHASE WARRANT
HEPION
PHARMACEUTICALS, INC.
| Warrant
Shares: [*] |
Issuance
Date: January [__], 2025 |
THIS
SERIES B COMMON STOCK PURCHASE WARRANT (“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 Shareholder Approval Date (as defined below) (such date, the “Initial Exercise Date”)
and on or prior to 5:00 p.m. (New York, New York time) on the two and one-half (2.5) year anniversary of the Initial Exercise Date, provided
that if such date is not a Trading Day, the immediately following Trading Day (the “Termination Date”) but not
thereafter, to subscribe for and purchase from Hepion Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
up to [______] shares of Common Stock, the (“Warrant Shares”), subject to adjustment hereunder. The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in
this Section 1. Capitalized word and terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated January [__], 2025, among the Company and the purchasers signatory
thereto.
“Alternate
Consideration” shall have the meaning set forth in Section 3(d).
“Attribution
Parties” shall have the meaning set forth in Section 2(e).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (i) 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, New York time) to 4:02 p.m. (New York, New York time)), (ii) 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, (iii) 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 (iv) in all other cases, the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
“Black
Scholes Value” shall have the meaning set forth in Section 3(d).
“Bloomberg”
means Bloomberg L.P., or any successor thereto.
“Buy-In”
shall have the meaning set forth in Section 2(d)(iv).
“Bylaws”
means the Amended and Restated Bylaws of the Company.
“Certificate
of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company.
“Company”
shall have the meaning set forth in the Preamble.
“Distribution”
shall have the meaning set forth in Section 3(c).
“Event
Market Price” shall have the meaning set forth in Section 3(i).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exercise
Price” shall have the meaning set forth in Section 2(b).
“Floor
Price” means (A) prior to the Shareholder Approval Date, a price equal to $[___], and (B) effective beginning on the Shareholder
Approval Date, a price equal to $[___]; which in each case shall be appropriately adjusted for any stock dividend, stock split, stock
combination, reclassification or similar event or transaction.
“Fundamental
Transaction” shall have the meaning set forth in Section 3(d).
“Holder”
shall have the meaning set forth in the Preamble.
“Initial
Exercise Date” shall have the meaning set forth in the Preamble.
“Issuance
Date” means the issuance date of this Warrant as set forth on the first page hereof.
“Notice
of Exercise” shall have the meaning set forth in Section 2(a).
“Purchase
Agreement” shall have the meaning set forth in Section 1.
“Purchase
Rights” shall have the meaning set forth in Section 3(b).
“Required
Holders” shall have the meaning set forth in Section 3(d).
“Reset
Date” means the eleventh (11th) Trading Day following the Shareholder Approval Date.
“Reset
Period” means the period commencing on the first Trading Day following the Shareholder Approval Date and ending following the
close of trading on the tenth (10th) Trading Day thereafter.
“Reset
Price” means the greater of (i) the lowest daily VWAP during the Reset Period and (ii) the Floor Price in effect as of the
Reset Date.
“Share
Combination Adjustment Period” shall have the meaning set forth in Section 3(i).
“Share
Combination Event” shall have the meaning set forth in Section 3(i).
“Share
Combination Event Date” shall have the meaning set forth in Section 3(i).
“Shareholder
Approval” means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC (or
any successor entity) from the shareholders of the Company with respect to issuance of all of the Warrant Shares upon the exercise of
the Warrants, including, without limitation, (A) to render inapplicable clause (A) of the definition of the Floor Price, thereby giving
full effect to the alternative cashless exercises pursuant to Section 2(c) hereof and the adjustment to the Exercise Price and/or
the number of shares of Common Stock underlying the Warrants following any Share Combination Event or Reset Date and (B) to consent to
any adjustment to the exercise price or number of shares of Common Stock underlying the Warrants in the event of a Share Combination
Event (as defined below).
“Shareholder
Approval Date” means the first (1st) Trading Day following the Company’s notice to the Holder of Shareholder Approval,
which notice shall be provided in writing to the Holder on the date the Company receives the Shareholder Approval in accordance with
SEC rules and regulations and applicable law and provisions of the Company’s Certificate of Incorporation and Bylaws.
“Standard
Settlement Period” shall have the meaning set forth in Section 2(d)(i).
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Successor
Entity” shall have the meaning set forth in Section 3(d).
“Termination
Date” shall have the meaning set forth in the Preamble.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market, the New York Stock Exchange, or the
NYSE American, (or any successors to any of the foregoing).
“Transfer
Agent” means Pacific Stock Transfer Company, the current transfer agent of the Company, with a mailing address of 6725 Via
Austin Pkwy Ste 300, Las Vegas, Nevada, 89119 and an email address of jclaiborne@pacificstocktransfer.com, and any successor transfer
agent of the Company.
“Trigger
Date” shall have the meaning set forth in Section 5(a).
“Warrant
Register” shall have the meaning set forth in Section 4(c).
“Warrant
Share Delivery Date” shall have the meaning set forth in Section 2(d)(i).
Section
2. Exercise.
(a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form attached hereto as Exhibit A
(the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) such earlier time 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 number of Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is applicable and specified
in the attached Notice of Exercise. For the avoidance of doubt, any reference to cashless exercise herein shall include a reference to
alternative cashless exercise. The Company shall have no obligation to inquire with respect to or otherwise confirm the authenticity
of the signature(s) contained on any Notice of Exercise nor the authority of the person so executing such Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of
Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this
Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised
in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the
date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection
to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated
on the face hereof.
(b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $[___], subject to adjustment hereunder
(the “Exercise Price”).
(c)
Cashless Exercise. If and only if at the time of any exercise hereof there is no effective registration statement registering,
or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may 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) the Bid Price of the Common Stock
on the principal Trading Market as reported by 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 hours
thereafter (including until two 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.
Whether
or not an effective registration statement or prospectus is available, the Holder may also effect an “alternative cashless exercise”
at any time on or after the Shareholder Approval Date. In such event, the aggregate number of Warrant Shares issuable in such alternative
cashless exercise pursuant to any given Notice of Exercise electing to effect an alternative cashless exercise shall equal the product
of (i) the aggregate number of Warrant Shares that would be issuable upon exercise of this Warrant if such exercise were by means of
a cash exercise rather than a cashless exercise, multiplied by (ii) 3.0. Such number of aggregate Warrant Shares issuable in such alternative
cashless exercise shall be proportionally adjusted in the event of any stock split, dividend, reclassification or any other adjustment
provided in Section 3(a) hereof. Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 2(c), provided that the Shareholder Approval Date shall
have occurred.
If
Warrant Shares are issued in any cashless exercise provided for under this Section 2(c), the parties acknowledge and agree that in accordance
with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.
The Company agrees not to take any position contrary to this Section 2(c).
(d)
Mechanics of Exercise.
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery
of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by
the date that is the earlier of (i) one (1) Trading Day after delivery of the Notice of Exercise to the Company and (ii) the number of
days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise and the aggregate Exercise
Price (other than in the case of a cashless 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 by the Warrant Share Delivery Date.
If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share
Delivery Date following payment of the aggregate Exercise Price by the Holder (other than in the case of cashless exercise is received
by the Company by such date), the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after the Warrant Share Delivery Date) for each
Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company
agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.
As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading
Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice
of Exercise.
(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 by delivering written notice
to the Company at any time prior to the delivery of such Warrant Shares.
(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 (other than a failure caused by incorrect
or incomplete information provided by the Holder to the Company), 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) provided that if the Common Stock is then listed or quoted on the Trading Market or any over-the-counter
market (including OTC Pink or any successor) such price set forth in (y)(2) of this clause (A) is reasonably comparable to a market price
or prices in purchases and sales of the Common Stock occurring in the market on or close in time to the Trading Day on which the Holder’s
purchase occurred taking into account the volume of the Holder’s purchase, 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. The obligation of the Company to pay compensation
for Buy-In under this Section 2(d)(iv) is subject to delivery by the Holder of the aggregate Exercise Price in accordance with the terms
of Section 2(a).
(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 substantially in the form attached hereto as Exhibit B 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 (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 and shall have no liability for exercises
of the Warrant that are not in compliance with the Beneficial Ownership Limitation, except to the extent the Holder relies on a number
of outstanding shares of Common Stock that was provided by the Company. 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 SEC,
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 request of a Holder, the Company shall within
one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding
shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a
Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon written notice to the Company, may
increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance
of 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. If the Warrant is unexercisable
as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration is owing to the Holder.
(f)
Reserved.
Section
3. Certain Adjustments.
(a)
Stock Dividends and Splits. In addition to any adjustment provided under Section 2(c), 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 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 that this Warrant is
outstanding the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other
property pro rata to all of the record holders of any class of shares of Common Stock (the “Purchase Rights”), then
the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent
(or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to
such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding
the Beneficial Ownership Limitation).
(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). To the extent that this Warrant has not been partially or completely exercised
at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the
Holder has exercised this Warrant.
(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, 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 greater than 50% of the outstanding Common
Stock or greater than 50% 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 (other
than a stock split or stock dividend), 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 (other than a stock split or stock dividend)) with another Person or group of Persons whereby such other
Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% 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 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 Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of
this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given
the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided,
further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction,
such holders of Common Stock will be deemed to have received shares of common stock of the Successor Entity (which Successor 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 (1) the 30 day volatility,
(2) the 100 day volatility or (3) the 365 day volatility, each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated
Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price
per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction
and (ii) the VWAP immediately preceding the public announcement of the applicable contemplated Fundamental Transaction (or the consummation
of the applicable Fundamental Transaction, if earlier), (D) the sum of the 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 Holder’s election and (ii) the date of consummation of the Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of
this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the holders of Warrants representing
at least a majority of the shares of Common Stock underlying the Warrants then outstanding without giving effect to any beneficial ownership
limitations (the “Required Holders”) and approved by the Required Holders (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 be added to the
term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction,
each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead
to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor
Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity
or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents
with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the
Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(d) regardless
of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a
Fundamental Transaction occurs prior to the Initial Exercise Date.
(e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(f)
Notice to Holder.
(i)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly deliver to the Holder by 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 other
than a stock split or stock dividend) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock (excluding any granting or issuance of rights to all of the Company’s stockholders pursuant to a
stockholder rights plan), (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe
for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of
its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by
facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company,
at least ten (10) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein
or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice and provided
further that no notice shall be required if the information is disseminated in a press release or document filed with the SEC. 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 SEC pursuant to a Current Report on Form 8-K. The Holder
shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event
triggering such notice except as may otherwise be expressly set forth herein.
(g)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during
the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Company’s
Board of Directors.
(h)
Shareholder Approval. After obtaining the Shareholder Approval, the Company shall comply with all information statement and mailing
and effective date requirements set by rules and regulations of the SEC (including the time periods provided for therein) and applicable
state laws and provisions of its Certificate of Incorporation and Bylaws with respect to the Shareholder Approval, and shall use its
best efforts to cause the minimal amount of time therefor to apply before the Shareholder Approval takes effect in accordance with such
rules and regulations, laws, and provisions. Without limiting the generality of the foregoing, immediately after obtaining such Shareholder
Approval the Company shall file with the SEC a written information statement containing the information specified in Schedule 14C with
respect to such Shareholder Approval and mail such information to shareholders of the Company as soon as practicable thereafter in accordance
with the rules and regulations of the SEC. The Company shall promptly provide responses (including filing an amended Schedule 14C) to
the SEC with respect to any comments received from the SEC on any information statement filed in accordance with this Section 3(h), and
the Company shall cause the definitive information statement to be mailed promptly after the staff of the SEC advises the Company that
it has no further comments thereon or that the Company may commence mailing the information statement, but in no ever later than two
(2) Trading Days thereafter.
(i)
Share 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 Issuance Date, there occurs any stock split, stock dividend, stock combination, or reverse stock split, recapitalization,
or other similar transaction involving the Common Stock (each, a “Share Combination Event,” and such date thereof,
the “Share Combination Event Date”) and the lowest VWAP during the period commencing five (5) consecutive Trading
Days immediately preceding and the five (5) consecutive Trading Days commencing on the Share Combination Event Date (the “Event
Market Price”) (provided if the Share Combination Event is effective after the close of trading on the primary Trading
Market, then commencing on the next Trading Day which period shall be the “Share Combination Adjustment Period”) is
less than the Exercise Price then in effect (after giving effect to the adjustment in Section 3(a) above), then at the close of trading
on the primary Trading Market on the last day of the Share Combination Adjustment Period, the Exercise Price then in effect on such fifth
(5th) Trading Day shall be reduced (but in no event increased) to the Event Market Price and the number of Warrant Shares issuable hereunder
shall be increased such that the aggregate Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding
shall remain unchanged. Notwithstanding the foregoing, the adjustment to the Exercise Price in this Section 3(i) shall not reduce the
Exercise Price below the Floor Price; provided further that notwithstanding the foregoing, if one or more Share Combination Events occurred
prior to the Shareholder Approval Date such that a reduction of the Exercise Price was limited by clause (A) of the definition of the
Floor Price, then effective on the Shareholder Approval Date, the Exercise Price will automatically be reduced to equal the greater of
(x) the lowest Event Market Price with respect to any Share Combination Event that occurred prior to the Shareholder Approval Date, and
(y) the Floor Price determined by reference to clause (B) of the definition of the Floor Price, and in any such event the number of Warrant
Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on the Issuance Date for the Warrant
Shares then outstanding shall remain unchanged. For the avoidance of doubt, (i) if the adjustment in the immediately preceding sentence
would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made, and if this Warrant is exercised,
on any given Exercise Date during the Share Combination Adjustment Period, solely with respect to such portion of this Warrant exercised
on such applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed to have ended on, and included,
the Trading Day immediately prior to such Exercise Date and the Event Market Price on such applicable Exercise Date will be the lowest
VWAP of the Common Stock immediately during such the Share Combination Adjustment Period prior to such Exercise Date and ending on, and
including the Trading Day immediately prior to such Exercise Date and (ii) all adjustments pursuant to this Section 3(i) shall also be
subject to Section 3(a) above, including any Event Market Price. Notwithstanding anything herein to the contrary, the “aggregate
Exercise Price” used in the determination of the increase in Warrant Shares above shall be based on the aggregate Exercise Price
on the Closing Date (reduced ratably for prior exercises), and shall not be based on an aggregate Exercise Price resulting from a reduction
in the Exercise Price without a proportionate increase in the number of Warrant Shares (i.e., pursuant to this Section 3(i) or otherwise).
(j)
Reset. On the Reset Date, the Exercise Price shall be adjusted to equal the lowest of (i) the Exercise Price then in effect, (ii)
the Reset Price determined as of the date of determination and (iii) the lowest VWAP during the period commencing five (5) consecutive
Trading Days immediately preceding the Reset Date. Upon such reset of the Exercise Price pursuant to this Section 3(j), the number of
Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on the Issuance Date for
the Warrant Shares then outstanding shall remain unchanged following such reset. Notwithstanding the foregoing, if a Holder requests
to exercise this Warrant in whole or in part on any given date prior to the Reset Date, solely with respect to such portion of this Warrant
being exercised on such applicable Exercise Date, (a) such applicable Reset Date shall be deemed to mean the Exercise Date, (b) such
applicable Reset Period shall be deemed to have ended on the Trading Day immediately prior to the Exercise Date and (c) the applicable
Reset Price for such exercised Warrants shall be calculated pursuant to this Section 3(j). For the avoidance of doubt, following the
calculation of the Reset Price pursuant to this Section 3(j), the Company’s obligations with regard to such exercised Warrants
shall be deemed satisfied and no additional Reset Price shall apply to such exercised Warrants.
Section
4. Transfer of Warrant.
(a)
Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office
of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto
as Exhibit B 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 Issuance Date of this Warrant
and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
(a)
Reverse Stock Split. If at any time this Warrant is outstanding and the Company receives notice from the Trading Market that the
Company is failing to satisfy the Trading Market’s minimum bid price requirement (the “Trigger Date”), then
the Company shall take all necessary steps to obtain the necessary consents and approvals to undertake a reverse stock split after such
Trigger Date and shall, prior to the effectiveness of any delisting notice issued by the Trading Market, effect such reverse stock split.
(b)
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.
(c)
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.
(d)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.
(e)
Authorized Shares.
(i)
The Company covenants that, from the Initial Exercise Date and thereafter 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).
(ii)
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 (it being understood that
this Warrant shall not in any case prevent the Company from effecting any such amendment, reorganization, transfer, consolidation, merger,
dissolution, issuance or sale). 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.
(iii)
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.
(f)
Governing Law; Exclusive 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, and any action relating to this Warrant
shall only be brought as provided in the Purchase Agreement.
(g)
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.
(h)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that
the right to exercise this Warrant terminates on the Termination Date. Without limiting any other provision of this Warrant, if the Company
willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the
Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto
or in otherwise enforcing any of its rights, powers or remedies hereunder.
(i)
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.
(j)
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.
(k)
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.
(l)
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 the 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.
(m)
Amendment and Waiver. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the
written consent of the Required Holders. Any such amendment shall apply to all Warrants outstanding and be binding upon all registered
holders of such Warrants.
(n)
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.
(o)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
| HEPION
PHARMACEUTICALS, INC. |
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| By: |
|
|
| Name: |
John
Brancaccio |
|
| Title: |
Interim
Chief Executive Officer |
|
[Signature
page to Series B Common Stock Purchase Warrant]
EXHIBIT
A
NOTICE
OF EXERCISE
| TO: | HEPION PHARMACEUTICALS,
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:
_______________________________
_______________________________
_______________________________
[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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Print) |
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| Address: |
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(Please
Print) |
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| Phone
Number: |
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Address: |
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| Dated:
_______________ __, ______ |
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| Holder’s
Signature: ___________________ |
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| Holder’s
Address: ____________________ |
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Exhibit
5.1
 |
Sheppard,
Mullin, Richter & Hampton LLP
30
Rockefeller Plaza
New
York, New York 10112-0015
212.653.8700
main
212.653.8701
fax
www.sheppardmullin.com |
January
14, 2025
VIA
EDGAR
c/o
Clementi Associates
919
Conestoga Road
Building
3, Suite 115
Rosemont,
PA 19010
Re: Registration
Statement on Form S-1
Ladies
and Gentlemen:
We
have acted as counsel to Hepion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), in connection
with the preparation and filing by the Company of a Registration Statement on Form S-1 (the “Registration Statement”)
with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”),
on or about the date hereof, with respect to the offering by the Company, as detailed in the Registration Statement, of up to 14,285,714
shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (“Common
Stock”) or pre-funded warrants (the “Pre-Funded Warrants”) in lieu thereof, together with Series
A common stock purchase warrants to purchase up to 14,285,714 Shares (“Series A Warrants”) and Series B common
stock purchase warrants to purchase up to 14,285,714 Shares (“Series B Warrants” and together with the Series
A Warrants and Pre-Funded Warrants, the “Warrants,” and collectively with the Common Stock, Series A
Warrants and Pre-Funded Warrants, the “Securities”).
This
opinion is being furnished in accordance with the requirements of Item 601(b)(5)(i) of Regulation S-K.
In
connection with this opinion, we have reviewed and relied upon the following:
| ● |
the
Registration Statement; |
| |
|
| ● |
the
form of Pre-Funded Warrant; |
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|
| ● |
the
form of Series A Warrant; |
| |
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| ● |
the
form of Series B Warrant; |
| |
|
| ● |
the
Certificate of Incorporation of the Company, as amended, in effect on the date hereof; |
| |
|
| ● |
the
Bylaws of the Company, as amended, in effect on the date hereof; |
| |
|
| ● |
the
resolutions of the Board of Directors of the Company, adopted on January [ ], 2025 authorizing/ratifying the issuance and sale of
the Securities; and |
| |
|
| ● |
such
other documents, records, certificates, memoranda and other instruments as we deem necessary as a basis for this opinion. |
In
connection with the issuance of this opinion letter, we have examined originals or copies, certified or otherwise identified to our satisfaction,
of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other
representatives of the Company and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinions
stated below. As to any facts relevant to the opinions stated herein that we did not independently establish or verify, we have relied
upon statements and representations of officers and other representatives of the Company and of public officials.
In
our examination, we have assumed (a) the genuineness of all signatures, including endorsements, (b) the legal capacity and competency
of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Company, that such
parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments,
that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered
by such parties and that such agreements or instruments are the valid, binding and enforceable obligations of such parties, (c) the authenticity
of all documents submitted to us as originals, (d) the conformity to original documents of all documents submitted to us as facsimile,
electronic, certified or photostatic copies, and the authenticity of the originals of such copies; (e) the accuracy, completeness and
authenticity of certificates of public officials; (f) the truth, accuracy and completeness of the information, representations and warranties
contained in the instruments, documents, certificates and records we have reviewed; and (g) the legal capacity for all purposes relevant
hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Company, that
such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments,
that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered
by such parties and that such agreements or instruments are the valid, binding and enforceable obligations of such parties.
Based
upon the foregoing and subject to the qualifications and assumptions stated herein, we are of the opinion that:
The
Securities have been duly authorized by all necessary corporate action on the part of the Company and, assuming a sufficient number of
authorized but unissued shares of Common Stock are available for issuance when the Warrants are exercised, the Shares, when and if issued,
delivered and paid for in accordance with the terms of the respective Warrants, will be validly issued, fully paid and nonassessable.
Our
opinion set forth above is subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered
in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing.
This
opinion letter is rendered solely in connection with the registration of the Securities under the Registration Statement. This opinion
letter is rendered as of the date hereof, and we assume no obligation to advise you or any other person with regard to any change after
the date hereof in the circumstances or the law that may bear on the matters set forth herein after the effectiveness of the Registration
Statement, even if the change may affect the legal analysis or a legal conclusion or other matters in this opinion letter.
The
opinion we render herein is limited to those matters governed by New York law as of the date hereof and we disclaim any obligation to
revise or supplement the opinion rendered herein should the above-referenced laws be changed by legislative or regulatory action, judicial
decision, or otherwise. We express no opinion as to whether, or the extent to which, the laws of any particular jurisdiction apply to
the subject matter hereof. We express no opinion as to matters governed by any laws other than New York law.
This
opinion letter is rendered as of the date first written above, and we disclaim any obligation to advise you of facts, circumstances,
events, or developments that hereafter may be brought to our attention or that may alter, affect, or modify the opinion expressed herein.
We
hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also hereby consent to the reference to
our firm under the heading “Legal Matters” in the Registration Statement. In giving this consent, we do not thereby admit
that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the General Rules and Regulations
under the Securities Act. It is understood that this opinion is to be used only in connection with the offer and sale of the Securities
being registered while the Registration Statement is effective under the Securities Act.
| |
Respectfully
submitted, |
| |
|
| |
/s/
Sheppard, Mullin, Richter & Hampton LLP |
| |
|
| |
SHEPPARD,
MULLIN, RICHTER & HAMPTON LLP |
Exhibit
10.7
SECURITIES
PURCHASE AGREEMENT
THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is entered into and made effective as of January [__], 2025, between
Hepion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature
pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”) as to the Shares, the Pre-Funded Warrants, the Series A Warrants, the
Series B Warrants and the Warrant Shares (each as defined herein) (collectively, the “Securities”), the Company desires
to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, the Securities
of the Company as provided in this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE
I.
DEFINITIONS
1.1.
Definitions. In addition to the words and terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following
words and terms have the meanings set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Agreement”
shall have the meaning ascribed to such term in the Preamble.
“BHCA”
shall have the meaning ascribed to such term in Section 3.1(ii).
“Board
of Directors” means the board of directors of the Company.
“BSA/PATRIOT
Act” shall have the meaning ascribed to such term in Section 3.2(i).
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the first (1st) Trading
Day following the date hereof (or the second (2nd) Trading Day following the date hereof if this Agreement is signed on a day that is
not a Trading Day or after 4:00 p.m. (New York, NY time) and before midnight (New York, NY time) on a Trading Day).
“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time shares of Common Stock, including, without limitation, any debt, preferred shares, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares
of Common Stock.
“Company”
shall have the meaning ascribed to such term in the Preamble.
“Company
Counsel” means Sheppard, Mullin, Richter & Hampton LLP, with offices located at 30 Rockefeller Plaza, New York, NY 10112.
“Control”
(including the terms “Controlled by” and “under common Control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership
of voting securities, as trustee or executor, by contract or otherwise, including the ownership, directly or indirectly, of securities
having the power to elect a majority of the board of directors or similar body governing the affairs of such person or securities that
represent a majority of the outstanding voting securities of such person.
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York, NY time) and
before midnight (New York, NY time) on any Trading Day, 9:01 a.m. (New York, NY time) on the Trading Day immediately following the date
hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight
(New York, NY time) and 9:00 a.m. (New York, NY time) on any Trading Day, no later than 9:01 a.m. (New York, NY time) on the date hereof,
unless otherwise instructed as to an earlier time by the Placement Agent.
“DVP”
shall have the meaning ascribed to such term in Section 2.1.
“DWAC”
shall have the meaning ascribed to such term in Section 2.2(a)(ii).
“EDGAR”
means the Electronic Data Gathering, Analysis, and Retrieval System.
“ERISA”
shall have the meaning ascribed to such term in Section 3.2(k).
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(r).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (i) shares of Common Stock, restricted stock units, or options, including the shares of Common
Stock underlying the restricted stock units or options, to employees, officers, directors, or consultants of the Company pursuant to
any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority
of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (ii) Common
Stock issued upon the exercise or exchange of or conversion of any Warrants issued hereunder or Common Stock Purchase Warrants issued
to the Placement Agent in connection with the Offering and/or other securities exercisable or exchangeable for or convertible into shares
of Common Stock issued and outstanding on the date of this Agreement provided that such securities have not been amended since
the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price, or conversion
price of such securities (other than in connection with stock splits or combinations or anti-dilution provisions contained therein as
disclosed in the SEC Reports and the Prospectus) or to extend the term of such securities or securities issuable in connection with a
transaction involving the Company and existing stockholders in which the Company offers the existing stockholders the option to exchange
their shares of Common Stock for other securities of the Company, (iii), securities issued pursuant to merger, acquisition, or strategic
transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as
“restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any
registration statement in connection therewith during the prohibition period in Section 4.11(a) herein, and provided, further
that any such issuance shall only be to a Person that (or to the equity holders of a Person) which is, itself or through its subsidiaries,
an operating company, or an owner of an asset in a business synergistic with the business of the Company and in which the Company receives
benefits in addition to any 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, and (iv) securities for settlement
of outstanding payables or liabilities provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith
during the prohibition period in Section 4.11(a) herein.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“FDA”
shall have the meaning ascribed to such term in Section 3.1(l).
“FDCA”
shall have the meaning ascribed to such term in Section 3.1(ll).
“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(ii).
“Financial
Advisor” means A.G.P./Alliance Global Partners.
“Food
and Drug Regulations” shall have the meaning ascribed to such term in Section 3.1(ll).
“FTC”
shall have the meaning ascribed to such term in Section 3.1(l).
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“GDPR”
shall have the meaning ascribed to such term in Section 3.1(oo).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(z).
“Issuer
Free Writing Prospectus” shall have the meaning ascribed to such term in Section 3.1(f).
“IT
Systems and Data” shall have the meaning ascribed to such term in Section 3.1(nn).
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up
Agreement” means the Lock-Up Agreement, dated as of the date hereof, by and among the Placement Agent and the directors, officers,
and 5% stockholders of the Company, substantially in the form of Exhibit A attached hereto.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m).
“Misconduct”
shall have the meaning ascribed to such term in Section 3.1(k).
“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(jj).
“Non-cooperative
Jurisdiction” shall have the meaning ascribed to such term in Section 3.2(j).
“OFAC”
shall have the meaning ascribed to such term in Section 3.1(gg).
“Offering”
shall mean the offering of the Securities contemplated by this Agreement and the Registration Statement.
“Per
Share Purchase Price” equals $[___], subject to adjustment for reverse and forward share splits, share dividends, share combinations
and other similar events with respect to shares of Common Stock that occur after the date of this Agreement and prior to the Closing;
provided that the purchase price per Pre-Funded Warrant shall be the Per Share Purchase Price minus $0.0001.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint share company, government (or an agency or subdivision thereof) or other entity of any kind.
“Personal
Data” shall have the meaning ascribed to such term in Section 3.1(oo).
“Placement
Agency Agreement” means the Placement Agency Agreement by and between the Company and the Placement Agent dated as of January
[__], 2025, as it may be amended from time to time.
“Placement
Agent” means Laidlaw & Company (UK) Ltd.
“Policies”
shall have the meaning ascribed to such term in Section 3.1(oo).
“Pre-Funded
Warrants” means the Common Stock Purchase Warrants delivered to certain of the Purchasers at the Closing in accordance with
Section 2.2(a)(iii) hereof to the extent any Purchasers elect to receive Pre-Funded Warrants in lieu of Shares, which Pre-Funded Warrants
shall be exercisable into shares of Common Stock and shall be in the form of Exhibit B attached hereto, which Pre-Funded Warrants
shall be exercisable beginning on the Initial Exercise Date (as defined therein) until all of the Pre-Funded Warrants have been exercised,
and shall be exercisable at an exercise price of $0.0001 per share.
“Preliminary
Prospectus” means the preliminary prospectus dated January [__], 2025, filed with the SEC.
“Pre-Settlement
Period” shall have the meaning set forth in Section 5.21.
“Pre-Settlement
Shares” shall have the meaning set forth in Section 5.21.
“Privacy
Laws” shall have the meaning ascribed to such term in Section 3.1(oo).
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, a preliminary inquiry, an informal investigation
or a partial proceeding, such as a deposition), whether commenced or threatened.
“Product”
shall have the meaning ascribed to such term in Section 3.1(ll).
“Prospectus”
means the final prospectus filed for the Registration Statement.
“Purchaser”
shall have the meaning ascribed to such term in the Preamble.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration
Statement” means the effective registration statement on Form S-1 filed with SEC (File No. 333-284052) which registers the
sale of the Securities to the Purchasers, and shall include the Rule 462(b) Registration Statement if applicable.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such
Rule.
“Rule
424” means Rule 424 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such
Rule.
“Rule
462(b) Registration Statement” means any registration statement prepared by the Company registering additional Securities,
which was filed with the SEC on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by
the SEC pursuant to the Securities Act, if applicable.
“SEC”
means the Securities and Exchange Commission.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Shares and the Warrants.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series
A Warrants” means the Common Stock Purchase Warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a)(iii) hereof, which Series A Warrants shall be exercisable into shares of Common Stock and shall be in the form of Exhibit C
attached hereto, which Series A Warrants shall be exercisable beginning on the Initial Exercise Date (as defined therein), have a term
of five years from the Series A Warrants’ Initial Exercise Date, and shall be exercisable at an exercise price of $[___] per share.
“Series
B Warrants” means the Common Stock Purchase Warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a)(iii) hereof, which Series B Warrants shall be exercisable into shares of Common Stock and shall be in the form of Exhibit D attached
hereto, which Series B Warrants shall be exercisable beginning on the Initial Exercise Date (as defined therein), have a term of two
and a half (2.5) years from the Series B Warrants’ Initial Exercise Date, and shall be exercisable at an exercise price of $[__]
per share.
“Shareholder
Approval” means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC (or
any successor entity) from the shareholders of the Company with respect to (i) reduction of the applicable floor price of the Warrants,
(ii) adjustment to the terms of the Warrants, (iii) issuance of all of the Warrant Shares upon the exercise the Warrants in accordance
with their terms (including adjustment provisions set forth therein), and (iv) consent to any adjustment to the exercise price or number
of shares of Common Stock underlying the Warrants in the event of a Share Combination Event, Dilutive Issuance and Reset Date (as defined
in the Warrants).
“Shareholder
Approval Date” means the first Trading Day following the Company’s notice to the Purchasers of Shareholder Approval,
which notice shall be provided in writing by the Company to the Purchasers on the date that the Company receives the Shareholder Approval
in accordance with SEC rules and regulations and applicable law and provisions of the Company’s Certificate of Incorporation and
Bylaws.
“Shares”
means the shares of Common Stock which are issuable to each Purchaser pursuant to this Agreement.
“Shell
Bank” shall have the meaning ascribed to such term in Section 3.2(i).
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be
deemed to include locating and/or borrowing shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Shares or Pre-Funded Warrants (in lieu of Shares)
and Warrants purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the
heading “Subscription Amount,” in United States dollars and in immediately available funds (minus, if applicable, a Purchaser’s
aggregate exercise price of the Pre-Funded Warrants, which amounts shall be paid as and when such Pre-Funded Warrants are exercised for
cash).
“Subsidiary”
of any person means any corporation, partnership, limited liability company, joint stock company, joint venture or other organization
or entity, whether incorporated or unincorporated, which is Controlled by such Person, and shall, where applicable, also include any
direct or indirect subsidiary of the Company formed or acquired after the date of this Agreement.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the shares of Common Stock are listed or quoted for trading
on the date in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
or the NYSE American (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Lock-Up Agreements, the Warrants, the Placement Agency Agreement, all exhibits and schedules
thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Pacific Stock Transfer Company, the current transfer agent of the Company, with a mailing address of 6725 Via
Austin Pkwy, Ste 300, Las Vegas, NV 89119, and any successor transfer agent of the Company.
“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.11(b).
“Warrants”
means, collectively, the Pre-Funded Warrants, the Series A Warrants and the Series B Warrants.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE
II.
PURCHASE AND SALE
2.1.
Closing.
(a)
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase,
up to an aggregate of $[_______] of the Shares and/or the Pre-Funded Warrants and the corresponding Warrants subscribed for by such Purchaser.
Notwithstanding anything herein to the contrary, to the extent that a Purchaser determines, in its sole discretion, that such Purchaser’s
Subscription Amount (together with such Purchaser’s Affiliates, and any Person acting as a group together with such Purchaser or
any of such Purchaser’s Affiliates) would cause such Purchaser’s beneficial ownership of the shares of Common Stock to exceed
the Beneficial Ownership Limitation, or as such Purchaser may otherwise choose, such Purchaser may elect to purchase Pre-Funded Warrants
in lieu of the Shares as determined pursuant to Section 2.2(a). The “Beneficial Ownership Limitation”
shall be 4.99% (or, with respect to each Purchaser, at the election of the Purchaser at Closing, 9.99%) of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of the Shares on the Closing Date. In each case, the election
to receive Pre-Funded Warrants is solely at the option of the Purchaser. Each Purchaser’s Subscription Amount as set forth on the
signature page hereto executed by such Purchaser shall be made available for “Delivery Versus Payment” (“DVP”)
settlement with the Company or its designee. The Company shall deliver to each Purchaser its respective Shares, Pre-Funded Warrants,
Series A Warrants and Series B Warrants, as applicable to such Purchaser and as indicated on such Purchaser’s signature page hereto
and determined based on its respective Subscription Amount and election for Shares and/or Pre-Funded Warrants, and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants
and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur remotely by electronic transfer of the Transaction
Documents and other items deliverable hereunder. Unless otherwise directed by the Placement Agent, settlement of the Shares shall occur
via DVP (i.e., on the Closing Date, the Company shall issue the Securities registered in the Purchasers’ names and addresses, and
the Shares shall be released by the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon
receipt of such Shares, the Placement Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment
therefor shall be made by the Placement Agent (or its clearing firm) by wire transfer to the Company).
2.2.
Deliveries.
(a)
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i)
this Agreement duly executed by the Company;
(ii)
a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The
Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal to such Purchaser’s
Subscription Amount divided by the Per Share Purchase Price (minus the number of shares of Common Stock issuable upon exercise of such
Purchaser’s Pre-Funded Warrant, if applicable), registered in the name of such Purchaser;
(iii)
duly executed Pre-Funded Warrants, if any, and Warrants issued and registered in the name of such Purchaser, as applicable to such Purchaser;
(iv)
a legal opinion of Company Counsel and a legal opinion of the Company’s intellectual property counsel, each in a form reasonably
acceptable to the Placement Agent;
(v)
a good standing certificate or its equivalent of the Company and each of its Subsidiaries in each such entity’s jurisdiction of
incorporation or formation issued by the relevant competent state or local government authority or registrar of companies or entities
as applicable, dated as of a date within ten (10) days of the Closing Date;
(vi)
a certificate executed by the Chief Executive Officer of the Company, in form and substance reasonably satisfactory to the Placement
Agent;
(vii)
a certificate executed by the Secretary of the Company, in form and substance reasonably satisfactory to the Placement Agent;
(viii)
Lock-up Agreements, in form and substance reasonably acceptable to the Placement Agent, executed by the Company and each officer, director
and greater than five percent (5%) shareholders of the Company;
(ix)
At the time this Agreement is executed, the Placement Agent shall have received a cold comfort letter from the Company’s independent
auditor, containing statements and information of the type customarily included in accountants’ comfort letters with respect to
the financial statements and certain financial information contained in the Registration Statement, the Preliminary Prospectus and the
Prospectus, addressed to the Placement Agent and in form and substance satisfactory in all respects to the Placement Agent; and
(x)
the Company’s wire instructions, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer;
and
(xi)
the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act).
(b)
On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i)
this Agreement duly executed by such Purchaser; and
(ii)
such Purchaser’s Subscription Amount (minus, if applicable, a Purchasers aggregate exercise price of the Pre-Funded Warrants, which
amounts shall be paid as and when such Pre-Funded Warrants are exercised for cash), which shall be made available for DVP settlement
with the Company or its designees.
2.3.
Closing Conditions.
(a)
Subject to Section 5.21 below, as applicable, the obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained herein (unless
such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to
the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date);
(ii)
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and
(iii)
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b)
Subject to Section 5.21 below, as applicable, the respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:
(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless
such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to
the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date);
(ii)
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed
in all material respects;
(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv)
the Company shall have obtained the Shareholder Approval;
(v)
there shall have been no Material Adverse Effect with respect to the Company since the date of this Agreement and to the Closing Date;
(vi)
from the date of this Agreement to the Closing Date, trading in the shares of Common Stock shall not have been suspended by the SEC or
any Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not
have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service,
or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of
such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing; and
(vii)
no stop order suspending the effectiveness of the Registration Statement, or any post-effective amendment thereto, has been issued under
the Securities Act.
ARTICLE
III.
REPRESENTATIONS AND WARRANTIES
3.1.
Representations and Warranties of the Company. Except as set forth in the SEC Reports and disclosure schedules attached hereto,
which SEC Reports and such schedules shall be deemed a part hereof and shall qualify any representation or warranty otherwise made herein
to the extent of the disclosure contained in the SEC Reports and such schedules, the Company hereby makes the following representations
and warranties to each Purchaser as of the date hereof and as of the Closing Date (unless as of a specific date therein, in which case
they shall be accurate as of such date):
(a)
Subsidiaries. All of the direct and indirect Subsidiaries of the Company are set forth in the Registration Statement. The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and
all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references
to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b)
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and, if applicable under the laws of the jurisdiction in which they are formed, in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and
to carry on its business as currently conducted. The Company and each of the Subsidiaries has all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date
of this Agreement to conduct its business purpose in all material respects as described in the Registration Statement and SEC Reports
and to own or lease its properties. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its
respective certificate or articles of incorporation or association, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where
the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a
material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the
results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations
under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”); provided that a change
in the market price or trading volume of the Common Stock alone shall not be deemed, in and of itself, to constitute a Material Adverse
Effect. To the knowledge of the Company, no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing
or seeking to revoke, limit or curtail such power and authority or qualification.
(c)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Board of Directors, or the Company’s stockholders in connection herewith or therewith
other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been
(or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will
constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation or association, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar
adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or
other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses
(ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings
required pursuant to Section 4.4 of this Agreement, (ii) the filing with the SEC of the Prospectus, (iii) application(s) to each applicable
Trading Market for the listing of the Shares and the Warrant Shares for trading thereon in the time and manner required thereby, (iv)
such filings as are required to be made under applicable state securities laws, and (v) the filing and mailing of a proxy statement on
Schedule 14A in connection with the Shareholder Approval (collectively, the “Required Approvals”).
(f)
Issuance of the Securities; Registration. The Shares are duly authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed
by the Company. The Warrants are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents,
will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general equitable principles. The Warrant Shares are duly authorized and,
when issued in accordance with the terms of the Warrants against payment therefor as provided therein, will be validly issued, fully
paid and non-assessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants (without taking into account
any limitations on the exercise of the Warrants set forth therein). The Company has prepared and filed the Registration Statement in
conformity with the requirements of the Securities Act, which became effective on January [______], 2025, including the Prospectus, and
such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective
under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Preliminary Prospectus or the Prospectus has been issued by the SEC and no Proceedings for that purpose have
been instituted or, to the knowledge of the Company, are threatened by the SEC. The Company, if required by the rules and regulations
of the SEC, shall file the Prospectus with the SEC pursuant to Rule 424(b). At the time the Registration Statement and any amendments
thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto
conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading; and the Preliminary Prospectus, the Prospectus and any amendments or supplements thereto, at the time the Preliminary
Prospectus and the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in
all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
Any
“issuer free writing prospectus” (as defined in Rule 433 under the Securities Act) relating to the Securities is hereafter
referred to as an “Issuer Free Writing Prospectus.” Any reference herein to the Preliminary Prospectus and the Prospectus
shall be deemed to refer to and include the documents incorporated by reference therein as of the date of filing thereof; and any reference
herein to any “amendment” or “supplement” with respect to any of the Preliminary Prospectus and the Prospectus
shall be deemed to refer to and include (i) the filing of any document with the SEC incorporated or deemed to be incorporated therein
by reference after the date of filing of such Preliminary Prospectus or Prospectus and (ii) any such document so filed.
All
references in this Agreement to the Registration Statement, the Preliminary Prospectus, the Prospectus, or any Issuer Free Writing Prospectus,
or any amendments or supplements to any of the foregoing, shall be deemed to include any copy thereof filed with the SEC on EDGAR.
(g)
Capitalization. The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g) which Schedule 3.1(g)
shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date
hereof. The Company has not issued any capital stock or Common Stock Equivalents since its most recently filed periodic report under
the Exchange Act, other than pursuant to the exercise of employee stock options or vesting and settlement of restricted stock units under
the Company’s stock option or equity incentive plans, the issuance of shares of Common Stock to employees pursuant to any employee
stock purchase plans, and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most
recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase
and sale of the Securities and set forth on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or Common Stock Equivalents
or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary
is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The
issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or Common Stock Equivalents
or other securities to any Person (other than the Purchasers). There are no outstanding securities or instruments of the Company or any
Subsidiary with any provision that adjusts, and the issuance and sale of the Securities will not result in a right of any holder of Company
securities or instruments to adjust, the exercise, conversion, exchange or reset price under any of such securities or instruments upon
an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any
Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does
not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the
outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws where applicable, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals, no further approval
or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Securities. There
are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.
(h)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof and the
registration statement on Form S-1 (File No. 333-284052), for the one (1) year preceding the date of this Agreement (or such shorter
period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, together with the Registration Statement, Preliminary Prospectus and Prospectus, being
collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of
the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with
respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments. The selected financial data set forth under the caption
“Selected Financial Data” in the SEC Reports fairly present, on the basis stated in such SEC Reports, the information included
therein. The agreements and documents described in the Registration Statement and the SEC Reports conform in all material aspects to
the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules
and regulations thereunder to be described in the Registration Statement, the Prospectus or the SEC Reports or to be filed with the SEC
as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized
or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration
Statement or the SEC Reports, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the
Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge,
the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefore may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the
best of the Company’s knowledge, any other party is in default thereunder and, to the best of the Company’s knowledge, no
event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder that has had
or that could reasonably be expected to result in a Material Adverse Effect. To the Company’s knowledge, performance by the Company
of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its
assets or businesses, including, without limitation, those relating to environmental laws and regulations.
(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as set forth in Schedule 3.1(i), (i) there has been no event, occurrence or development that has had or
that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed
in filings made with the SEC, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option or equity incentive plans. The Company does not have pending before the SEC any request for
confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth in Schedule
3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur
or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or
financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation
is made or deemed made that has not been publicly disclosed at least one Trading Day prior to the date that this representation is made.
(j)
Litigation. There is no Proceeding pending or, to the knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) which (i) adversely affects or challenges the legality, validity or enforceability
of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the
subject of any Proceeding involving a claim of violation of or liability under federal or state securities laws or a claim of breach
of fiduciary duty, which could result in a Material Adverse Effect. There has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company.
The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act.
(k)
Labor Relations. (1) No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. (2) No executive officer of the Company or any Subsidiary, to the knowledge of
the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in
favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries
to any liability with respect to any of the foregoing matters. (3) To the Company’s knowledge, (a) no allegation of sexual harassment,
sexual misconduct or discrimination, whether such discrimination arises from race, ethnic background, sex, gender status, age or otherwise
(“Misconduct”) have been made involving any current or former director, officer, employee or independent contractor
of the Company or any of its Subsidiaries, (b) neither the Company nor any of its Subsidiaries have entered into any settlement agreements
related to allegations of Misconduct by any current or former director, officer, employee, or independent contractor of the Company or
any of its Subsidiaries. (4) The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except
where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(l)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to the U.S. Food and Drug Administration
(“FDA”) and comparable foreign regulators, the U.S. Federal Trade Commission (“FTC”), state unfair
trade practice laws and rules and foreign equivalents, taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.
(m)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of Proceedings relating to the revocation or
modification of any Material Permit. The disclosures in the Registration Statement concerning the effects of federal, state, local and
all foreign regulation on the Company’s business as currently contemplated are correct in all material respects. The Company is
and has been in material compliance with any term of any such Material Permits, except for any violations which would not reasonably
be expected to have a Material Adverse Effect. The Company has not received notice of any Proceeding from any governmental authority
or third party alleging that any product, operation or activity is in violation of any applicable laws or regulations or Material Permits
or has any knowledge that any such entity or third party is considering any such Proceeding, nor, to the Company’s knowledge, has
there been any material noncompliance with or violation of any applicable laws or regulations by the Company that could reasonably be
expected to require the issuance of any such communication or result in an investigation, corrective action, or enforcement action by
any governmental authority.
(n)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to or have valid and marketable
rights to lease or otherwise to use all real property owned or leased by them and good and marketable title in all personal property
owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except
for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to
be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties.
Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries are in compliance in all material respects.
(o)
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Except
as set forth in the SEC Reports, none of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement, except as would not reasonably be expected to have a Material Adverse Effect. Neither
the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports,
a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights
of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company,
all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(p)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a significant increase in cost.
(q)
Transactions With Affiliates and Employees. Except as set forth in Schedule 3.1(q), none of the executive officers or directors
of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently
a party to any transaction with the Company or any Subsidiary (other than for services as employees, executive officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to
or from any executive officer, director or such employee or, to the knowledge of the Company, any entity in which any executive officer,
director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder, member or partner, in, in
each case in excess of 1% of the Company’s average total assets as of December 31, 2023 and 2022 other than for: (i) payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee
benefits, including equity award or option agreements under any equity incentive plan of the Company.
(r)
Sarbanes-Oxley; Internal Accounting Controls. Except as set forth in the SEC Reports, the Company and the Subsidiaries are in
material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date of this
Agreement and applicable to the Company and the Subsidiaries, and any and all applicable rules and regulations promulgated by the SEC
thereunder that are effective as of the date of this Agreement and as of the Closing Date and applicable to the Company and the Subsidiaries.
Except as set forth in the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets and liabilities is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as set forth in the SEC Reports, the Company and the
Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company
and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the
Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the Company’s
disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the Company’s most
recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in
its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date and other than
as set forth in the SEC Reports, there have been no changes in the internal control over financial reporting (as such term is defined
in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect,
the internal control over financial reporting of the Company and its Subsidiaries.
(s)
Certain Fees. Except for fees payable to the Financial Advisor and the Placement Agent in connection herewith, no brokerage or
finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.
Other than for Persons directly engaged by a Purchaser, if any, the Purchasers shall have no obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by the Transaction Documents.
(t)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(u)
Registration Rights. Other than as described in the SEC Reports or as have been complied with as of the date hereof, no Person
has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company
or any Subsidiary.
(v)
Listing and Maintenance Requirements. The shares of Common Stock are registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the shares of Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating
such registration. Other than as disclosed in the SEC Reports, the Company has not, in the twelve (12) months preceding the date of this
Agreement, received notice from any Trading Market on which the shares of Common Stock are or have been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Common Stock is currently
eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is
current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such
electronic transfer.
(w)
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the
laws of its jurisdiction of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result
of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.
(x)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or
counsel with any information that it believes constitutes or might constitute material, non-public information which is not otherwise
disclosed in the Prospectus or the SEC Reports. The Company understands and confirms that the Purchasers will rely on the foregoing representation
in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers
regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby is true and correct
in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases
disseminated by the Company during the 12 months preceding the date of this Agreement taken as a whole do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.
(y)
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this Offering of the Securities
to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market
on which any of the securities of the Company are listed or designated.
(z)
Solvency. Except as disclosed in the Preliminary Prospectus or the Prospectus, based on the consolidated financial condition of
the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities
hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect
of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s
assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including
its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and
projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds
the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not
intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable
on or in respect of its debt). Except as disclosed in the Preliminary Prospectus or the Prospectus, the Company has no knowledge of any
facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one (1) year from the Closing Date. The Preliminary Prospectus and the Prospectus sets forth as of the
date of this Agreement and as of the Closing Date, respectively, all outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of Fifty Thousand Dollars ($50,000) (other than trade accounts
payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the
notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments in excess of One Hundred Thousand Dollars ($100,000) due under leases
required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(aa)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income
and franchise taxes and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment
of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any
Subsidiary know of no basis for any such claim.
(bb)
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any
agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf
of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA. The Company
has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all
material respects with the FCPA.
(cc)
Accountants. The Company’s independent registered public accounting firm is set forth in the Preliminary Prospectus and
the Prospectus. To the knowledge of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange
Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for
the fiscal year ending December 31, 2024.
(dd)
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or
any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby
is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
(ee) Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.13 hereof), it is understood and acknowledged by the Company that: (i) none of the
Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or
short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the
Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including,
without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private
placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any
Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or
indirectly, presently may have a “short” position in the shares of Common Stock, and (iv) each Purchaser shall not be
deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at
various times during the period that the Securities are outstanding, and (z) such hedging activities (if any) could reduce the value
of the existing shareholders’ equity interests in the Company at and after the time that the hedging activities are being
conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction
Documents.
(ff)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf (other than the Placement Agent,
as to which no representation is made) has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid
for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person
any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and
(iii), compensation paid to the Placement Agent in connection with the placement of the Securities.
(gg)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or Affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
(hh)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within
the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.
(ii)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly,
five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its
Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject
to the BHCA and to regulation by the Federal Reserve.
(jj)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
applicable United States federal and state and foreign money laundering statutes and applicable rules and regulations thereunder (collectively,
the “Money Laundering Laws”), and no Proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company or any Subsidiary, threatened.
(kk)
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating
to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have
received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and
(iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(ll)
Food and Drug Regulations. As to each product subject to the jurisdiction of the FDA under the Federal Food, Drug and Cosmetic
Act, and the regulations thereunder (the “FDCA”) and similar or comparable governmental authorities located in other
countries and laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application
approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising,
record keeping and filing of reports, including, without limitation in foreign jurisdictions including Health Canada (collectively, “Food
and Drug Regulations”), that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company
or any of its Subsidiaries (each such product, a “Product”), such Product is being manufactured, packaged, labeled,
tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under applicable Food and Drug
Regulations, except where the failure to be in compliance would not have or would reasonably be expected to have a Material Adverse Effect
or as is disclosed in the Preliminary Prospectus or the Prospectus. Except as disclosed in the Preliminary Prospectus or the Prospectus,
there is no pending, completed or, to the Company’s knowledge, threatened, Proceeding against the Company or any of its Subsidiaries,
and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication arising from or relating
to Food and Drug Regulations, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution
of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Product, (ii) withdraws its
approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional
materials relating to, any Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries,
(iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree
of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations
by the Company or any of its Subsidiaries (including Food and Drug Regulations), and which, either individually or in the aggregate,
would have or would reasonably be expected to have a Material Adverse Effect. The properties, business and operations of the Company
have been and are being conducted in all material respects in accordance with all applicable Food and Drug Regulations. The Company has
not been informed by the FDA or any other governmental authority that such governmental authority will prohibit the marketing, sale,
license or use in the United States or in another jurisdiction of any product proposed to be developed, produced or marketed by the Company.
(mm)
Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the
Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options or awards prior to, or otherwise knowingly coordinate the grant of stock options
or awards with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial
results or prospects.
(nn)
Cybersecurity. There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s
information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees,
suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems
and Data”) that would reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect and
(i) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably
be expected to result in, any material security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries
are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator
or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems
and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as
would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented
and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous
operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and
disaster recovery technology consistent with industry standards and practices.
(oo)
Compliance with Data Privacy Laws. (i) The Company and the Subsidiaries are, and at all times during the last three (3) years
were, in material compliance with all applicable state, federal and foreign data privacy and security laws and regulations, including,
without limitation, the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, “Privacy
Laws”); (ii) the Company and the Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to
ensure compliance with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure,
handling and analysis of Personal Data (as defined below) (the “Policies”); (iii) the Company provides accurate notice
of its applicable Policies to its customers, employees, third party vendors and representatives as required by the Privacy Laws; and
(iv) applicable Policies provide accurate and sufficient notice of the Company’s then-current privacy practices relating to its
subject matter, and do not contain any material omissions of the Company’s then-current privacy practices, as required by Privacy
Laws. “Personal Data” means (i) a natural person’s name, street address, telephone number, email address, photograph,
social security number, bank information, or customer or account number; (ii) any information which would qualify as “personally
identifying information” under the FTC, as amended; (iii) “personal data” as defined by GDPR; and (iv) any other piece
of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of
any identifiable data related to an identified person’s health or sexual orientation. (i) None of such disclosures made or contained
in any of the Policies have been inaccurate, misleading, or deceptive in violation of any Privacy Laws and (ii) the execution, delivery
and performance of the Transaction Documents will not result in a breach of any Privacy Laws or Policies. Neither the Company nor the
Subsidiaries (i) to the knowledge of the Company, has received written notice of any actual or potential liability of the Company or
the Subsidiaries under, or actual or potential violation by the Company or the Subsidiaries of, any of the Privacy Laws; (ii) is currently
conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any regulatory request
or demand pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement by or with any court or arbitrator or governmental
or regulatory authority that imposed any obligation or liability under any Privacy Law.
3.2.
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and
warrants as of the date of this Agreement and as of the Closing Date to the Company as follows (unless as of a specific date therein,
in which case they shall be accurate as of such date):
(a)
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance
by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to
which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof,
will constitute the valid and legally binding obligation of such Purchaser, enforceable against it 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.
(b)
Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct
or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this
representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or
otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business.
(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is,
and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8), (a)(9), or (a)(13) under the Securities Act or (ii) a “qualified institutional buyer” as
defined in Rule 144A(a) under the Securities Act.
(d)
Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of
an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(e)
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto), and the SEC Reports including the Prospectus and, has been afforded, (i) the opportunity to ask
such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company
and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges
and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information
or advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any
Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate
may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it. In connection
with the issuance of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial
advisor or fiduciary to such Purchaser.
(f)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has
not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser
first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material
pricing terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of
such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion
of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other
than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of
all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions,
with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
(g)
Ownership of Company Securities. Except as disclosed in writing to the Company as of the date of this Agreement, no Purchaser,
any of its Affiliates, or any other Persons whose beneficial ownership of shares of Common Stock would be aggregated with the Purchaser’s
for purposes of Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, including any “group”
of which the Purchaser is a member, directly or indirectly owns, beneficially or otherwise (including solely with respect to an economic
interest), any of the outstanding shares of Common Stock, or any other shares of capital stock, options, warrants, derivative securities,
rights or any other securities (including any securities convertible into, exchangeable for or that represent the right to receive securities)
of the Company.
(h)
Nature of Warrants. The Purchaser acknowledges that the Warrants will not be immediately exercisable upon issuance, that the Purchaser
may only exercise the Warrants beginning on the applicable Initial Exercise Date, and that the Warrants shall be subject to the Company
complying with applicable rules and regulations of the Trading Market including those relating to the Shareholder Approval Date (as defined
in the Warrants). The Purchaser further acknowledges that while the Company believes the Warrants are compliant with the rules and regulations
of the Trading Market, neither the Company nor the Placement Agent provide any representation, warranty or guarantee that the Warrants
or, based on the Warrants, the Offering are compliant with such rules and regulations and that the Trading Market may require amendment
to the terms of the Warrants in order to comply with its rules and regulations, and the Purchaser covenants and agrees to reasonably
cooperate with the Company and the Placement Agent in good faith in connection with any amendment or other action with respect to the
Warrants that may be required by the Trading Market in the event that the Warrants are deemed to be non-compliant with such rules and
regulations by the Trading Market. The Purchaser further acknowledges that the Warrants will not be listed or quoted for trading on any
securities exchange or quotation system and will not be publicly traded.
(i)
Sanctioned Persons; BSA/PATRIOT Act. Purchaser is not owned or controlled by or acting on behalf of (in connection with this Agreement),
a Sanctioned Person. Purchaser is not an institution that accepts currency for deposit and that (i) has no physical presence in the jurisdiction
in which it is incorporated or in which it is operating and (ii) is unaffiliated with a regulated financial group that is subject to
consolidated supervision (a “Shell Bank”) or providing banking services to a Shell Bank. Purchaser represents that
if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act
of 2001 and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Purchaser maintains policies
and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Purchaser also represents that, to
the extent required by applicable law, it maintains, either directly or through the use of a third-party administrator, policies, and
procedures reasonably designed for the screening of any investors in the Purchaser against Sanctions-related lists of blocked or restricted
persons. Purchaser further represents and warrants that (A) the funds held by Purchaser and used to purchase the Securities were not
directly or indirectly derived from or related to any activities that may contravene U.S. federal, state, or non-U.S. anti-money laundering,
anti-corruption, or Sanctions laws and regulations or activities that may otherwise be deemed criminal and (B) any returns from the Purchaser’s
investment will not be used to finance any illegal activities. For purposes of this Agreement, “Sanctioned Person”
means at any time any person or entity with whom dealings are restricted, prohibited, or sanctionable under any Sanctions (as defined
below), including as a result of being: (I) listed on any Sanctions-related list of designated or blocked or restricted persons; (II)
that is a national of, the government of, or any agency or instrumentality of the government of, or resident in, or organized under the
laws of, a country or territory that is the target of comprehensive Sanctions from time to time (as of the date of this Agreement, Cuba,
Iran, North Korea, Syria, and the Crimea region); or (III) a relationship of ownership, control, or agency with any of the foregoing.
“Sanctions” means those trade, economic and financial sanctions laws, regulations, embargoes, and restrictive measures
(in each case having the force of law) administered, enacted, or enforced from time to time by (1) the United States (including without
limitation the U.S. Department of the Treasury, Office of Foreign Assets Control, the U.S. Department of State, and the U.S. Department
of Commerce), (2) the European Union and enforced by its member states, (3) the United Nations, and (4) the United Kingdom.
(j)
Non-cooperative Jurisdiction. Purchaser is not owned or controlled by or acting on behalf of (in connection with this Agreement),
a person or entity resident in, or whose funds used to purchase the Securities are transferred from or through, a country, territory,
or entity that (i) has been designated as non-cooperative with international anti-money laundering or counter terrorist financing principles
or procedures by the United States or by an intergovernmental group or organization, such as the Financial Action Task Force, of which
the United States is a member; (ii) is the subject of an advisory issued by the Financial Crimes Enforcement Network of the U.S. Department
of the Treasury; or (iii) has been designated by the Secretary of the Treasury under Section 311 of the USA PATRIOT Act as warranting
special measures due to money laundering concerns (any such country or territory, a “Non-cooperative Jurisdiction”),
or an entity or individual that resides or has a place of business in, or is organized under the laws of, a Non-cooperative Jurisdiction.
(k)
ERISA. If Purchaser is an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section 4975
of the Code or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined
in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA), or other plan that is not subject to the foregoing
but may be subject to provisions under any other federal, state, local, non-U.S., or other laws or regulations that are similar to such
provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such
plan, account or arrangement subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, Purchaser
represents and warrants that the acquisition and holding of the Securities will not result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code.
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.
ARTICLE
IV.
OTHER AGREEMENTS OF THE PARTIES
4.1.
Warrant Shares. If all or any portion of the Warrants are exercised at a time when there is an effective registration statement
to cover the issuance or resale of the Warrant Shares or if the Warrants are exercised via cashless exercise, the Warrant Shares issued
pursuant to any such exercise shall be issued free of all legends. If at any time following the date hereof the Registration Statement
(or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise
available for the sale or resale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing that
such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement is
effective again and available for the sale or resale of the Warrant Shares (it being understood and agreed that the foregoing shall not
limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance with applicable federal
and state securities laws). The Company shall use best efforts to keep a registration statement (including the Registration Statement)
registering the issuance or resale of the Warrant Shares effective during the term of the Warrants.
4.2.
Furnishing of Information. Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired,
the Company covenants to use its reasonable efforts to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company
is not then subject to the reporting requirements of the Exchange Act except in the event that the Company consummates: (A) any transaction
or series of related transactions as a result of which any Person (together with its Affiliates) acquires then outstanding securities
of the Company representing more than fifty percent (50%) of the voting control of the Company; (B) a merger or reorganization of the
Company with one or more other entities in which the Company is not the surviving entity; or (C) a sale of all or substantially all of
the assets of the Company.
4.3.
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent transaction, other than the Shareholder Approval.
4.4.
Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material
terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the SEC within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents
to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the
Company or any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates or agents, including, without
limitation, the Placement Agent, in connection with the transactions contemplated by the Transaction Documents. In addition, effective
upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees, Affiliates or agents, including, without limitation, the Placement Agent, on the one hand, and any of the Purchasers
or any of their Affiliates on the other hand, shall terminate and be of no further force or effect. The Company understands and confirms
that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. The Company and
each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby,
and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the
prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement
or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name
of any Purchaser in any filing with the SEC or any regulatory agency or Trading Market, without the prior written consent of such Purchaser,
except (a) as required by federal securities law in connection with the filing of final Transaction Documents with the SEC and (b) to
the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with
prior notice of such disclosure permitted under this clause (b) and reasonably cooperate with such Purchaser regarding such disclosure.
4.5.
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person,
that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.6.
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person
acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably
believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such
information and agreed with the Company to keep such information confidential. The Company understands and confirms that each Purchaser
shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers
any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that
such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers,
directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall
remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the
SEC on a Current Report on Form 8-K or shall issue a press release containing such material non-public information. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
4.7.
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for the purposes set forth in
the Prospectus, and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment
of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any shares of
Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.
4.8.
Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser
and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or
incur as a result of or relating to (i) any breach of any of the representations, warranties, covenants or agreements made by the Company
in this Agreement or in the other Transaction Documents, (ii) any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or Prospectus or by any omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading (other than untrue statements or alleged
untrue statements in, or omissions or alleged omissions from, information relating to a Purchaser Party furnished in writing by or on
behalf of such Purchaser Party expressly for use in the Registration Statement or Prospectus), or (iii) any Proceeding instituted against
the Purchaser Parties in any capacity (including a Purchaser Party’s status as an investor), or any of them or their respective
Affiliates, by the Company or any stockholder of the Company who is not an Affiliate of such Purchaser Party, arising out of or relating
to any of the transactions contemplated by the Transaction Documents. For avoidance of doubt, the indemnification provided herein is
intended to and shall also cover, direct claims brought by the Company against the Purchaser Parties; provided, however, that such indemnification
shall not cover any loss, claim, damage or liability to the extent it is finally judicially determined to be attributable to any Purchaser
Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in any Transaction
Document or any conduct by a Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful
misconduct. If any Proceeding shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify the Company in writing, and, except with respect to direct claims brought by the
Company, the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the
Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such Proceeding and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the
employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel or (iii) in such Proceeding there is, in the reasonable opinion of counsel to the
applicable Purchaser Party (which may be internal counsel), a material conflict on any material issue between the position of the Company
and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement for any settlement by a Purchaser
Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed. In addition, if
any Purchaser Party takes actions to collect amounts due under any Transaction Documents or to enforce the provisions of any Transaction
Documents, then the Company shall pay the cost incurred by such Purchaser Party for such collection, enforcement or action, including,
but not limited to, attorney’s fees and disbursements. The indemnification and other payment obligations required by this Section
4.8 shall be made by periodic payments of the amount thereof during the course of the investigation, defense, collection, enforcement
or action, as and when bills are received or are incurred; provided, that if any Purchaser Party is finally judicially determined not
to be entitled to indemnification or payment under this Section 4.8, such Purchaser Party shall promptly reimburse the Company for
any payments that are advanced under this sentence. The indemnity agreements contained herein shall be in addition to any cause of action
or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9.
Reservation of Shares of Common Stock. As of the date of this Agreement, the Company has reserved and the Company shall continue
to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose
of enabling the Company to issue the Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants, including
but not limited to, a number of shares of Common Stock sufficient to honor the issuance of the maximum number of shares of Common Stock
issuable assuming exercise in full of the Series B Warrants via an “alternative cashless exercise” at the Floor Price (as
defined thereunder) under Section 2(c) of the Series B Warrants.
4.10.
Listing of Shares; Shareholder Approval. The Company hereby agrees to use commercially reasonable efforts to maintain the listing
or quotation of the Shares and Warrant Shares on each Trading Market on which any shares of Common Stock are currently listed, and concurrently
with the Closing, the Company shall apply to list or quote all of the Shares and Warrant Shares on such Trading Markets and promptly
secure the listing of all of the Shares and Warrant Shares on such Trading Markets. The Company further agrees, if the Company applies
to have the shares of Common Stock traded on any other Trading Market, it will then include in such application all of the Shares and
Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted
on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing
and trading of its shares of Common Stock on a Trading Market and will comply in all material respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading Market. For so long as the Company maintains a listing or quotation
of the Shares and Warrant Shares on a Trading Market, the Company agrees to maintain the eligibility of the Common Stock for electronic
transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment
of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer. Notwithstanding
the foregoing, this Section 4.10 shall not apply in the event that the Company consummates: (i) any transaction or series of related
transactions as a result of which any Person (together with its Affiliates) acquires then outstanding securities of the Company representing
more than fifty percent (50%) of the voting control of the Company; (ii) a merger or reorganization of the Company with one or more other
entities in which the Company is not the surviving entity; or (iii) a sale of all or substantially all of the assets of the Company.
In addition, the Company shall file a proxy statement on Schedule 14A within ten (10) days of Closing and hold a special meeting of shareholders
(which may also be at the annual meeting of shareholders) at the earliest practical date after the date following the filing thereof
(and in no event later than 60 days after the Closing) for the purpose of obtaining Stockholder Approval, with the recommendation of
the Company’s Board of Directors that such proposal be approved, and the Company shall solicit proxies from its stockholders in
connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders
shall vote their proxies in favor of such proposal. The Company shall use its reasonable best efforts to obtain such Stockholder Approval.
In the event the Company fails to obtain Stockholder Approval as contemplated by the terms hereof, each Purchaser shall be refunded all
consideration paid for the Warrants purchased by such Purchaser as promptly as practicable following the Company’s failure to obtain
such Stockholder Approval, but in any event no later than three (3) Trading Days thereafter.
4.11.
Subsequent Equity Sales.
(a)
From the date hereof until [sixty (60) days] after the [Shareholder Approval Date/the Closing Date], neither the Company nor any Subsidiary
shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Stock or Common Stock
Equivalents, or (ii) file any registration statement or amendment or supplement thereto, other than with respect to the Registration
Statement or a registration statement on Form S-8, except for the Securities issued pursuant hereto or otherwise in connection with the
Offering.
(b)
From the date hereof until [one hundred and eighty (180) days] after the [Shareholder Approval Date/the Closing Date], the Company shall
be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common
Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or
exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such debt or equity security (other than in connection with
a stock split or stock dividend or similar event) or upon the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement,
including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price regardless
of whether shares pursuant to such agreement have actually been issued and regardless of whether such agreement is subsequently canceled[;
provided, however, that commencing sixty (60) days after the Shareholder Approval Date/Closing Date] the Company’s issuance of
Common Stock or Common Stock Equivalents pursuant to an at-the-market facility with the Placement Agent as sales agent shall not be deemed
a Variable Rate Transaction. The Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance,
which remedy shall be in addition to any right to collect damages.
(c)
Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction
shall be an Exempt Issuance.
4.12.
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration
is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate
right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat
the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the
purchase, disposition or voting of Securities or otherwise.
4.13.
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly, covenants that neither it nor any Affiliate
acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the
Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4. Each
Purchaser, severally and not jointly, covenants that until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality
of the existence and terms of this transaction. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement
to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby
that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated
by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser
shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities
laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial
press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the
securities of the Company to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates,
or agent, including, without limitation, the Placement Agent after the issuance of the initial press release as described in Section
4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities
covered by this Agreement.
4.14.
Exercise Procedures. The form of Notice of Exercise included in the Warrants sets forth the totality of the procedures required
of the Purchasers in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required
of the Purchasers to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to
exercise the Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms,
conditions and time periods set forth in the Transaction Documents.
4.15.
Lock-Up Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements except
to extend the term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms. If
any party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use its reasonable efforts
to seek specific performance of the terms of such Lock-Up Agreement.
ARTICLE
V.
MISCELLANEOUS
5.1.
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without
any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the
Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however,
that no such termination will affect the right of any party hereto to sue for any breach by any other party (or parties).
5.2.
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including,
without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3.
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4.
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of: (i) the time of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached
hereto at or prior to 5:30 p.m. (New York, NY time) on a Trading Day, (ii) the next Trading Day after the time of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York, NY time) on any Trading Day, (iii)
the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon
actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes,
or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice
with the SEC pursuant to a Current Report on Form 8-K or by issuing a press release containing such material non-public information.
5.5.
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares based on
the Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) or, in the case of a waiver, by the party
against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately
and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers)
shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
5.6.
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
5.7.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom
such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8.
Third-Party Beneficiaries. The Placement Agent shall be a third-party beneficiary of the representations and warranties of the
Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for
the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
5.9.
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of
any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such Proceeding is improper or is an inconvenient venue for such Proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
If any party shall commence an Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.8, the prevailing party in such Proceeding shall be reimbursed by the non-prevailing party for its
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.
5.10.
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities for
the applicable statute of limitations.
5.11.
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.
5.12.
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
5.13.
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission
of an exercise of an Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded
exercise notice concurrently (if such shares were delivered to the applicable Purchaser) with the return to such Purchaser of the aggregate
exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant
to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
5.14.
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also
pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15.
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any Proceeding for specific performance of any such obligation the defense that
a remedy at law would be adequate.
5.16.
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
5.17.
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation
of the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to
communicate with the Company through Sullivan & Worcester LLP, the legal counsel of the Placement agent and Financial Advisor, and
Sullivan & Worcester LLP, as legal counsel of the Placement agent and the Financial Advisor, does not represent any of the Purchasers
and only represents the Placement agent and the Financial Advisor. The Company has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.
It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between
the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
5.18.
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts
have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.
5.19.
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
5.20.
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise
the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward share splits, share dividends, share combinations and other similar events with respect to the shares of Common Stock and
Warrants that occur after the date of this Agreement.
5.21.
Sales During Pre-Settlement Period. Notwithstanding anything herein to the contrary, if at any time on or after the time of execution
of this Agreement by the Company and an applicable Purchaser, through, and including the time immediately prior to a Closing (the “Pre-Settlement
Period”), such Purchaser sells to any Person all, or any portion, of any Shares to be issued hereunder to such Purchaser at
the Closing (collectively, the “Pre-Settlement Shares”), such Purchaser shall, automatically hereunder (without any
additional required actions by such Purchaser or the Company), be deemed to be unconditionally bound to purchase, and the Company shall
be deemed unconditionally bound to sell, such Pre-Settlement Shares to such Purchaser at the Closing; provided, that the Company shall
not be required to deliver any Pre-Settlement Shares to such Purchaser prior to the Company’s receipt of the purchase price of
such Pre-Settlement Shares hereunder; and provided further that the Company hereby acknowledges and agrees that the forgoing shall not
constitute a representation or covenant by such Purchaser as to whether or not during the Pre-Settlement Period such Purchaser shall
sell any Shares to any Person and that any such decision to sell any Shares by such Purchaser shall be made, in the sole discretion of
such Purchaser, at the time such Purchaser elects to effect any such sale, if any.
5.22.
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
| HEPION
PHARMACEUTICALS, INC. |
|
| |
|
|
| By: |
|
|
| Name: |
John
Brancaccio |
|
| Title: |
Interim
Chief Executive Officer |
|
Address
for Notice:
[___]
Email:
[___]
With
a copy to (which shall not constitute notice):
[___]
Email:
[___]
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
[SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]
[PURCHASER
SIGNATURE PAGES TO Hepion Pharmaceuticals, inc. SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
Name
of Purchaser: ________________________________________________________
Signature
of Authorized Signatory of Purchaser: _________________________________
Name
of Authorized Signatory: _______________________________________________
Title
of Authorized Signatory: ________________________________________________
Email
Address of Authorized Signatory: _________________________________________
Facsimile
Number of Authorized Signatory: __________________________________________
Address
for Notice to Purchaser (and delivery of Warrants):
Address
for Delivery of Applicable Securities to Purchaser (if not same as address for notice):
Subscription
Amount: $_________________
Shares:
(if applicable) _________________
Pre-Funded
Warrants: (if applicable)
Series
A Warrants: __________________
Series
B Warrants: __________________
EIN
Number: _______________________
[SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]
Disclosure
Schedules
to Securities Purchase Agreement
Schedule
3.1(g)
Capitalization
[
]
Schedule
3.1(i)
Material Changes; Undisclosed Events, Liabilities or Developments
[
]
Schedule
3.1(q)
Transactions With Affiliates and Employees
[
]
Exhibit
A
Form
of Lock-Up Agreement
Exhibit
B
Form
of Pre-Funded Warrant
Exhibit
C
Form
of Series A Warrant
Exhibit
D
Form
of Series B Warrant
Exhibit
23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
hereby consent to the incorporation by reference in this Registration Statement on Form S-1 (File No. 333-284052) of our report dated
April 16, 2024, with respect to the consolidated financial statements of Hepion Pharmaceuticals, Inc., included in its Annual Report
on Form 10-K for the year ended December 31, 2023. Our opinion includes an explanatory paragraph as to Hepion Pharmaceuticals, Inc.’s
ability to continue as a going concern. We also consent to the reference to our firm under the heading “Experts” in such
Registration Statement.
/s/
Grassi & Co., CPAs, P.C.
Jericho,
New York
January
14, 2025
Exhibit
23.2
Consent
of Independent Registered Public Accounting Firm
We
hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of our report
dated April 10, 2023, except for Note 2, for which the date is April 16, 2024, relating to the consolidated financial statements of
Hepion Pharmaceuticals, Inc. (the Company) appearing in the Company’s Annual Report on Form 10-K for the year ended December
31, 2022. Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going
concern.
We
also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/
BDO USA, P.C.
Woodbridge,
New Jersey
January
14, 2025
Hepion Pharmaceuticals (PK) (USOTC:CTRVP)
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