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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 13, 2024
|
|
|
GAIN
THERAPEUTICS, INC. |
(Exact name of registrant as specified in its
charter) |
Delaware |
|
001-40237 |
|
85-1726310 |
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification No.) |
4800
Montgomery Lane, Suite 220
Bethesda,
Maryland 20814
(Address of principal executive offices) (Zip
Code)
(301)
500-1556
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the
Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company x
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Securities registered pursuant to Section 12(b)
of the Act:
Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
Common
Stock, par value $0.0001 |
GANX |
The
Nasdaq Stock
Market LLC |
Item 1.01 Entry into a Material Definitive Agreement.
On June 13, 2024,
Gain Therapeutics, Inc., a Delaware corporation (the “Company”), entered into an underwriting agreement (the
“Underwriting Agreement”) with Titan Partners Group LLC, a division of American Capital Partners, LLC, as the
underwriter (the “Underwriter”), relating to the offering, issuance and sale of an aggregate of (i) 7,116,547
shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), and (ii) pre-funded
warrants (the “Pre-Funded Warrants”) exercisable for an aggregate of up to 1,031,602 shares of Common Stock, at a
price to the public of $1.35 per share and $1.3499 per Pre-Funded Warrant (the “Offering”). The net proceeds to
the Company from the Offering are expected to be approximately $10.1 million, after deducting underwriting discounts and
commissions and other estimated offering expenses payable by the Company.
The
Pre-Funded Warrants are each exercisable for one share of Common Stock at an exercise price of $0.0001 per share and will expire when
exercised in full. The Company is prohibited from effecting an exercise of any Pre-Funded Warrants to the extent that such exercise would
result in the number of shares of Common Stock beneficially owned by such holder and its affiliates exceeding 4.99% (or 9.99% at election
of the holder) of the total number of shares of Common Stock outstanding immediately after giving effect to the exercise, which percentage
may be increased or decreased at the holder’s election not to exceed 9.99%.
The Offering is being made pursuant to the Company’s
effective registration statement on Form S-3 (File No. 333-265061) that was initially filed on May 18, 2022, and amended
on May 23, 2022, and declared effective on June 1, 2022 (the “Registration Statement”) by the Securities
and Exchange Commission (the “SEC”) and a prospectus supplement and accompanying prospectus filed with the SEC.
Pursuant to the
Underwriting Agreement, the Company granted to the Underwriter an option, exercisable not later than 30 days after the date of the
closing of the Offering, to purchase from the Company up to an additional 1,222,222 shares of Common Stock, representing up to
fifteen percent (15%) of the shares of Common Stock and Pre-Funded Warrants sold in the Offering, for the purpose of covering
over-allotments of such securities, if any.
Pursuant to the terms of the
Underwriting Agreement, the Company has agreed to certain restrictions on the issuance and sale of its Common Stock and securities convertible
into shares of Common Stock during the sixty (60) day period following the closing of the Offering. The Company has also agreed that from the date of the Underwriting Agreement until the six-month anniversary of the closing of the Offering,
without the prior consent of the Underwriter and subject to certain exceptions, the Company will not undertake any offering of its securities
involving a “Variable Rate Transaction” (as defined in the Underwriting Agreement).
The Underwriting Agreement
contains customary representations, warranties and agreements by the Company, conditions to closing, indemnification obligations of the
Company and the Underwriter, including for liabilities under the Securities Act of 1933, as amended (the “Securities
Act”), other obligations of the parties and termination provisions. The representations, warranties and covenants contained
in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the
parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
Upon the closing of the
Offering, the Company agreed to issue to the Underwriter, or its designees, warrants (the “Underwriter Warrants”)
to purchase up to 570,370 shares of Common Stock, or seven percent (7%) of the total number of shares of Common Stock and Pre-Funded
Warrants sold in the Offering, as well as additional Underwriter Warrants to purchase up to an aggregate of 85,555 shares of Common Stock if the Underwriter exercises
its option to purchase additional shares of Common Stock in full. The Underwriter Warrants will be exercisable at an exercise price of $1.6875 per share and are
exercisable during the four-and-one-half year period commencing six months after the closing date of the Offering.
The foregoing
description of the Underwriting Agreement, the Pre-Funded Warrants, and the Underwriter Warrants are not complete and are subject
to, and qualified in its entirety by, reference to the full text of the Underwriting Agreement, the Pre-Funded Warrants, and the
Underwriter Warrants, forms of which are filed as Exhibit 1.1, 4.1 and 4.2, respectively, to this Current Report on
Form 8-K and are incorporated by reference herein.
Item 7.01. Regulation
FD Disclosure.
On
June 13, 2024, the Company issued two press releases regarding (i) the launch (the “Launch
Press Release”) and (ii) the pricing of the Offering (the “Pricing Press
Release”). Copies of the Launch Press Release and the Pricing Press Release are furnished hereto as Exhibit 99.1 and
Exhibit 99.2, respectively.
The
information in this Current Report on Form 8-K under Item 7.01, including the information contained in Exhibits 99.1 and 99.2, is
being furnished to the SEC and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not
be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set
forth by a specific reference in such filing.
Cautionary Statement Regarding Forward-Looking Statements
Statements contained in this
Current Report on Form 8-K regarding matters that are not historical facts are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements may involve risks and uncertainties, such as statements
related to the anticipated closing of the Offering and the amount of proceeds expected from the Offering. The risks and uncertainties
involved include the Company’s ability to satisfy certain conditions to closing on a timely basis or at all, as well as other risks
detailed from time to time in the Company’s SEC filings, including in its annual report on Form 10-K filed with the SEC on
March 23, 2023, the preliminary prospectus supplement filed with the SEC on June 13, 2024, and the final prospectus supplement
to be filed with the SEC.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
* Filed Herewith
** Exhibit is being furnished as part of this Current Report on
Form 8-K.
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
GAIN THERAPEUTICS, INC. |
|
|
Dated: June 14, 2024 |
By: |
/s/ Gene Mack |
|
Name: |
Gene Mack |
|
Title: |
Chief Financial Officer |
Exhibit 1.1
SHARES OF COMMON STOCK
(OR PRE-FUNDED WARRANTS IN LIEU THEREOF)
GAIN
THERAPEUTICS, INC.
__________________________
Underwriting Agreement
June 13, 2024
Titan Partners Group LLC,
a division of American Capital Partners, LLC
As the Representative of the several Underwriters
listed in Schedule A hereto
c/o Titan Partners Group LLC,
a division of American Capital Partners, LLC
4 World Trade Center, 29th Floor
New York, NY 10007
Ladies and Gentlemen:
Gain Therapeutics, Inc., a Delaware corporation (the “Company”),
confirms its agreement with Titan Partners Group LLC, a division of American Capital Partners, LLC (“Titan Partners”)
and each of the other Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which
term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for which Titan Partners is acting
as representative (in such capacity, the “Representative,” and if there are no Underwriters other than Titan Partners,
references to multiple Underwriters shall be disregarded and the term Representative as used herein shall have the same meaning as Underwriter),
with respect to (i) the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective
numbers of (a) shares of common stock, par value $0.0001 per share (“Common Stock”), of the Company (“Closing
Shares”) and (b) pre-funded warrants (the “Pre-funded Warrants” and together with the Closing Shares, the
“Closing Securities”) to purchase shares of Common Stock at an exercise price equal to $0.0001 per share (the “Pre-funded
Warrant Shares”), if any, each as set forth in Schedule A hereto and (ii) the grant by the Company to the Underwriters,
acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of 1,222,222 additional
shares of Common Stock (the “Option Shares”). The Pre-funded Warrants and the Underwriter Warrants (as defined below)
are herein called, collectively, the “Warrants.” The Pre-funded Warrant Shares and the Underwriter Warrant Shares (as
defined below) are herein called, collectively, the “Warrant Shares.” The Closing Shares, the Option Shares, the Warrants
and the Warrant Shares are herein called, collectively, the “Securities.”
The Company understands
that the Underwriters propose to make a public offering of the Securities as soon as the Representative deems advisable after this
Underwriting Agreement (this “Agreement”) has been executed and delivered.
The Company has filed with
the Securities and Exchange Commission (the “Commission”) a shelf registration statement on Form S-3 (No. 333-265061),
covering the public offering and sale of certain securities, including the Securities, under the Securities Act of 1933, as amended (the
“1933 Act”) and the rules and regulations of the Commission promulgated thereunder (the “1933 Act Regulations”),
which shelf registration statement was declared effective on June 1, 2022. Such 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 Item 12 of Form S-3 under the 1933
Act and the documents otherwise deemed to be a part thereof as of such time pursuant to Rule 430B under the 1933 Act Regulations (“Rule
430B”), and is referred to herein as the “Registration Statement;” 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 Item
12 of Form S-3 under the 1933 Act and the documents otherwise deemed to be a part thereof as of such time pursuant to the Rule 430B. Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations in connection with the offer and sale of the Securities
is herein called the “Rule 462(b) Registration Statement” and, after such filing, the term “Registration Statement”
shall include the Rule 462(b) Registration Statement. Each preliminary prospectus used in connection with the offering of the Securities,
including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, are collectively referred to herein as a “preliminary prospectus.” Promptly after execution and delivery of this Agreement,
the Company will prepare and file a final prospectus relating to the Securities in accordance with the provisions of Rule 424(b) under
the 1933 Act Regulations (“Rule 424(b)”). The final prospectus, in the form first furnished or made available to the Underwriters
for use in connection with the offering of the Securities, including the documents incorporated or deemed to be incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, are collectively referred to herein as the “Prospectus.” For purposes
of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement
to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval system (or any successor system)(“EDGAR”).
As used in this Agreement:
“Applicable
Time” means 7:45 P.M., New York City time, on June 13, 2024 or such other time as agreed by the Company and the Representative.
“General
Disclosure Package” means any Issuer General Use Free Writing Prospectuses issued at or prior to the Applicable Time, the most
recent preliminary prospectus (including any documents incorporated therein by reference) that is distributed to investors prior to the
Applicable Time and the information included on Schedule B-1 hereto, all considered together.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act
Regulations (“Rule 433”), including without
limitation any “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations (“Rule
405”)) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road
show for an offering that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be
filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a
description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required
to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective
investors (other than a “bona fide electronic road show,” as defined in Rule 433 (a “Bona Fide Electronic
Road Show”)), as evidenced by its being specified in Schedule B-2 hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
“Testing-the-Waters
Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of
the 1933 Act.
“Written
Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning
of Rule 405 under the 1933 Act.
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, any 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, and the rules and regulations
promulgated thereunder (collectively, the “1934 Act”), 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.
SECTION 1. Representations
and Warranties by the Company. The Company represents and warrants to each Underwriter as of the date hereof, the Applicable Time,
the Closing Time (as defined below) and any Date of Delivery (as defined below), and agrees with each Underwriter, as follows:
(a) Registration
Statement and Prospectuses. The conditions for use of Form S-3 set forth in the General Instructions thereto, and other
conditions related to the offer and sale of the Securities, have been satisfied. Each of the Registration Statement and any amendment thereto
has become effective under the 1933 Act, including General Instruction I.B.1 of Form S-3. The aggregate market value of the outstanding
voting and non-voting common equity (as defined in Securities Act Rule 405) of the Company held by persons other than affiliates
of the Company (pursuant to Securities Act Rule 144, those that directly, or indirectly through one or more intermediaries, control,
or are controlled by, or are under common control with, the Company) (the “Non-Affiliate Shares”), was equal to or
greater than $75 million (calculated by multiplying (x) the highest price at which the common equity of the Company closed on Nasdaq
within the 60 day period immediately prior to March 26, 2024 (the date on which the Company filed its annual report on Form 10-K
for the year ended December 31, 2023) times (y) the number of Non-Affiliate Shares). No stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto has been issued by the Commission under the 1933 Act, no order preventing
or suspending the use of any preliminary prospectus or the Prospectus has been issued by the Commission and no proceedings for any of
those purposes have been instituted by the Commission 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.
Each of the Registration Statement
and any post-effective amendment thereto, at the time of its effectiveness and at each deemed effective date with respect to the Underwriters
pursuant to Rule 430B(f)(2) under the 1933 Act Regulations, complied in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations. Each preliminary prospectus, the Prospectus and any amendment or supplement thereto, at the time each
was filed with the Commission, complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. Each
preliminary prospectus delivered to the Underwriters for use in connection with the 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.
The documents incorporated or
deemed to be incorporated by reference in the Registration Statement and the Prospectus, when they became effective or at the time they
were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission under the 1934 Act (the “1934 Act Regulations”).
The Registration Statement,
any preliminary prospectus and the Prospectus, and the filing of the Registration Statement, any preliminary prospectus and the Prospectus
with the Commission have been duly authorized by and on behalf of the Company, and the Registration Statement has been duly executed pursuant
to such authorization.
(b) Accurate
Disclosure. Neither the Registration Statement nor any amendment thereto, at its effective time, at the Closing Time or at any Date
of Delivery, 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. As of the Applicable Time, none of (A) the
General Disclosure Package, (B) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General
Disclosure Package, nor (C) any individual Written Testing-the-Waters Communication, when considered together with the General Disclosure
Package, 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.
Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of
any filing with the Commission pursuant to Rule 424(b), at the Closing Time or at any Date of Delivery, 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. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, at the time the Registration
Statement became effective or when such documents incorporated by reference were filed with the Commission, as the case may be, when read
together with the other information in the Registration Statement, the General Disclosure Package or the Prospectus, as the case may be,
did not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
The representations and warranties
in this subsection shall not apply to statements in or omissions from the Registration Statement (or any amendment thereto), the General
Disclosure Package or the Prospectus (or any amendment or supplement thereto, including any prospectus wrapper) made in reliance upon
and in conformity with written information furnished to the Company by any Underwriter through the Representative expressly for use therein.
For purposes of this Agreement, the only information so furnished shall be the information in the first paragraph under the caption “Discounts,
Commissions and Expenses,” the statements under the caption “Price Stabilization, Short Positions and Penalty Bids”
and the statements under the caption “Electronic Distribution” in each case contained in the “Underwriting” section
of the Prospectus (collectively, the “Underwriter Information”).
(c) Issuer
Free Writing Prospectuses. No Issuer Free Writing Prospectus conflicts or will conflict with the information contained in the Registration
Statement or the Prospectus, including any document incorporated by reference therein, and any preliminary or other prospectus deemed
to be a part thereof that has not been superseded or modified. No filing of any “road show” (as defined in Rule 433(h))
is required in connection with the offering of the Securities. Any Issuer Free Writing Prospectus that the Company is required to file pursuant
to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements
of the 1933 Act and the 1933 Act Regulations. Each Issuer Free Writing Prospectus that the Company has filed, or is required to file,
pursuant to Rule 433(d) under the 1933 Act or that was prepared by or on behalf of or used or referred to by the Company complies
or will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. Except for the Issuer Free
Writing Prospectuses, if any, identified in Schedule B-2 hereto, and electronic road shows, if any, each furnished to the Representative
before first use, the Company has not prepared, used or referred to, and will not, without the prior consent of the Representative, prepare,
use or refer to, any issuer free writing prospectus.
(d) Testing-the-Waters
Materials. The Company (A) has not engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications
with the consent of the Representative with entities that are qualified institutional buyers within the meaning of Rule 144A under
the 1933 Act or institutions that are accredited investors within the meaning of Rule 501 under the 1933 Act and (B) has not
authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company reconfirms that the Representative
has been authorized to act on its behalf in undertaking Testing-the-Waters Communications.
(e) Company
Not Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest
time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of
the 1933 Act Regulations) of the Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as
defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary
that the Company be considered an ineligible issuer.
(f) Emerging
Growth Company Status. From the time of the initial filing of the Registration Statement with the Commission (or, if earlier, the
first date on which the Company engaged directly or through any individual or entity authorized to act on its behalf in any Testing-the-Waters
Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of
the 1933 Act (an “Emerging Growth Company”).
(g) Independent
Accountants. To the Company’s knowledge, Ernst & Young AG, the accounting firm that certified the financial statements
and supporting schedules of the Company that are incorporated by reference in the Registration Statement, the General Disclosure Package
and the Prospectus, is an independent registered public accounting firm as required by the 1933 Act, the 1933 Act Regulations, the 1934
Act, the 1934 Act Regulations and the Public Company Accounting Oversight Board (United States).
(h) SEC
Reports. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under
the 1933 Act and the 1934 Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the
date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement,
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 1933 Act and the 1934 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 1933 Act.
(i) Financial
Statements; Non-GAAP Financial Measures. The financial statements (including the related notes thereto) of the Company included or
incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related
schedules and notes, comply as to form in all material respects with Regulation S-X under the 1933 Act and present fairly, in all material
respects, the financial position of the Company and its consolidated Subsidiaries (as defined below) at the dates indicated and the statement
of operations, comprehensive loss, changes in stockholders’ equity and cash flows of the Company and its consolidated Subsidiaries
for the periods specified; said financial statements have been prepared in conformity with U.S. generally accepted accounting principles
(“GAAP”) applied on a consistent basis throughout the periods covered thereby, except in the case of unaudited interim
financial statements, which are subject to normal year-end adjustments and do not contain certain footnotes as permitted by the applicable
rules of the Commission, and any supporting schedules, if any, present fairly, in all material respects, the information required
to be stated therein. The selected financial data and the summary financial information, if any, and other financial data included or
incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus has been derived from the accounting
records of the Company and present fairly, in all material respects, the information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included therein. Except as included therein, no historical or pro forma financial statements
or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the General Disclosure
Package or the Prospectus under the 1933 Act or the 1933 Act Regulations. All disclosures contained in the Registration Statement, the
General Disclosure Package or the Prospectus, or incorporated by reference therein, regarding “non-GAAP financial measures”
(as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the
1934 Act, and Item 10 of Regulation S-K, to the extent applicable. The interactive data in eXtensible Business Reporting Language included
or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus fairly presents the information
called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable
thereto.
(j) Compliance
with the Sarbanes-Oxley Act of 2002. There is and has been no failure on the part of the Company or any of the Company’s directors
or officers, in their capacities as such, to comply in all material respects with any applicable provision of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated in connection therewith, with which the Company is required to comply, including Section 402
related to loans.
(k) No
Material Adverse Change in Business. Except as otherwise stated therein, since the respective dates as of which information is given
in the Registration Statement, the General Disclosure Package or the Prospectus, (i) there has not been any change in the capital
stock (other than the issuance of shares of Common Stock upon exercise of stock options and warrants described as outstanding in, and
the grant of options and awards under the Company’s existing stock-based compensation plans (the “Company Stock Plans”)
described in, and the issuance of any stock upon the conversion of Company securities described in the Registration Statement, the General
Disclosure Package and the Prospectus, and the repurchase or retirement of shares of capital stock pursuant to agreements providing for
an option to repurchase or a right of first refusal on behalf of the Company pursuant to the Company’s repurchase rights), any change
in short-term debt or long-term debt of the Company, or any dividend or distribution of any kind declared, set aside for payment, paid
or made by the Company on any class of capital stock, or any material adverse change, or any development that would reasonably be expected
to result in a material adverse change, in or affecting the condition (financial or otherwise), business, assets, properties, results
of operations or prospects of the Company and its Subsidiaries, whether or not arising in the ordinary course of business (a “Material
Adverse Effect”); (ii) the Company has not entered into any transaction or agreement (whether or not in the ordinary course
of business) that is material to the Company or incurred any liability or obligation, direct or contingent, that is material to the Company;
and (iii) the Company has not sustained any loss or interference with its business that is material to the Company and that is either
from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action,
order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus.
(l) Litigation.
There is no action, suit, proceeding, inquiry, arbitration, governmental proceeding, litigation or investigation pending or, to the knowledge
of the Company, threatened against or involving the Company, any Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Legal Action”) which has not been disclosed in the Registration Statement, the General Disclosure Package or the Prospectus
and (i) is reasonably be expected to result in a Material Adverse Effect if resolved adversely to the Company or (ii) is required
to be disclosed in the Registration Statement, General Disclosure Package or the Prospectus. To the Company’s knowledge, there is
no Legal Action pending or threatened against or involving any director or officer of the Company or any Subsidiary. The Commission has
not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary
under the 1934 Act or the 1933 Act.
(m) Good
Standing of the Company. The Company has been duly organized and is validly existing and in good standing under the laws of its jurisdiction
of organization, is duly qualified to do business and is in good standing in each jurisdiction in which its ownership or lease of property
or the conduct of its business requires such qualification, and has all power and authority necessary to own or hold its properties and
to conduct the business in which it is engaged, except where the failure to be so qualified or in good standing or have such power or
authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Other than as disclosed
in Exhibit 21.1 of the Company’s most recent Annual Report on Form 10-K, the Company does not have any direct or indirect
subsidiaries and does not own or control, directly or indirectly, any corporation, association or other entity.
(n) Good
Standing of the Company’s Subsidiaries. Each subsidiary of the Company (each, a “Subsidiary” and, collectively,
the “Subsidiaries”) has been duly organized and is validly existing in good standing under the laws of the jurisdiction
of its incorporation or organization, has corporate or similar power and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure to be so qualified or to be in good standing would not result in a Material
Adverse Effect. Except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, all of
the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity. None of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar
rights of any securityholder of such Subsidiary. The only Subsidiaries of the Company are the entities listed on Exhibit 21 to the
Registration Statement.
(o) Capitalization.
The authorized, issued and outstanding shares of capital stock of the Company are as set forth in the SEC Reports (except
for subsequent issuances, if any, (A) pursuant to this Agreement, (B) pursuant to reservations, agreements or employee benefit
plans referred to in the Registration Statement, the General Disclosure Package and the Prospectus or (C) pursuant to the conversion
of convertible securities or exercise of options referred to in the Registration Statement, the General Disclosure Package and the Prospectus).
The outstanding shares of capital stock of the Company have been duly authorized and are validly issued, fully paid and non-assessable.
None of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(p) Stock
Options. Except where the failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, with respect to the stock options (the “Stock Options”) granted pursuant to the Company Stock Plans,
(i) each Stock Option intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”), so qualifies, (ii) each grant of a Stock Option was duly authorized no
later than the date on which the grant of such Stock Option was by its terms to be effective (the “Grant Date”) by
all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and
authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and, to the
knowledge of the Company (other than with respect to the execution and delivery by the Company) the award agreement governing such grant
(if any) was duly executed and delivered by each party thereto, (iii) each such grant was made, in all material respects, in accordance
with the terms of the Company Stock Plans, the 1934 Act and all other applicable laws and regulatory rules or requirements, including
the rules of Nasdaq Global Market and any other exchange on which Company securities are traded, and (iv) each such grant was
properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company. Each Company
Stock Plan is accurately described in all material respects in the Registration Statement, the General Disclosure Package and the Prospectus.
The Company has not knowingly granted, and there is no and has been no policy or practice of the Company of granting, Stock Options prior
to, or otherwise coordinating the grant of Stock Options with, the release or other public announcement of material information regarding
the Company or its results of operations or prospects.
(q) Authorization
of Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(r) Authorization
and Description of Securities. The Securities to be purchased by the Underwriters from the Company have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will be validly issued and fully paid and non-assessable; and the issuance of
the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company. The Warrants have been
duly authorized by the Company and, when executed and delivered by the Company in accordance with this Agreement, will constitute valid
and legally binding agreements of the Company enforceable against the Company in accordance with their terms, except as enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles
relating to enforceability. The Pre-funded Warrant Shares and the Underwriter Warrant Shares have been duly authorized and reserved for
issuance by all necessary corporate action on the part of the Company and when paid for and issued upon exercise in accordance with the
Pre-funded Warrants and the Underwriter Warrants, respectively, such shares of Common Stock will be validly issued, fully paid and non-assessable,
and the issuance of the Warrant Shares will not be subject to the preemptive or other similar rights of any securityholder of the Company.
The Securities conform to all statements relating thereto contained in the Registration Statement, the General Disclosure Package and
the Prospectus and such description conforms to the rights set forth in the instruments defining the same. No holder of Securities will
be subject to personal liability by reason of being such a holder.
(s) Registration
Rights. Except as described in the Registration Statement, the General Disclosure
Package and the Prospectus, to the extent that any person has the right to require the Company to register any securities for sale under
the 1934 Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Securities, those
rights have been waived as of the date of this Agreement with respect to such filing or issuance and sale of Securities pursuant to this
Agreement.
(t) Absence
of Violations, Defaults and Conflicts. Neither the Company nor any Subsidiary is (A) in violation of its charter,
by-laws or similar organizational document, (B) in default in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument
to which the Company or any Subsidiary is a party or by which either of them may be bound or to which any of the properties or assets
of the Company or any Subsidiary is subject (collectively, “Agreements and Instruments”), except for such defaults
that would not, individually or in the aggregate, result in a Material Adverse Effect, or (C) in violation of any law, statute, rule,
regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other
authority, body or agency having jurisdiction over the Company or its Subsidiaries or any of their respective properties, assets or operations
(each, a “Governmental Entity”), except for such violations that would not, individually or in the aggregate, result
in a Material Adverse Effect. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated
herein and in the Registration Statement, the General Disclosure Package and the Prospectus (including the issuance and sale of the Securities,
the Warrant Shares, the execution and delivery of the Warrants and the use of the proceeds from the sale of the Securities as described
therein under the caption “Use of Proceeds”) and compliance by the Company with its obligations hereunder have been
duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any properties or assets of the Company or its Subsidiaries pursuant to, the Agreements
and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, individually
or in the aggregate, result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter,
by-laws or similar organizational document of the Company or its Subsidiaries or any law, statute, rule, regulation, judgment, order,
writ or decree of any Governmental Entity. As used herein, a “Repayment Event” means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or its Subsidiaries.
(u) Listing.
The Common Stock is listed on The Nasdaq Global Market, and the Company has taken no action designed to, or likely to have the effect
of, delisting the Common Stock from The Nasdaq Global Market, nor has the Company received any notification that The Nasdaq Global Market
is contemplating terminating such listing, except as described in the Registration Statement, the General Disclosure Package and the Prospectus.
(v) Absence
of Labor Dispute. No labor dispute with the employees of the Company or its Subsidiaries exists or, to the knowledge of the Company,
is imminent. The Company is not aware that any key employee or significant group of employees of the Company or any Subsidiary plans to
terminate employment with the Company or any Subsidiary.
(w) Absence
of Proceedings. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there is no
action, suit, proceeding, inquiry or investigation before or brought by any Governmental Entity (including, without limitation, any action,
suit proceeding, inquiry or investigation before or brought by the U.S. Food and Drug Administration (the “FDA”), the
European Medicines Agency (the “EMA”)), or any comparable regulatory authority in any jurisdiction now pending or,
to the knowledge of the Company, threatened, against or affecting the Company or its Subsidiaries, which would reasonably be expected
to result in a Material Adverse Effect, or which would reasonably be expected to materially and adversely affect their respective properties
or assets or the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations
hereunder; and the aggregate of all pending legal or governmental proceedings to which the Company or any such Subsidiary is a party or
of which any of their respective properties or assets is the subject which are not described in the Registration Statement, the General
Disclosure Package and the Prospectus, including ordinary routine litigation incidental to the business, would not reasonably be expected
to result in a Material Adverse Effect.
(x) Accuracy
of Exhibits. There are no contracts or documents which are required to be described in the Registration Statement, the General Disclosure
Package or the Prospectus or to be filed as exhibits to the Registration Statement which have not been so described and filed as required.
(y) No
Consents Required. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of,
any Governmental Entity is necessary or required for the performance by the Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement, except such
as have been already obtained or as may be required under the 1933 Act, the 1933 Act Regulations, the rules of the Nasdaq Stock Market
LLC, state securities laws or the rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
(z) Possession
of Licenses and Permits. The Company and its Subsidiaries possess such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business
now operated by them (including, without limitation, all such permits, licenses, approvals, consents and other authorizations required
by the FDA, the EMA, the Therapeutic Goods Administration of Australia (“TGA”), or any other federal, state, local
or foreign agencies or bodies engaged in the regulation of clinical or preclinical studies, pharmaceuticals, biologics, biohazardous substances
or activities related to the business now operated by the Company and its Subsidiaries), except (i) as described in the Registration
Statement, the General Disclosure Package or the Prospectus or (ii) where the failure so to possess would not, individually or in
the aggregate, result in a Material Adverse Effect. The Company and its Subsidiaries are in compliance with the terms and conditions of
all Governmental Licenses, except where the failure so to comply would not, individually or in the aggregate, result in a Material Adverse
Effect. All of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect would not, individually or in the aggregate, result in a Material
Adverse Effect. Neither the Company nor its Subsidiaries has received any notice of proceedings relating to the revocation or modification
of any Governmental Licenses which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
(aa) Title
to Property. The Company and its Subsidiaries have good and marketable title to all real property owned by them and good title to
all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind except such as (A) are described in the Registration Statement, the General Disclosure Package and the
Prospectus or (B) do not, individually or in the aggregate, 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 or its Subsidiaries; and all of the leases and subleases material
to the business of the Company and its Subsidiaries, considered as one enterprise, and under which the Company or its Subsidiaries holds
properties described in the Registration Statement, the General Disclosure Package or the Prospectus, are in full force and effect, and
neither the Company nor any such Subsidiary has any notice of any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights
of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.
(bb) Title
to Intellectual Property. The Company owns or possesses or has valid rights to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets software, databases,
know-how, internet domain names, other unpatented and/or unpatentable proprietary confidential information systems, processes or procedures
and similar rights (“Intellectual Property Rights”) necessary for the conduct of the business of the Company and the
Subsidiaries as currently carried on and as described in the Registration Statement, the General Disclosure Package and the Prospectus.
The Intellectual Property Rights licenses described in the Registration Statement, General Disclosure Package and the Prospectus are valid,
binding upon and enforceable against the parties thereto in accordance with their respective terms. To the knowledge of the Company, no
action or use by the Company or any Subsidiary necessary for the conduct of its business as currently carried on and as described in the
Registration Statement, the General Disclosure Package and the Prospectus will involve or give rise to any infringement of, or license
or similar fees for, any Intellectual Property Rights of others. None of the Company nor any Subsidiary has received any notice alleging
any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably be expected
to result, individually or in the aggregate, in a Material Adverse Effect (A) to the knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company or any Subsidiary; (B) there
is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the
Company or any Subsidiary in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable
basis for any such claim, that would, individually or in the aggregate, together with any other claims in this Section 1(bb), reasonably
be expected to result in a Material Adverse Effect; (C) the Intellectual Property Rights owned by the Company and, to the knowledge
of the Company, the Intellectual Property Rights licensed to the Company or any Subsidiary have not been adjudged by a court of competent
jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware
of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other
claims in this Section 1(bb), reasonably be expected to result in a Material Adverse Effect; (D) there is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company or any Subsidiary infringes, misappropriates
or otherwise violates any Intellectual Property Rights or other proprietary rights of others, none of the Company nor any Subsidiary has
received any written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such
claim that would, individually or in the aggregate, together with any other claims in this Section 1(bb), reasonably be expected
to result in a Material Adverse Effect; and (E) to the Company’s knowledge, no employee of the Company or any Subsidiary is
in or has ever been in violation in any material respect of any term of any employment contract, patent disclosure agreement, invention
assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or
with a former employer where the basis of such violation relates to such employee’s employment with the Company or any Subsidiary,
or actions undertaken by the employee while employed with the Company or any Subsidiary and could reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Effect. To the Company’s knowledge, all material technical information developed by and
belonging to the Company and the Subsidiaries which has not been patented has been kept confidential. None of the Company nor any Subsidiary
is a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or
entity that are required to be set forth in the Registration Statement, the General Disclosure Package and the Prospectus and are not
described therein. The Registration Statement, the General Disclosure Package and the Prospectus contain in all material respects the
same description of the matters set forth in the preceding sentence. None of the technology employed by the Company or the Subsidiaries
has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or any Subsidiary
or, to the Company’s knowledge, any of their officers, directors or employees, or otherwise in violation of the rights of any persons.
(cc) Patents
and Patent Applications. All patents and patent applications owned by or licensed to the Company or under which the Company has rights
have, to the knowledge of the Company, been duly and properly filed and maintained; to the knowledge of the Company, the parties prosecuting
such patent applications have complied with their duty of candor and disclosure to the USPTO in connection with such applications; and
the Company is not aware of any facts required to be disclosed to the USPTO that were not disclosed to the USPTO and which would preclude
the grant of a patent in connection with any such application or would reasonably be expected to form the basis of a finding of invalidity
with respect to any patents that have issued with respect to such applications. To the Company’s knowledge, all patents and patent
applications owned by the Company and filed with the USPTO or any foreign or international patent authority (the “Company Patent
Rights”) and all patents and patent applications in-licensed by the Company and filed with the USPTO or any foreign or international
patent authority (the “In-licensed Patent Rights”) have been duly and properly filed; the Company believes it has complied
with its duty of candor and disclosure to the USPTO for the Company Patent Rights and, to the Company’s knowledge, the licensors
of the In-licensed Patent Rights have complied with their duty of candor and disclosure to the USPTO for the In-licensed Patent Rights.
(dd) FDA
Compliance. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, the Company: (A) is
and at all times has been in material compliance with all statutes, rules or regulations of the FDA and other comparable Governmental
Entities applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, storage, import, export
or disposal of any product under development, manufactured or distributed by the Company (“Applicable Laws”); (B) has
not received any FDA Form 483, notice of adverse finding, warning letter, untitled letter or other correspondence or notice from
the FDA or any Governmental Authority alleging or asserting material noncompliance with any Applicable Laws or any licenses, certificates,
approvals, clearances, exemptions, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws
(“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; (D) has not received notice of any
claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from the FDA or any Governmental Authority
or third party alleging that any product operation or activity is in material violation of any Applicable Laws or Authorizations and has
no knowledge that the FDA or any Governmental Authority or third party is considering any such claim, litigation, arbitration, action,
suit, investigation or proceeding; (E) has not received notice that the FDA or any Governmental Authority has taken, is taking or
intends to take action to limit, suspend, modify or revoke any material Authorizations and has no knowledge that the FDA or any Governmental
Authority is considering such action; and (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 materially
complete and correct on the date filed (or were corrected or supplemented by a subsequent submission).
(ee) Tests
and Preclinical and Clinical Trials. The studies, tests and preclinical and clinical trials conducted by or, to the Company’s
knowledge, on behalf of the Company, or in which the Company participated, that are described in the Registration Statement, General Disclosure
Package or the Prospectus, were and, if still ongoing, are being conducted in all material respects in accordance with experimental protocols,
procedures and controls pursuant to accepted professional scientific standards and all Authorizations and Applicable Laws, including,
without limitation, the Federal Food, Drug and Cosmetic Act and the rules and regulations promulgated thereunder (collectively, “FFDCA”)
and the rules and other regulations of National Institute of Health Department of Health and Human Services, the European Commission,
the EMA and the TGA; the descriptions of the results of such studies, tests and trials contained in the Registration Statement, the General
Disclosure Package and the Prospectus are, to the Company’s knowledge, accurate and complete in all material respects and fairly
present the data derived from such studies, tests and trials; except to the extent disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, the Company is not aware of any studies, tests or trials, the results of which the Company believes
reasonably call into question the study, test, or trial results described or referred to in the Registration Statement, the General Disclosure
Package and the Prospectus when viewed in the context in which such results are described and the clinical state of development; and,
except to the extent disclosed in the Registration Statement, the General Disclosure Package or the Prospectus, the Company has not received
any notices or correspondence from the FDA, the EMA, the TGA or any Governmental Entity requiring the termination or suspension of any
studies, tests or preclinical or clinical trials conducted by or on behalf of the Company, other than ordinary course communications with
respect to modifications in connection with the design and implementation of such trials, copies of which communications have been made
available to you. There has not been any violation of applicable law or regulation by the Company in any of its product development efforts,
submissions or reports to the FDA, the European Commission, the EMA, the TGA or any other applicable regulatory agency that could reasonably
be expected to require investigation, corrective action or result in enforcement action, except where such violation would not, singly
or in the aggregate, result in a Material Adverse Effect. Neither the Company, nor any Person engaged by the Company has made an untrue
statement of a material fact or a fraudulent statement to the FDA, the European commissions, the EMA, the TGA, or any other Governmental
Entity responsible for enforcement or oversight with respect to Healthcare Laws, or failed to disclose a material fact required to be
disclosed to the FDA, the European Commissions, the EMA, the TGA, or such other Governmental Entity that, at the time such disclosure
was made, would reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements
of Material Facts, Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991), or for any other
Governmental Entity to invoke a similar policy. The research studies and clinical trials of the Company are being conducted in an ethical
and humane manner under state, national or supra-national applicable laws, including without limitation Good Clinical Practices, that
are either equal or more stringent than applicable laws and regulations enforced by the Department of Health and Human Services and FDA
governing human, animal or non-human primate research participants and test subjects (including regulations regarding “Informed
Consent” as such term is defined under applicable law in the jurisdictions where clinical trials were or are being conducted) and
such studies and the clinical trials are conducted under the auspices of a neutral and independent Institutional Animal Care and Use Committee
or Institutional Review Board, Ethics Committee, and applicable state, national, or supra national agencies responsible for oversight.
(ff) Compliance
with Health Care Laws. The Company has operated and currently is in compliance with all applicable health care laws, rules and
regulations (except where such failure to operate or non-compliance would not, individually or in the aggregate, result in a Material
Adverse Effect), including, without limitation, (i) the Federal, Food, Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.);
(ii) all applicable federal, state, local and all applicable foreign healthcare related fraud and abuse laws, including, without
limitation, the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the U.S. Physician Payments Sunshine Act (42 U.S.C. §
1320a-7h), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the criminal False Claims Law (42 U.S.C. § 1320a-7b(a)),
all criminal laws relating to healthcare fraud and abuse, including but not limited to 18 U.S.C. Sections 286 and 287, the healthcare
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 exclusion laws (42 U.S.C. § 1320a-7), and the civil monetary penalties law (42 U.S.C. §
1320a-7a); (iii) HIPAA, as amended by the Health Information Technology for Economic Clinical Health Act (42 U.S.C. Section 17921
et seq.); (iv) all applicable federal, state, local and all applicable foreign laws and regulations pertaining to the testing and
manufacture of healthcare products including, without limitation, Basic Health and Human Services Policy for Protection of Human Research
Subjects “Common Rule” as codified and enforced by the Department of Health and Human Services in 45 C.F.R. part 46 and enforced
by FDA under 21 C.F.R. part 50, Good Clinical Practices (as defined below) and Good Laboratory Practices, Laboratory Animal Welfare Act
of 1966, the Controlled Substances Act (2 U.S.C. § 801, et seq.) and Good Manufacturing Practices (21 C.F.R. §§210 &
211); (v) the regulations promulgated pursuant to such laws; and (vi) any other similar local, state, federal, or foreign laws
(collectively, the “Health Care Laws”). Neither the Company, nor to the Company’s knowledge, any of its officers,
directors, employees or agents have engaged in activities which are, as applicable, cause for false claims liability, civil penalties,
or mandatory or permissive exclusion from Medicare, Medicaid, or any other state or federal healthcare program. The Company has not received
written notice or other correspondence of any claim, action, suit, audit, survey, proceeding, hearing, enforcement, investigation, arbitration
or other action (“Action”) from any 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, and, to the Company’s knowledge, no such claim,
action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action is threatened. The Company is not a party to
and does not have any ongoing reporting obligations pursuant to any corporate integrity agreement, deferred prosecution agreement, monitoring
agreement, consent decree, settlement order, plan of correction or similar agreement imposed by any governmental or regulatory authority.
Additionally, neither the Company, nor to the Company’s knowledge, any of its employees, officers or directors, has been excluded,
suspended or debarred from participation in any U.S. state or 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 could reasonably be expected
to result in debarment, suspension, or exclusion.
For
purposes of this Section 1(ff), “Good Clinical Practices” means, with respect to Company, the then
current standards for clinical trials for pharmaceuticals (including all applicable requirements relating to protection of human subjects),
as set forth in the FDCA and applicable regulations promulgated thereunder (including, for example, 21 C.F.R. Parts 50, 54, and 56), as
amended from time to time, and such standards of good clinical practice (including all applicable requirements relating to protection
of human subjects) as are required by other organizations and Governmental Entities in any other countries, including applicable regulations
or guidelines from the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human
Use, and the Clinical Trial Notification and/or Clinical Trial Approval schemes for the conduct of clinical trials in Australia, in which
the products of Company or its Affiliates are sold or intended to be sold, to the extent such standards are not less stringent than in
the United States.
For
purposes of this Section 1(ff), “Good Laboratory Practices” mean, with respect to Company, the then
current standards for pharmaceutical laboratories, as set forth in the FDCA and applicable regulations and guidances promulgated thereunder,
as amended from time to time, including applicable requirements contained in 21 C.F.R. Part 58, and such standards of good laboratory
practices as are required by other organizations and Governmental Entities in any other countries, including applicable regulations or
guidelines from the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human
Use, and the Clinical Trial Notification and/or Clinical Trial Approval schemes for the conduct of clinical trials in Australia, in which
the products of Company or its Affiliates are sold or intended to be sold, to the extent such standards are not less stringent than in
the United States.
(gg)
Health Care Products Manufacturing. The manufacture of the Company’s product candidates
by the Company or, to the knowledge of the Company, on behalf of the Company, is being conducted in compliance with all applicable Health
Care Laws pertaining to the manufacture and post market surveillance of Drugs, Devices, and Biologics, including, without limitation,
the FDA’s current good manufacturing practice regulations pertaining to drugs (21 CFR Parts 210 and 211 et seq.), and, to the extent
applicable, the respective counterparts governing manufacturing operations promulgated by other applicable regulatory agencies. Except
as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not had any manufacturing
site (whether owned by the Company or, to the knowledge of the Company, that of a third party manufacturer of the Company’s products)
subject to an FDA or other applicable regulatory agency consent decree, seizure, import alert, or export prohibition, nor received any
FDA or other applicable regulatory agency “warning letters,” or “untitled letters” alleging or asserting material
noncompliance with any applicable Health Care Laws, requests to make material changes to the Company’s products, processes or operations
from the FDA or other applicable regulatory agency, other than those that have been satisfactorily addressed and/or closed with the FDA
or other applicable regulatory agency. To the knowledge of the Company, none of the FDA or any other applicable regulatory agency is
considering such action.
(hh) Environmental
Laws. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus or would not, individually
or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any Subsidiary is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection
of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or mold (collectively,
“Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Company and its Subsidiaries
have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the knowledge of the Company threatened, administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental
Law against the Company or any Subsidiary and (D) to the Company’s knowledge, there are no events or circumstances that would
reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party
or Governmental Entity, against or affecting the Company or any Subsidiary relating to Hazardous Materials or any Environmental Laws.
(ii) Accounting
Controls and Disclosure Controls. The Company and each of its Subsidiaries maintain effective internal control over financial reporting
(as defined under Rule 13-a15 and 15d-15 under the rules and regulations of the Commission under the 1934 Act Regulations and
a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance
with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance
with management’s general or specific authorization; (D) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any differences; and (E) the interactive data in eXtensible
Business Reporting Language incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus
fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and
guidelines applicable thereto. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, since
the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and (2) no change in the Company’s internal control over financial
reporting that has materially adversely affected, or is reasonably likely to materially adversely affect, the Company’s internal
control over financial reporting. The Company and each of its Subsidiaries maintain an effective system of disclosure controls and procedures
(as defined in Rule 13a-15 and Rule 15d-15 under the 1934 Act Regulations) that are designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s
management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow
timely decisions regarding disclosure.
(jj) Payment
of Taxes. All United States federal income tax returns of the Company and its Subsidiaries required by law to be filed have been filed
and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which
appeals have been or will be promptly taken and as to which adequate reserves have been provided in conformity with GAAP. The United States
federal income tax returns of the Company through the fiscal year ended December 31, 2016 have been settled and no assessment in
connection therewith has been made against the Company. The Company and its Subsidiaries have filed all other tax returns that are required
to have been filed by them pursuant to applicable foreign, state, local or other law except insofar as the failure to file such returns
would not result in a Material Adverse Effect, and have paid all taxes due pursuant to such returns or pursuant to any assessment received
by the Company and its Subsidiaries, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves
have been established by the Company. The charges, accruals and reserves on the books of the Company in respect of any income and corporation
tax liability for any years not finally determined are, in conformity with GAAP, adequate to meet any assessments or re-assessments for
additional income tax for any years not finally determined, except to the extent of any inadequacy that would not result in a Material
Adverse Effect.
(kk) Insurance.
The Company and its Subsidiaries carry or are entitled to the benefits of insurance, with financially sound and reputable insurers, in
such amounts and covering such risks as is generally maintained by companies of established repute engaged in the same or similar business,
and all such insurance is in full force and effect. The Company has no reason to believe that it or its Subsidiaries will not be able
(A) to renew its existing insurance coverage as and when such policies expire or (B) 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 Effect. Neither of the Company nor its Subsidiaries has been denied any insurance coverage which it has sought or for which it
has applied.
(ll) Investment
Company Act. The Company is not required, and upon the issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Registration Statement, the General Disclosure Package and the Prospectus will not be
required, to register as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”).
(mm)
Absence of Manipulation. Neither the Company nor any affiliate of the Company has taken, nor
will the Company or any affiliate take, directly or indirectly, any action which is designed, or would be expected, to cause or result
in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale
of the Securities or to result in a violation of Regulation M under the 1934 Act.
(nn)
Foreign Corrupt Practices Act. None of the Company, its Subsidiaries or, to the knowledge of
the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or its Subsidiaries is
aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation,
making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise
to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything
of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof
or any candidate for foreign political office, in contravention of the FCPA and the Company has and, to the knowledge of the Company,
its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed
to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(oo) Money
Laundering Laws. To the Company’s knowledge after due inquiry, the operations of the Company and its Subsidiaries are and have
been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of all 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 or its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(pp)
OFAC. None of the Company, its Subsidiaries or, to the knowledge of the Company, any director,
officer, agent, employee, affiliate or representative of the Company or its Subsidiaries is an individual or entity (“Person”)
currently the subject or target of any sanctions administered or enforced by the United States Government, including, without limitation,
the U.S. Department of the Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union,
Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company
located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not directly or indirectly
use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture
partners or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of
such funding, is the subject of Sanctions or in any other manner that will result in a violation by any Person (including any Person
participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.
(qq) Statistical
and Market-Related Data. Any statistical and market-related data included in the Registration Statement, the General Disclosure Package
or the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable and accurate
and, to the extent required, the Company has obtained the written consent to the use of such data from such sources.
(rr) Privacy
and Data Protection. The Company and its Subsidiaries operate their business in a manner compliant in all material respects with all
United States federal, state, local, foreign and international privacy, data security and data protection laws and binding regulations
applicable to the Company’s collection, use, transfer, protection, disposal, disclosure, handling, storage and analysis of any information
that constitutes “personal information,” “personal data” or “personally identifiable information”
as defined in applicable laws (“Personal Information”). The Company and its Subsidiaries are in compliance in all material
respects with their respective internal policies and procedures designed to ensure the integrity and security of the data collected, handled
or stored in connection with their business. The Company and its Subsidiaries are in compliance in all material respects with their respective
internal policies and procedures designed to ensure compliance with the Health Care Laws that govern privacy and data security and take
reasonable steps designed to ensure compliance with such policies and procedures. The Company and its Subsidiaries have taken reasonable
steps to maintain the confidentiality of their Personal Information , protected health information, consumer information and other confidential
information of the Company, its Subsidiaries and any third parties in their possession (“Sensitive Company Data”).
The tangible or digital information technology systems (including computers, screens, servers, workstations, routers, hubs, switches,
networks, data communications lines, technical data and hardware), software and telecommunications systems used or held for use by the
Company and its Subsidiaries (the “Company IT Assets”) are adequate and operational for, in accordance with
their documentation and functional specifications, the business of the Company and its Subsidiaries as now operated and as currently proposed
to be conducted as described in the Registration Statement, the General Disclosure Package and the Prospectus. The Company and its Subsidiaries
have established commercially reasonable disaster recovery and security plans, procedures and facilities for the business consistent with
industry standards and practices in all material respects, including, without limitation, for the Company IT Assets and other data held
or used by or for the Company and its Subsidiaries. To the knowledge of the Company, the Company and its Subsidiaries have not suffered
or incurred any security breaches, compromises or incidents with respect to any Company IT Asset or Sensitive Company Data, except where
such breaches, compromises or incidents would not reasonably be expected to, individually or in the aggregate, result in a Material Adverse
Effect; and to the knowledge of the Company, there has been no unauthorized or illegal use of or access to any Company IT Asset or Sensitive
Company Data by any unauthorized third party. The Company and its Subsidiaries have not been required to notify any individual of any
information security breach, compromise or incident involving Sensitive Company Data.
(ss) No
Broker Fees. Except as disclosed in the General Disclosure Package, there are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder’s
fee or other like payment in connection with the offering of the Securities contemplated hereby.
(tt)
Transactions With Affiliates and Employees. Except as set forth in the General Disclosure Package,
none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring
payments to or from, any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in
excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan
of the Company.
(uu)
Application of Takeover Protections. The Company and the Board of Directors have taken all
necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation
(or similar charter documents) or the laws of its state of incorporation that is or could become applicable as a result of the Underwriters
and the Company fulfilling their obligations or exercising their rights under this Agreement, and any other documents or agreements executed
in connection with the transactions contemplated hereunder.
(vv) No
Integrated Offering. 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 or exchange on which any of the securities of the Company are listed or designated.
(ww) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Time, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount
that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business
as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of
the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the
current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws
of any jurisdiction within one year from the Closing Time.
(xx) Stock
Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of
the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under
the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(yy)
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 the Representative’s request.
(zz)
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.
(aaa) D&O
Questionnaires. To the Company’s knowledge, all information contained in the FINRA questionnaires completed by each of
the Company’s directors and officers immediately prior to the offering of the Securities and in the Lock-up Agreements (as defined below)
provided to the Underwriters is true and correct in all respects and the Company has not become aware of any information which would cause
the information disclosed in such FINRA questionnaires become inaccurate and incorrect.
(bbb) FINRA
Affiliation. No officer, director or any beneficial owner of 10% or more of the Company’s unregistered securities has any direct
or indirect affiliation or association with any FINRA member (as determined in accordance with the rules and regulations of FINRA)
that is participating in the offering of the Securities. The Company will advise the Representative and Underwriters’ counsel if it
learns that any officer, director or owner of 10% or more of (i) the Company’s outstanding shares of Common Stock or (ii) 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 is or becomes an affiliate or associated person
of a FINRA member firm.
(ccc) Board
of Directors. The Board of Directors is comprised of the persons set forth in the Company’s annual report on Form 10-K
filed with the Commission on March 26, 2024 and incorporated by reference into each preliminary prospectus and the Prospectus. The
qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley
Act of 2002 and the rules promulgated thereunder applicable to the Company and the rules of the Nasdaq Stock Market LLC. At
least one member of the Board of Directors qualifies as a “financial expert” as such term is defined under the Sarbanes-Oxley
Act of 2002 and the rules promulgated thereunder and the rules of the Nasdaq Stock Market LLC. In addition, at least a majority
of the persons serving on the Board of Directors qualify as “independent” as defined under the rules of the Nasdaq Stock
Market LLC.
(ddd) Cybersecurity.
(i)(x) There has been no material 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”) and (y) 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 security breach or other compromise to its IT Systems and Data; (ii) the Company
and the Subsidiaries are presently in material compliance with all (a) applicable laws or statutes and all judgments, orders, rules and
regulations of any court or arbitrator or governmental or regulatory authority, (b) internal policies and (c) 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; (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.
(eee) ERISA
Compliance. The Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance
in all material respects with ERISA. “ERISA Affiliate” means, with respect to the Company or any of its subsidiaries, any
member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company or such subsidiary
is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to
any “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates. No
“employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such
“employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under
ERISA). Neither the Company, its Subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections
412, 4971, 4975 or 4980B of the Code. Each employee benefit plan established or maintained by the Company, its Subsidiaries or any of
their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, which would cause the loss of such qualification. The execution of this Agreement, or the consummation
of the transactions contemplated hereunder, does not constitute a triggering event under any employee benefit plan or any other employment
contract, whether or not legally enforceable, which (either alone or upon the occurrence of any additional or subsequent event) will or
may result in any payment (of severance pay or otherwise), acceleration, increase in vesting, or increase in benefits to any current or
former participant, employee or director of the Company other than an event that is not material to the financial condition or business
of the Company and the Subsidiaries taken as a whole.
(fff) Warrant Shares Reserved. The Company
shall, at all times while any Warrants are outstanding, reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved shares of Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of the Warrants,
the number of Warrant Shares that are initially issuable and deliverable upon the exercise of the then-outstanding Warrants.
Any certificate signed by any
officer of the Company or any of its subsidiaries and delivered to any Underwriter or to counsel for the Underwriters in connection with
the offering, or the purchase and sale, of the Securities shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
The Company has a reasonable
basis for making each of the representations set forth in this Section 1. The Company acknowledges that the Underwriters and, for
purposes of the opinions to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will
rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.
SECTION 2. Sale
and Delivery to Underwriters; Closing.
(a)
Closing Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions
herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from the Company, at the price per share set forth in Schedule A, that number of Closing Shares and Pre-funded
Warrants set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Closing Shares and Pre-funded
Warrants which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof, subject, in each case,
to such adjustments among the Underwriters as the Representative in its sole discretion shall make to eliminate any sales or purchases
of fractional shares.
(b) Option
Shares. In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 1,222,222 shares of Common Stock, at the price per share set forth in Schedule A,
less an amount per share equal to any dividends or distributions declared by the Company and payable on the Closing Securities but not
payable on the Option Shares. The option hereby granted may be exercised for 30 days after the date hereof and may be exercised in
whole or in part at any time from time to time upon notice by the Representative to the Company setting forth the number of Option Shares
as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Shares.
Any such time and date of delivery (a “Date of Delivery”) shall be determined by the Representative, but any Date of
Delivery after the Closing Time shall not be later than seven full business days nor earlier than two full business days after the exercise
of said option, nor in any event prior to the Closing Time. If the option is exercised as to all or any portion of the Option Shares,
each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Shares then being
purchased which the number of Closing Shares and Pre-funded Warrants set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Closing Securities, subject, in each case, to such adjustments as the Representative in its sole discretion
shall make to eliminate any sales or purchases of fractional shares.
(c) Payment.
Payment of the purchase price for, and delivery of certificates or
security entitlements for, the Closing Securities shall be made at the offices of McGuireWoods LLP, or at such other place as shall be
agreed upon by the Representative and the Company, at 10:00 A.M. (New York City time) on the first (second, if the pricing occurs
after 4:30 P.M. (New York City time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions
of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Representative
and the Company (such time and date of payment and delivery being herein called “Closing Time”). Delivery of the Closing
Shares at the Closing Time shall be made through the facilities of The Depository Trust Company unless the Representative shall otherwise
instruct. The Warrants shall be delivered to the Representative in definitive form, registered in such names and in such denominations
as the Representative shall request in writing not later than the Closing Date. The Warrants will be made available for inspection by
the Representative on the business day prior to the Closing Time.
In addition, in the event
that any or all of the Option Shares are purchased by the Underwriters, payment of the purchase price for, and delivery of certificates
or security entitlements for, such Option Shares shall be made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Representative and the Company, on each Date of Delivery as specified in the notice from the Representative to the Company.
Delivery of the Option Shares on each such Date of Delivery shall be made through the facilities of The Depository Trust Company unless
the Representative shall otherwise instruct.
Payment shall be made to the
Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Representative
for the respective accounts of the Underwriters of certificates or security entitlements for the Securities to be purchased by them. It
is understood that each Underwriter has authorized the Representative, for its account, to accept delivery of, receipt for, and make payment
of the purchase price for, the Closing Securities and the Option Shares, if any, which it has agreed to purchase. Titan Partners, individually
and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Closing
Securities or the Option Shares, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Time or
the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder.
(d) Underwriter Warrants.
The Company hereby agrees to issue to the Representative (and/or its
affiliates, employees or third-party designees) at the Closing Time and each Date of Delivery, if any, warrants (“Underwriter
Warrants”) for the purchase of an aggregate of a number of shares of Common Stock (the “Underwriter Warrant Shares”),
representing 7% of the Closing Securities sold at the Closing Time and 7% of the Option Shares sold at each Date of Delivery, if any.
The Underwriter Warrants, in form and substance acceptable to the Representative, shall be exercisable, in whole or in part, commencing
on the date that is 180 days after the date of this Agreement and expiring on the five year anniversary of the date of this Agreement
at an initial exercise price per share of Common Stock of $1.6875. The Representative understands and agrees that there are significant
restrictions pursuant to FINRA Rule 5110 against transferring the Underwriter Warrants and the underlying shares of Common Stock during
the one hundred eighty (180) days after this Agreement and by its acceptance thereof shall agree that it will not sell, transfer, assign,
pledge or hypothecate the Underwriter Warrants, or any portion thereof, or be the subject of any hedging, short sale, derivative, put
or call transaction that would result in the effective economic disposition of such securities for a period of one hundred eighty (180)
days following the date of this Agreement to anyone other than (i) an Underwriter or a selected dealer in connection with the Offering
or (ii) a bona fide officer, partner, employee or registered representative of the Underwriter or selected dealer; and only if any such
transferee agrees to the foregoing lock-up restrictions. Delivery of the Underwriter Warrants shall be made at the Closing Time and each
Date of Delivery, if any, and shall be issued in the name or names and in such authorized denominations as the Representative may request.
(e) Non-accountable
Expenses. The Company hereby agrees to pay the Representative a non-accountable expense allowance in the amount of one-half percent
(0.5%) of the gross proceeds of the sale of Closing Securities at the Closing Time and one-half percent (0.5%) of the gross proceeds of the sale
of any Option Shares on each Date of Delivery, to be paid at the Closing Time and each Date of Delivery, if any, by deduction from the
proceeds on such date.
SECTION 3. Covenants
of the Company. The Company covenants with each Underwriter as follows:
(a) Compliance
with Securities Regulations and Commission Requests. The Company, subject to Section 3(b), will comply with the requirements
of Rule 430B, and will notify the Representative as soon as practicable, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus (including any document incorporated by reference therein) or for additional
information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of
the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the 1933 Act concerning the Registration
Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering
of the Securities. The Company will effect all filings required under Rule 424(b), in the manner and within the time period required by
Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the form
of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order, prevention
or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Continued
Compliance with Securities Laws. The Company will comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Registration
Statement, the General Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Securities is (or, but
for the exception afforded by Rule 172 of the 1933 Act Regulations (“Rule 172”), would be) required by the 1933 Act
to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that
the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) amend or supplement the General Disclosure Package or the Prospectus
in order that the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the General Disclosure
Package or the Prospectus, as the case may be, in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly (A) give the Representative notice of such event, (B) prepare any amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the Prospectus comply
with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies of
any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not
file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall object. The Company will
furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company
has given the Representative notice of any filings made pursuant to the 1934 Act or the 1934 Act Regulations within 48 hours prior to
the Applicable Time; the Company will give the Representative notice of its intention to make any such filing from the Applicable Time
to the Closing Time and will furnish the Representative with copies of any such documents a reasonable amount of time prior to such proposed
filing, as the case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall
reasonably object.
(c) Delivery
of Registration Statements. The Company has furnished or will deliver to the Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith
or incorporated by reference therein and documents incorporated or deemed incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Representative, without charge, a conformed copy of the Registration
Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery
of Prospectuses. The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such
Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Securities is (or, but for the
exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished
to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(e) Blue
Sky Qualifications. The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may
designate and to maintain such qualifications in effect so long as required to complete the distribution of the Securities; provided,
however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(f) Rule 158.
The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders
as soon as practicable an earning statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the
last paragraph of Section 11(a) of the 1933 Act.
(g) Use
of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in all material respects in the manner
specified in the Registration Statement, the General Disclosure Package and the Prospectus under the heading “Use of Proceeds.”
(h) [Reserved].
(i) Restriction
on Sale of Securities.
| (1) | During a period of sixty (60) days from the date of the Closing Time, the Company will not, without the
prior written consent of the Representative, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file or confidentially
submit any registration statement under the 1933 Act with respect to any of the foregoing, (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise or (iii) publicly announce an intention to effect any such swap, agreement or
other transaction described in clause (i). The foregoing sentence shall not apply to any Exempt Issuance (as defined below). |
| (2) | From the date hereof until the six-month anniversary of the Closing Time, without the prior consent of
the Representative, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company
or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction.
“Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities
that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either
(A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices
of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with
a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or
equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company
or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited
to, an equity line of credit, 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, that an “at-the-market”
offering by the Company shall not be deemed a Variable Rate Transaction for purposes of this Section 3(i)(2). Any Underwriter 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. |
| (3) | Notwithstanding the foregoing, this Section 3(i) shall not apply in respect of an Exempt Issuance,
except that no Variable Rate Transaction shall be an Exempt Issuance. “Exempt Issuance” means the issuance of (a) the
Securities to be sold hereunder; (b) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the
conversion of a convertible security outstanding on the date hereof and referred to in the Registration Statement, the General Disclosure
Package and the Prospectus; (c) any shares of Common Stock issued or options or other equity awards to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company referred to in the Registration Statement, the General Disclosure Package and
the Prospectus or the shares of Common Stock underlying such options or other equity awards; (d) any shares of Common Stock issued
pursuant to any existing non-employee director stock plan or dividend reinvestment plan referred to in the Registration Statement, the
General Disclosure Package and the Prospectus; (e) the filing by the Company of any registration statement on Form S-8 or a
successor form thereto; (f) sales of shares of capital stock of the Company under any trading plan pursuant to Rule 10b5-1 under
the Securities Exchange Act of 1934, as amended, existing as of the date of this Agreement; (g) the issuance by the Company
of shares of Common Stock upon the exercise of a stock option or warrant or the conversion or vesting of a security outstanding on the
date hereof, (h) the issuance by the Company of shares of Common Stock or securities convertible into, exchangeable for or that represent
the right to receive shares of Common Stock in connection with acquisition, license, collaboration or other strategic relationship,which
may include the sale of equity securities, or (i) the sale of shares of Common Stock to cover the payment of exercise prices or the
payment of taxes associated with the exercise or vesting of equity awards under any equity compensation plan of the Company. |
(j) Reporting
Requirements. The Company, during the period when a Prospectus relating to the Securities is (or, but for the exception afforded by Rule 172,
would be) required to be delivered under the 1933 Act, will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and 1934 Act Regulations.
(k) Issuer
Free Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it will not
make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free
writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under
Rule 433; provided that the Representative will be deemed to have consented to the Issuer Free Writing Prospectuses listed on Schedule B-2
hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been
reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such free writing prospectus
consented to, or deemed consented to, by the Representative as an “issuer free writing prospectus,” as defined in Rule 433,
and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing
with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict
with the information contained in the Registration Statement, any preliminary prospectus or the Prospectus or included or would include
an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representative
and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict,
untrue statement or omission.
(l) Testing-the-Waters
Materials. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event
or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
existing at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly amend or supplement,
at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.
(m) Emerging
Growth Company Status. The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth
Company at any time prior to the later of (i) completion of the distribution of the Securities within the meaning of the 1933
Act and (ii) completion of the 90-day restricted period referred to in Section 3(i).
SECTION 4. Payment
of Expenses.
(a) Expenses.
The Company hereby agrees to pay at the Closing Time and on each Date
of Delivery, if any, to the extent not paid at the Closing Time, all reasonable out of pocket expenses associated with the Offering or
incident to the performance of the obligations of the Company under this Agreement, up to $125,000, including, but not limited to: (a)
all filing fees and communication expenses relating to the registration of the Securities to be sold in the Offering (including the Option
Shares) with the Commission; (b) all FINRA Public Offering Filing System fees associated with the review of the Offering by FINRA; (c)
the fees and expenses incurred in connection with the listing of the Closing Shares and the Option Shares, if any, on the Nasdaq Stock
Market LLC and such other stock exchanges as the Company and the Representative together determine; (d) all fees, expenses and disbursements
relating to the registration or qualification of such Securities under the “blue sky” securities laws of such states and other
foreign jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees,
and the fees and expenses of blue sky counsel); (e) the costs of all mailing and printing of the underwriting documents (including, without
limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’
Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements
and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (f) the costs
and expenses of the Company’s public relations firm; (g) the costs of preparing, printing and delivering the Securities; (h) the
costs for “tombstones” and/or other commemorative items; (i) fees and expenses of the Transfer Agent for the Closing Shares
and the Option Shares, if any (including, without limitation, any fees required for same-day processing of any instruction letter delivered
by the Company); (j) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters;
(k) the fees and expenses of the Company’s accountants; (l) the fees and expenses of the Company’s legal counsel and other
agents and representatives; (m) the Underwriters’ costs of mailing prospectuses to prospective investors; (n) the costs associated
with advertising the Offering in the national editions of the Wall Street Journal and New York Times after the Closing Time; (o) the reasonable
fees and expenses of McGuireWoods LLP; (p) the Company’s reasonable “road show” expenses for the Offering; and (q) the
costs for bound volumes of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company
or its designee will provide within a reasonable time after the Closing in such quantities as the Representative may reasonably request.
The Representative may also deduct from the net proceeds of the Offering payable to the Company at the Closing Time, or each Date of Delivery,
if any, the expenses set forth herein to be paid by the Company to the Underwriters in an amount not to exceed $125,000 including the
fees and expenses of McGuire Woods in clause (o) above. Prior to the execution of this Agreement, the Company shall have paid to the Representative
an advance in the amount of $15,000 to be credited against the accountable expenses actually incurred by the Representative that may be
reimbursed pursuant to this Section 4(a). Such advance shall have been made in accordance with FINRA Rule 5110(g)(4)(A).
(b) Termination
of Agreement. If this Agreement is terminated by the Representative in accordance with the provisions of Section 5, Section 9(a)(i),
Section 9(a)(iii) or Section 10 hereof, the Company shall reimburse the Underwriters for all of their reasonably documented
out-of-pocket expenses, including the reasonable and documented fees and disbursements of counsel for the Underwriters; provided that
if this Agreement is terminated by the Representative pursuant to Section 10 hereof, the Company will have no obligation to reimburse
any defaulting Underwriter.
SECTION 5. Conditions
of Underwriters’ Obligations. The obligations of the several Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company contained herein or in certificates of any officer of the Company or any of its Subsidiaries delivered pursuant
to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness
of Registration Statement. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective
and, at the Closing Time, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto
has been issued under the 1933 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;
and the Company has complied with each request (if any) from the Commission for additional information to the reasonable satisfaction
of counsel to the Underwriters.
(b) Opinion
of Counsel for Company. At the Closing Time, the Representative shall have received the opinion and the negative assurance letter,
each dated the Closing Time, of Lowenstein Sandler LLP, counsel for the Company, together with the opinion of Sterne, Kessler, Goldstein &
Fox, special counsel for the Company with respect to intellectual property matters, each in form and substance satisfactory to the Representative.
(c) Officers’
Certificate. At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information
is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the Representative shall have received a certificate of the
principal executive officer of the Company and of the principal financial officer of the Company, dated the Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the representations and warranties of the Company in this Agreement
are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time, and
(iv) no stop order suspending the effectiveness of the Registration Statement under the 1933 Act has been issued, 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 their knowledge, contemplated.
(d) Accountant’s
Comfort Letter. At the time of the execution of this Agreement, the Representative shall have received from Ernst & Young
AG a letter, dated such date, in form and substance satisfactory to the Representative, together with signed or reproduced copies of such
letter for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’
“comfort letters” to underwriters with respect to the financial statements and certain financial information contained in
the Registration Statement, the General Disclosure Package and the Prospectus.
(e) Bring-down
Comfort Letter. At the Closing Time, the Representative shall have received from Ernst & Young AG a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e) of this Section,
except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.
(f) Approval
of Listing. The Company shall have submitted a listing of additional shares notification form to Nasdaq Stock Market LLC
with respect to the Closing Shares and the Option Shares, if any.
(g) No
Objection. The non-objection letter issued by FINRA with respect to the Registration Statement shall not have been rescinded, withdrawn
or suspended, nor shall FINRA have raised any subsequent objection to, or issued comments with respect to, the amount of compensation
allowable or payable to each Underwriter as described in the Registration Statement.
(h) Lock-up
Agreements. At the date of this Agreement, the Representative shall have received an agreement substantially in the form of Exhibit A
hereto signed by all of the Company’s directors, officers and securityholders (the “Lock-up Agreements”).
(i) [Reserved].
[(j) [Reserved].
(k) Conditions
to Purchase of Option Shares. In the event that the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Shares, the representations and warranties of the Company contained herein and the statements
in any certificates furnished by the Company and any of its Subsidiaries hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Representative shall have received:
| (1) | Officers’ Certificate. A certificate, dated such Date of Delivery, of the principal executive
officer of the Company and of the principal financial officer of the Company confirming that the certificate delivered at the Closing
Time pursuant to Section 5(c) hereof remains true and correct as of such Date of Delivery. |
| (2) | Opinion of Counsel for Company. If requested by the Representative, the opinion, and negative assurance
letter, of Lowenstein Sandler LLP, counsel for the Company, together with the opinion of Sterne, Kessler, Goldstein & Fox, special
counsel for the Company with respect to intellectual property matters, each in form and substance satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Shares to be purchased on such Date of Delivery and otherwise to the same effect as
the opinions and negative assurance letter required by Section 5(b) hereof. |
| (3) | Bring-down Comfort Letter. If requested by the Representative, a letter from Ernst & Young
AG, in form and substance satisfactory to the Representative and dated such Date of Delivery, substantially in the same form and substance
as the letter furnished to the Representative pursuant to subsection (e) of this Section, except that the “specified date”
in the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Date of Delivery. |
(l) Underwriter
Warrants. At the Closing Time and at each Date of Delivery (if any), the Company shall have delivered to the Representative an
executed copy or copies of the Underwriter Warrants.
(m) Additional
Documents. At the Closing Time and at each Date of Delivery (if any), counsel
for the Underwriters shall have been furnished with such other documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as herein contemplated shall be reasonably satisfactory in form and
substance to the Representative and counsel for the Underwriters.
(n) Termination
of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option Shares on a Date of Delivery which is after the Closing Time,
the obligations of the several Underwriters to purchase the relevant Option Shares, may be terminated by the Representative by notice
to the Company at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and except that Sections 1, 4, 6, 7, 8, 13, 14 and 15 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification
of Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates (as such term is defined in Rule 501(b) under
the 1933 Act (each, an “Affiliate”)), its selling agents and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
| (1) | against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of
any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto),
including any information deemed to be a part thereof pursuant to Rule 430B, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included (A) in any preliminary prospectus, any Issuer Free Writing Prospectus, any Written
Testing-the-Waters Communication, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto), or (B) in
any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering
of the Securities (“Marketing Materials”), including any roadshow or investor presentations made to investors by the Company
(whether in person or electronically), or the omission or alleged omission in any preliminary prospectus, any Issuer Free Writing Prospectus,
any Written Testing-the-Waters Communication, the General Disclosure Package, the Prospectus (or any amendment or supplement thereto)
or in any Marketing Materials of a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; |
| (2) | against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent
of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced
or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company; |
| (3) | against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen
by the Representative), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (1) or (2) above; |
provided, however, that this indemnity agreement
shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged
untrue statement or omission made in the Registration Statement (or any amendment thereto), including any information deemed to be a part
thereof pursuant to Rule 430B, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with the Underwriter Information.
(b) Indemnification
of Company, Directors and Officers. Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment thereto), including any information deemed to be a part
thereof pursuant to Rule 430B, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with the Underwriter Information.
(c) Actions
against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement.
In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by the
Representative, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall
be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however,
that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for the reasonable fees and expenses of more than one counsel (in addition
to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect
to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever
in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not
the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim 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 party.
(d) Settlement
without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on
the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, on the one hand, and of the Underwriters, on the other hand, in connection
with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received
by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company, on the one hand, and the total underwriting discount received
by the Underwriters, on the other hand, in each case as set forth on the cover of the Prospectus, bear to the aggregate public offering
price of the Securities as set forth on the cover of the Prospectus.
The relative fault of the
Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement
or omission or alleged omission.
Notwithstanding the provisions
of this Section 7, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions
received by such Underwriter in connection with the Securities underwritten by it and distributed to the public.
No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
For purposes of this
Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and each Underwriter’s Affiliates and selling agents shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters’ respective
obligations to contribute pursuant to this Section 7 are several in proportion to the number of Closing Shares and Pre-funded
Warrants set forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations,
Warranties and Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company or any of its Subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any
Underwriter, its officers or directors or any person controlling the Company and (ii) delivery of and payment for the Securities.
SECTION 9.
Termination of Agreement.
(a) Termination.
The Representative may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there
has been, in the judgment of the Representative, since the time of execution of this Agreement or since the respective dates as of which
information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its Subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a prospective change in U.S. or international political, financial
or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representative, impracticable or
inadvisable to proceed with the completion of the offering or to enforce contracts for the sale of the Securities, or (iii) if trading
in any securities of the Company has been suspended or materially limited by the Commission or the Nasdaq Stock Market LLC, or (iv) if
trading generally on the NYSE MKT or the New York Stock Exchange or in the Nasdaq Global Market has been suspended or materially limited,
or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or
by order of the Commission, FINRA or any other governmental authority, or (v) a material disruption has occurred in commercial banking
or securities settlement or clearance services in the United States or with respect to Clearstream or Euroclear systems in Europe, or
(vi) if a banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities.
If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 4, 6, 7, 8, 14, 15 and 16 shall survive such termination
and remain in full force and effect.
SECTION 10. Default
by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Time or
a Date of Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement (the “Defaulted
Securities”), the Representative shall have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in
such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representative shall not have completed such
arrangements within such 24-hour period, then:
(a) if
the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if
the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase, and the Company to sell,
the Option Shares to be purchased and sold on such Date of Delivery shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to
this Section shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default
which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which
does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell the relevant Option Shares,
as the case may be, either the (i) Representative or (ii) the Company shall have the right to postpone Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration
Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter”
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. 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
e-mail attachment at the email address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City
time) on a day on which the Nasdaq Stock Market LLC is open for trading (“Trading Day”), (ii) the next Trading
Day after the time of transmission, if such notice or communication is delivered via e-mail attachment at the e-mail 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 City 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 (iv) 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 below:
if sent to the Representative
or any Underwriter, shall be delivered personally, by e-mail, or sent by a nationally recognized overnight courier service to:
Titan Partners Group LLC, a division
of American Capital Partners, LLC
4 World Trade Center, 29th Floor
New York, NY 10007
Attention: Adam Sands
Email: notices@titanpartnersgrp.com
with a copy to Underwriters’ counsel (which
shall not constitute notice) at:
McGuireWoods LLP
1251 Avenue of the Americas, 20th Floor
New York, NY 10020
Attention: Stephen Older, Esq.
Carly E. Ginley, Esq.
Email: solder@mcguirewoods.com
cginley@mcguirewoods.com
if sent to the Company, shall be delivered personally,
by e-mail, or sent by a nationally recognized overnight courier service to:
Gain Therapeutics, Inc.
4800 Montgomery Lane, Suite 220
Bethesda, Maryland 20814
Attention: Matthias Alder,
Chief Executive Officer
Email: malder@gaintherapeutics.com
Tel. No: (703) 623-7090
with a copy to the Company counsel (which shall
not constitute notice) at:
Lowenstein Sandler LLP
1251 Avenue of the Americas, 17th Floor
New York, New York 10020
Attention: Steven Skolnick
Email: sskolnick@lowenstein.com
Tel. No: (973) 597-2476
SECTION 12. No
Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the purchase and sale
of the Securities pursuant to this Agreement, including the determination of the public offering price of the Securities and any related
discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters,
on the other hand, (b) in connection with the offering of the Securities and the process leading thereto, each Underwriter is and has
been acting solely as a principal and is not the agent or fiduciary of the Company, any of its Subsidiaries or their respective stockholders,
creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor
of the Company with respect to the offering of the Securities or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Company or any of its Subsidiaries on other matters) and no Underwriter has any obligation to
the Company with respect to the offering of the Securities except the obligations expressly set forth in this Agreement, (d) the Underwriters
and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company
and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering of the Securities
and the Company has consulted its own respective legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
SECTION 13. Parties.
This Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than
the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole
and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING
LAW. This agreement and any claim, controversy or dispute arising under or related to this agreement shall be governed by, and
construed in accordance with the laws of, the state of New York without regard to its choice of law provisions.
SECTION 15. Waiver
of Trial by Jury. The Company and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
SECTION 16. Consent
to Jurisdiction; Waiver of Immunity. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby shall be instituted in (i) the federal courts of the United States of America located in the City and County
of New York, Borough of Manhattan or (ii) the courts of the State of New York located in the City and County of New York, Borough
of Manhattan (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment of any such court, as to which such jurisdiction is non-exclusive)
of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s
address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The
parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified
Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other
proceeding brought in any such court has been brought in an inconvenient forum.
SECTION 17. TIME.
TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 18. Partial
Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement
is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
SECTION 19. Counterparts.
This Agreement may be executed in any number of counterparts (which may include counterparts delivered by any standard form of telecommunication),
each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same agreement. Counterparts
may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform
Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission
method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
SECTION 20. Effect
of Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
SECTION 21. Entire
Agreement. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the
Underwriters, or any of them, with respect to the subject matter hereof.
SECTION 22. Recognition
of the U.S. Special Resolution Regimes. In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding
under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under
this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this
Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
In the event that any Underwriter
that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime,
Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent
than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the
United States or a state of the United States.
For purposes of this Agreement,
(A) “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in
accordance with, 12 U.S.C. § 1841(k); (B) “Covered Entity” means any of the following: (i) a “covered
entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as
that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); (C) “Default Right” has the meaning
assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and
(D) “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated
thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
[SIGNATURE PAGES FOLLOW]
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Very truly yours, |
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GAIN THERAPEUTICS, INC. |
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By: |
/s/Matthias
Adler |
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Name: |
Matthias Adler |
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Title: |
Chief Executive Officer |
Accepted as of the date hereof
Titan
Partners Group LLC, |
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A
Division of American Capital Partners, LLC |
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By: |
/s/
Sanjay Allahdad |
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Name: |
Sanjay Allahdad |
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Title: |
Authorized Representative |
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For themselves and as Representative of the other Underwriters named
in Schedule A hereto.
[Signature Page to Underwriting
Agreement]
SCHEDULE A
Closing Shares: 7,116,547
Pre-funded Warrants: 1,031,602
Option Shares: 1,222,222
Price to Public for Closing Shares and Option Shares: $1.3500
Price to Public for Pre-funded Warrants: $1.3499
Underwriters’ Discount: $0.0945
Name of Underwriter | |
Number of Closing Shares | | |
Number of Pre-funded
Warrants | |
Titan Partners Group LLC, a division of American Capital Partners, LLC | |
| 7,116,547 | | |
| 1,031,602 | |
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Total | |
| 7,116,547 | | |
| 1,031,602 | |
SCHEDULE B-1
Pricing Terms
1. The Company is selling (a) 7,116,547 shares of Common Stock and (b)
1,031,602 Pre-funded Warrants.
2. The
Company has granted an option to the Underwriters, severally and not jointly, to purchase up to an additional 1,222,222 shares of Common
Stock.
3. The public offering price per share for the Securities shall be (i)
$1.3500 in respect of the shares of Common Stock and (ii) $1.3499 in respect of the Pre-funded Warrants.
SCHEDULE B-2
Free Writing Prospectuses
None.
Exhibit A
FORM OF LOCK-UP AGREEMENT
[See attached]
Lock-Up Agreement
June 13, 2024
Titan Partners Group LLC,
a division of American Capital Partners, LLC
4 World
Trade Center, 29th Floor
New York, NY 10007
Ladies and Gentlemen:
The undersigned
understands that Titan Partners Group LLC, a division of American Capital Partners, LLC (the “Underwriter”), proposes
to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Gain Therapeutics, Inc., a Delaware corporation
(the “Company”), providing for the public offering (the “Public Offering”) of shares of common stock,
par value $0.0001 per share (“Common Stock”), of the Company (the “Closing Shares”) and pre-funded
warrants to purchase shares of Common Stock at an exercise price equal to $0.0001 per share (the “Pre-funded Warrants”
and together with the Closing Shares, the “Closing Securities”).
To induce
the Underwriter to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the
prior written consent of the Underwriter, the undersigned will not, during the period commencing on the date hereof and ending sixty
(60) days after the date on which the Closing Time occurs (the “Lock-Up Period”), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition
(collectively, the “Lock-Up Securities”); (2) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Lock-Up Securities, whether any such transaction is to be
settled by delivery of shares of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with
respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities. Notwithstanding
the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written
consent of the Underwriter in connection with (a) transactions relating to Lock-Up Securities acquired in open market transactions
after the completion of the Public Offering; provided that no filing under Section 16(a) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), shall be required or shall be voluntarily made in connection with
subsequent sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock- Up Securities as a bona
fide gift or gifts, by will or intestacy or to a family member or trust for the benefit of a family member (for purposes of this
lock-up agreement, “family member” means any relationship by blood, marriage or adoption, not more remote than first
cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; (d) if the undersigned, directly or
indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of Lock-Up
Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned, as the case may be;
(e) the sales of Lock-Up Securities to cover the payment of the exercise prices or the payment of taxes associated with the exercise
or vesting of equity awards under any equity compensation plan of the Company; (f) pursuant to a qualified domestic order or in
connection with a divorce settlement; (g) by will or intestate succession to the legal representative, heir, beneficiary or Family
Member of the undersigned upon the death of the undersigned; or (h) sales or transfers of Lock-Up Securities solely in connection
with the “cashless” exercise of Company stock options outstanding on the date hereof for the purpose of exercising such
stock options (provided that any remaining Lock-Up Securities received upon such exercise will be subject to the terms hereof); provided that
in the case of any transfer pursuant to the foregoing clauses (b), (c), (d) or (h), (i) any such transfer shall not
involve a disposition for value, (ii) each transferee shall sign and deliver to the Underwriter a lock-up agreement substantially in
the form of this lock-up agreement and (iii) no filing under Section 16(a) of the Exchange Act shall be required or shall be
voluntarily made, except for a Form 5. The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance
with this lock-up agreement.
No provision
in this lock-up agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities
exercisable or exchangeable for or convertible into shares of Common Stock, as applicable; provided that the undersigned does not
transfer the shares of Common Stock acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into
or modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of such a plan in such
a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period).
The undersigned
understands that the Company and the Underwriter are relying upon this lock-up agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representative, successors and assigns.
The undersigned
understands that, if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Closing Securities to be sold thereunder, then this lock-up agreement shall be void and of no
further force or effect.
Whether or
not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be
made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriter.
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Very truly yours, |
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(Name - Please Print) |
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(Signature) |
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(Name of Signatory, in the case of
entities - Please Print) |
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(Title of Signatory, in the case of
entities - Please Print) |
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Address: |
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Exhibit 4.1
PRE-FUNDED COMMON
STOCK PURCHASE WARRANT
GAIN THERAPEUTICS,
Inc.
Warrant Shares: [________] |
Initial Issue Date: June 14, 2024 |
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Initial Exercise Date: June 14, 2024 |
THIS PRE-FUNDED COMMON STOCK
PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [___________________] or his assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) until this Warrant is exercised in full (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Gain Therapeutics, Inc., a company incorporated under the laws of the State of
Delaware (the “Company”), up to [_________] shares of Common Stock (as subject to adjustment hereunder, the “Warrant
Shares”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b).
Section 1. Definitions.
In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined in good faith by an independent appraiser
selected in good faith by the Board of Directors of the Company, the fees and expenses of which shall be paid by the Company.
“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; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“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 Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“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.
“Registration
Statement” means the Company’s registration statement on Form S-3, as amended and supplemented (File No. 333-265061).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Transfer
Agent” means Pacific Stock Transfer Company, 6725 Via Austi Parkway, Suite 300, Las Vegas, Nevada, 89119 and any successor
transfer agent of the Company.
“Underwriting
Agreement” means that certain securities underwriting agreement, dated as of June 13, 2024, between the Company and Titan
Partners Group LLC, a division of American Capital Partners, LLC, as representative of the several underwriters named in Schedule I thereto.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price per share of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day
from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume
weighted average price per share of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c)
if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on
the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the 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 Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section 2. Exercise.
a) Exercise
of Warrant. Subject to the provisions of Section 2(e) herein, exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by
delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder
at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy or PDF copy submitted by e-mail
(or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the
earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section
2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant
Shares specified in the applicable Notice of Exercise by wire transfer of immediately available funds or cashier’s check drawn
on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable
Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Exercise be required. The Company may reasonably rely on the authenticity of the information provided
by the Holder in the Notice of Exercise and 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. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise
is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal
to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business
Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of
the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise
Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 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. 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. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in
part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing ((A-B)(X)) by (A), where:
| (A) = | as applicable: (i) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise if such Notice of
Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day
that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a)
hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws)
on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price
of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the
time of the Holder’s execution of the applicable Notice of Exercise if such Notice
of Exercise is executed during “regular trading hours” on a Trading Day and is
delivered within two (2) hours thereafter (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2(a)
hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of
such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and
delivered pursuant to Section 2(a) hereof after the close of “regular trading
hours” on such Trading Day; |
| (B) = | the Exercise Price of this Warrant, as
adjusted hereunder; and |
| (X) = | the number of Warrant Shares that would
be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of the Warrant. 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 Transfer Agent is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations
pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name
of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address
specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) two (2) Trading Days after the delivery
to the Company of the Notice of Exercise, and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery
to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice
of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate
Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay, beginning one Trading Day after the Warrant Share Delivery Date, 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 City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Underwriting
Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial
Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of
the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares 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 (in which case, any liquidated damages payable under Section
2(d)(i) shall cease to accrue).
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x)
the Holder’s total purchase price (including reasonable and customary brokerage commissions, if any) for the shares of Common Stock
so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation
was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares
for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of
shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A)
of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure
to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
v. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and
such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant
when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company
may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vi. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
viii. Signature.
This Section 2 and the exercise form attached hereto set forth the totality of the procedures required of the Holder in order
to exercise this Warrant. Without limiting the preceding sentences, no ink-original exercise form shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any exercise form be required in order to exercise this Warrant. No additional
legal opinion, other information or instructions shall be required of the Holder to exercise this Warrant. The Company shall honor exercises
of this Warrant and shall deliver Warrant Shares underlying this Warrant in accordance with the terms, conditions and time periods set
forth herein.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons
acting as a group together with the Holder or any of the Holder’s Affiliates (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 to the extent such issuance would exceed such limitation. 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 not have any liability for any error made by the Holder or any other Person. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic
or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written
or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution
Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership
Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this
Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section
2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions
of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until
the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply
to a successor holder of this Warrant.
Section 3. Certain
Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if the Company, at any time while this Warrant
is outstanding grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights; provided,
however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent
(or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent).
c) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent
(or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent).
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 (other than for the purpose of changing the Company’s
name and /or the jurisdiction of incorporation of the Company or a holding company for the Company), (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in
one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares
for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock or 50% or
more of the voting power of the then outstanding common equity of the Company, (iv) the Company, directly or indirectly, in one or more
related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company,
directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or
group of Persons whereby such other Person or group acquires more than 50% of the then outstanding shares of Common Stock or 50% or more
of the voting power of the then outstanding common equity of the Company (not including any shares of Common Stock held by the other
Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise
of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction (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 (together, 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 Company prior to such Fundamental Transaction and shall deliver to the
Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or
its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to
any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant
to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor
Entity had been named as the Company herein.
e) Calculations.
All calculations under this Section 3 shall be made by the Company to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall
promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of
the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property,
or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company,
then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email
address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to
be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such
notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 4. Transfer
of Warrant.
a) Transferability.
Subject to the Securities Act
and any other applicable securities laws, and the conditions set forth in Section 4(d), this Warrant and all rights hereunder
are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers
an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and
shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder
of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No
Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in
no event shall the Company be required to net cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized
Shares.
The Company covenants that,
during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares
to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except and to the extent
as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary
to enable the Company to perform its obligations under this Warrant.
Before taking any action
which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
e) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Underwriting Agreement.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. No provision of this Warrant shall be construed
as a waiver by the Holder of any rights that the Holder may have under U.S. federal securities laws and the rules and regulation of the
Commission thereunder. Without limiting any other provision of this Warrant or the Underwriting Agreement, if the Company willfully and
knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall
pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Underwriting Agreement.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
l) Amendment.
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 Holder
of this Warrant (or, if after the Initial Issue Date, this Warrant is subdivided into multiple Warrants, the Holders of the replacement
or substitute Warrants representing at least a majority of the shares of Common Stock underlying such Warrants then outstanding). Any
such amendment shall apply to all Warrants outstanding and be binding upon all holders of such Warrants.
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.
|
By: | |
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| Name: Matthias Alder |
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| Title: Chief Executive Officer |
[signature
page]
gain
therapeutics, inc. – Pre-funded warrant
NOTICE OF EXERCISE
TO: GAIN
THERAPEUTICS, 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 or by physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name of Investing Entity: _______________________________________________________________
Signature of Authorized Signatory of Investing
Entity: _________________________________________
Name of Authorized Signatory: ___________________________________________________________
Title of Authorized Signatory: ____________________________________________________________
Date: ________________________________________________________________________________
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the
foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
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(Please Print) |
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Address: |
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(Please Print) |
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Phone Number: |
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Email Address: |
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Dated: _______________ __, ______ |
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Holder’s Signature: |
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Holder’s Address: |
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Exhibit 4.2
REPRESENTATIVE’S PURCHASE WARRANT
GAIN
THERAPEUTICS, inc.
Warrant Shares: _________1 | | Initial Exercise Date: _____, 20242 |
|
| | |
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| | Issue Date: _______, 2024 |
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This REPRESENTATIVE’S
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 referred to above as the Initial Exercise Date (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New
York City time) on ____, 20293 (the “Termination Date”) but not thereafter, to subscribe for and purchase
from Gain Therapeutics, Inc, a Delaware corporation (the “Company”), up to _______ shares (as subject to adjustment
hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Underwriting Agreement (the
“Underwriting Agreement”), dated _____, 2024, between the Company and Titan Partners Group LLC, a division of American
Capital Partners, LLC, as representative of the several Underwriters named in Schedule I thereto.
Section 2. Exercise.
a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy
or PDF copy submitted by email (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period
(as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer of immediately available funds or cashier’s
check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the
applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Exercise be required. The Company may reasonably rely on the authenticity of the information
provided by the Holder in the Notice of Exercise and 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. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise
is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal
to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business
Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of
the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be less than the amount stated on the face hereof.
1
Insert 7% of the total shares sold in the Offering.
2
Insert the six-month anniversary date of the Offering’s closing.
3
Insert the five-year anniversary date of the Offering’s closing.
b) Exercise
Price. The exercise price per share of Common Stock under this Warrant shall be $____4, subject to adjustment hereunder
(the “Exercise Price”).
c) Cashless
Exercise. In lieu of exercising this Warrant by delivering the aggregate Exercise Price by wire transfer or cashier’s check,
at the election of Holder, this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise”
in which the Holder shall be entitled to receive 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) at the
option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise
or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a
Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular
trading hours” on a Trading Day) pursuant to Section 2(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.
“VWAP” means, for
any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock are then listed or quoted
on The New York Stock Exchange, the NYSE American or any tier of The Nasdaq Stock Market (each, 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 are then listed or quoted as reported by Bloomberg L.P. (“Bloomberg”) (based on a trading day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock are listed or quoted on the
OTCQB or OTCQX (each as operated by OTC Markets Group, Inc., or any successor market), the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock are not then listed
or quoted for trading on the OTCQB or OTCQX Markets and if prices for the Common Stock are then reported in the OTC Pink Market published
by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a Common Stock as determined by an
independent appraiser selected in good faith by the Board of Directors of the Company and reasonably acceptable to the Holder, the fees
and expenses of which shall be paid by the Company.
4
Insert 125% of the public offering price of the shares.
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities
Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants
being exercised may be tacked onto the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this
Section 2(c).
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless
exercise pursuant to this Section 2(c).
d) Mechanics
of Exercise.
| i. | Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased
hereunder to be transmitted by the Company’s transfer agent (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 Transfer Agent is then a participant in such system and either (A) there is
an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) the
Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise
by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for
the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice
of Exercise by the date that is the earlier of (i) two (2) Trading Days after the delivery to the Company by the Holder of the
Notice of Exercise and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company
of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise,
the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise
Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, then commencing
on the date that is two (2) Trading Days after the Warrant Share Delivery Date, provided the Warrant Shares have not been delivered,
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 such liquidated damages begin to accrue) 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; provided, however, that the Holder
shall be required to return any Warrant Shares or Common Stock subject to any such rescinded exercise notice concurrently with the return
to the Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of the Holder’s right
to acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored
right).
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase
(in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with
an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit
a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all
Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another
established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
viii. Signature.
This Section 2 and the exercise form attached hereto set forth the totality of the procedures required of the Holder in order
to exercise this Warrant. Without limiting the preceding sentences, no ink-original exercise form shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any exercise form be required in order to exercise this Warrant. No additional
legal opinion, other information or instructions shall be required of the Holder to exercise this Warrant. The Company shall honor exercises
of this Warrant and shall deliver Warrant Shares underlying this Warrant in accordance with the terms, conditions and time periods set
forth herein.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (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 not have any liability for any error made by the Holder or any other Person. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual
report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written
or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution
Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership
Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares
of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.
The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e),
provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this
Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st
day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder
of this Warrant.
Section 3. Certain
Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way
of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of
shares of Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this
Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or re-classification. For the purposes of clarification, the Exercise
Price of this Warrant will not be adjusted in the event that the Company or any subsidiary thereof, as applicable, sells or grants any
option to purchase, or sell or any grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or
any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the
Exercise Price then in effect.
b) 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 the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent
that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent).
c) Pro
Rata Distribution. 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 (other than cash) of stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent)
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 (other than for the purpose of changing the
Company’s name and/or the jurisdiction of incorporation of the Company or a holding company of the Company), (ii) the Company
(and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders
of 50% or more of the outstanding Common Stock or 50% or more of the voting power of the then outstanding common equity of the Company,
(iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a
stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off,
merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of
the outstanding shares of Common Stock or 50% or more of the voting power of the then outstanding common equity of the Company (not including
any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons
making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 2(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(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by
the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall deliver to the Holder in exchange for this Warrant
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which
is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the
shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this
Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the
value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
e) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be
the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company (and all of its Subsidiaries, taken as
a whole) is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile
or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least
20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants
are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall
not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this
Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to
exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.
Section 4. Transfer
of Warrant.
a) Transferability.
Pursuant to FINRA Rule 5110(e)(1), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be sold,
transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that
would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the
commencement of sales of the offering pursuant to which this Warrant is being issued, except as permitted under FINRA Rule 5110(e)(2).
Subject to the foregoing restriction, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this
Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially
in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant
or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant
shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant
to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning
this Warrant in full. This Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be
identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by or on behalf of the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
d) Representation
by Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise
hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or
reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant
to sales registered or exempted under the Securities Act.
Section 5. Registration
Rights.
a) To
the extent the Company does not maintain an effective registration statement for the Warrant Shares and in the further event that the
Company files a registration statement with the Securities and Exchange Commission covering the sale of its shares of Common Stock (other
than a registration statement on Form S-4 or S-8, or on another form, or in another context, in which such “piggyback”
registration would be inappropriate), then, for a period of five (5) years from the commencement of sales of the Offering, the Company
shall give written notice of such proposed filing to the Holder as soon as practicable but in no event less than ten (10) days before
the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended
method(s) of distribution, and the name of the proposed managing underwriter or underwriters, if any, of the offering, and offer
to the Holder in such notice the opportunity to register the sale of such number of shares of Warrant Shares as such Holder may request
in writing within five (5) days following receipt of such notice (a “Piggyback Registration”). The Company shall
cause such Warrant Shares to be included in such registration and shall use its commercially reasonable efforts to cause the managing
underwriter or underwriters of a proposed underwritten offering to permit the Warrant Shares requested to be included in a Piggyback Registration
on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of such Warrant
Shares in accordance with the intended method(s) of distribution thereof. All Holders proposing to distribute their securities through
a Piggyback Registration that involves an underwriter or underwriters shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such Piggyback Registration. Furthermore, each Holder must provide such information as reasonably
requested by the Company (which information shall be limited to that which is required for disclosure under the Securities Act and the
forms, rules and regulations promulgated thereunder) to be included in the registration statement timely or the Company may elect
to exclude such Holder from the registration statement.
b) In
addition, to the extent the Company does not maintain an effective registration statement for the Warrant Shares, for a period of five
(5) years from the commencement of sales of the Offering, the Holder shall be entitled to one (1) demand right for the registration
of the Warrant Shares at the Company’s expense (other than any underwriting discounts, selling commissions, share transfer taxes
applicable to the sale of the Warrant Shares, and fees and disbursements of counsel for the Holder) (the “Demand Registration”).
In the event of a Demand Registration, the Company shall use its commercially reasonable efforts to register the applicable Warrant Shares
within sixty (60) days after receiving the Demand Registration. All Holders of Warrant Shares proposing to distribute their securities
through a Demand Registration that involves an underwriter or underwriters shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such Demand Registration. Furthermore, each Holder must provide such information as
reasonably requested by the Company (which information shall be limited to that which is required for disclosure under the Securities
Act and the forms, rules and regulations promulgated thereunder) to be included in the registration statement timely or the Company
may elect to exclude such Holder from the registration statement.
c) Notwithstanding
the foregoing, the registration rights described in this Section 5 shall be subject to limitations imposed by the Commission’s
rules or comments of the Commission staff in connection with its review of the registration statement for any such resale registration.
Moreover, notwithstanding the foregoing registration obligations of the Company, if the Company furnishes to the Holders requesting a
Demand Registration a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the
Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for a registration statement
to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective,
because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction
involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose
for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange
Act, then the Company shall have the right to defer taking action with respect to such Demand Registration or withdraw a related registration
statement for a period of not more than forty-five (45) calendar days; provided, however, that the Company may not invoke this right more
than twice in any twelve (12) month period or during the twelve (12) month period prior to the Termination Date.
Section 6. Miscellaneous.
a) No
Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in
no event shall the Company be required to net cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business
Day.
d) Authorized
Shares.
i. 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).
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. 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.
e) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Underwriting Agreement.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this
Warrant or the Underwriting Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which
results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs
and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any and all notices or other communications or deliveries to be provided hereunder shall be made in accordance with Section 7.3 of
the Underwriting Agreement.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder 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.
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GAIN THERAPEUTICS, INC. |
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By: |
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Name: |
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Title: |
NOTICE OF EXERCISE
To: GAIN
THERAPEUTICS, 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: ___________________________________________________________________
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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Email Address: |
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Dated:
_______________ __, ______ |
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Holder’s
Signature:_____________________________ |
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Holder’s
Address:______________________________ |
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Exhibit 5.1
June 14, 2024
Gain Therapeutics, Inc.
4800 Montgomery Lane, Suite 220
Bethesda, Maryland 20814
Ladies and Gentlemen:
We have acted as counsel to
Gain Therapeutics, Inc., a Delaware Corporation (the “Company”), in connection with (i) the Registration Statement
on Form S-3 (Registration No. 333- 249917) initially filed by the Company with the Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Securities Act”) on May 18, 2022, and amended on May 23, 2022 (the
“Registration Statement”), and the related prospectus contained in the Registration Statement (the “Base Prospectus”)
and (ii) the preparation and filing of the prospectus supplement, dated June 13, 2024 (the “Prospectus Supplement”)
relating to the issuance and sale by the Company of (i) up to 8,338,769 shares (the “Shares”) of common stock, par
value $0.0001 per share (the “Common Stock”) (including 1,222,222 shares of Common Stock issuable by the Company upon
exercise of an option to purchase additional shares granted by the Company to the underwriter), (ii) pre-funded warrants (the “Pre-Funded
Warrants”) to purchase up to an aggregate of 1,031,602 shares of Common Stock (the “Pre-Funded Warrant Shares”)
being issued to certain purchasers, and (iii) warrants (the “Underwriter Warrants” and together with the Pre-Funded
Warrants, the “Warrants”) to purchase up to 655,925 shares of Common Stock (the “Underwriter Warrant Shares”
and together with the Pre-Funded Warrant Shares, the “Warrant Shares”) being issued to the underwriter, pursuant to
the Registration Statement. The Shares, Warrants, and Warrant Shares are referred to collectively as the “Securities.”
The Securities are to be issued
and sold by the Company pursuant to that certain underwriting agreement, dated as of June 13, 2024 (the “Underwriting
Agreement”), by and between the Company and Titan Partners Group LLC, a division of American Capital Partners, LLC, as underwriter,
which is being filed with the Commission as Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed on the date
hereof.
We are acting as counsel for
the Company in connection with the issuance and sale by the Company of the Securities. In connection with this opinion, we have (i) examined
a signed copy of the Registration Statement as filed with the Commission, including the exhibits thereto, the Base Prospectus and the
Prospectus as filed with the Commission, (ii) investigated such questions of law, (iii) examined originals or certified, conformed
or reproduction copies of such agreements, instruments, documents of the Company, such certificates of public officials and such other
documents, and (iv) received such information from officers and representatives of the Company as we have deemed necessary or appropriate
for the purposes of this opinion.
In all such examinations,
we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of original and certified
documents and the conformity to original or certified documents of all copies submitted to us as conformed or reproduction copies. As
to various questions of fact relevant to the opinion expressed herein, we have relied upon, and assume the accuracy of, the representations
and warranties set forth in the Underwriting Agreement, and certificates and oral or written statements and other information of or from
public officials and officers and representatives of the Company.
Based upon the foregoing
and subject to the limitations, qualifications and assumptions set forth herein, we are of the opinion that (i) the Shares have been
duly authorized and, when issued and paid for in accordance with the terms of the Underwriting Agreement, will be validly issued,
fully paid and non-assessable, (ii) the issuance of the Warrants covered by the Registration Statement has been duly authorized by
the Company, and such Warrants will be valid and binding obligations of the Company when such Warrants shall have been duly
executed, countersigned and registered and duly delivered, (iii) the issuance of the Warrant Shares issuable upon exercise of the
Warrants covered by the Registration Statement pursuant to the terms of the Warrants have been duly authorized by the Company and
reserved for issuance, and such Warrant Shares will be validly issued, fully paid and non-assessable when certificates representing
such Warrant Shares shall have been duly executed, countersigned and registered and duly delivered to the holders thereof against
payment of the exercise price therefor or, if any such Warrant Shares are to be issued in uncertificated form, the Company’s
books shall reflect the issuance of such Warrant Shares to the holders thereof against payment of the exercise price therefor, in
each case in accordance with the terms of the Warrants.
The opinion expressed herein
is limited to the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”), as currently
in effect, and reported judicial decisions interpreting such provisions of the DGCL) and the applicable laws of the State of New York
and we express no opinion as to the effect on the matters covered by this letter of the laws of any other jurisdiction.
The opinion expressed herein
is limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated herein. We undertake
no obligation to supplement this letter if any applicable laws change after the date hereof or if we become aware of any facts that might
change the opinion expressed herein after that date or for any other reason.
We hereby consent to the filing
of this opinion as Exhibit 5.1 to the Current Report on Form 8-K filed by the Company on the date hereof and which is incorporated
by reference into the Registration Statement and to the references to this firm under the caption “Legal Matters” in the Prospectus
Supplement. In giving these consents, we do not admit that we are “experts” within the meaning of Section 11 of the Securities
Act or within the category of persons whose consent is required by Section 7 of the Securities Act.
Very truly yours, |
|
|
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/s/ Lowenstein Sandler LLP |
|
|
|
Lowenstein Sandler LLP |
|
Exhibit 99.1
Gain Therapeutics Announces
Proposed Public Offering
BETHESDA, Md., June
13, 2024 – Gain Therapeutics, Inc. (“Gain” or the “Company”) (Nasdaq: GANX) today announced that
it is proposing to offer and sell, subject to market conditions, shares of its common stock (or pre-funded warrants in lieu thereof)
in an underwritten public offering. Gain expects to grant the underwriter a 30-day option to purchase up to an additional 15% of
the shares of common stock and pre-funded warrants offered in the offering. All of the securities are being offered by the Company.
Gain intends to use the
net proceeds from the offering to continue clinical and nonclinical development of its lead product candidate GT-02287 for the treatment
of neurodegenerative diseases including GBA1 Parkinson’s disease and for general corporate purposes. The final terms of the offering
will depend on market and other conditions at the time of pricing, and there can be no assurance as to whether or when the offering may
be completed, or as to the actual size or terms of the offering.
Titan Partners Group, a division of American Capital
Partners, is acting as sole bookrunner for the offering.
The securities described above will be offered
pursuant to a shelf registration statement on Form S-3 (File No. 333-265061), which was previously filed with the Securities and
Exchange Commission (“SEC”) and became effective on June 1, 2022. A preliminary prospectus supplement and accompanying
base prospectus relating to and describing the terms of the offering will be filed with the SEC and will be available on the
SEC’s website located at http://www.sec.gov, copies of which may be obtained, when available, for free by contacting Titan
Partners Group LLC, a division of American Capital Partners, LLC, 4 World Trade Center, 29th Floor, New York, New York 10007, by phone
at (929) 833-1246 or by email at prospectus@titanpartnersgrp.com.
The offering will be made only by means of a prospectus.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein,
nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
About Gain Therapeutics,
Inc.
Gain Therapeutics, Inc.
is a clinical-stage biotechnology company leading the discovery and development of next generation allosteric therapies. Gain’s
lead drug candidate GT-02287 for the treatment of GBA1 Parkinson’s disease, is currently being evaluated in a Phase 1 clinical trial.
Leveraging AI-supported
structural biology, proprietary algorithms, and supercomputer-powered physics-based models, the company’s Magellan™ drug discovery
platform can identify novel allosteric binding sites on disease-implicated proteins, pinpointing pockets that cannot be found or drugged
with current technologies. Its AI and machine-learning tools and virtual screening capabilities leverage the emerging on-demand compound
libraries covering vast chemical spaces of over five trillion compounds to identify and select suitable small molecule hits for experimental
validation.
Gain’s unique approach
enables the discovery of novel, allosteric small molecule modulators that can restore or disrupt protein function. Deploying its highly
advanced platform, Gain is accelerating drug discovery and unlocking novel disease-modifying treatments for untreatable or difficult-to-treat
disorders including neurodegenerative diseases, rare genetic disorders and oncology.
Forward Looking Statements
This release contains “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements are typically preceded by words such as “believes,” “expects,” “anticipates,”
“intends,” “will,” “may,” “should,” or similar expressions. These forward-looking statements
reflect management’s current knowledge, assumptions, judgment and expectations regarding future performance or events. Although
management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will
prove to be correct or that those goals will be achieved, and you should be aware that actual results could differ materially from those
contained in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, including,
but not limited to, risks associated with market conditions and the satisfaction of customary closing conditions related to the offering
and uncertainties related to the Company’s expectations regarding the completion, timing and size of the proposed offering. For
a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking
statements, as well as risks relating to the Company’s business in general, please refer to the Company’s prospectus supplement
to be filed with the SEC, and the documents incorporated by reference therein, including the Company’s Form 10-K for the year ended
December 31, 2023 and Form 10-Q for the quarter ended March 31, 2024.
All forward-looking statements
are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date of this release. We have no obligation, and expressly disclaim any obligation, to update,
revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contact:
CORE IR
(516) 222-2560
ir@gaintherapeutics.com
Media Contacts:
Russo Partners
Nic Johnson and Elio Ambrosio
nic.johnson@russopartnersllc.com
elio.ambrosio@russopartnersllc.com
(212) 845-4242
Exhibit 99.2
Gain Therapeutics Announces
Pricing of $11.0 Million Public Offering
BETHESDA, Md., June
13, 2024 – Gain Therapeutics, Inc. (“Gain” or the “Company”) (Nasdaq: GANX) today announced
the pricing of an underwritten public offering of (i) 7,116,547 shares of its common stock at a public offering price of $1.35 per share
and (ii) pre-funded warrants to purchase 1,031,602 shares of common stock in lieu of shares of common stock to certain investors.
The pre-funded warrants will be immediately exercisable, and may be exercised at any time after their original issuance. The purchase
price of each pre-funded warrant sold in the offering will be equal to the price at which a share of common stock is sold in the offering,
minus $0.0001, and the exercise price of each pre-funded warrant will equal $0.0001 per share.
In connection with the
offering, Gain has granted the underwriter a 30-day option to purchase up to an additional 1,222,222 shares of common stock at the public
offering price, less underwriting discounts and commissions.
Titan Partners Group,
a division of American Capital Partners, is acting as the sole bookrunner for the offering.
Gain expects to receive
aggregate gross proceeds from the offering, excluding the exercise of the underwriter’s option, if any, of approximately $11.0 million,
excluding underwriting discounts and commissions and other offering-related expenses.
The offering is expected
to close on or about June 17, 2024, subject to customary closing conditions.
Gain intends to use the
net proceeds from the offering to continue clinical and nonclinical development of its lead product candidate GT-02287 for the treatment
of neurodegenerative diseases including GBA1 Parkinson’s disease and for general corporate purposes.
The securities in the
offering are being offered pursuant to a prospectus supplement and an accompanying base prospectus forming part of a shelf registration
statement on Form S-3 (File No. 333-265061), which was previously filed with the Securities and Exchange Commission (“SEC”)
and became effective on June 1, 2022. A preliminary prospectus supplement and accompanying base prospectus relating to the offering was
filed with the SEC and is available on the SEC’s website at www.sec.gov. A final prospectus supplement relating to the offering
will be filed with the SEC and will be available on the SEC’s website located at www.sec.gov. When available, copies of the final
prospectus supplement and the accompanying base prospectus may be obtained for free by contacting Titan Partners Group LLC, a division
of American Capital Partners, LLC, 4 World Trade Center, 29th Floor, New York, NY 10007, by phone at (929) 833-1246 or by email at prospectus@titanpartnersgrp.com.
This press release does
not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any
sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration
or qualification under the securities laws of any such state or other jurisdiction.
About Gain Therapeutics,
Inc.
Gain Therapeutics, Inc.
is a clinical-stage biotechnology company leading the discovery and development of next generation allosteric therapies. Gain’s
lead drug candidate GT-02287 for the treatment of GBA1 Parkinson’s disease, is currently being evaluated in a Phase 1 clinical trial.
Leveraging AI-supported
structural biology, proprietary algorithms, and supercomputer-powered physics-based models, the company’s Magellan™ drug discovery
platform can identify novel allosteric binding sites on disease-implicated proteins, pinpointing pockets that cannot be found or drugged
with current technologies. Its AI and machine-learning tools and virtual screening capabilities leverage the emerging on-demand compound
libraries covering vast chemical spaces of over five trillion compounds to identify and select suitable small molecule hits for experimental
validation.
Gain’s unique approach
enables the discovery of novel, allosteric small molecule modulators that can restore or disrupt protein function. Deploying its highly
advanced platform, Gain is accelerating drug discovery and unlocking novel disease-modifying treatments for untreatable or difficult-to-treat
disorders including neurodegenerative diseases, rare genetic disorders and oncology.
Forward Looking Statements
This release contains
“forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These statements are typically preceded by words such as “believes,” “expects,” “anticipates,”
“intends,” “will,” “may,” “should,” or similar expressions. These forward-looking statements
reflect management’s current knowledge, assumptions, judgment and expectations regarding future performance or events. Although
management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will
prove to be correct or that those goals will be achieved, and you should be aware that actual results could differ materially from those
contained in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, including,
but not limited to, risks associated with market conditions and the satisfaction of customary closing conditions related to the offering
and uncertainties related to the offerings and the use of proceeds from the offerings. For a further description of the risks and uncertainties
that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the Company’s
business in general, please refer to the Company’s prospectus supplement to be filed with the SEC, and the documents incorporated
by reference therein, including the Company’s Form 10-K for the year ended December 31, 2023 and Form 10-Q for the quarter ended
March 31, 2024.
All forward-looking statements
are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date of this release. We have no obligation, and expressly disclaim any obligation, to update,
revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contact:
CORE IR
(516) 222-2560
ir@gaintherapeutics.com
Media Contacts:
Russo Partners
Nic Johnson and Elio Ambrosio
nic.johnson@russopartnersllc.com
elio.ambrosio@russopartnersllc.com
(212) 845-4242
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