As filed with the Securities and Exchange
Commission on June 30, 2023.
Registration No. 333-272469
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Allarity Therapeutics, Inc.
(Exact name of registrant as specified in its
charter)
Delaware | | 2834 | | 87-2147982 |
(State or other jurisdiction of
incorporation or organization) | | (Primary Standard Industrial
Classification Code Number) | | (I.R.S. Employer
Identification No.) |
24 School Street, 2nd Floor
Boston, MA 02108
Telephone: (401) 426-4664
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
James G. Cullem
Chief Executive Officer
c/o Allarity Therapeutics, Inc.
24 School Street, 2nd Floor
Boston, MA 02108
Telephone: (401) 426-4664
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Scott E. Bartel
Daniel B. Eng
Lewis Brisbois Bisgaard & Smith LLP
633 West 5th Street, Suite 4000
Los Angeles, CA 90071
(213) 358-6174 |
|
David E. Danovitch
Aaron M. Schleicher
Sullivan & Worcester LLP
1633 Broadway
New York, NY 10019
212-660-3060 |
Approximate date of commencement
of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.
If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. ☒
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | Emerging growth company | ☒ |
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The registrant hereby amends
this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further
amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
The information in
this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities nor does
it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Preliminary Prospectus |
Subject To
Completion |
Dated June 30, 2023 |
Up to 2,049,180
Shares of Common Stock
Up to 2,049,180 Warrants
to purchase up to 2,049,180 Shares of Common Stock
Up to 2,049,180 Pre-Funded
Warrants to purchase up to 2,049,180 Shares of Common Stock
Up to 2,049,180 Shares
of Common Stock Issuable Upon Exercise of Common Warrants
We
are offering on a “reasonable best efforts” basis up to $15.0 million of shares
of our common stock, $0.0001 par value per share (“Common Stock”), and Common
Stock purchase warrants (the “common warrants”), at an assumed combined public
offering price of $7.32 (equal to the last sale price of our Common Stock as reported by
The Nasdaq Capital Market on June 29, 2023). Each common warrant is exercisable for one share
of Common Stock, is assumed to have an exercise price of $7.32 per share (100% of the assumed
public offering price per share and accompanying common warrant), will be exercisable upon
issuance and will expire five (5) years from the date of issuance. The Common Stock and common
warrants are immediately separable and will be issued separately in this offering.
We are also offering to those
purchasers, if any, whose purchase of Common Stock in this offering would otherwise result in any such purchaser, together with its affiliates,
beneficially owning more than 4.99% (or, at the election of such purchaser, 9.99%) of our outstanding Common Stock immediately following
the consummation of this offering, the opportunity to purchase pre-funded warrants in lieu of shares of our Common Stock that would otherwise
result in such purchaser’s beneficial ownership exceeding 4.99% (or, at the election of such purchaser, 9.99%) of our outstanding
Common Stock. The purchase price for each pre-funded warrant and common warrant will equal the combined public offering price for the
Common Stock and accompanying common warrant in this offering less the $0.001 per share exercise price of each such pre-funded warrant.
Each pre-funded warrant will be exercisable upon issuance and will not expire prior to exercise. The pre-funded warrants and common warrants
are immediately separable and will be issued separately in this offering. For each pre-funded warrant we sell, the number of shares of
Common Stock we are offering will be decreased on a one-for-one basis.
For purposes of clarity, each
share of Common Stock or pre-funded warrant to purchase one share of Common Stock is being sold together with one common warrant to purchase
one share of Common Stock. The Common Stock or pre-funded warrant to purchase one share of Common Stock, together with one common warrant
to purchase one share of Common Stock is being offered on a best-efforts basis as described in this prospectus for a maximum aggregate
offering amount of $15.0 million. This prospectus also relates to the offering of the shares of our Common Stock issuable upon the exercise
of such pre-funded warrants and common warrants sold in this offering.
Effective
June 27, 2023, our shares of Common Stock are listed on The Nasdaq Capital Market under the
symbol “ALLR.” Previously, our shares of Common Stock were listed on The Nasdaq
Global Market. On June 29, 2023, the last reported sale price of our Common Stock on The
Nasdaq Capital Market was $7.32 per share. There is no established trading market for the
pre-funded warrants or common warrants and we do not expect a market to develop. In addition,
we do not intend to list the pre-funded warrants or common warrants on The Nasdaq Capital
Market, any other national securities exchange or any other trading system. Without an active
trading market, the liquidity of the pre-funded warrants and common warrants may be limited.
Except as otherwise indicated herein, all information in this prospectus, including the number
of shares of Common Stock that will be outstanding after this offering, gives effect to the
1-for-35 reverse stock split effected on March 24, 2023 and the 1-for-40 reverse stock split
effected on June 28, 2023 (collectively, the “Share Consolidations”).
We have retained A.G.P./Alliance
Global Partners to act as our sole placement agent in connection with the securities offered by this prospectus. The placement
agent is not purchasing or selling any of these securities nor is it required to sell any specific number or dollar amount of securities,
but has agreed to use its reasonable best efforts to solicit offers to purchase the securities offered by this prospectus. We may not
sell all of the securities in this offering. We have agreed to pay the placement agent the placement agent fees set
forth in the table below. The actual combined public offering price of the Common Stock and common warrants, and pre-funded warrants and
common warrants we are offering, and the exercise price of the common warrants that we are offering, will be negotiated between us, the
placement agent and the investors in the offering based on a to be negotiated discount to the trading price of our Common Stock prior
to the offering.
3i, LP, the sole holder
of our Series A Preferred Stock and holder of warrants to purchase 481,752 shares of Common Stock, subject to adjustment upon closing
of this offering, may participate in this offering on the same terms and conditions as other purchasers, and we intend to use the proceeds
from the sale of securities to 3i, LP (the “3i Proceeds”), if any, to repurchase a portion of the shares of Series A Preferred
Stock owned by 3i, LP. In addition, a portion of the proceeds from this offering will be used to redeem a promissory note issued to 3i,
LP for the principal amount of $350,000.
There
is no minimum number of securities or minimum aggregate amount of proceeds for this offering to close. This offering will terminate not
later than fifteen business days following its commencement, subject to our right to terminate earlier. We will deliver all securities
to be issued in connection with this offering delivery versus payment (“DVP”)/receipt versus payment (“RVP”) upon
receipt of investor funds received by the Company. Accordingly, neither we nor the placement agent have made any arrangements to place
investor funds in an escrow account or trust account since the placement agent will not receive investor funds in connection with the
sale of the securities offered hereunder.
We
are an “emerging growth company” and a “smaller reporting company” under applicable Securities and Exchange Commission
(“SEC”) rules and, as such, have elected to comply with certain reduced public company disclosure requirements for this prospectus
and future filings. See the discussions in the section titled “Summary – Implications of Being an Emerging Growth Company
and a Smaller Reporting Company.”
Investing in our securities
involves a high degree of risk. See section titled “Risk Factors” beginning on page 12.
| |
Per
Share of
Common
Stock and
Common
Warrant | | |
Per
Pre-Funded
Warrant and
Common
Warrant | | |
Total
Offering | |
Public offering price | |
$ | | | |
$ | | | |
$ | | |
Placement Agent Fees(1) | |
$ | | | |
$ | | | |
$ | | |
Proceeds to us (before expenses)(2) | |
$ | | | |
$ | | | |
$ | | |
(1) |
We have agreed to pay the placement agent a cash fee equal to 7.00% of the gross proceeds that are sold in the offering and to reimburse the placement agent for certain expenses. See section titled “Plan of Distribution” for additional information. |
(2) |
The amount of offering proceeds to us presented in this table does not give effect to any exercise of the common warrants or pre-funded warrants. |
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Delivery of the shares of our Common Stock and pre-funded warrants
together with accompanying common warrants, to certain of the investors will be made on , 2023, subject to customary closing conditions.
Sole Placement Agent
A.G.P.
The date of this prospectus is ,
2023.
TABLE OF CONTENTS
Neither we nor the placement
agent has authorized anyone to provide you with information other than that contained in this prospectus or any free writing prospectus
prepared by or on behalf of us or to which we have referred you. We and the placement agent take no responsibility for, and can provide
no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to
buy, the securities only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate
only as of the date on the front cover page of this prospectus, or other earlier date stated in this prospectus, regardless of the time
of delivery of this prospectus or of any sale of our securities.
No action is being taken in
any jurisdiction outside the United States to permit a public offering of our securities or possession or distribution of this prospectus
in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform
themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.
When used herein, unless the
context requires otherwise, references to the “Company,” “we,” “our” and “us” refer to
Allarity Therapeutics, Inc., a Delaware corporation.
MARKET AND INDUSTRY DATA
This prospectus contains estimates,
projections and other information concerning our industry, our business and the markets for our therapeutic candidates, including data
regarding the estimated size of such markets and the incidence of certain medical conditions. We obtained the industry, market and similar
data set forth in this prospectus from our internal estimates and research and from academic and industry research, publications, surveys
and studies conducted by third parties, including governmental agencies. In some cases, we do not expressly refer to the sources from
which this data is derived. Information that is based on estimates, forecasts, projections, market research or similar methodologies is
inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed
in this information. While we believe our internal research is reliable, such research has not been verified by any third party.
PROSPECTUS SUMMARY
This summary highlights
information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your
investment decision. Before investing in our securities, you should carefully read this entire prospectus, including our consolidated
financial statements and the related notes thereto and the information set forth in the sections titled “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report
on Form 10-K for the year ended December 31, 2022, and Form 10-Q for the three months ended March 31, 2023, which are incorporated herein
by reference.
Overview
We are a clinical-stage, precision
medicine biopharmaceutical company actively advancing a pipeline of in-licensed oncology therapeutics for patients with difficult-to-treat
cancers. Our clinical program includes three anti-cancer assets in mid- to late-stage clinical development and one anti-cancer asset in
early stage clinical development. Our programs and partnerships leverage our proprietary, highly accurate Drug Response Predictor (DRP®)
technology to refine patient selection and improve clinical outcomes. Our DRP® technology has been broadly validated across an extensive
array of therapies and tumor types with a high degree of accuracy for matching the right patient to the right drug. By identifying those
patients who will and who will not respond, the DRP® companion diagnostics have the potential to transform cancer therapeutic development
across many indications by increasing clinical success rates with trials involving a fewer number of patients and improve patient outcomes
by matching them to the right drug.
Our pipeline currently consists
of three mid-to-late stage clinical candidates for cancer and one anti-cancer asset in early stage clinical development. We are focused
on the clinical development of three priority programs: dovitinib in combination with stenoparib for the second-line or later treatment
of metastatic ovarian cancer, stenoparib as a monotherapy for ovarian cancer, and Ixempra® as a monotherapy for metastatic breast
cancer. In addition, Allarity is supporting the development of one additional clinical asset through business development activities which
are considered at mid-stage development. Each Allarity pipeline program is being co-developed with a drug specific DRP® companion
diagnostic to select and treat patients most likely to benefit from treatment.
While we have not yet successfully
received regulatory or marketing approval for any of our therapeutic candidates or companion diagnostics, and while we believe that our
approach has the potential to reduce the cost and time of drug development through the identification and selection of patient populations
more likely to respond to therapy, our strategy involves risks and uncertainties that differ from other biotechnology companies that focus
solely on new therapeutic candidates that do not have a history of failed clinical development. By utilizing our DRP® platform
to generate a drug-specific companion diagnostic for each of our therapeutic candidates, if approved by the FDA, we believe our therapeutic
candidates have the potential to advance the goal of personalized medicine by selecting the patients most likely to benefit from each
of our therapeutic candidates and avoid the treatment of non-responder patients. All of our therapeutic candidates are clinical stage
assets and the FDA has not yet approved any of our therapeutic candidates or any of our DRP® companion diagnostics. As
used in this prospectus, statements regarding the use of our proprietary DRP® companion diagnostics or our proprietary
DRP® platform or our observations that a therapeutic candidate may have anti-cancer or anti-tumor activity or is observed
to be well tolerated in a patient population should not be construed to mean that we have resolved all issues of safety and/or efficacy
for any of our therapeutic candidates or DRP® companion diagnostic. Issues of safety and efficacy for any therapeutic candidate
or companion diagnostic may only be determined by the U.S. FDA or other applicable regulatory authorities in jurisdictions outside
the United States.
Our clinical and commercial
development team is advancing our pipeline of targeted oncology therapeutic candidates, all of which have previously succeeded at least
through Phase 1 clinical trials demonstrating that the therapeutic candidate is well tolerated. Our three priority assets, dovitinib,
stenoparib, and IXEMPRA® (ixabepilone) are all former drug candidates of large pharmaceutical companies.
Our most advanced therapeutic
candidate, dovitinib, is a selective inhibitor of several classes of tyrosine kinases, including FGFR and VEGFR, and was formerly developed
by Novartis Pharma AG (“Novartis”) through Phase 3 clinical trials in numerous indications. We submitted a New Drug Application
(“NDA”) with the FDA on December 21, 2021, for the third line treatment of metastatic renal cell carcinoma (mRCC or kidney
cancer) in patients selected by our Dovitinib-DRP® companion diagnostic. Prior to submission of the NDA, we submitted a
Pre-Market Approval (“PMA”) application to the FDA for approval of our dovitinib-specific DRP® companion diagnostic
for use to select and treat patients likely to respond to dovitinib. On February 15, 2022, we received Refusal to File (RTF) letters for
both our dovitinib NDA and our DRP®-Dovitinib companion diagnostic PMA. The FDA has asserted that neither our NDA or PMA
meets the regulatory requirements to warrant a complete agency review. The primary grounds of rejection asserted by the FDA relates to
our use of prior Phase 3 clinical trial data, generated by Novartis in a “superiority” endpoint study against sorafenib (Bayer),
to support a “non-inferiority” endpoint in connection with the DRP®-Dovitinib companion diagnostic. Based upon
the reasons given in the RTF letters and a subsequent Type C meeting with the FDA on May 31, 2022, we anticipate that the FDA will require
a prospective Phase 3 clinical trial as well as additional dose optimization studies before regulatory approval of Dovitinib as a monotherapy
and its companion diagnostic Dovitinib-DRP for the treatment of third-line mRCC can be obtained. While we have decided that the costs,
risks and potential benefits of conducting these studies for dovitinib as a monotherapy for mRCC are no longer the best path toward commercial
success, we continue to evaluate other potential Phase 1b/2 clinical trials for dovitinib combined with other approved drugs in the mRCC
space and in other indications. On March 20, 2023, we announced that we had dosed our first patient in a Phase 1b clinical study to evaluate
the combination of stenoparib and dovitnib for the treatment of advanced solid tumors, including ovarian cancer. The completion of this
offering will provide us with financing to dose additional patients and our ability to continue these clinical trials will be dependent
upon additional financing. Our decision to advance dovitinib as a combination therapy and not as a monotherapy is based on our belief
that both the science and the market for oncology therapies has shifted towards combination therapies and away from monotherapies for
multiple indications of cancer. We further believe that our DRP®-Dovitinib companion diagnostic is indication agnostic
and our retrospective analysis of the clinical data generated in the Novartis clinical studies for mRCC will also support a companion
diagnostic for dovitinib in second-line or later treatment of metastatic ovarian cancer, as well as other indications.
Our second priority therapeutic
candidate is stenoparib (formerly E7449), a novel inhibitor of the key DNA damage repair enzyme poly-ADP-ribose polymerase (“PARP”),
which also has an observed inhibitory action against Tankyrases, another important group of DNA damage repair enzymes. Stenoparib was
formerly developed by Eisai, Inc. (“Eisai”) through Phase 1 clinical trials, and we are currently advancing a Phase 2 clinical
trial of this therapeutic candidate for the treatment of ovarian cancer at trial sites in the U.S. and Europe together with its stenoparib-specific
DRP® companion diagnostic, for which the FDA has previously approved an Investigational Device Exemption (“IDE”)
application. In addition, upon completion of this offering, we anticipate continuing a stenoparib in combination with dovitinib Phase
1b/2 Clinical Trial for second-line or later treatment of metastatic ovarian cancer.
Our third priority therapeutic
candidate is IXEMPRA® (ixabepilone), a selective microtubule inhibitor, which has been shown to interfere with cancer cell
division, leading to cell death. IXEMPRA® (ixabepilone) was formerly developed and brought to market by Bristol-Myers Squibb,
is currently marketed and sold in the U.S. by R-PHARM US LLC, for the treatment of metastatic breast cancer treated with two or more prior
chemotherapies. We are currently advancing IXEMPRA®, together with its drug-specific DRP® companion diagnostic,
in a Phase 2 European clinical trial for the same indication, with the goal of eventually submitting an application for Marketing Authorization
(“MA”) with the European Medicine Agency (“EMA”) to market IXEMPRA®, together with its drug-specific
DRP® companion diagnostic, in the European market.
We have in-licensed the intellectual
property rights to develop, use and market our two most advanced therapeutic candidates, dovitinib and stenoparib. Consequently, we must
perform all of the obligations under these license agreements, including the payment of substantial development milestones payments and
royalty payments on future sales in the event we receive marketing approval for dovitinib or stenoparib in the future. If we fail to perform
our obligations under our license agreements, we may lose the intellectual property rights to these therapeutic candidates which will
have a material adverse effect on our business.
Our focused approach to address
major unmet needs in oncology leverages our management’s expertise in discovery, medicinal chemistry, manufacturing, clinical development,
and commercialization. As a result, we have created substantial intellectual property around the composition of matter for our new chemical
entities. The foundations of our approach include:
|
● |
The pursuit of clinical-stage assets: We strive to identify and pursue novel oncology therapeutic candidates that have advanced beyond Phase 1 clinical trials and are preferably Phase 2 to Phase 3 clinical stage assets. Accordingly, the assets we have acquired, and intend to acquire, have undergone prior clinical trials by other pharmaceutical companies with clinical data that helps us evaluate whether these candidates will be well tolerated in the tested patient population, and in some cases, have observed anti-cancer or anti-tumor activity that would support additional clinical trials using our DRP® platform. We often focus our acquisition efforts on therapeutic candidates that have been the subject of clinical trials conducted by large pharmaceutical companies. Further we intend to select therapeutic candidates for which we believe we can develop a drug-specific DRP® to advance together with the therapeutic candidate in further clinical trials as a companion diagnostic to select and treat the patients most likely to respond to the therapeutic candidate. We further consider whether the licensor or assignor can provide us substantial clinical grade active pharmaceutical ingredients (“API”) for the therapeutic candidate, at low-to-no cost, for our use in future clinical trials. The availability of API at low-to-no cost reduces both our future clinical trial costs and the lead time it takes us to start a new clinical trial for the therapeutic candidate. As an example, our therapeutic candidate, dovitinib, was developed by Novartis through Phase 2 clinical trials in numerous indications and in Phase 3 clinical trials for RCC before we acquired the therapeutic candidate, and it came with a substantial API. |
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● |
Our proprietary DRP® companion diagnostics: We believe our proprietary and patented Drug Response Predictor (DRP®) platform provides us with a substantial clinical and commercial competitive advantage for each of the therapeutic candidates in our pipeline. Our DRP® companion diagnostic platform is a proprietary, predictive biomarker technology that employs complex systems biology, bio-analytics with a proprietary clinical relevance filter to bridge the gap between in vitro cancer cell responsiveness to a given therapeutic candidate and in vivo likelihood of actual patient response to that therapeutic candidate. The DRP® companion diagnostic platform has been retrospectively validated by us using retrospective observational studies in 35 clinical trials that were conducted or sponsored by other companies. We intend to develop and validate a drug-specific DRP® biomarker for each and every therapeutic candidate in our therapeutic candidate pipeline to serve as a companion diagnostic to select and treat patients most likely to respond to that therapeutic candidate. Although we are in the early stages of our companion diagnostic development and have not yet received a PMA from the FDA, our DRP® technology has been peer-reviewed by numerous publications and we have patented our DRP® platform for more than 70 anti-cancer drugs. While retrospective studies guide our clinical development of our companion diagnostics, prospective clinical trials may be required in order to receive a PMA from the FDA. |
|
● |
A precision oncology approach: Our focused strategy is to advance our pipeline of therapeutic candidates, together with DRP® companion diagnostics, to bring these therapeutic candidates, once approved, to market and to patients through a precision oncology approach. Our DRP® companion diagnostic platform provides a gene expression fingerprint that we believe reveals whether a specific tumor in a specific patient is likely to respond to one of our therapeutic candidates and therefore can be used to identify those patients who are most likely to respond to a particular therapeutic treatment in order to guide therapy decisions and lead to better treatment outcomes. We believe our DRP® companion diagnostic platform may be used both to identify a susceptible patient population for inclusion in clinical trials during the drug development process (and to exclude the non-susceptible patient population), and further to select the optimal anti-cancer drug for individual patients in the treatment setting once an anti-cancer drug is approved and marketed. By including only patients that have tumors that we believe may respond to our therapeutic candidate in our clinical trials, we believe our proprietary DRP® companion diagnostics platform has the potential to improve the overall treatment response in our clinical trials and thereby improving our chances for regulatory approval to market our therapeutic candidate, while potentially reducing the time, cost, and risk of clinical development. |
The following chart summarizes
our therapeutic candidate pipeline:
Implications of Being an Emerging Growth Company
and a Smaller Reporting Company
We are an “emerging
growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth
companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take
advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting
standards.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K. Even after we no longer qualify as an emerging growth company,
we may still qualify as a “smaller reporting company,” which would allow us to continue to take advantage of many of the same
exemptions from disclosure requirements, including presenting only the two most recent fiscal years of audited financial statements and
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We may continue to be a
smaller reporting company after the close of this offering if either (i) the market value of our stock held by non-affiliates is less
than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market
value of our stock held by non-affiliates is less than $700 million. To the extent we take advantage of such reduced disclosure obligations,
it may also make comparison of our financial statements with other public companies difficult or impossible.
Corporate Information
Our former parent, Allarity
Therapeutics A/S, was founded in Denmark in 2004 by our chief scientific officer, Steen Knudsen, Ph.D., and our Director and Senior Vice
President of Investor Relations, Thomas Jensen, both of whom were formerly academic researchers at the Technical University of Denmark
working to advance novel bioinformatic and diagnostic approaches to improving cancer patient response to therapeutics. On May 20, 2021,
we entered a Plan of Reorganization and Asset Purchase Agreement (the “Recapitalization Share Exchange”), between us, Allarity
Acquisition Subsidiary, our wholly owned Delaware subsidiary (“Acquisition Sub”), and Allarity Therapeutics A/S, an Aktieselskab
organized under the laws of Denmark. Pursuant to the terms of the Recapitalization Share Exchange, our Acquisition Sub acquired substantially
all of the assets and liabilities of Allarity Therapeutics A/S in exchange for shares of our Common Stock on December 20, 2021, and our
Common Stock began trading on the Nasdaq Global Market on that same day.
Our principal executive offices
are located at 24 School Street, 2nd Floor, Boston, MA 02108 and our telephone number is (401) 426-4664. Our corporate website
address is www.allarity.com. Information contained on or accessible through our website is not a part of this prospectus, and the
inclusion of our website address in this prospectus is an inactive textual reference only.
Allarity and its subsidiaries
own or have rights to trademarks, trade names and service marks that they use in connection with the operation of their business. In addition,
their names, logos and website names and addresses are their trademarks or service marks. Other trademarks, trade names and service marks
appearing in this prospectus are the property of their respective owners. Solely for convenience, in some cases, the trademarks, trade
names and service marks referred to in this prospectus are listed without the applicable ®, ™ and
SM symbols, but they will assert, to the fullest extent under applicable law, their rights to these trademarks, trade names and service
marks.
Recent Events
Subsequent to our quarterly period ended March 31, 2023, we entered
into a series of transactions, certain events occurred and we received notifications as follows. The transactions or events or notifications
discussed below, are discussed in more detail in the Current Reports on Form 8-K filed by us with the SEC and incorporated by reference.
See section titled “Incorporation of Certain Information By Reference.”
Secured 3i, LP Bridge Loan
On June 29, 2023, the
Company entered into a Secured Note Purchase Agreement with 3i, LP (the “June 2023 Purchase Agreement”), pursuant to which,
on June 30, 2023, 3i, LP purchased a secured promissory note for a principal amount of $350,000 (the “3i June Promissory Note”).
Such note matures on July 31, 2023, and carries an interest rate of 5% per annum, and is secured by all of the Company’s assets
pursuant to that certain security agreement dated June 29, 2023 (the “Security Agreement”). Under the 3i June Promissory
Note, the outstanding obligations thereunder, including accrued interest will be paid in full from the gross proceeds of our next financing
(the “Next Financing”); provided, however, that if the gross proceeds from the Next Financing are insufficient to settle
the payment of the outstanding principal balance of the 3i June Promissory Note, together with all accrued interest thereon, in full,
then the Company will instead be obligated to convert all of the unpaid principal balance of the note, together with all accrued interest
thereon, into 486 shares of Series A Preferred Stock (the “Repayment Shares”). In connection with the Repayment Shares, the
June 2023 Purchase Agreement provides that if the closing sale price of the shares of Common Stock of the trading day immediately prior
to the execution of the June 2023 Purchase Agreement (the “Current Closing Price”) is lower than the initial conversion price
of $30.00 as set forth in Certificate of Designation of Series A Preferred Stock, as amended and currently in effect (the “Series
A COD”) then the conversion price of Series A Preferred Stock will be reduced to the Current Closing Price, pursuant to the voluntary
adjustment provision of Section 8 of the Series A COD (“Downward Adjustment to Conversion Price”) and the Company shall file
a second certificate of amendment to the Series A COD with the Delaware Secretary of State to amend the Series A COD to reflect the Downward
Adjustment to Conversion Price (“Second Certificate of Amendment”). Based on the closing price of the shares of Common Stock
on June 28, 2023, the Downward Adjustment to Conversion Price is equal to $8.00 per share. As contemplated by the June 2023 Purchase
Agreement, the Company filed the Second Certificate of Amendment with the Delaware Secretary of State on June 30, 2023.
June Special Meeting of Stockholders and
June Share Consolidation
On
June 23, 2023, we held a Special Meeting of Stockholders (the “Special Meeting”) for our stockholders of record of our outstanding
shares of Common Stock and Series A Preferred Stock. At the Special Meeting, the stockholders of Common Stock and Series A Preferred
Stock approved an amendment to our Certificate of Incorporation, to, at the discretion of the board, effect a reverse stock split with
respect to our issued and outstanding Common Stock at a ratio between 1-for-15 and 1-for-50 (the “June Reverse Stock Split Proposal”).
Upon stockholder approval, the Board of Directors determined a ratio of 1-for-40 for the reverse stock split (the “June Reverse
Stock Split”). On June 28, 2023 Company filed a Fourth Certificate of Amendment of the Certificate of Incorporation to effect the
June Reverse Stock Split at 4:05 PM ET on June 28 2023 (the “June Share Consolidation”). No fractional shares were issued
in connection with the June Share Consolidation. If, as a result of the June Share Consolidation, a stockholder would otherwise have
been entitled to a fractional share, each fractional share was rounded up to the next whole number. The June Share Consolidation resulted
in a reduction of our outstanding shares of Common Stock from 20,142,633 to approximately 503,566. The par value of our authorized stock
remained unchanged at $0.0001.
April 21, 2023 Public Offering (the “April
Offering”)
On
April 21, 2023, we closed a public offering of 71,734 shares of our Common Stock and 71,734
common stock purchase warrants, each exercisable for one share of Common Stock, at a combined
public offering price of $30.00, and 178,267 pre-funded warrants, each exercisable for one
share of Common Stock, and 178,267 common stock purchase warrants (the common stock purchase
warrants sold in the public offing hereinafter referred to as the “April 2023 Common
Warrants”) at a combined public offering price of $30.00 less the $0.001 for the pre-funded
warrants, for aggregate gross proceeds of approximately $7.5 million, before deducting placement
agents fees and offering expenses payable by the Company. The Common Stock, pre-funded warrant
and April 2023 Common Warrants were sold pursuant to a securities purchase agreement with
the purchaser signatory thereto or pursuant to the prospectus which was part of an effective
registration statement on Form S-1 filed with the SEC. The Common Stock, pre-funded warrants
and April 2023 Common Warrants are immediately separable and were issued separately in the
offering. As of the date of this prospectus, there are no pre-funded warrants outstanding
from the April Offering. For additional information regarding the April 2023 Common Warrants,
see “Description of our Capital Stock”.
Pursuant
to a securities purchase agreement entered into with certain investors in the April Offering, we agreed that for a period of 90 days from
the close of the April Offering, that we would not issue, enter into any agreement to issue or announce the issuance or proposed issuance
of any shares of Common Stock or securities convertible or exercisable into Common Stock or file a registration statement with the SEC
to register our securities, subject to certain exceptions. The investors to the securities purchase agreement in the April Offering, excluding
3i, LP, have agreed to waive that provision and permit the offering of our Common Stock, pre-funded warrants and common warrants in exchange
for (i) the repricing of the exercise price of the April 2023 Common Warrant to the exercise price of the common warrant offered in this
offering if the exercise price of the common warrant is lower than the then-current April 2023 Common Warrant exercise price; and (ii)
extending the termination date of the April 2023 Common Warrant to the date of termination of the common warrants offered in this offering.
3i, LP and the Company have entered into a separate limited waiver and amendment agreement, as discussed below.
Amendment to April
2023 Common Warrants Issued in the April Offering
In
connection with this offering, we may amend the terms of the April 2023 Common Warrants, which were previously issued in connection with
the April Offering, to reduce the exercise price of such warrants and to extend the term during which those warrants could remain exercisable.
3i LP Transactions
On April 19, 2023, 3i, LP, the sole former holder of our Series C Convertible
Redeemable Preferred Stock, par value $0.0001 per share (the “Series C Preferred Stock”) and outstanding secured promissory
notes, and sole holder of our Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”)
and the Exchange Warrant (as defined below), provided the Company with a loan for $350,000, evidenced by a Secured Promissory Note dated
April 19, 2023 (the “April Note”), which required a mandatory conversion of the principal into 486 shares of Series A Preferred
Stock (the “Note Conversion Shares”) subject to and upon the closing of the April Offering. Upon the closing of the April
Offering, the Note Conversion Shares were issued to 3i, LP and the April Note was cancelled.
On
April 20, 2023, the Company entered into a certain Modification and Exchange Agreement, as amended on May 26, 2023 (the “Exchange
Agreement”) with 3i, LP pursuant to which the parties agreed to, among other things, (i) amend and restate the Series A COD, which
among other things, eliminates the Series A Preferred Stock redemption right and dividend (except for certain exceptions as specified
in the Series A COD), and provides for the conversion of Series A Preferred Stock into Common Stock at a conversion price of $30.00 which
is equal to the price for a share of Common Stock sold in the April Offering, (ii) exchange 50,000 shares of Series C Preferred Stock
(the “Series C Shares”) beneficially owned by 3i, LP for 5,577 shares of Series A Preferred Stock (the “Exchange Shares”),
(iii) exchange the warrant issued in a financing on December 20, 2021, (the “PIPE Warrant”) held by 3i, LP for a new warrant
(the “Exchange Warrant”), which reflects an exercise price of $30.00 and represents a right to acquire 315,085 shares of
Common Stock, which is subject to adjustment upon the closing of this offering (“New Warrant Shares”). On April 21, 2023,
the closing of the transactions contemplated by the Exchange Agreement occurred and the Exchange Warrant and the Exchange Shares were
issued to 3i, LP, and the PIPE Warrant and the Series C Shares were cancelled.
In
addition, the Company entered into a Cancellation of Debt Agreement dated April 20, 2023 (the “Cancellation of Debt Agreement”),
which became effective as of the April 21, 2023. Upon the closing of the April Offering, pursuant to the terms of the Cancellation of
Debt Agreement, all of the Company’s outstanding indebtedness under the following four secured promissory notes issued pursuant
to Secured Note Purchase Agreement dated November 22, 2022 between the Company and 3i, LP (collectively the “3i, LP Promissory
Notes”): the first note was for an aggregate principal amount of $350,000 (which purchase price was paid in form of cash was received
in November 2022); the second note was for the principal amount of $1,666,640 and which represents the payment of $1,666,640 due to 3i,
LP in Alternative Conversion Floor Amounts, as defined in the Certificate of Designations of Series A Preferred Stock filed with the
Delaware Secretary of State in December 2021 (the “Original Series A COD”), that began to accrue on July 14, 2022; the third
note was for an aggregate principal amount of $650,000 which purchase price was paid in cash on December 30, 2022; and the fourth note
was for the aggregate principal amount of $350,000 (which purchase price was paid in cash on April 11, 2023) and the Alternative Conversion
Amount (as defined in the Cancellation of Debt Agreement ) due by the Company to 3i, LP were paid in full. Accordingly, any and all obligations
in connection therewith were extinguished without any additional further action on the part of 3i, LP upon payment of $3,347,583 in cash
from a portion of the proceeds from the April Offering. In addition, pursuant to such agreement, 1,550 shares of Series A Preferred Stock
(the “Redemption Shares”) beneficially owned by 3i, LP were redeemed in full for a purchase price of $1,652,416, which redemption
price was paid in cash from the portion of the proceeds from the closing of the April Offering. The
Company also entered into a first amendment to the registration rights agreement dated May 20, 2021 (“RRA”), which became
effective upon the closing of the April Offering to amend certain defined terms under the RRA to include the Exchange Shares, the New
Warrant Shares and the Note Conversion Shares (the “Amended RRA”).
On June 6, 2023, 3i, LP
and Company entered into a separate limited waiver and amendment agreement whereby 3i, LP (“3i Waiver Agreement”) agreed
to waive certain rights granted under a Series A Preferred Stock securities purchase agreement dated December 20, 2021, the Exchange
Agreement and the securities purchase agreement related to the April Offering in exchange for (i) amending the conversion price of the
Series A Preferred Stock to equal the public offering price of the shares of Common Stock in this offering if the public offering price
of the shares of Common Stock in this offering is lower than the then-current conversion price of the Series A Preferred Stock; (ii)
participating in this offering, at its option, under the same terms and conditions as other investors, of which proceeds from 3i, LP’s
participation will be used to redeem a portion of shares of Series A Preferred Stock 3i, LP received from the Exchange Agreement; and
(iii) (1) the repricing of the exercise price of the April 2023 Common Warrant to the exercise price of the common warrant offered in
this offering if the exercise price of the common warrant is lower than the then-current exercise price of the April 2023 Common Warrant;
and (2) extending the termination date of the April 2023 Common Warrant to the date of termination of the common warrants offered in
this offering.
Series A Preferred Stock Conversions
From
March 31, 2023 to June 29, 2023, pursuant to the exercise of conversion by 3i, LP, we issued
479,709 shares of Common Stock to 3i, LP upon the conversion of 7,520 shares of Series A
Preferred Stock based on a conversion price ranging from $30.00 to $70.80. No proceeds were
received by the Company upon such conversion. As of June 29, 2023, there were 6,047 shares
of Series A Preferred Stock issued and outstanding.
Amended and Restated Certificate of Designations
of Series A Preferred Stock; Amendment
On
April 21, 2023, in connection with the transactions contemplated under the Exchange Agreement, the Company filed the Series A COD with
the Secretary of State of the State of Delaware (the “Delaware Secretary of State”). The Series A COD eliminated
the Series A Preferred Stock redemption right and dividend (except for certain exceptions as specified therein), and provided for the
conversion of Series A Preferred Stock into Common Stock at a conversion price equal to the price for a share of Common Stock sold in
the April Offering, $30.00 per share, and based on a stated value of $1,080 per share.
On May 30, 2023, the Company filed an amendment to the Amended and
Restated Certificate of Designations for the Series A Preferred Stock with the Delaware Secretary of State (“Amended COD”)
to amend the voting rights of the Series A Preferred Stock which among other things provided additional voting rights to the Series A
Preferred Stock.
Under
the Amended COD, holders of the Series A Preferred Stock have the following voting rights:
(1) holders of the Series A Preferred Stock have a right to vote on all matters presented
at the Special Meeting together with the Common Stock as a single class on an “as converted”
basis using the conversion price of $30.00 and based on stated value of $1,080 subject to
a beneficial ownership limitation of 9.99%, and (2), in addition, holders of Series A Preferred
Stock have granted the Board the right to vote, solely for the purpose of satisfying quorum
and casting the votes necessary to adopt a reverse stock split of the Company’s issued
and outstanding shares of Common Stock (the “Reverse Stock Split Proposal”) and
to adjourn any meeting of stockholders called for the purpose of voting on reverse stock
split (the “Adjournment Proposal”) under Delaware law, that will “mirror”
the votes cast by the holders of shares of Common Stock and Series A Preferred Stock, voting
together as a single class, with respect to the Reverse Stock Split Proposal and the Adjournment
Proposal. The number of votes per each share of Series A Preferred Stock that may be voted
by the Board shall be equal to the quotient of (x) the sum of (1) the original aggregated
stated value of the Series A Preferred Stock when originally issued on December 20, 2021
(calculated based on the original stated value of $1,000 of the Series A Preferred Stock
multiplied by 20,000 shares of Series A Preferred Stock) and (2) $1,200,000, which represents
the purchase price of the Series C Preferred Stock when originally issued; divided by (y)
the conversion price of $30.00. If the Board decides to cast the vote, it must vote all votes
created by Amended COD in the same manner and proportion as votes cast by the holders of
Common Stock and Series A Preferred Stock, voting as single class. The Series A Preferred
Stock voting rights granted to the holders thereof relating to the Reverse Stock Split Proposal
and the Adjournment Proposal 2 expire automatically on July 31, 2023.
In addition, among other
things, the Reverse Stock Split Proposal, the effectuation of the June Reverse Stock Split, and the amendment to the Company’s
Certificate of Incorporation, are subject to the consent by the holders of a majority of the then outstanding shares of Series A Preferred
Stock. Such consent was received on June 27, 2023.
Notice of Breach From Novartis Pharma AG
Pursuant to a license
agreement with Novartis dated April 6, 2018, through our wholly-owned subsidiary Allarity Therapeutics Europe ApS, we have the right
to use dovitinib used in combination with stenoparib to address the second-line or later treatment of metastatic ovarian cancer. Under
the terms of the license agreement, we are required to make certain milestone payments, including a payment of $1,500,000 which was due
on April 1, 2023. We did not make that milestone payment, and on April 4, 2023, Novartis sent a notice of breach under the license agreement
to Allarity Therapeutics Europe ApS stating that it has 30 days from April 4, 2023, to cure. See “RISK FACTORS -Risks Related to
Our Business -We are in default under our license agreement with Novartis.” We are trying to revise the payment terms of
the Novartis license agreement and in April 2023 we paid Novartis $100,000. As of the date of this prospectus, Novartis has not enforced
its default notice, but no assurance can be given that it will not enforce the default notice in the future.
Stenoparib Exclusive License Agreement with
Eisai Inc.
The
Company previously entered into an Exclusive License Agreement with Eisai effective July 12, 2022 (the “Exclusive License Agreement”).
In consideration for extension of certain deadlines and payment obligations, the Company has entered into several amendments to the Exclusive
License Agreement. On May 26, 2023, the Company and Eisai entered into a fourth amendment to the Exclusive License Agreement with an
effective date of May 16, 2023, to postpone the extension payment, restructure the payment schedule and extend the deadline to complete
enrollment in a further Phase 1b or Phase 2 Clinical Trial for the Stenoparib (the “Product”). The Company agreed to pay
Eisai in periodic payments as follows: (i) one hundred thousand dollars ($100,000) which has been paid; (ii) fifty thousand dollars ($50,000)
within ten (10) days of execution of the fourth amendment; (iii) one hundred thousand dollars ($100,000) upon completion of a capital
raise; and (iv) eight hundred and fifty thousand dollars ($850,000) on or before March 1, 2024. The Company will have until April 1,
2024, to complete enrollment in a further Phase 1b or Phase 2 Clinical Trial of the Product. If the Company has not achieved successful
completion of a further Phase 1b or Phase 2 Clinical Trial of the Product prior to April 1, 2024, Eisai may terminate the Exclusive License
Agreement in its entirety, in its sole discretion on at least 120 days prior written notice. See “RISK FACTORS -Risks Related to
Our Business -Our License Agreement with Eisai is Subject to Risk.”
Nasdaq Notification and Appeal Hearing
As previously disclosed on
Form 8-K filed with the SEC on October 14, 2022, we received a letter from Nasdaq Listing Qualifications on October 12, 2022 notifying
us that the Company’s stockholders’ equity as reported in its Quarterly Report on Form 10-Q for the period ended June 30,
2022 (the “June Form 10-Q”), did not satisfy the continued listing requirement under Nasdaq Listing Rule 5450(b)(1)(A) for
The Nasdaq Global Market, which requires that a listed company’s stockholders’ equity be at least $10.0 million. As reported
on the June Form 10-Q, the Company’s stockholders’ equity as of June 30, 2022 was approximately $8.0 million. Pursuant to
the letter, we were required to submit a plan to regain compliance with Nasdaq Listing Rule 5450(b)(1)(A) by November 26, 2022. After
discussions with the Nasdaq Listing Qualifications staff, on December 12, 2022, we filed a plan to regain and demonstrate long-term Nasdaq
Listing Qualifications compliance including seeking to phase-down to The Nasdaq Capital Market. On December 21, 2022, we received notification
from the Nasdaq Listing Qualifications staff that they have granted the Company’s request for an extension until April 10, 2023,
to comply with this requirement.
On April 11, 2023, we received notification from the Nasdaq Listing
Qualifications staff that it has determined that the Company did not meet the terms of the extension. Specifically, the Company did not
complete its proposed transactions and was unable to file a Form 8-K by the April 10, 2023 deadline evidencing compliance with Nasdaq
Listing Rule 5450(b)(1)(A). As a result, the Company’s securities will be delisted from The Nasdaq Global Market unless the Company
appeals the Nasdaq Listing Qualifications staff’s decision. The Company filed a notice of appeal and on May 18, 2023 the Company
presented its appeal before the Nasdaq hearings panel.
Subsequent
to the May 18, 2023 hearing, on May 23, 2023, we received notification from the Nasdaq Listing
Qualifications staff that stated because we have not complied with Nasdaq Listing Rule 5450(a)(1)
regarding a bid price of $1.00 by May 22, 2023, this non-compliance will be considered by
the Nasdaq hearings panel as to whether our Common Stock should be delisted on The Nasdaq
Stock Market LLC. We had until May 30, 2023, to present our view to the Nasdaq hearings panel
and we provided additional information to the Nasdaq hearings panel by such date.
On June 6, 2023, we received
a letter from the Nasdaq hearings panel that granted the Company’s request for continued listing on the Nasdaq Stock Market LLC
until July 1, 2023 and the Company’s transfer to The Nasdaq Capital Market, subject to the following conditions: (1) on or before
July 1, 2023, the Company shall demonstrate compliance with Nasdaq Listing Rule 5450(b)(1) dealing with primary equity securities listed
on the Global Market, and on or before July 1, 2023, the Company shall demonstrate compliance with Nasdaq Listing Rule 5450(a)(1) dealing
with a minimum bid of $1.00 per share. The Nasdaq hearings panel reserves the right to reconsider its grant based on any event, condition
or circumstance that exists or develops that would make continue listing of the Company’s securities on The Nasdaq Stock Market
inadvisable or unwarranted. The Company intends to seek further clarification from the Nasdaq hearings panel as to the timing of meeting
the conditions set forth in their letter. No assurance can be given that the Company will meet the conditions set forth in the Nasdaq
hearings panel letter and that our shares of common stock will continue to be listed on The Nasdaq Stock Market LLC. On June 14, 2023,
we received a clarification letter from Nasdaq granting the Company’s request for continued listing on The Nasdaq Capital Market
and transfer to The Nasdaq Capital Market subject to the following: (1) on or before July 10, 2023, the Company will demonstrate compliance
with Listing Rule 5550(a)(2); and (2) on or before July 14, 2023, the Company will demonstrate compliance with Listing Rule 5550(b).
As further discussed below, on June 28, 2023, we received notification from Nasdaq Listing Qualifications that because we transferred
to The Nasdaq Capital Market, we have regained compliance with Listing Rule 5550(a)(5) because our Market Value of Publicly Held Shares
(“MVPHS”) has been $1,000,000 or greater for at least 10 consecutive business days.
Shareholder
Letter
On May 31, 2023, we received
a letter from an attorney purportedly representing a shareholder of the Company questioning certain information contained in our preliminary
proxy statement for our Special Meeting, and questioning our ability under Delaware law to amend the Original Series A COD to provide
for voting rights to the holders thereof without seeking approval from the holders of our common stock. We have clarified any perceived
inconsistent statements regarding voting procedures for the matters to be voted upon at the Special Meeting in our definitive proxy statement
filed with the SEC, and believe that, contractually, we are authorized to provide for voting rights to the holders of the Series A Preferred
Stock without seeking approval by the holders of our common stock.
THE OFFERING
Common Stock offered by us
|
Up to 2,049,180
shares based on an assumed combined public offering price of $7.32, which is equal to the last sale price
of our Common Stock as reported by The Nasdaq Capital Market on June 29, 2023. |
|
|
Common Warrants offered by us |
Common warrants to purchase up to 2,049,180 shares of our Common Stock, which will be exercisable
during the period commencing on the date of their issuance and ending five years from such date at an exercise price of $__ per share
of Common Stock. The common warrants will be sold together with the Common Stock but issued separately from the Common Stock and
may be transferred separately immediately thereafter. A common warrant to purchase one share of our Common Stock will be issued for
every share of Common Stock purchased in this offering. |
|
|
Pre-Funded Warrants offered by us |
We are also offering to certain purchasers whose purchase of our Common Stock in this offering would otherwise result in the purchaser, together with its affiliates, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding shares of Common Stock immediately following the consummation of this offering, the opportunity to purchase pre-funded warrants (together with the common warrants, the “Warrants”) in lieu of Common Stock that would otherwise result in any such purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding shares of Common Stock. Each pre-funded warrant will be exercisable for one share of Common Stock. The purchase price of each pre-funded warrant and the accompanying common warrant will equal the price at which the Common Stock and the accompanying common warrant are being sold to the public in this offering, minus $0.001, and the exercise price of each pre-funded warrant will be $0.001 per share. The pre-funded warrants will be exercisable immediately and may be exercised at any time until exercised in full. For each pre-funded warrant we sell, the number of shares of Common Stock we are offering will be decreased on a one-for-one basis. Because we will issue one common warrant for each share of Common Stock and for each pre-funded warrant to purchase one share of Common Stock sold in this offering, the number of common warrants sold in this offering will not change as a result of a change in the mix of the shares of our Common Stock and pre-funded warrants sold. |
|
|
Public Offering Price |
$__ per share of Common Stock and accompanying common warrant or $__ per pre-funded warrant and accompanying common warrant, as applicable. |
|
|
Best Efforts |
We
have agreed to issue and sell the securities offered hereby to the purchasers through the placement agent. The placement agent is
not required to buy or sell any specific number or dollar amount of the securities offered hereby, but it will use its reasonable
best efforts to solicit offers to purchase the securities offered by this prospectus. See “Plan of Distribution” on page
38 of this prospectus. |
|
|
Shares
of Common Stock to be Outstanding Immediately After
this Offering
(1) |
Up to 2,552,745 shares of Common Stock (assuming the sale of the maximum number of shares of Common
Stock in this offering, at the assumed combined public offering price of $7.32, the closing sale price of our Common Stock on the
Nasdaq Capital Market on June 29, 2023, and no sale of any pre-funded warrants but excluding the number of shares of Common Stock
issuable upon exercise of common warrants sold in this offering). |
|
|
Use of Proceeds |
We estimate that the net proceeds from this offering will be approximately $13.610 million
(assuming the sale of all securities offered hereby at the combined public offering price of $7.32, based on the closing sale price
of our Common Stock on the Nasdaq Capital Market on June 29, 2023, and assuming no sale of any pre-funded warrants and no exercise
of the common warrants issued in connection with this offering) after deducting the placement agent fees and estimated offering expenses
payable by us. We intend to use a portion of the net proceeds to make payments under each of the Novartis and Eisai license agreements,
to initiate our clinical trials, to pay off the 3i June Promissory Note, to pay account payables and accrued liabilities outstanding,
and for working capital and general corporate purposes. The amount of net proceeds and payments therefrom will depend on the actual
amount of the proceeds we will receive from the offering and will be subject to the discretion of and timing by the Board of
Directors. In addition, 3i, LP, the sole holder of our Series A Preferred Stock and holder of our warrants to purchase 481,752 shares
of Common Stock, may participate in this offering on the same terms and conditions as other purchasers, and we intend to use the
3i Proceeds, if any, to repurchase a portion of the outstanding shares of Series A Preferred Stock owned by 3i, LP. See section titled
“Use of Proceeds” on page 23 of this prospectus. |
Risk Factors |
You should read the “Risk Factors” section beginning on page 12 of this prospectus and in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022, and Quarterly Report on Form 10-Q for the three-month period ended March 31, 2023, which is incorporated herein by reference for a discussion of factors that you should consider before investing in our securities. |
|
|
Trading Symbol |
Our shares of Common Stock are listed on The Nasdaq Capital Market under the symbol “ALLR.”
There is no established public trading market for the common warrants and pre-funded warrants to be sold in this offering and we
do not expect a market to develop. In addition, we do not intend to apply for listing of the common warrants or pre-funded warrants
on The Nasdaq Capital Market, any other national securities exchange or any other trading system. |
|
|
Transfer Agent |
The transfer agent and registrar for our
Common Stock is Computershare Trust Company, N.A. |
(1) |
The number of shares of Common
Stock that will be outstanding after this offering as shown above is based on 503,566 shares of Common
Stock outstanding as of June 29, 2023, and excludes the following: |
|
● |
412 shares Common Stock issuable pursuant to options outstanding as
of June 29, 2023, with a weighted-average exercise price of $7,633.85;
|
|
|
|
|
● |
1,401 shares of Common
Stock available under our 2021 Equity Incentive Plan (“2021 Plan”) as of June 29, 2023; |
|
● |
315,085
shares of Common Stock issuable upon the exercise of warrants at an exercise price of $30.00;
subject to adjustment based on the public offering price of this offering; |
|
|
|
|
● |
250,000 shares of Common Stock
issuable upon the exercise of warrants at an exercise price of $34.00 per share, which may subject
to adjustment based on the public offering price of this offering; |
|
● |
816,345 shares of Common Stock issuable upon conversion of 6,047 shares of Series A Preferred
Stock outstanding held by 3i, LP as of June 29, 2023, at the Series A Preferred Stock Conversion Price of $8.00 per share, subject
to adjustment based on the public offering price of this offering and based on the stated value of $1,080 per share; |
|
● |
up to 2,049,180 shares
of Common Stock issuable upon the exercise of the common warrants to be issued in connection with this offering. |
Unless otherwise indicated, all information in
this prospectus assumes:
|
● |
no exercise of the outstanding options, warrants, or conversion of outstanding shares of Series A Preferred Stock described above; and |
|
|
|
|
● |
no exercise of the common warrants or pre-funded warrants sold in this offering. |
SUMMARY HISTORICAL FINANCIAL INFORMATION
The following summary historical
financial information of Allarity set forth below should be read in conjunction with “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and our historical financial statements and the related notes thereto incorporated
by reference in this prospectus.
The
summary consolidated balance sheet data as of December 31, 2021 and 2022 and summary consolidated
statements of operations and comprehensive loss data for the years ended December 31, 2021
and 2022 are derived from our audited consolidated financial statements incorporated by reference
in this prospectus. The summary consolidated balance sheet data as of March 31, 2022 and
2023 and summary consolidated statements of operations and comprehensive loss data for three
months ended March 31, 2022 and 2023 are derived from our unaudited consolidated financial
statements incorporated by reference in this prospectus. The historical results are not necessarily
indicative of the results to be expected in the future. Share and per share calculations
gives effect to the Share Consolidations.
In thousands, except share data | |
As of December 31, | | |
As
of March 31, | |
| |
2021 | | |
2022 | | |
2022 | | |
2023 | |
Consolidated Balance Sheet Data: | |
| | |
| | |
| | |
| |
Total assets | |
$ | 49,633 | | |
$ | 14,544 | | |
$ | 31,290 | | |
$ | 12,702 | |
Total liabilities | |
| 30,849 | | |
| 12,654 | | |
| 14,416 | | |
| 13,041 | |
Total mezzanine equity | |
| 632 | | |
| 2,003 | | |
| 2,142 | | |
| 2,763 | |
Total stockholders’ equity (deficit) | |
$ | 18,152 | | |
$ | (113 | ) | |
$ | 14,732 | | |
$ | (3,102 | ) |
| |
Year Ended December 31, | | |
Three Months Ended March 31, | |
| |
2021 | | |
2022 | | |
2022 | | |
2023 | |
Consolidated Statements of Operations and Comprehensive Loss Data | |
| | |
| | |
| | |
| |
Revenue | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | |
Operating expenses | |
| | | |
| | | |
| | | |
| | |
Research and development | |
| 14,196 | | |
| 6,930 | | |
| 1,289 | | |
| 1,427 | |
Impairment of intangible assets | |
| — | | |
| 17,571 | | |
| 14,007 | | |
| — | |
General and administrative | |
| 12,360 | | |
| 9,962 | | |
| 3,013 | | |
| 2,232 | |
Total operating expenses | |
| 26,556 | | |
| 34,463 | | |
| 18,309 | | |
| 3,659 | |
Loss from operations | |
| (26,556 | ) | |
| (34,463 | ) | |
| (18,309 | ) | |
| (3,659 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expenses) | |
| | | |
| | | |
| | | |
| | |
Gain from the sale of IP | |
| 1,005 | | |
| 1,780 | | |
| 1,780 | | |
| — | |
Interest income | |
| — | | |
| 30 | | |
| — | | |
| 4 | |
Interest expense | |
| (499 | ) | |
| (223 | ) | |
| (39 | ) | |
| (92 | ) |
Finance expenses | |
| (1,347 | ) | |
| — | | |
| — | | |
| (9 | ) |
Loss on investment | |
| (495 | ) | |
| (115 | ) | |
| (36 | ) | |
| — | |
Foreign exchange gains (losses) | |
| (95 | ) | |
| (913 | ) | |
| (269 | ) | |
| 95 | |
Change in fair value adjustment of derivative and warrant liabilities | |
| 2,087 | | |
| 17,579 | | |
| 12,566 | | |
| 309 | |
Penalty on Series A Preferred stock liability | |
| — | | |
| (800 | ) | |
| — | | |
| — | |
Non-cash interest expense related to beneficial conversion feature of convertible debt | |
| (141 | ) | |
| — | | |
| — | | |
| — | |
Change in fair value of convertible debt | |
| (474 | ) | |
| — | | |
| — | | |
| — | |
Net other income | |
| 41 | | |
| 16,884 | | |
| 14,002 | | |
| 307 | |
Net loss before tax benefit (expense) | |
| (26,515 | ) | |
| (17,579 | ) | |
| (4,307 | ) | |
| (3,352 | ) |
Income tax benefit (expense) | |
| (133 | ) | |
| 1,521 | | |
| 1,227 | | |
| — | |
Net loss | |
| (26,648 | ) | |
| (16,058 | ) | |
| (3,080 | ) | |
| (3,352 | ) |
Deemed dividend of 5% on Series C Convertible Preferred stock | |
| — | | |
| — | | |
| — | | |
| (4 | ) |
Deemed dividend of 8% on Series A Convertible Preferred stock | |
| — | | |
| (1,572 | ) | |
| (1,572 | ) | |
| — | |
Cash obligations on converted Series A Convertible Preferred stock | |
| — | | |
| (3,421 | ) | |
| — | | |
| — | |
Net loss attributable to common stockholders | |
$ | (26,648 | ) | |
$ | (21,051 | ) | |
| (4,652 | ) | |
| (3,356 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basis and diluted net loss per share applicable to common stockholders | |
$ | (146.67 | ) | |
$ | (77.36 | ) | |
$ | (19.64 | ) | |
$ | (4.43 | ) |
Basic and diluted weighted average common shares outstanding | |
| 181,686 | | |
| 272,204 | | |
| 236,811 | | |
| 758,144 | |
| |
| | | |
| | | |
| | | |
| | |
Other comprehensive loss, net of tax: | |
| | | |
| | | |
| | | |
| | |
Net loss | |
$ | (26,648 | ) | |
$ | (16,058 | ) | |
$ | (3,080 | ) | |
$ | (3,352 | ) |
Change in cumulative translation adjustment | |
| (1,966 | ) | |
| (121 | ) | |
| (214 | ) | |
| 84 | |
Change in fair value attributable to instrument specific credit risk | |
| (9 | ) | |
| — | | |
| — | | |
| — | |
Total comprehensive loss attributable to common stockholders | |
$ | (28,623 | ) | |
$ | (16,179 | ) | |
$ | (3,294 | ) | |
$ | (3,268 | ) |
RISK FACTORS
An investment in our securities
is subject to a number of risks, including risks related to this offering, our business and industry, as well as risks related to our
shares of Common Stock. You should carefully consider all of the information in this prospectus and the documents incorporated by reference
into this prospectus, including our financial statements and related notes, before making an investment in our securities The occurrence
of any of the adverse developments described in the following risk factors and risk factors incorporated by reference could materially
and adversely harm our business, financial condition, results of operations or prospects. In that case, the trading price of our Common
Stock could decline, and you may lose all or part of your investment. In addition, please read the information in the section entitled
“Risk Factors” on page 12 of this prospectus and in Item 1A “Risk Factors” of our Annual Report on Form 10-K for
the year ended December 31, 2022 and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023, which are incorporated
herein by reference, for a more thorough description of these and other risks.
Risks Related to Our Business
We have insufficient
cash to continue our operations, our continued operations are dependent on us raising capital and these conditions give rise to substantial
doubt over the Company’s ability continue as a going concern
As
of March 31, 2023, we had $295,000 in cash, and an accumulated deficit of $85.9 million. We had a working capital deficit of $8.6 million.
On April 21, 2023, the Company completed a public offering financing and received net proceeds (after costs of the April Offering, payment
of 3i, LP Promissory Notes and Redemption Shares) of approximately $1.9 million, which has been determined to be insufficient to fund
the Company’s operations for longer than approximately three months. Further, we believe that our existing cash and cash equivalents
as of June 29, 2023, and our anticipated expenditures and commitments for the next twelve months, will not enable us to fund our operating
expenses and capital expenditure requirements for the twelve months from the date of this prospectus. These conditions give rise to substantial
doubt over the Company’s ability to continue as a going concern. We will need to raise additional capital after to support our
operations and execute our business plan. We will be required to pursue sources of additional capital through various means, including
debt or equity financings. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other
convertible securities that will have additional dilutive effects. We cannot assure that additional funds will be available when needed
from any source or, if available, will be available on terms that are acceptable to us and may cause existing shareholders both book
value and ownership dilution. Further, we may incur substantial costs in pursuing future capital and/or financing, including investment
banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash
expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our
financial condition and results of operations. Our ability to obtain needed financing may be impaired by such factors as the weakness
of capital markets, and the fact that we have not been profitable, which could impact the availability and cost of future financings.
If the amount of capital we are able to raise from financing activities is not sufficient to satisfy our capital needs, we may have to
reduce our operations accordingly.
We are in default under our license agreement
with Novartis
Pursuant to a license agreement
with Novartis and our wholly-owned subsidiary Allarity Therapeutics Europe ApS dated April 6, 2018, we have the right to use dovitinib
used in combination with stenoparib to address the second-line or later treatment of metastatic ovarian cancer. Under the terms of the
license agreement, we are required to make certain milestone payments, including a payment of $1,500,000 which was due on April 1, 2023.
We did not make that milestone payment, and on April 4, 2023, we received notice from Novartis stating that Allarity Therapeutics Europe
ApS is in breach of the license agreement and has 30 days from April 4, 2023, to cure. Subsequent to our April Offering, at the end of
April 2023, we made a payment of $100,000 to Novartis. We intend to cure this breach by making the milestone payments from proceeds of
this offering and/or working with Novartis on an alternate payment structure. However, no assurance can be given that Novartis will accept
an alternative payment structure and if we fail to make the milestone payments, Novartis does not agree to an alternative payment structure
or we are otherwise in breach of the license agreement, we may lose our right to use dovitinib which will adversely affect our ability
to conduct our clinical trials and to achieve our business objectives and adversely affect our financial results.
We are delinquent in our payment to
Eisai
In consideration for extension
of certain deadlines and payment obligations, the Company entered in several amendments to an Exclusive License Agreement with Eisai.
On May 26, 2023, the Company and Eisai entered into a fourth amendment to the Exclusive License Agreement with an effective date of May
16, 2023, under which the Company agreed to pay Eisai in periodic payments as follows: (i) one hundred thousand dollars ($100,000) which
has been paid; (ii) fifty thousand dollars ($50,000) within ten (10) days of execution of the fourth amendment; (iii) one hundred thousand
dollars ($100,000) upon completion of a capital raise; and (iv) eight hundred and fifty thousand dollars ($850,000) on or before March
1, 2024. Under the Exclusive License Agreement, the Company will have until April 1, 2024, to complete enrollment in a further Phase 1b
or Phase 2 Clinical Trial of the Product. If the Company has not achieved successful completion of a further Phase 1b or Phase 2 Clinical
Trial of the Product prior to April 1, 2024, Eisai may terminate the Agreement in its entirety, in its sole discretion on at least 120
days prior written notice. In light of our financial condition and dependence on financing for our operations, we may be unable to meet
the payment requirements under the fourth amendment and we may lose our right to use Stenoparib, which will adversely affect our ability
to conduct our clinical trials and to achieve our business objectives and adversely affect our financial results.
Our assets are subject to a Security
Agreement with 3i, LP and an event of default under the 3i June Promissory Note could adversely affect our business, financial condition,
results of operations or liquidity.
Under the 3i June Promissory
Note, 3i, LP is a secured party and upon an event of default under the Security Agreement and the 3i June Promissory Note, 3i, LP, which
among other occurrences including delisting by Nasdaq, will have a right to the collateral granted to them and we may lose our ownership
interest in our assets, including our shares in our wholly owned subsidiaries Allarity Acquisition Subsidiary, Inc. and Allarity Therapeutics
A/S and our intellectual property rights including our patents, trademarks and copyrights. In the event we default under the 3i June
Promissory Note, our default could adversely affect our business, financial condition, results of operations and liquidity.
Risks Related to Owning our Securities and
this Offering
We currently do not satisfy The Nasdaq
Capital Market continued listing requirements and if we fail to regain compliance our Common Stock will be delisted.
The listing of our Common
Stock on The Nasdaq Capital Market is contingent on our compliance with The Nasdaq Capital Market’s conditions for continued listing.
On April 20, 2022, we received notice from the Nasdaq Listing Qualifications stating that because we had not yet filed our Annual Report
on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”) by its due date, we were no longer in compliance with
the listing requirement which requires listed companies to timely file all required periodic financial reports with the SEC. On May 17,
2022, we filed our Form 10-K with the SEC. Subsequent to the filing of the Form 10-K, we were late in filing our Form 10-Q for the quarterly
periods ended March 31, 2022, and June 30, 2022.
On October 12, 2022, we received
a letter from Nasdaq Listing Qualifications notifying us that the Company’s stockholders’ equity as reported in its Quarterly
Report on Form 10-Q for the period ended June 30, 2022 (the “June Form 10-Q”), did not satisfy the continued listing requirement
under Nasdaq Listing Rule 5450(b)(1)(A) for The Nasdaq Global Market, which requires that a listed company’s stockholders’
equity be at least $10.0 million. As reported on the June Form 10-Q, the Company’s stockholders’ equity as of June 30, 2022
was approximately $8.0 million. Pursuant to the letter, we were required to submit a plan to regain compliance with Nasdaq Listing Rule
5450(b)(1)(A) by November 26, 2022. After discussions with the Nasdaq Listing Qualifications staff, on December 12, 2022, we filed a plan
to regain and demonstrate long-term Nasdaq Listing Qualifications compliance including seeking to phase-down to The Nasdaq Capital Market.
On December 21, 2022, we received notification from the Nasdaq Listing Qualifications staff that they have granted us an extension of
time until April 10, 2023, to regain and evidence compliance with Nasdaq Listing Rule 5450(b)(1)(A). On April 11, 2023, we received notification
from the Nasdaq Listing Qualifications staff that it has determined that the Company did not meet the terms of the extension. Specifically,
the Company did not complete its proposed transactions and was unable to file a Form 8-K by the April 10, 2023 deadline, evidencing compliance
with Nasdaq Listing Rule 5450(b)(1)(A), and, as a result, the staff notification indicated that Company’s Common Stock will be delisted
from The Nasdaq Global Market. In that regard, unless the Company requests an appeal of such determination by April 18, 2023, trading
of the Company’s Common Stock will be suspended at the opening of business on April 20, 2023, and a Form 25-NSE will be filed with
the SEC which will remove the Company’s Common Stock from listing and registration on The Nasdaq Stock Market LLC. The Company requested
an appeal for such determination, and on May 18, 2023, the Company had its appeal hearing before the Nasdaq hearings panel.
On November 21, 2022,
the Company received written notice from Nasdaq Listing Qualifications indicating that the Company is not in compliance with the minimum
bid price requirement of $1.00 per share under the Nasdaq Listing Rules. Based on the closing bid price of the Company’s listed
securities for the last 30 consecutive business days from October 10, 2022 to November 18, 2022, the Company no longer met the minimum
bid price requirement set forth in Listing Rule 5550(a)(2). Under Nasdaq Listing Rules, we are provided with a compliance period of 180
calendar days, or until May 22, 2023, to regain compliance under the Nasdaq Listing Rules. In the event we do not regain compliance by
May 22, 2023, we may be eligible for additional time to regain compliance. On March 24, 2023, we effected the 1-for-35 share consolidation
of our Common Stock in order to attempt to meet the minimum bid requirement of $1.00 per share. On May 23, 2023, we received a
letter from the staff of Nasdaq Regulation that the Company did not regain compliance of the minimum bid price requirement of $1.00 by
May 22, 2023, and as a result, the Nasdaq hearings panel will consider this matter in their decision regarding the Company’s continued
listing on The Nasdaq Global Market. On June 23, 2023, we held the Special Meeting of our stockholders to consider the adoption of an
amendment to our certificate of incorporation to effect a reverse stock split within a range of 15 for 1 to 50 for 1 with the exact ratio
to be determined by the Board and approved by the holder of our Series A Preferred Stock and we have informed the Nasdaq hearings panel
of our Special Meeting. On June 23, 2023, at the Special Meeting, the June Reverse Stock Split Proposal was approved by the stockholders
of the Company and subsequently the Board determined a fixed ratio of 40 for 1. The June Share Consolidation was effectuated on June
28, 2023.
On December 20, 2022,
we received a written notice from Nasdaq Listing Qualifications indicating that we are not in compliance with the minimum MVPHS of $5,000,000
requirement under the Nasdaq Listing Rules Based on our MVPHS for the thirty-one (31) consecutive business days from November 4, 2022
to December 19, 2022, we no longer meet the minimum MVPHS requirement set forth in Listing Rule 5450(b)(1)(C). Under Nasdaq Listing Rules,
we are provided with a compliance period of 180 calendar days, or until June 19, 2023 to regain compliance. To regain compliance under
Nasdaq Listing Rules, our MVPHS must close at $5,000,000 for a minimum of ten (10) consecutive business days. In the event we do not
regain compliance by June 19, 2023, we anticipate receiving a letter from Nasdaq Listing Qualifications seeking our delisting in which
case, we will appeal to the Nasdaq hearings panel. On June 28, 2023, we received notification from Nasdaq Listing Qualifications that
because we transferred to The Nasdaq Capital Market, we have regained compliance with Listing Rule 5550(a)(5) because our MVPHS has been
$1,000,000 or greater for at least 10 consecutive business days.
On February 8, 2023, we received
notice from Nasdaq Listing Qualifications stating that due to the resignation of Soren G. Jensen from the Company’s board and audit
committee, effective on February 4, 2023, the Company no longer complies with Nasdaq’s Listing Rules’ independent director
and audit committee requirements as set forth in Nasdaq Listing Rules 5605(b)(1)(A) and 5605(c)(4) which requires a majority of the board
of directors to be comprised of independent directors and an audit committee of at least three independent directors. The February 8,
2023 Nasdaq Listing Qualification notice has no immediate effect on the listing or trading of the Company’s Common Stock on the
Nasdaq Global Market. In accordance with Nasdaq Listing Rules, we have a cure period to regain compliance as follows: (i) until the earlier
of the Company’s next annual shareholders’ meeting or February 4, 2024; or (ii) if the next annual shareholders’ meeting
is held before August 3, 2023, then the Company must evidence compliance no later than August 3, 2023. The Company’s board is currently
seeking to appoint a new independent director who will also qualify under the Nasdaq Listing Rules to serve as a member of the audit committee,
and intends to regain compliance with the Nasdaq Listing Rules as soon as practicable.
On June 6, 2023, we received
a letter from the Nasdaq hearings panel that granted the Company’s request for continued listing on the Nasdaq Stock Market LLC
until July 1, 2023 and the Company’s transfer to The Nasdaq Capital Market, subject to the following conditions: (1) on or before
July 1, 2023, the Company shall demonstrate compliance with Nasdaq Listing Rule 5450(b)(1) dealing with primary equity securities listed
on the Global Market, and on or before July 1, 2023, the Company shall demonstrate compliance with Nasdaq Listing Rule 5450(a)(1) dealing
with a minimum bid of $1.00 per share. The Nasdaq hearings panel reserves the right to reconsider its grant based on any event, condition
or circumstance that exists or develops that would make continue listing of the Company’s securities on The Nasdaq Stock Market
inadvisable or unwarranted. The Company intends to seek further clarification from the Nasdaq hearings panel as to the timing of meeting
the conditions set forth in their letter. No assurance can be given that the Company will meet the conditions set forth in the Nasdaq
hearings panel letter and that our shares of common stock will continue to be listed on The Nasdaq Stock Market LLC. On June 14, 2023,
we received a clarification letter from Nasdaq granting the Company’s request for continued listing on The Nasdaq Capital Market
and transfer to The Nasdaq Capital Market, subject to the following: (1) on or before July 10, 2023, the Company will demonstrate compliance
with Listing Rule 5550(a)(2); and (2) on or before July 14, 2023, the Company will demonstrate compliance with Listing Rule 5550(b).
In the event we do not meet The Nasdaq Capital Market listing conditions set forth by the Nasdaq hearings panel, we intend to go back
to the Nasdaq hearings panel to seek additional time to comply with such conditions.
If we fail to meet the
Nasdaq listing requirements and do not regain compliance, we will be subject to delisting by Nasdaq. In the event our Common Stock is
no longer listed for trading on The Nasdaq Capital Market, our trading volume and share price may decrease and you may have a difficult
time selling your shares of Common Stock. In addition, we may experience difficulties in raising capital which could materially adversely
affect our operations and financial results. Further, delisting from Nasdaq markets could also have other negative effects, including
potential loss of confidence by partners, lenders, suppliers and employees. Finally, delisting could make it harder for you and the Company
to sell the securities and hard for us to raise capital.
We may not apply the 3i Proceeds in a manner
that will increase the value of your investment.
We intend to use the 3i
Proceeds received in this offering to repurchase a portion of the shares of Series A Preferred Stock owned by 3i, L.P. The use of the
3i Proceeds to purchase a portion of their shares of Series A Preferred Stock instead of using such proceeds for working capital or otherwise
in furtherance of the Company’s business objectives may not increase the value of your investment. In addition, we intend to use
a portion of the proceeds (other than from 3i, L.P.) from this offering to pay off the 3i June Promissory Note.
There is no public market for the pre-funded
warrants and common warrants to purchase common stock in this offering.
There is no established public
trading market for the pre-funded warrants and common warrants that are being offered in this offering, and we do not expect a market
to develop. In addition, we do not intend to apply to list the pre-funded warrants and common warrants on any national securities exchange
or other trading market. Without an active market, the liquidity of the pre-funded warrants and common warrants will be limited.
The holders of the pre-funded warrants and
common warrants will have no rights as common stockholders until such holders exercise their pre-funded warrants or common warrants and
acquire shares of our common stock.
Except by virtue of such holder’s
ownership of shares of our Common Stock, the holder of a pre-funded warrant and common warrant will not have the rights or privileges
of a holder of our Common Stock, including any voting rights, until such holder exercises the pre-funded warrant and common warrant. Upon
exercise of the pre-funded warrant or common warrant, the holders will be entitled to exercise the rights of a stockholder of Common Stock
only as to matters for which the record date occurs after the exercise date.
Because the public offering price of our
securities will be substantially higher than the pro forma as adjusted net tangible book value per share of our outstanding common stock
following this offering, new investors will experience immediate and substantial dilution.
The assumed combined public
offering price of the Common Stock and pre-funded warrants are substantially higher than the pro forma as adjusted net tangible book
value per share of our Common Stock immediately following this offering based on the total value of our tangible assets less our total
liabilities. Therefore, assuming the sale of all shares of Common Stock offered hereby and no sale of any pre-funded warrants in this
offering, you will suffer immediate and substantial dilution of $3.75 in the pro forma as adjusted net tangible book value per share
of Common Stock as of March 31, 2023, based on the assumed combined public offering price of $7.32, which is the last reported sale price
of our Common Stock on The Nasdaq Capital Market on June 29, 2023. Therefore, if you purchase shares of our Common Stock and pre-funded
warrants in this offering, you will pay a price per share that substantially exceeds our pro forma as adjusted net tangible book value
per share after this offering. See the section titled “Dilution” below for a more detailed discussion of the dilution
you will incur if you participate in this offering.
Upon the closing of this offering, the
conversion price of the shares of Series A Preferred Stock, exercise price of some of the April 2023 Warrants and Exchange Warrant will
be subject to adjustment based on the public price of this offering.
On June 6, 2023, 3i, LP
and Company entered into the 3i Waiver Agreement pursuant to which 3i, LP agreed to waive certain rights granted under a Series A Preferred
Stock securities purchase agreement dated December 20, 2021, the Exchange Agreement and the securities purchase agreement related to
the April Offering in exchange for (i) amending the conversion price of the Series A Preferred Stock to equal the public offering price
of the shares of Common Stock in this offering if the public offering price of the shares of Common Stock in this offering is lower than
the then-current conversion price of the Series A Preferred Stock; (ii) participating in this offering, at its option, under the same
terms and conditions as other investors, of which proceeds from 3i, LP’s participation will be used to redeem a portion of shares
of Series A Preferred Stock 3i, LP received from the Exchange Agreement; and (iii) (1) the repricing of the exercise price of the April
2023 Common Warrant to the exercise price of the common warrant offered in this offering if the exercise price of the common warrant
is lower than the then-current April 2023 Common Warrant exercise price; and (2) extending the termination date of the April 2023 Common
Warrant to the date of termination of the common warrants offered in this offering. In addition, the Exchange Warrant provides for an
adjustment of the shares of common stock underlying the warrant and exercise price if the Company sells securities below the exercise
price of the Exchange Warrant of $30.00. The exercise of such securities based on the downward adjusted exercise price or conversion
price will result in issuance of additional securities and additional dilution to our stockholders.
We received a request for documents from
the SEC in the investigation known as “In the Matter of Allarity Therapeutics, Inc.,” and, separately, a letter from Nasdaq,
regarding the same matter, the consequences of which are unknown.
In January 2023, we received
a request to produce documents from the SEC that stated that the staff of the SEC is conducting an investigation known as “In the
Matter of Allarity Therapeutics, Inc.” to determine if violations of the federal securities laws have occurred. The documents requested
appear to focus on submissions, communications and meetings with the FDA regarding our NDA for Dovitinib or Dovitinib-DRP. The SEC letter
also stated that investigation is a fact-finding inquiry and does not mean that that the SEC has concluded that the Company or anyone
else has violated the laws. As a result of the disclosure of the SEC request, the Nasdaq staff has requested us to provide them with the
information requested by the SEC. We are providing the information requested by the SEC and Nasdaq staff.
We do not know when the SEC’s
or Nasdaq’s investigation will be concluded or what action, if any, might be taken in the future by the SEC, Nasdaq or their staff
as a result of the matters that are the subject to its investigation or what impact, if any, the cost of continuing to respond to inquiries
might have on our financial position or results of operations. We have not established any provision for losses in respect of this matter.
In addition, complying with any such future requests by the SEC or Nasdaq for documents or testimony would distract the time and attention
of our officers and directors or divert our resources away from ongoing business matters. This investigation may result in significant
legal expenses, the diversion of management’s attention from our business, could cause damage to our business and reputation, and
could subject us to a wide range of remedies, including enforcement actions by the SEC or delisting proceedings by Nasdaq. There can be
no assurance that any final resolution of this or any similar matters will not have a material adverse effect on our financial condition
or results of operations.
If our business developments and achievements
do not meet the expectations of investors or securities analysts or for other reasons the expected benefits do not occur, the market price
of our common stock traded on Nasdaq may decline.
If our business developments
and achievements do not meet the expectations of investors or securities analysts, the market price of Common Stock traded on Nasdaq may
decline. The trading price of our Common Stock could be volatile and subject to wide fluctuations in response to various factors, some
of which are beyond our control. Any of the factors listed below could have a negative impact on your investment in our securities and
our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities
may not recover and may experience a further decline.
Factors affecting the trading
price of our securities may include:
|
● |
adverse regulatory decisions; |
|
● |
any delay in our regulatory filings for our therapeutic candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; |
|
● |
the impacts of the ongoing COVID-19 pandemic and related restrictions as they may related to our clinical trials; |
|
● |
the commencement, enrollment or results of any future clinical trials we may conduct, or changes in the development status of our therapeutic candidates; |
|
● |
adverse results from, delays in or termination of clinical trials; |
|
● |
unanticipated serious safety concerns related to the use of our therapeutic candidates; |
|
● |
lower than expected market acceptance of our therapeutic candidates following approval for commercialization, if approved; |
|
● |
changes in financial estimates by us or by any securities analysts who might cover our securities; |
|
● |
conditions or trends in our industry; |
|
● |
changes in the market valuations of similar companies; |
|
● |
stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the biopharmaceutical industry; |
|
● |
publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; |
|
● |
announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures; |
|
● |
announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; |
|
● |
investors’ general perception of our business prospects or management; |
|
● |
recruitment or departure of key personnel; |
|
● |
overall performance of the equity markets; |
|
● |
trading volume of our Common Stock; |
|
● |
disputes or other developments relating to intellectual property rights, including patents, litigation matters and our ability to obtain, maintain, defend, protect and enforce patent and other intellectual property rights for our technologies; |
|
● |
significant lawsuits, including patent or stockholder litigation; |
|
● |
proposed changes to healthcare laws in the U.S. or foreign jurisdictions, or speculation regarding such changes; |
|
● |
general political and economic conditions; and |
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● |
other events or factors, many of which are beyond our control. |
In addition, in the past,
stockholders have initiated class action lawsuits against biopharmaceutical and biotechnology companies following periods of volatility
in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs
and divert management’s attention and resources from our business.
The price of our common stock has fluctuated
substantially.
The price of our Common Stock
has fluctuated substantially. Therefore, some investors who have purchased our Common Stock at high prices face the risk of losing a significant
portion of their original investment if they have to sell at a time when the price of our Common Stock has declined. In addition, the
volatility of our stock price could cause other consequences including causing a short squeeze due to the difference in investment decisions
by short sellers of Common Stock and buy-and-hold decisions of longer investors.
You should consider an investment
in our securities to be risky, and you should invest in our securities only if you can withstand a significant loss and wide fluctuations
in the market value of your investment. Some factors that may cause the market price of our Common Stock to fluctuate, in addition to
the other risks mentioned in this “Risk Factors” section and elsewhere in this prospectus, are:
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sale of our Common Stock by our stockholders, executives, and directors; |
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volatility and limitations in trading volumes of our shares of Common Stock; |
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our ability to obtain financings to conduct and complete research and development activities including, but not limited to, our proposed clinical trials, and other business activities; |
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possible delays in the expected recognition of revenue due to lengthy and sometimes unpredictable sales timelines; |
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the timing and success of introductions of new drugs by our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners; |
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network outages or security breaches; |
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the lack of market acceptance and sales growth for our therapeutic candidates, if any, that receive marketing approval; |
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our ability to secure resources and the necessary personnel to conduct clinical trials on our desired schedule; |
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commencement, enrollment or results of our clinical trials for our therapeutic candidates or any future clinical trials we may conduct; |
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changes in the development status of our therapeutic candidates; |
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any delays or adverse developments or perceived adverse developments with respect to the FDA’s review of our planned NDA, PMA and clinical trials; |
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any delay in our submission for studies or drug approvals or adverse regulatory decisions, including failure to receive regulatory approval for our therapeutic candidates; |
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unanticipated safety concerns related to the use of our therapeutic candidates; |
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failures to meet external expectations or management guidance; |
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changes in our capital structure or dividend policy and future issuances of securities; |
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sales of large blocks of Common Stock by our stockholders, including,
but not limited to, sales by 3i, LP as a result of the conversion of Series A Preferred Stock and upon the exercise of the Exchange Warrant
and exercise of our April 2023 Common Warrants issued in connection with the April Offering. ; |
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announcements and events surrounding financing efforts, including debt and equity securities; |
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our inability to enter into new markets or develop new drugs; |
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competition from existing technologies and drugs or new technologies and drugs that may emerge; |
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announcements of acquisitions, partnerships, collaborations, joint ventures, new drugs, capital commitments, or other events by us or our competitors; |
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changes in general economic, political and market conditions in or any of the regions in which we conduct our business; |
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changes in industry conditions or perceptions; |
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changes in valuations of similar companies or groups of companies; |
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analyst research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage; |
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departures and additions of key personnel; |
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disputes and litigations related to intellectual properties, proprietary rights, and contractual obligations; |
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changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and |
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other events or factors, many of which may be out of our control. |
In addition, if the market
for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence,
the trading price of our Common Stock could decline for reasons unrelated to our business, financial condition and results of operations.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could
be costly to defend and a distraction to management.
We are subject to penalties if we fail
to meet certain conditions of the Certificate of Designations of the Series A Preferred Stock.
We are authorized to issue
up to 500,000 shares of preferred stock, 20,000 shares of which have been designated as Series A Preferred Stock. As of June 29, 2023,
there are 6,047 shares of Series A Preferred Stock outstanding. We could issue a series of preferred
stock that could, depending on the terms of the series, impede or discourage an acquisition attempt or other transaction that some, or
a majority, of the holders of our Common Stock might believe to be in their best interests or in which the holders of our Common Stock
might receive a premium over the market price of the Common Stock. Additionally, the issuance of preferred stock may adversely affect
the rights of holders of our Common Stock by restricting dividends on our Common Stock, diluting the voting power of our Common Stock
or subordinating the liquidation rights of our Common Stock.
If certain defined “triggering events” defined in the Series
A COD occur, such as a failure to convert the Series A Preferred Stock into Common Stock when a conversion right is exercised, failure
to issue our Common Stock when the Exchange Warrant is exercised, failure to declare and pay to any holder any dividend on any dividend
date, then we may be required to pay a dividend on the stated value of each share of Series A Preferred Stock in the amount of 18% per
annum, but paid quarterly in cash, so long as the triggering event is continuing.
As a result of these or other
factors, the issuance of the Series A Preferred Stock could diminish the rights of holders of our Common Stock, or delay or prevent a
change of control of the Company, and could have an adverse impact on the market price of our Common Stock.
Our continued operations are dependent on
us raising capital.
We will need to raise additional
capital after this offering to support our operations and execute on our business plan. We will be required to pursue sources of additional
capital through various means, including debt or equity financings. Any new securities that we may issue in the future may be sold on
terms more favorable for our new investors than the terms of this offering. Newly issued securities may include preferences, superior
voting rights, and the issuance of warrants or other convertible securities that will have additional dilutive effects. We cannot assure
that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to
us and may cause existing shareholders both book value and ownership dilution. Further, we may incur substantial costs in pursuing future
capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other
costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible
notes and warrants, which will adversely impact our financial condition and results of operations. Our ability to obtain needed financing
may be impaired by such factors as the weakness of capital markets, and the fact that we have not been profitable, which could impact
the availability and cost of future financings. If the amount of capital we are able to raise from financing activities is not sufficient
to satisfy our capital needs, we may have to reduce our operations accordingly.
Future sales, or the perception of future
sales, by us or our stockholders in the public market could cause the market price for our common stock to decline.
The sale of shares of our
Common Stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of
our Common Stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity
securities in the future at a time and at a price that it deems appropriate. The holders of the Series A Preferred Stock, Exchange Warrant,
and April 2023 Common Warrants issued in connection with the April Offering may convert, exercise or exchange their securities into shares
of Common Stock which sales thereof could adversely affect the market price of shares of our Common Stock.
Because there are no current plans to pay
cash dividends on shares of our common stock for the foreseeable future, you may not receive any return on investment unless you sell
your shares of common stock for a price greater than that which you paid for it.
We intend to retain future
earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cash dividends for the foreseeable
future. Any decision to declare and pay dividends as a public company in the future will be made at the discretion of our Board of Directors
and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and
other factors that our Board of Directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants of
any existing and future outstanding indebtedness we or our subsidiaries incur or from restrictions imposed by any preferred stock we may
issue in the future. As a result, you may not receive any return on an investment in our Common Stock unless you sell your shares of Common
Stock for a price greater than that which you paid for it.
We may incur substantial penalties if we
fail to maintain the effectiveness of our registration statement covering the resale of our common stock issued to 3i, LP upon conversion
of our Series A Preferred Stock.
Under the terms of the Amended
RRA with 3i, LP, if we fail to maintain the effectiveness of the registration statement beyond defined allowable grace periods, we will
incur certain registration delay payments equal to 2% of 3i, LP’s investment that has not yet been converted to Common Stock and
sold pursuant to the registration statement upon our failure to maintain the effectiveness of the registration statement and every thirty
(30) days thereafter. For example, as a result of the Company’s delay in filing its periodic reports with the SEC in 2022, a Triggering
Event under Section 5(a)(ii) of the Original Series A COD, occurred on or about April 29, 2022, and that in consideration for the Registration
Delay Payments that the Company was obligated to pay under the Amended RRA, and additional amounts the Company was obligated to pay under
the Original Series A COD, together with 3i, LP’s legal fees incurred in the preparation of the Forbearance Agreement and Waiver
dated April 27, 2022, the Company agreed to pay 3i, LP an aggregate amount of $538,823 which was paid pursuant to that certain Forbearance
Agreement and Waiver with 3i, LP. In addition, if we fail to file a registration statement related to the Exchange Shares and Exchange
Warrants by a specific date pursuant to the Modification and Exchange Agreement, we will incur registration delay payments equal to 2%
of 3i, LP’s investment on the date of the filing failure and each thirty-day period thereafter until the filing failure is cured.
There is no assurance that an active and
liquid trading market in our common stock will develop.
Even though our shares of
Common Stock are listed on Nasdaq, there can be no assurance any broker will be interested in trading our Common Stock. Therefore, it
may be difficult to sell any shares you acquire if you desire or need to sell them. We cannot provide any assurance that an active and
liquid trading market in our Common Stock will develop or, if developed, that the market will continue.
Our Certificate of Incorporation and our
by-laws, and Delaware law may have anti-takeover effects that could discourage, delay or prevent a change in control, which may cause
our stock price to decline.
Our Certificate of Incorporation
and our by-laws could make it more difficult for a third-party to acquire us, even if closing such a transaction would be beneficial
to our stockholders. We are authorized to issue up to 500,000 shares of preferred stock, of which 20,000 shares have been designated
as Series A Preferred Stock, of which 6,047 are outstanding as of June 29, 2023, 200,000 shares have been designated as Series B Preferred
Stock, $0.0001 par value per share (“Series B Preferred Stock”) of which none are issued and outstanding, 50,000 shares have
been designated as Series C Preferred Stock, none of which is issued and outstanding. The remaining preferred stock may be issued in
one or more series, the terms of which may be determined at the time of issuance by our Board of Directors without further action by
stockholders. The terms of any series of preferred stock may include voting rights (including the right to vote as a series on particular
matters), preferences as to dividend, liquidation, conversion and redemption rights and sinking fund provisions. The issuance of any
preferred stock could materially adversely affect the rights of the holders of our Common Stock, and therefore, reduce the value of our
Common Stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge
with, or sell our assets to, a third-party and thereby preserve control by the present management.
Provisions of our Certificate
of Incorporation, by-laws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender
offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Such provisions may also
prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, our Certificate of Incorporation
and bylaws and Delaware law, as applicable, among other things:
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provide for a classified board of directors; |
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provide the board of directors with the ability to alter the by-laws without stockholder approval; |
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establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings; and |
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provide that vacancies on the board of directors may be filled by a majority of directors in office, although less than a quorum. |
Our Certificate of Incorporation designates
the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for
the District of Delaware) as the exclusive forum for certain types of claims that the federal courts do not have exclusive jurisdiction,
which may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable.
Article Fourteenth of our
Certificate of Incorporation specifies that unless we consent in writing to the selection of an alternative forum, the court of Chancery
of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware)
shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any derivative action or proceeding brought on
our behalf; any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or
to our stockholders; (b) any action asserting a claim against us arising pursuant to the Delaware General Corporation Law (“DGCL”)
or Certificate of Incorporation or our by-laws; or (c) or any action asserting a claim against us that is governed by the internal affairs
doctrine. There is uncertainty as to whether a court would enforce this provision with respect to claims under the Securities Act where
the state courts have concurrent jurisdiction and our stockholders cannot waive compliance with the federal securities laws and the rules
and regulations thereunder. The exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum
that it finds favorable for disputes against us and our directors, officers and other employees, which may discourage such lawsuits, or
may require increased costs to bring a claim. The exclusive forum provision does not apply to actions brought to enforce a duty or liability
created by the Exchange Act or any other claim for which federal courts have exclusive jurisdiction.
General Risk Factors
We are an “emerging growth company”
and a “smaller reporting company” and will be able to avail ourselves of reduced disclosure requirements applicable to emerging
growth companies and smaller reporting companies, which could make our common stock less attractive to investors.
We are an “emerging
growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of
the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved. In addition, Section 107 of the JOBS Act also provides that an “emerging growth
company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for
complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of
certain accounting standards until those standards would otherwise apply to private companies. We are not electing to delay such adoption
of new or revised accounting standards, and as a result, we will comply with new or revised accounting standards on the relevant dates
on which adoption of such standards is required for non-emerging growth companies. We cannot predict if investors will find our Common
Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there
may be a less active trading market for our Common Stock and our stock price may be more volatile. We may take advantage of these reporting
exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until
the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more;
(ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our December 2021 offering;
(iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or
(iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K. Even after we no longer qualify as an emerging
growth company, we may still qualify as a “smaller reporting company,” which would allow us to continue to take advantage
of many of the same exemptions from disclosure requirements, including presenting only the two most recent fiscal years of audited
financial statements and reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and
proxy statements. We will continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates
is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal
year and the market value of our stock held by non-affiliates is less than $700 million. To the extent we take advantage of such
reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
We may be at risk of securities class action
litigation.
We may be at risk of securities
class action litigation. In the past, biotechnology and pharmaceutical companies have experienced significant stock price volatility,
particularly when associated with binary events such as clinical trials and drug approvals. If we face such litigation, it could result
in substantial costs and a diversion of management’s attention and resources, which could harm our business and results in a decline
in the market price of our Common Stock.
Financial reporting obligations of being
a public company in the United States require well defined disclosure and procedures and internal control over financial reporting
that Allarity A/S did not have as a Danish company and that are expensive and time-consuming requiring our management to devote substantial
time to compliance matters.
As a publicly traded company
in the U.S., we will continue to incur significant additional legal, accounting and other expenses that Allarity A/S did not incur as
a Danish company. For example, as a Danish company with our ordinary shares listed on the Nasdaq First North Growth Market in Stockholm,
we were not required to have, and did not have, well defined disclosure controls and procedures and internal controls over financial reporting
that are generally required of U.S. publicly held companies. In connection with our review of our previously existing internal controls
as part of our preparations for becoming a U.S. publicly traded company, we determined that our internal control over financial reporting
for prior periods were ineffective and included material weaknesses that needed to be remedied. Although we have taken, and are continuing
to take, additional steps to remedy these material weaknesses in order to assure compliance with our future financial reporting obligations,
there can be no assurance that we will be able to do so in a timely manner or at all, or that additional material weaknesses may not exist.
These reporting obligations
associated with being a public company in the United States require significant expenditures and will place significant demands on
our management and other personnel, including costs resulting from our reporting obligations under the Securities Exchange Act of 1934,
as amended, (the “Exchange Act”), and the rules and regulations regarding corporate governance practices, including those
under the Sarbanes-Oxley Act of 2002, as amended, (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform
and Consumer Protection Act, as amended, (the “Dodd-Frank Act”), and the listing requirements of the stock exchange on which
our securities are to be listed. These rules require the establishment and maintenance of effective disclosure controls and procedures
and internal controls over financial reporting and changes in corporate governance practices, among many other complex rules that are
often difficult to implement, monitor and maintain compliance with. Moreover, despite recent reforms made possible by the JOBS Act, the
reporting requirements, rules, and regulations will make some activities more time-consuming and costly, particularly after we are no
longer an “emerging growth company.” In addition, we expect these rules and regulations to make it more difficult and more
expensive for us to obtain director and officer liability insurance. Our management and other personnel will need to devote a substantial
amount of time to ensure that we comply with all these requirements and to keep pace with new regulations, otherwise we may fall out of
compliance and risk becoming subject to litigation or being delisted, among other potential problems.
If we fail to comply with
the rules under the Sarbanes-Oxley Act related to our disclosure controls and procedures or internal controls over our financial reporting
in the future, or, if we discover additional material weaknesses and other deficiencies in our internal controls over financial reporting,
our stock price could decline significantly and raising capital could be more difficult.
Section 404 of the Sarbanes-Oxley
Act requires annual management assessments of the effectiveness of our internal controls over financial reporting after a transition period
ending with our second annual report on Form 10-K filed under Section 13(a) of the Exchange Act. If we fail to comply
with the rules under the Sarbanes-Oxley Act related to disclosure controls and procedures in the future, or, if in the future we discover
additional material weaknesses and other deficiencies in our internal controls over financial reporting, our stock price could decline
significantly and raising capital could be more difficult.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties.
Forward-looking statements provide current expectations or forecasts of future events. Forward-looking statements include statements about
Allarity’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts.
The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,”
“project,” “should,” “would” and similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not forward-looking. These statements speak only as of the date of this prospectus
and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms
a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate
that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. In addition to factors
identified under the section titled “Risk Factors” in this prospectus, factors that may impact such forward-looking statements
include:
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our plans to develop and commercialize our drug candidates; |
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our ability to generate any revenue or become profitable; |
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the initiation, cost, timing, progress and results of our current and future preclinical studies and clinical trials, as well as our research and development programs; |
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the impacts of the ongoing COVID-19 pandemic and related restrictions as they may related to our clinical trials; |
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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; |
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our ability to meet the Nasdaq continued listing standards; |
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our ability to successfully acquire or in-license additional product candidates on reasonable terms; |
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our ability to maintain and establish collaborations or obtain additional funding; |
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our ability to obtain regulatory approval of its current and future drug candidates; |
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our expectations regarding the potential market size and the rate and degree of market acceptance of such drug candidates; |
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our expectations regarding our ability to fund operating expenses and capital expenditure requirements with our existing cash and cash equivalents, and future expenses and expenditures; |
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our ability to secure sufficient funding and alternative source of funding to support when needed and on terms favorable to us to support our business objective, product development, other operations or commercialization efforts;
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our ability to enroll patients in our clinical trials, our clinical development activities;
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our ability to retain key employees, consultants and advisors; |
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our ability to retain reliable third parties to perform the chemistry work associated with our drug discovery, preclinical activities and to conduct our preclinical studies and clinical trials in a satisfactory manner; |
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our ability to secure reliable on third party manufacturers to produce clinical and commercial supplies of API for our therapeutic candidates; |
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our ability to obtain, maintain, protect and enforce sufficient patent and other intellectual property rights for our therapeutic candidates and technology; |
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our anticipated strategies and our ability to manage our business operations effectively; |
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the impact of governmental laws and regulations; |
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the possibility that we may be adversely impacted by other economic, business, and/or competitive factors; and |
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any future currency exchange and interest rates. |
These forward-looking statements
are based on information available as of the date of this prospectus, and current expectations, forecasts and assumptions, and involve
a number of risks and uncertainties. We do not assume any obligation to update any forward-looking statements, Accordingly, forward-looking
statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update
forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future
events or otherwise, except as may be required under applicable securities laws.
USE OF PROCEEDS
We estimate that the net
proceeds from this offering will be approximately $13.610 million after deducting the placement agent fees and estimated offering expenses
payable by us, assuming the sale of all securities offered hereby at the assumed combined public offering price of $7.32 per Common Stock
and accompanying common warrant based on the closing sale price of our Common Stock on the Nasdaq Capital Market on June 29, 2023 and
assuming no sale of any pre-funded warrants and no exercise of the common warrants issued in connection with this offering.
A $1.00 increase (decrease)
in the assumed combined public offering price per share would increase (decrease) the net proceeds to us from this offering by approximately
$1.88 million ($1.93 million) assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains
the same, after deducting the placement agent fee and estimated offering expenses payable by us and assuming no exercise of common warrants
or sale of pre-funded warrants.
We intend to use a portion
of the net proceeds of this offering to make payments under each of the Novartis and Eisai license agreements, to initiate our clinical
trials, to pay off the 3i June Promissory Note, to pay account payables and accrued liabilities outstanding, and for working capital
and general corporate purposes. The use of proceeds and payments therefrom will depend on the actual amount of the net proceeds we will
receive from the offering and will be subject to the discretion of and timing by the Board of Directors.
In addition, 3i, LP may
participate in this offering on the same terms and conditions as other purchasers, and we intend to use the 3i Proceeds, if any, to repurchase
a portion of the shares of Series A Preferred Stock owned by 3i, LP.
MARKET INFORMATION FOR OUR SECURITIES AND DIVIDEND
POLICY
Our Common Stock is listed
on the Nasdaq Capital Market under the symbol “ALLR.” Our Common Stock previously was listed on the Nasdaq Global Market
prior to June 27, 2023. Prior to the consummation of the Recapitalization Share Exchange on December 20, 2021, Allarity Therapeutics
A/S ordinary shares were listed on the Nasdaq First North Growth Market: Stockholm under the symbol “ALLR:ST.” As of June
29, 2023, there were one (1) holder of record of our Common Stock. The foregoing number of stockholders of record does not include an
unknown number of stockholders who hold their stock in “street name.”
On November 22, 2022,
our Board declared a dividend of Series B Preferred Stock to the stockholders of record of Common Stock and Series A Preferred Stock
as of December 5, 2022. On December 5, 2022, each share of Common Stock then outstanding received 0.016 of a share of Series B Preferred
Stock and each share of Series A Preferred Stock outstanding received 1.744 shares of Series B Preferred Stock. All Series B Preferred
Stock were redeemed at $0.01 per share. Pursuant to the terms of the Original Series A COD and Certificate of Designations of Series
C Preferred Stock, the Company recorded a deemed dividend of 8% on the Series A Preferred Stock of $1,572,000 for the year ended December
31, 2022 and a deemed dividend of 5% on the Series C Preferred Stock of $4,000,000 for the quarter ended March 31, 2023.
We do not anticipate declaring
or paying, in the foreseeable future, any cash dividends on our Common Stock. We intend to retain all available funds and future earnings,
if any, to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future.
Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our Board of Directors
and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements,
business prospects and other factors our Board of Directors may deem relevant.
CAPITALIZATION
The following table sets forth our cash and
capitalization as of March 31, 2023:
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on an actual basis reflecting
the Share Consolidations; |
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on
a pro forma basis giving effect to the (i) conversion of 8,214 shares of Series A Preferred Stock into 223,857 shares of Common
Stock; (ii) exchange of 50,000 shares of Series C Preferred Stock for 5,577 shares of Series A Preferred Stock; (iii)
redemption of 1,550 shares of Series A Preferred Stock for the cancellation of outstanding indebtedness under secured promissory
notes issued to 3i, LP and amounts owed to 3i, LP for the alternative conversion amount relating to the amount due to 3i LP upon
exercise of certain Series A Preferred Stock; (iv) issuance of 486 shares of Series A Preferred Stock in redemption of $350,000
owed to 3i, LP pursuant to Secured Promissory Note dated April 19, 2023; (v) issuance of 71,734 shares of Common Stock, 178,267
pre-funded warrants and 250,000 April 2023 Common Warrants for gross process of $7.5 million in the April Offering; (vi) issuance
of 178,267 shares of Common Stock upon exercise of 178,267 pre-funded warrants at $0.001 per share; (vii) bridge loans on April 11,
2023 and April 19, 2023 of $700,000 in the aggregate and deemed dividend on Series C Preferred Stock; (viii) removal of redemption
feature from Series A Preferred Stock; and (ix) issuance of 3i June Promissory Note. |
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on
a pro forma as adjusted basis to give effect to the issuance and sale of shares of our Common Stock and pre-funded warrants to purchase
up to 2,049,180 shares of our Common Stock in this offering at an assumed combined public offering price of $7.32 per share
of Common Stock and common warrant (the last reported sale price of our Common Stock on The Nasdaq Capital Market on June 29,
2023), less placement agent fees and estimated offering expenses payable by us, for total net proceeds of approximately $13.610 million,
assuming no exercise of common warrants and no exercise of pre-funded warrants. |
You should read the forgoing
table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Company”
and our consolidated financial statements and related notes appearing in our Form 10-K for the year ended December 31, 2022, and Form
10-Q for the quarterly period ended March 31, 2023, incorporated by reference to this prospectus.
| |
As of March 31, 2023 | |
(In thousands, except share data) | |
Actual (unaudited) | | |
Pro Forma | | |
Pro Forma As Adjusted | |
Cash | |
$ | 295 | | |
$ | 3,160 | | |
$ | 16,800 | |
Total long-term liabilities | |
| 1,453 | | |
| 1,453 | | |
| 1,453 | |
Redeemable preferred stock (500,000 shares authorized) | |
| | | |
| | | |
| | |
Series A Convertible Preferred stock, $0.0001 par value (20,000
shares designated) shares issued and outstanding, actual and pro forma and pro forma as adjusted; 9,748, 6,047 and nil | |
| 1,436 | | |
| — | | |
| — | |
Series B Preferred stock $0.0001 par value (200,000 shares
designated); shares issued and outstanding, actual and pro forma and pro forma as adjusted; nil, nil and nil | |
| — | | |
| — | | |
| — | |
Series C Convertible Preferred stock, $0.0001 par value (50,000
shares designated) shares issued and outstanding, actual and pro forma and pro forma as adjusted; 50,000, nil and nil | |
| 1,327 | | |
| — | | |
| — | |
Total Redeemable Preferred stock | |
| 2,763 | | |
| — | | |
| — | |
Shareholders’ (deficit) equity | |
| | | |
| | | |
| | |
Series A Convertible Preferred stock, $0.0001 par value (20,000
shares designated) shares issued and outstanding, actual, pro forma, and pro forma as adjusted: 0, 6,047, and 6,047 | |
| — | | |
| 57 | | |
| 57 | |
Common Stock, $0.0001 par value, 750,000,000 shares authorized, shares
issued and outstanding, actual; shares issued and outstanding, pro forma and pro forma as adjusted; 29,710; 503,566 and 2,552,746 | |
| — | | |
| — | | |
| 6 | |
Additional paid-in capital | |
| 83,437 | | |
| 91,687 | | |
| 105,321 | |
Accumulated other comprehensive loss | |
| (637 | ) | |
| (637 | ) | |
| (637 | ) |
Accumulated Deficit | |
| (85,902 | ) | |
| (85,934 | ) | |
| (85,934 | ) |
Total Stockholders’ (deficit)
equity | |
| (3,102 | ) | |
| 5,172 | | |
| 18,812 | |
Total Capitalization | |
$ | (1,649 | ) | |
$ | 6,625 | | |
$ | 20,265 | |
A $1.00 increase (decrease)
in the assumed combined public offering price per share of Common Stock and common warrant of $7.32, which was the last reported sale
price of our Common Stock on the Nasdaq Capital Market on June 29, 2023, would increase (decrease) each of cash, Common Stock and additional
paid-in capital, total stockholders’ equity and total capitalization on a pro forma as adjusted basis by approximately $1.88 million
($1.93 million), assuming that the number of shares of Common Stock offered by us, as set forth on the cover page of this prospectus,
remains the same and after deducting the placement agent fee and estimated offering expenses payable by us and assuming no exercise of
common warrants or sale of pre-funded warrants.
The table and discussion
above is based on 29,710 shares of Common Stock outstanding as of March 31, 2023, and excludes the following:
| ● | 439
shares of Common Stock issuable pursuant to options outstanding as of March 31, 2023,
with a weighted-average exercise price $7,633.85; |
| | |
| ● | 1,401
shares of Common Stock available under our 2021 Plan as of March 31, 2023; |
| | |
| ● | 315,085
shares of Common Stock issuable upon the exercise of Common Stock warrants at an exercise
price of $30.00 per share, subject to adjustment based on the public offering price in this
offering; |
| | |
| ● | 250,000 shares of Common Stock issuable upon the exercise of Common
Stock warrants at an exercise price of $34.00 per share, which may be subject to adjustment based on the public offering price of this
offering; |
| | |
| ● | 816,345 shares of Common Stock issuable upon conversion of 6,047 shares
of Series A Preferred Stock outstanding by 3i, LP, at a conversion price of $8.00, subject to adjustment based on the public offering
price of this offering, and based on a stated value of $1,080 per share; and |
| | |
| ● | up
to 2,049,180 shares of Common Stock issuable upon the exercise of the common warrants sold
in this offering. |
DILUTION
If you invest in our securities
in this offering, your ownership interest will be diluted immediately to the extent of the difference between the combined public offering
price per share of our Common Stock and pre-funded warrant and the pro forma as adjusted net tangible book value per share of our Common
Stock immediately after this offering.
Our historical negative
net tangible book value as of March 31, 2023, was $(12,831,000), or $(431.28) per share of our Common Stock. Our historical negative
net tangible book value is the amount of our total tangible assets less our total liabilities. Historical negative net tangible book
value per share represents our historical negative net tangible book value divided by the 29,710 shares of our Common Stock outstanding
as of March 31, 2023. After giving effect to the (i) conversion of 8,214 shares of Series A Preferred Stock into 223,857 shares of Common
Stock; (ii) exchange of 50,000 shares of Series C Preferred Stock for 5,577 shares of Series A Preferred Stock; (iii) redemption of 1,550
shares of Series A Preferred Stock for the cancellation of outstanding indebtedness under secured promissory notes issued to 3i, LP and
amounts owed to 3i, LP for the alternative conversion amount relating to the amount due to 3i LP upon exercise of certain Series A Preferred
Stock, (iv) issuance of 486 shares of Series A Preferred Stock repayment of $350,000 owed to 3i, LP pursuant to Secured Promissory Note
dated April 19, 2023; (v) issuance of 71,734 shares of Common Stock, 178,267 pre-funded warrants and 250,000 April 2023 Common Warrants
for gross process of $7.5 million in the April Offering; (vi) issuance of 178,267 shares of Common Stock upon exercise of 178,267 pre-funded
warrants at $0.001 per share; (vii) bridge loans on April 11, 2023 and April 19, 2023 of $700,000 in the aggregate and deemed dividend
on Series C Preferred Stock; (viii) removal of redemption feature from Series A Preferred Stock; and (ix) issuance of 3i June Promissory
Note, our pro forma negative net tangible book value would have been $(4,539,000), or $(9.01) per share.
After giving effect to
the sale of Common Stock and common warrants in this offering at an assumed combined public offering price of $7.32, the closing sale
price per share of our Common Stock on June 29, 2023, and $7.319 per pre-funded warrant and common warrant (which equals the price per
share at which the shares of Common Stock are being sold to the public in this offering, minus the $0.001 per share exercise price of
each such pre-funded warrant) (excluding shares of Common Stock issuable upon exercise of the pre-funded warrants or common warrants
or any resulting accounting associated with the exercise of the pre-funded warrants or common warrants) and after deducting the estimated
placement agent fees and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31,
2023 would have been approximately $9,101,000, or $3.57 per share. This represents an immediate increase in pro forma net tangible book
value of $12.58 per share to existing stockholders and an immediate dilution of $3.75 per share to new investors. The following table
illustrates this per share dilution:
Assumed public offering price
per share |
|
|
|
|
|
$ |
7.32 |
|
Historical negative net tangible book value per
share as of March 31, 2023 |
|
$ |
(431.28 |
) |
|
|
|
|
Pro forma negative net tangible book value per share
as of March 31, 2023 |
|
$ |
(9.01 |
) |
|
|
|
|
Increase (decrease) in the net tangible book value
per share attributable to this offering |
|
$ |
12.58 |
|
|
|
|
|
Pro forma as adjusted net tangible book value per
share after this offering |
|
|
|
|
|
$ |
3.57 |
|
Dilution per share to new investors participating
in this offering |
|
|
|
|
|
$ |
3.75 |
|
A $1.00 increase (decrease)
in the assumed combined public offering price of a share of Common Stock and common warrant, assuming that the number of shares of Common
Stock offered by us, as set forth on the cover page of this prospectus, remains the same, assuming no exercise of any common warrants,
and after deducting the estimated placement agent fees and expenses, would increase or decrease our pro forma as adjusted net tangible
book value to approximately $10.982 million or $4.76 per share and $7.171 million or $2.49 per share, respectively, representing an immediate
dilution of approximately $3.56 and $3.83 per share to new investors purchasing shares of our Common Stock in this offering.
The table and discussion
above are based on 29,710 shares of Common Stock outstanding as of March 31, 2023, and excludes, as of that date, the following:
| ● | 439 shares of Common Stock subject to the 2021 Equity Incentive Plan
pursuant to the options outstanding at a weighted-average exercise price $7,633.85; |
| | |
| ● | 1,401
shares of Common Stock available under our 2021 Plan as of March 31, 2023; |
| | |
| ● | 315,085
shares of Common Stock issuable upon the exercise of Common Stock warrants at an exercise
price of $30.00 per share, subject to adjustment based on the public offering price
in this offering; |
| | |
| ● | 250,000
shares of Common Stock issuable upon the exercise of Common Stock warrants at an exercise
price of $34.00 per share, which may be subject to adjustment based on public offering
price of this offering; |
| | |
| ● | 816,345 shares of Common Stock issuable upon exercise of conversion
of 6,047 shares of Series A Preferred Stock outstanding by 3i, LP, at a conversion price of $8.00, subject to adjustment based on the
public offering price of this offering and based on the stated value of $1,080 per share; and |
| | |
| ● | up
to 2,049,180 shares of Common Stock issuable upon the exercise of the common warrants sold
in this offering. |
The foregoing discussion and
table do not take into account further dilution to new investors that could occur upon the exercise of outstanding options, warrants or
other convertible securities having an exercise price per share less than the offering price per share in this offering. In addition,
we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds
for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt
securities, the issuance of these securities could result in further dilution to our stockholders.
DESCRIPTION OF OUR CAPITAL STOCK
The following description
of the material terms of our capital stock. We urge you to read the applicable provisions of DGCL and our Certificate of Incorporation
and bylaws carefully and in their entirety because they describe your rights as a holder of shares of our capital stock. This description
gives effect to the Share Consolidations.
General
Our purpose is to engage
in any lawful act or activity for which corporations may now or hereafter be organized under the DGCL. Our Certificate of Incorporation
authorizes capital stock consisting of 750,000,000 shares of Common Stock, par value $0.0001 per share, and 500,000 shares of preferred
stock, par value $0.0001 per share, of which 20,000 shares of preferred stock have been designated Series A Convertible Preferred Stock;
200,000 shares of preferred stock have been designated as Series B Preferred Stock; and 50,000 shares of preferred stock have been designated
as Series C Preferred Stock.
On March 24, 2023, we
effected the 1-for-35 share consolidation of our Common Stock. Subsequently on June 28, 2023, we effected a 1-for-40 share consolidation
of our Common Stock. The par value of our Common Stock remains unchanged.
As of June 29, 2023, we
had 503,566 shares of Common Stock, 6,047 shares of Series A Preferred Stock, no shares of Series B Preferred Stock and no shares of
Series C Preferred Stock issued and outstanding.
Common Stock
Holders of our Common Stock
are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders, including the election or removal
of directors, except for any directors who are elected exclusively by the holders of a class of our preferred stock that entitles that
class of stock to elect one or more directors. The holders of our Common Stock do not have cumulative voting rights in the election of
directors.
Upon our liquidation, dissolution
or winding up and after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation
preferences, if any, the holders of our Common Stock (and the holders of any preferred stock that may then be outstanding, to the extent
required by our Certificate of Incorporation, including any certificate of designation with respect to any series of preferred stock)
will be entitled to receive pro rata our remaining assets available for distribution, unless holders of a majority of the outstanding
shares of Common Stock approve a different treatment of the shares. Holders of our Common Stock do not have preemptive, subscription,
redemption or conversion rights. Our Common Stock will not be subject to further calls or assessment by us. There will be no redemption
or sinking fund provisions applicable to our Common Stock. All shares of our Common Stock that will be outstanding at the effective time
will be fully paid and non-assessable. The rights, powers, preferences and privileges of holders of our Common Stock will be subject to
those of the holders of our Series A Preferred Stock and any other shares of preferred stock we may authorize and issue in the future.
Preferred Stock
Our Certificate of Incorporation
authorizes our Board of Directors to establish one or more series of preferred stock (including convertible preferred stock). Unless required
under the Certificate of Incorporation, or by law or Nasdaq, the authorized shares of preferred stock will be available for issuance without
further action by stockholders. Our Board of Directors may determine, with respect to any series of preferred stock, the powers including
preferences and relative participations, optional or other special rights, and the qualifications, limitations or restrictions thereof,
of that series, including, without limitation:
|
● |
the designation of the series; |
|
● |
the number of shares of the series, which our Board of Directors may, except where otherwise provided in the preferred stock designation, increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares then outstanding); |
|
● |
whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series; |
|
● |
the dates at which dividends, if any, will be payable; |
|
● |
the redemption rights and price or prices, if any, for shares of the series; |
|
● |
the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series; |
|
● |
the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding-up of our affairs; |
|
● |
whether the shares of the series will be convertible into shares of any other class or series, or any other security, of ours or any other corporation, and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as of which the shares will be convertible and all other terms and conditions upon which the conversion may be made; |
|
● |
restrictions on the issuance of shares of the same series or of any other class or series; and |
|
● |
the voting rights, if any, of the holders of the series. |
We could issue a series of
preferred stock that could, depending on the terms of the series, impede or discourage an acquisition attempt or other transaction that
some, or a majority, of the holders of our Common Stock might believe to be in their best interests or in which the holders of our Common
Stock might receive a premium for your Common Stock over the market price of the Common Stock. Additionally, the issuance of preferred
stock may adversely affect the rights of holders of our Common Stock by restricting dividends on our Common Stock, diluting the voting
power of our Common Stock or subordinating the liquidation rights of our Common Stock. As a result of these or other factors, the issuance
of preferred stock could have an adverse impact on the market price of our Common Stock.
Series A Convertible
Preferred Stock
On December 8, 2021, the
Board adopted resolutions to create a series of twenty thousand (20,000) shares of preferred stock, par value $0.0001, designated as
“Series A Convertible Preferred Stock.” On December 14, 2021, we filed the Original Series A COD for 20,000 shares of Series
A Preferred Stock. On April 21, 2023, in connection with the transactions contemplated under the Exchange Agreement, the Company filed
the Series A COD with the Delaware Secretary of State. The Series A COD eliminated the Series A Preferred Stock redemption right and
dividend (except for certain exceptions as specified therein), and provided for the conversion of Series A Preferred Stock into Common
Stock at an initial conversion price equal to the price for a share of Common Stock sold in the Offering, $30.00 per share and based
on the stated value of $1,080 per share.
On June 6, 2023, 3i, LP
and Company entered into the 3i Waiver Agreement whereby 3i, LP agreed to waive certain rights granted under a Series A Preferred Stock
securities purchase agreement dated December 20, 2021, the Exchange Agreement and the securities purchase agreement related to the April
Offering in exchange for, among other things, amending the conversion price of the Series A Preferred Stock to equal the public offering
price of the shares of Common Stock in this offering if the public offering price of the shares of Common Stock in this offering is lower
than the then-current conversion price of the Series A Preferred Stock.
On May 30, 2023, the Company
filed the Amended COD with the Delaware Secretary of State to amend the voting rights of the Series A Preferred Stock which among other
things provided additional voting rights to the Series A Preferred Stock Under the Amended COD, holders of the Series A Preferred stock
have the following voting rights: (1) holders of the Series A Preferred Stock have a right to vote on all matters presented at the Special
Meeting together with the Common Stock as a single class on an “as converted” basis using the conversion price of $30.00
and based on stated value of $1,080 subject to a beneficial ownership limitation of 9.99%, and (2), in addition, holders of Series A
Preferred Stock have granted the Board the right to vote, solely for the purpose of satisfying quorum and casting the votes necessary
to adopt the Reverse Stock Split Proposal and the Adjournment Proposal under Delaware law, that will “mirror” the votes cast
by the holders of shares of Common Stock and Series A Preferred Stock , together as a single class, with respect to the Reverse Stock
Split Proposal and the Adjournment Proposal. The number of votes per each share of Series A Preferred Stock that may be voted by the
Board shall be equal to the quotient of (x) the sum of (1) the original aggregated stated value of the Series A Preferred Stock when
originally issued on December 20, 2021 (calculated based on the original stated value of $1,000 of the Series A Preferred Stock multiplied
by 20,000 shares of Series A Preferred Stock) and (2) $1,200,000, which represents the purchase price of the Series C Preferred Stock
when originally issued; divided by (y) the conversion price of $30.00. If the Board decides to cast the vote, it must vote all votes
created by Amended COD in the same manner and proportion as votes cast by the holders of Common Stock and Series A Preferred Stock, voting
as single class. The Series A Preferred Stock voting rights granted to the holders thereof relating to the Reverse Stock Split Proposal
and the Adjournment Proposal expire automatically on July 31, 2023.
Except to the extent that
the holders of at least a majority of the outstanding Series A Preferred Stock (the “Required Holders”) expressly consent
to the creation of Parity Stock (as defined below) or Senior Preferred Stock (as defined below), all shares of capital stock are junior
in rank to all Series A Preferred Stock with respect to the preferences as to dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Company (such junior stock is referred to herein collectively as “Junior Stock”). The rights
of all such shares of capital stock of the Company will be subject to the rights, powers, preferences and privileges of the Series A Preferred
Stock. Without limiting any other provision of this Certificate of Designations, without the prior express consent of the Required Holders,
voting separate as a single class, the Company will not hereafter authorize or issue any additional or other shares of capital stock that
is (i) of senior rank to the Series A Preferred Stock in respect of the preferences as to dividends, distributions and payments upon the
liquidation, dissolution and winding up of the Company (collectively, the “Senior Preferred Stock”), (ii) of pari passu rank
to the Series A Preferred Stock in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution
and winding up of the Company (collectively, the “Parity Stock”) or (iii) any Junior Stock having a maturity date or any other
date requiring redemption or repayment of such shares of Junior Stock that is prior to the first anniversary from December 21, 2021.
In the event of the merger or consolidation of the Company with or into another corporation, the Series A Preferred Stock will maintain
their relative rights, powers, designations, privileges and preferences provided for herein and no such merger or consolidation will result
inconsistent therewith.
The
Series A Preferred Stock has a liquidation preference equal to an amount per Series A Preferred Stock equal to the sum of (i) the Black
Scholes Value (as defined in the Warrants, which was sold concurrent with the Series A Preferred Stock) with respect to the outstanding
portion of all Warrants held by such holder (without regard to any limitations on the exercise thereof) as of the date of such event
and (ii) the greater of (A) 125% of the Conversion Amount of such Series A Preferred Stock on the date of such payment and (B) the amount
per share such holder would receive if such holder converted such Series A Preferred Stock into Common Stock immediately prior to the
date of such payment, and will be entitled to convert into shares of Common Stock at an initial fixed conversion price of $30.00 per
share, subject to a beneficial ownership limitation of 9.99%.
If certain defined “triggering
events” defined in the Series A COD, as amended and restated and amended, occur, or our failure to convert the Series A Preferred
Stock into Common Stock when a conversion right is exercised, failure to issue our Common Stock when the Exchange Warrant is exercised,
failure to declare and pay to any holder any dividend on any dividend date, then we may be required to pay a dividend on the stated value
on the Series A Preferred Stock in the amount of 18% per annum, but paid quarterly in cash, so long as the triggering event is continuing.
As a result of the Company’s
delay in filing its periodic reports with the SEC in 2022, a “triggering event” under Section 5(a)(ii) of the Original Series
A COD, occurred on or about April 29, 2022, and because of the delay the Company was obligated to pay (i) registration delay payments
under the RRA, (ii) additional amounts under the Original Series A COD, and (iii) legal fees incurred in the preparation of the Forbearance
Agreement and Waiver to 3i, LP in an aggregate amount of $538,823 which was paid pursuant to that certain Forbearance Agreement and Waiver
with 3i, LP
On June 6, 2023, 3i, LP
and Company entered into the 3i Waiver Agreement pursuant to which 3i, LP agreed to waive certain rights granted under a Series A Preferred
Stock securities purchase agreement dated December 20, 2021, the Exchange Agreement and the securities purchase agreement related to
the April Offering in exchange for (i) amending the conversion price of the Series A Preferred Stock to equal the public offering price
of the shares of Common Stock in this offering if the public offering price of the shares of Common Stock in this offering is lower than
the then-current conversion price of the Series A Preferred Stock; (ii) participating in this offering, at its option, under the same
terms and conditions as other investors, of which proceeds from 3i, LP’s participation will be used to redeem a portion of shares
of Series A Preferred Stock 3i, LP received from the Exchange Agreement; and (iii) (1) the repricing of the exercise price of the April
2023 Common Warrant to the exercise price of the common warrant offered in this offering if the exercise price of the common warrant
is lower than the then-current April 2023 Common Warrant exercise price; and (2) extending the termination date of the April 2023 Common
Warrant to the date of termination of the common warrants offered in this offering.
On June 29, 2023, the
Company entered into the June 2023 Purchase Agreement with 3i LP pursuant to which on June 30, 2023, 3i, LP purchased the 3i June Promissory
Note for principal amount of $350,000. The terms of the 3i June Promissory Note provides that the outstanding obligations thereunder,
including accrued interest will be paid in full at the Next Financing; provided, however, that if the gross proceeds from the financing
are insufficient to settle the payment of the outstanding balance of the 3i June Promissory Note, together with all accrued interest
thereon, in full, then the Company will instead be obligated to convert all of the unpaid principal balance of the note, together with
all accrued interest thereon, into 486 shares of Series A Preferred Stock, In connection with the Purchase Agreement, the Company and
3i LP agreed to adjust the then conversion price of the Series A Preferred Stock to the Downward Adjustment to Conversion Price. Based
on the closing price of the shares of Common Stock on June 28, 2023, the Downward Adjustment to Conversion Price is equal to $8.00 per
share. In connection therewith, the Company filed the Second Certificate of Amendment to the Series A COD with the Delaware Secretary
of State to amend the Series A COD to reflect the Downward Adjustment to Conversion Price.
Series B Preferred
Stock
On
November 22, 2022, the Board of Directors established the Series B Preferred Stock, par value $0.0001 per share (“Series B Preferred
Stock”). On November 22, 2022, we filed a Certificate of Designations setting forth the rights, preferences, privileges, and restrictions
for 200,000 shares of Series B Preferred Stock. The holders of Series B Preferred Stock are not entitled to receive dividends of any kind.
Each outstanding share of Series B Preferred Stock has 400 votes per share; The Series B Preferred Stock ranks senior to the Common Stock,
but junior to the Series A Preferred Stock, as to any distribution of assets upon a liquidation, dissolution or winding up of the Company,
whether voluntarily or involuntarily The Series B Preferred Stock shall rank senior to the Common Stock, but junior to the Series A Preferred
Stock. All shares of Series B Preferred Stock that are not present in person or by proxy through the presence of such holder’s shares
of Common Stock or Series A Preferred Stock, in person or by proxy, at any meeting of stockholders held to vote on the proposals relating
to reverse stock split, the Share Increase Proposal and the adjournment proposal as of immediately prior to the opening of the polls at
such meeting (the “Initial Redemption Time”) will be automatically be redeemed by the Company at the Initial Redemption Time
without further action on the part of the Company or the holder thereof (the “Initial Redemption”). Any outstanding shares
of Series B Preferred Stock that have not been redeemed pursuant to an Initial Redemption will be redeemed in whole, but not in part,
(i) if such redemption is ordered by the Board of Directors in its sole discretion, automatically and effective on such time and date
specified by the Board of Directors in its sole discretion or (ii) automatically upon the approval by the Company’s stockholders
of the Reverse Stock Split Proposal and the Share Increase Proposal at any meeting of stockholders held for the purpose of voting on such
proposals. Each share of Series B Preferred Stock redeemed in any Redemption will be redeemed in consideration for the right to receive
an amount equal to $0.01 in cash for each share of Series B Preferred Stock as of the applicable Redemption Time. Each share of Series
B Preferred Stock has 400 votes per share and is entitled to vote with the Common Stock and Series A Preferred Stock, together as a single
class, on the certain proposals. The power to vote, or not to vote, the shares of Series B Preferred Stock is vested solely and exclusively
in the Board of Directors, or its authorized proxy. As of February 3, 2023, all shares of Series B preferred stock have redeemed and none
are issued and outstanding.
Series C Preferred Stock
On February 24, 2023,
the Board of Directors established the Series C Preferred Stock, and on February 24, 2023, we filed a Certificate of Designations of
Series C Preferred Stock (the “Series C Certificate of Designations”) setting forth the rights, preferences, privileges,
and restrictions for 50,000 shares of Series C Preferred Stock, as amended on February 28, 2023. As
a result of the transactions contemplated by the Exchange Agreement, there are no shares of Series C Preferred Stock issued and outstanding.
Dividends. Under the
terms of the Series C Certificate of Designations, the holders of Series C Preferred Stock will be entitled to receive dividends, based
on the Stated Value, at a rate of five percent (5%) per annum, which shall accrue and be compounded daily, commencing on the date of first
issuance of any Series C Preferred Stock until the date that the Series C Preferred Stock is converted to Common Stock.
Voting Rights. The
Series C Certificate of Designations provides that the Series C Preferred Stock will have no voting rights other than the exclusive right
to vote with respect to the Share Increase Proposal and the Reverse Stock Split Proposal and shall not be entitled to vote on any other
matter except to the extent required under the DGCL, and the right to cast 620 votes per share of Series C Preferred Stock on the Share
Increase and Reverse Stock Split Proposals.
Liquidation. In addition,
upon any liquidation, dissolution or winding-up of the Company, prior and in preference to the Common Stock, holders of Series C Preferred
Stock shall be entitled to receive out of the assets available for distribution to stockholders an amount in cash equal to 105% of the
aggregate Stated Value of all shares of Series C Preferred Stock held by such holder.
Conversion. The conversion
price for the Series C Preferred Stock shall initially equal the lower of: (i) $6.37, which is the official closing price of the Common
Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) on the Trading Day immediately preceding the Original Issuance Date; and
(ii) the lower of: (x) the official closing price of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) on the
Trading Day immediately preceding the Conversion Date or such other date of determination; and (y) the average of the official closing
prices of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) for the five (5) Trading Days immediately preceding
the Conversion Date or such other date of determination, subject to adjustment herein. In no event shall the Series C Preferred Stock
Conversion Price be less than $1.295 (the “Floor Price”). In the event that the Series C Preferred Stock Conversion Price
on a Conversion Date would have been less than the applicable Floor Price if not for the immediately preceding sentence, then on any such
Conversion Date the Company shall pay the Holder an amount in cash, to be delivered by wire transfer out of funds legally and immediately
available therefor pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained by multiplying
(A) the higher of (I) the highest price that the Common Stock trades at on the Trading Day immediately preceding such Conversion Date
and (II) the applicable Series C Preferred Stock Conversion Price and (B) the difference obtained by subtracting (I) the number of shares
of Common Stock delivered (or to be delivered) to the Holder on the applicable Share Delivery Date with respect to such conversion of
Series C Preferred Stock from (II) the quotient obtained by dividing (x) the applicable Conversion Amount that the Holder has elected
to be the subject of the applicable conversion of Series C Preferred Stock, by (y) the applicable Series C Preferred Stock Conversion
Price without giving effect to clause (x) of such definition.
Redemption. Each holder
of Series C Preferred Stock shall have the right to cause the Company to redeem in cash all or part of such holder’s shares of Series
C Preferred Stock at a price per share equal to 110% of the Stated Value (i) after the earlier of (1) the receipt of Authorized Stockholder
Approval and (2) the date that is 60 days following the original issue date and (ii) before the date that is 365 days after the original
issue date. Upon receipt of a written notice to the Company by each holder (each, a “Redemption Notice”) setting forth the
number of shares of Series C Preferred Stock that such holder wishes to redeem, the Company shall redeem such shares of Series C Preferred
Stock in accordance with the Redemption Notice no later than 5 days after the date on which the Redemption Notice is delivered to the
Company.
Dividends
The DGCL permits a corporation
to declare and pay dividends out of “surplus” or, if there is no “surplus,” out of its net profits for the fiscal
year in which the dividend is declared and/or the preceding fiscal year. “Surplus” is defined as the excess of the net assets
of the corporation over the amount determined to be the capital of the corporation by the Board of Directors. The capital of the corporation
is typically calculated to be (and cannot be less than) the aggregate par value of all issued shares of capital stock. Net assets equal
the fair value of the total assets minus total liabilities. The DGCL also provides that dividends may not be paid out of net profits if,
after the payment of the dividend, capital is less than the capital represented by the outstanding stock of all classes having a preference
upon the distribution of assets.
Declaration and payment of
any dividend will be subject to the discretion of our Board of Directors. The time and amount of dividends will be dependent upon our
financial condition, operations, cash requirements and availability, debt repayment obligations, capital expenditure needs and restrictions
in our debt instruments, industry trends, the provisions of Delaware law affecting the payment of distributions to shareholders and any
other factors our Board of Directors may consider relevant.
On November 22, 2022, the
Board of Directors declared a dividend of Series B Preferred Stock to the stockholders of record of Common Stock and Series A Preferred
Stock as of December 5, 2022. On December 5, 2022, each share of Common Stock outstanding received 0.016 of a share of Series B Preferred
Stock and each share of Series A Preferred Stock outstanding received 1.744 shares of Series B Preferred Stock.
Pursuant to the terms of the
respective Original Series A COD and Series C Certificate of Designations, the Company recorded a deemed dividend of 8% on the Series
A Preferred Stock of $1,572,000 for the year ended December 31, 2022 and a deemed dividend of 5% on the Series C Preferred Stock of $4,000,000
for the quartered ended March 31, 2023.
We have no current plans to
pay dividends on our Common Stock. Any decision to declare and pay dividends in the future will be made at the sole discretion of our
Board of Directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual
restrictions and other factors that our Board of Directors may deem relevant. Because we will be a holding company and will have no direct
operations, we will only be able to pay dividends from funds we receive from our operating subsidiaries. In addition, our ability to pay
dividends may be limited by the agreements governing any indebtedness that we or our subsidiaries incur in the future.
PIPE Warrant and Exchange Warrant
Concurrently with the
issuance of our Series A Preferred Stock, on December 20, 2021, we issued warrants to purchase 1,443 shares of our Common Stock at an
exercise price of $13,868.40 per share, subject to adjustments, PIPE Warrant. The terms of the PIPE Warrant are as follows:
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The PIPE Warrant has a term of three years and expire on December 20, 2024; |
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The exercise of the PIPE Warrant is subject to a beneficial ownership limitation of 9.99%; |
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The exercise price and the number of shares issuable upon the exercise of the PIPE Warrant are subject to adjustment, as follows: |
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In the event of a stock dividend, stock split or stock combination recapitalization or other similar transaction involving the Company’s Common Stock the exercise price will be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event; |
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If the Company sells or issues any shares of Common Stock, options, or convertible securities at an exercise price less than a price equal to the PIPE Warrant exercise price in effect immediately prior to such sale (a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the exercise price then in effect shall be reduced to an amount equal to the new issuance price; |
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Simultaneously with any adjustment to the exercise price, the number of shares that may be purchased upon exercise of the PIPE Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of shares shall be the same as the aggregate exercise price in effect immediately prior to such adjustment (without regard to any limitations on exercise) and; |
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Voluntary adjustment reducing the exercise price for the Company to any amount and for any period deemed appropriate by the Board of Directors of the Company with the prior written consent of the Required Holders. |
In the event of either the Company consolidating or merging with or
into another entity (the “Fundamental Transaction”), the sale or assignment of substantially all of the Company’s subsidiaries,
or a Triggering Event (as defined in the Original Series A COD), the holder is entitled to require the Company to pay the holder an amount
in cash equal to the Black-Scholes value of the PIPE Warrant on or prior to the later of the second trading after the date of request
for payment and the date of consummation of the Fundamental Transaction; or at any time after the occurrence of the Triggering Event.
In connection with the
Exchange Agreement, on April 21, 2023 the PIPE Warrant was exchanged for the Exchange Warrant with the right to purchase 315,085 shares
of our Common Stock at an exercise price of $30.00 per share, subject to adjustment upon closing of this offering. Notwithstanding the
foregoing changes, all other terms of the Exchange Warrant are substantially the same as the terms of the PIPE Warrant.
April 2023 Common Warrants
In
connection with the April 21, 2023 public offering, the Company issued the April 2023 Common Warrants. Subject to certain ownership limitations,
the April 2023 Common Warrants are exercisable immediately from the date of issuance. The April 2023 Common Warrants have an exercise
price of $34.00 per share and expire on the 5 year anniversary of the date of issuance, April 21, 2023. The exercise price of the
April 2023 Common Warrants is subject to certain adjustments, including stock dividends, stock splits, combinations and reclassifications
of the Company’s Common Stock. In the event of a fundamental transaction, as described in the April 2023 Common Warrants, each
of the holders of the April 2023 Common Warrants will have the right to exercise its April 2023 Common Warrant and receive the same amount
and kind of securities, cash or property as such holder would have been entitled to receive upon the occurrence of such fundamental transaction
if such holder had been, immediately prior to such fundamental transaction, the holder of shares of the Company’s Common Stock
issuable upon the exercise of its April 2023 Common Warrant. Additionally, in the event of a fundamental transaction within the Company’s
control, as described in the April 2023 Common Warrants, each holder of the April 2023 Common Warrants will have the right to require
the Company to repurchase the unexercised portion of its April 2023 Common Warrant at its fair value using a variant of the Black Scholes
option pricing formula. In the event of a fundamental transaction that is not within the Company’s control, each holder of the
April 2023 Common Warrants will have the right to require the Company or a successor entity to redeem the unexercised portion of its
April 2023 Common Warrant for the same consideration paid to the holders of the Company’s Common Stock in the fundamental transaction
at the unexercised April 2023 Common Warrant’s fair value using a variant of the Black Scholes option pricing formula.
Pursuant to a securities purchase
agreement entered into with certain investors in the April Offering, we agreed that for a period of 90 days from the close of the April
Offering, that we would not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common
Stock or securities convertible or exercisable into Common Stock or file a registration statement with the SEC to register our securities,
subject to certain exceptions. The investors to the securities purchase agreement in the April Offering have agreed to waive that provision
and permit the offering of our Common Stock, pre-funded warrants and common warrants in exchange for (i) the repricing of the exercise
price of the April 2023 Common Warrant to the exercise price of the common warrant offered in this offering if the exercise price of the
common warrant is lower than the then-current April 2023 Common Warrant exercise price; and (ii) extending the termination date of the
April 2023 Common Warrant to the date of termination of the common warrants offered in this offering.
On June 29, 2023, we entered
into the June 2023 Purchase Agreement for a bridge loan in order to provide us with more time to secure additional financings. On June
30, 2023, 3i, LP purchased the 3i June Promissory Note for a principal amount of $350,000, which purchase price was paid in cash. Such
note matures on July 31, 2023, and carries an interest rate of 5% per annum and is secured by all of the Company’s assets pursuant
to the Security Agreement. Under the 3i June Promissory Note, the outstanding obligations thereunder, including accrued interest will
be paid in full at the Next Financing; provided, however, that if the gross proceeds from the Next Financing are insufficient to settle
the payment of the outstanding principal balance of the 3i June Promissory Note, together with all accrued interest thereon, in full,
then the Company will instead be obligated to convert all of the unpaid principal balance of the 3i June Promissory Note, together with
all accrued interest thereon, into the Repayment Shares. The June 2023 Purchase Agreement also provides that if the Current Closing Price
is lower than the initial conversion price of $30.00 as set forth in the Series A COD, then the conversion price of Series A Preferred
Stock will be reduced to the Downward Adjustment to Conversion Price and we shall file the Second Certificate of Amendment to the Series
A COD with the Delaware Secretary of State to amend the Series A COD to reflect the Downward Adjustment to Conversion Price. Based on
the closing price of the shares of Common Stock on June 28, 2023, the Downward Adjustment to Conversion Price is equal to $8.00 per share.
Annual Stockholder Meetings
Our bylaws will provide that
annual stockholder meetings will be held at a date, time and place, if any, as exclusively selected by our Board of Directors. To the
extent permitted under applicable law, we may conduct meetings by remote communications, including by webcast.
Dissenters’ Rights of Appraisal and Payment
Under the DGCL, with certain
exceptions, our shareholders will have appraisal rights in connection with a reorganization or consolidation we may undertake in the future.
Pursuant to the DGCL, shareholders who properly request and perfect appraisal rights in connection with such reorganization or consolidation
will have the right to receive payment of the fair value of their shares as determined by the Delaware Court of Chancery.
Shareholders’ Derivative Actions
Under the DGCL, any of our
shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action; provided that the
stockholder bringing the action is a holder of our shares at the time of the transaction to which the action relates or such stockholder’s
stock thereafter devolved by operation of law.
Anti-Takeover Provisions
Our Certificate of Incorporation
and our by-laws could make it more difficult for a third-party to acquire us, even if closing such a transaction would be beneficial to
our stockholders. We are authorized to issue shares of preferred stock, which may be issued in one or more series, the terms of which
may be determined at the time of issuance by our Board of Directors without further action by stockholders. The terms of any series of
preferred stock may include voting rights (including the right to vote as a series on particular matters), preferences as to dividend,
liquidation, conversion and redemption rights and sinking fund provisions. The issuance of any preferred stock could materially adversely
affect the rights of the holders of our Common Stock, and therefore, reduce the value of our Common Stock. In particular, specific rights
granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third-party
and thereby preserve control by the present management.
Provisions of our Certificate
of Incorporation, by-laws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender
offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Such provisions may also
prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, our Certificate of Incorporation
and bylaws and Delaware law, as applicable, among other things:
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provide for a classified board of directors; |
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provide the board of directors with the ability to alter the by-laws without stockholder approval; |
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establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings; and |
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provide that vacancies on the board of directors may be filled by a majority of directors in office, although less than a quorum. |
Exclusive Forum
Our Certificate of Incorporation
provides that unless we consent to the selection of an alternative forum, any (1) derivative action or proceeding brought on our
behalf, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee to us or
our shareholders, (3) action asserting a claim arising pursuant to any provision of the DGCL or Certificate of Incorporation or bylaws
or (4) action asserting a claim governed by the internal affairs doctrine or otherwise related to our internal affairs shall, to
the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not
have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware. Any person or entity purchasing
or otherwise acquiring any interest in shares our capital stock shall be deemed to have notice of and consented to the forum provisions
in our Certificate of Incorporation. In addition, the provisions described above will not apply to suits brought to enforce a duty or
liability arising under the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Furthermore, unless
we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive
forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. We intend for this provision to
apply to any complaints asserting a cause of action under the Securities Act despite the fact that Section 22 of the Securities Act creates
concurrent jurisdiction for the federal and state courts over all actions brought to enforce any duty or liability created by the Securities
Act or the rules and regulations promulgated thereunder. There is uncertainty as to whether a court would enforce this provision with
respect to claims under the Securities Act where the state courts have concurrent jurisdiction and our stockholders cannot waive compliance
with the federal securities laws and the rules and regulations thereunder.
Limitations on Liability and Indemnification
of Officers and Directors
The DGCL authorizes corporations
to limit or eliminate the personal liability of directors to corporations and their shareholders for monetary damages for breaches of
directors’ fiduciary duties, subject to certain exceptions. Our Certificate of Incorporation includes a provision that eliminates
the personal liability of directors for monetary damages for any breach of fiduciary duty as a director, except to the extent such exemption
from liability or limitation thereof is not permitted under the DGCL. The effect of these provisions is to eliminate our rights and the
rights of our shareholders, through shareholders’ derivative suits on our behalf, to recover monetary damages from a director for
breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior. However, exculpation does not apply
to any director if the director has acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions
or derived an improper benefit from his or her actions as a director.
Our bylaws provide that we
must indemnify and advance expenses to our directors and officers to the fullest extent authorized by the DGCL. We are also expressly
authorized to carry directors’ and officers’ liability insurance providing indemnification for our directors, officers and
certain employees for some liabilities. We believe that these indemnification and advancement provisions and insurance are useful to attract
and retain qualified directors and executive officers.
The limitation of liability,
advancement and indemnification provisions in our Certificate of Incorporation and bylaws may discourage shareholders from bringing a
lawsuit against directors for breach of their fiduciary duty.
These provisions also may
have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful,
might otherwise benefit us and our shareholders. In addition, your investment may be adversely affected to the extent we pay the costs
of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
There is currently no pending
material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers, or control persons, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Transfer Agent and Registrar
The transfer agent and
registrar for our Common Stock is Computershare Trust Company, N.A. The transfer agent’s address is 150 Royal Street, Canton, MA
02021.
Exchange Listing
Our Common Stock is
currently listed on The Nasdaq Capital Market under the symbol “ALLR.”
DESCRIPTION OF SECURITIES WE ARE OFFERING
We are offering shares of
Common Stock, common warrants to purchase shares of Common Stock and pre-funded warrants to purchase shares of Common Stock. For each
pre-funded warrant we sell, the number of shares of Common Stock we are offering will be decrease on a one-for-one basis. The shares of
Common Stock and accompanying common warrants are immediately separable and will be issued separately in the offering, and the pre-funded
warrants and the accompanying common warrants are immediately separable and will be issued separately in the offering.
We are also registering the
shares of our Common Stock issuable from time to time upon exercise of the common warrants and pre-funded warrants offered hereby.
Common Stock
The material terms and provisions
of our Common Stock and each other class of our securities which qualifies or limits our Common Stock are described under the caption
“Description of Our Capital Stock” in this prospectus.
Pre-Funded Warrants
The following summary of certain
terms and provisions of pre-funded warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety
by, the provisions of the pre-funded warrant, the form of which is filed as an exhibit to the registration statement of which this prospectus
forms a part. Prospective investors should carefully review the terms and provisions of the form of pre-funded warrant for a complete
description of the terms and conditions of the pre-funded warrants.
Duration and Exercise Price.
Each pre-funded warrant offered hereby will have an initial exercise price per share equal to $0.001. The pre-funded warrants will be
immediately exercisable and may be exercised at any time until the pre-funded warrants are exercised in full. The exercise price and number
of shares of Common Stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations
or similar events affecting our Common Stock and the exercise price. The pre-funded warrants will be issued separately from the accompanying
common warrants and may be transferred separately immediately thereafter.
Exercisability. The
pre-funded warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise (except in the case of
a cashless exercise as discussed below). Purchasers of the pre-funded warrants in this offering may elect to deliver their exercise notice
following the pricing of the offering and prior to the issuance of the pre-funded warrants at closing to have their pre-funded warrants
exercised immediately upon issuance and receive shares of Common Stock underlying the pre-funded warrants upon closing of this offering.
A holder (together with its affiliates) may not exercise any portion of the pre-funded warrant to the extent that the holder would own
more than 4.99% of the outstanding Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from
the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s pre-funded
warrants up to 9.99% of the number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such
percentage ownership is determined in accordance with the terms of the pre-funded warrants. Purchasers of pre-funded warrants in this
offering may also elect prior to the issuance of the pre-funded warrants to have the initial exercise limitation set at 9.99% of our outstanding
Common Stock. No fractional shares of Common Stock will be issued in connection with the exercise of a pre-funded warrant. In lieu of
fractional shares, we will round down to the next whole share.
Cashless Exercise.
If, at the time a holder exercises its pre-funded warrants, a registration statement registering the issuance of the shares of Common
Stock underlying the pre-funded warrants under the Securities Act is not then effective or available, then in lieu of making the cash
payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead
to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined according to a formula
set forth in the pre-funded warrants.
Transferability. Subject
to applicable laws, a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded warrant to us
together with the appropriate instruments of transfer.
Exchange Listing. There
is no trading market available for the pre-funded warrants on any securities exchange or nationally recognized trading system. We do not
intend to list the pre-funded warrants on any securities exchange or nationally recognized trading system.
Right as a Stockholder.
Except as otherwise provided in the pre-funded warrants or by virtue of such holder’s ownership of shares of our Common Stock, the
holders of the pre-funded warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, until
they exercise their pre-funded warrants.
Fundamental Transaction.
In the event of a fundamental transaction, as described in the pre-funded warrants and generally including any reorganization, recapitalization
or reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or assets,
our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding Common Stock, or any person
or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the holders of the pre-funded
warrants will be entitled to receive upon exercise of the pre-funded warrants the kind and amount of securities, cash or other property
that the holders would have received had they exercised the pre-funded warrants immediately prior to such fundamental transaction. Notwithstanding
the foregoing, in the event of a fundamental transaction, the holder of the pre-funded warrant will have the right to require us or the
successor entity to purchase the remaining unexercised portion of the pre-funded warrant in cash in an amount equal to a Black Scholes
Value as defined in the pre-funded warrant.
Common Warrants
The following summary of certain
terms and provisions of common warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety
by, the provisions of the common warrants, the form of which is filed as an exhibit to the registration statement of which this prospectus
forms a part. Prospective investors should carefully review the terms and provisions of the form of common warrants for a complete description
of the terms and conditions of the common warrants.
Duration and Exercise Price.
Each common warrant offered hereby will have an initial exercise price per share equal to $ . The common warrants will be immediately
exercisable and will expire on the fifth anniversary of the original issuance date. The exercise price and number of shares of Common
Stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar
events affecting our Common Stock and the exercise price. The common warrants will be issued together with the Common Stock or pre-funded
warrant and may be transferred separately immediately thereafter. A common warrant to purchase one share of our Common Stock will be issued
for every share of Common Stock purchased in this offering.
Exercisability. The
common warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice
accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise (except in the case of a cashless
exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the common warrant to the extent
that the holder would own more than 4.99% of the outstanding Common Stock immediately after exercise, except that upon at least 61 days’
prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s
common warrants up to 9.99% of the number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as
such percentage ownership is determined in accordance with the terms of the common warrants. No fractional shares of Common Stock will
be issued in connection with the exercise of a common warrant. In lieu of fractional shares, we will round down to the next whole share.
Cashless Exercise.
If, at the time a holder exercises its common warrants, a registration statement registering the issuance of the shares of Common Stock
underlying the common warrants under the Securities Act is not then effective or available and an exemption from registration under the
Securities Act is not available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be
made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either
in whole or in part) the net number of shares of Common Stock determined according to a formula set forth in the common warrants.
Transferability. Subject
to applicable laws, common warrants in physical form may be transferred upon surrender of the common warrant together with the appropriate
instruments of transfer.
Exchange Listing. There
is no established public trading market for the common warrants, and we do not expect a market to develop. In addition, we do not intend
to list the common warrants on any securities exchange or nationally recognized trading system. Without an active trading market, the
liquidity of the common warrants will be limited.
Right as a Stockholder.
Except as otherwise provided in the common warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holders
of the common warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, until they exercise
their common warrants.
Fundamental Transaction.
In the event of a fundamental transaction, as described in the form of common warrant, and generally including any reorganization,
recapitalization or reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our properties
or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding Common Stock,
or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the holders
of the common warrants will be entitled to receive upon exercise of the common warrants the kind and amount of securities, cash or other
property that the holders would have received had they exercised the common warrants immediately prior to such fundamental transaction.
Notwithstanding the foregoing, in the event of a fundamental transaction, the holder of the common warrant will have the right to require
us or the successor entity to purchase the remaining unexercised portion of the common warrant in cash in an amount equal to a Black Scholes
Value as defined in the common warrant.
PLAN OF DISTRIBUTION
Pursuant to a placement agency
agreement to be entered into between A.G.P./Alliance Global Partners (“A.G.P.”) and us, we will engage A.G.P. to act as our
exclusive placement agent to solicit offers to purchase the securities offered by this prospectus on a reasonable best-efforts basis.
The placement agent is not purchasing or selling any securities, nor is it required to arrange for the purchase and sale of any specific
number or dollar amount of securities, other than to use its “reasonable best efforts” to arrange for the sale of the securities
by us. Therefore, we may not sell the entire amount of securities being offered, or any at all. The placement agent may engage one or
more subagents or selected dealers in connection with this offering.
We will enter into a securities
purchase agreement directly with the investors, at the investor’s option, who purchase our securities in this offering. Investors
who do not enter into a securities purchase agreement shall rely solely on this prospectus in connection with the purchase of our securities
in this offering.
We will deliver the securities
being issued to the investors upon receipt of investor funds for the purchase of the securities offered pursuant to this prospectus. We
will deliver the securities being offered pursuant to this prospectus upon closing.
We will pay the placement
agent a cash transaction fee equal to 7.0% of the aggregate gross proceeds to us from the sale of the securities in the offering. In addition,
we will reimburse the placement agent for its accountable legal expenses incurred in connection with this offering in the amount of up
to $125,000, as well as non-accountable expenses of up to $25,000, including, but not limited to, IPREO software related expenses, background
check(s), tombstones, marketing related expenses and any other expenses incurred by the placement agent in connection with this offering.
The placement agency agreement, however, will provide that in the event this offering is terminated, the placement agent will only be
entitled to the reimbursement of out-of-pocket accountable expenses actually incurred in accordance with Financial Industry Regulatory
Authority, Inc. (“FINRA”) Rule 5110(f)(2)(C).
The following table shows
the public offering price, placement agent fees and proceeds, before expenses, to us, assuming the purchase of all the securities we are
offering. Because there is no minimum offering amount required as a condition to closing in this offering, the actual total placement
agent fees, if any, are not presently determinable and may be substantially less than the maximum amount set forth below.
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Per Common Stock and Common Warrant | | |
Per Pre-Funded Warrant and Common Warrant | | |
Offering | |
Public offering price | |
$ | | | |
$ | | | |
$ | | |
Placement Agent Fees (7.0%) | |
$ | | | |
$ | | | |
$ | | |
Proceeds, before expenses, to us | |
$ | | | |
$ | | | |
$ | | |
We estimate that the total
expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding
the placement agent commission, will be approximately $ , all of
which are payable by us. This figure includes the placement agent’s out-of-pocket expenses, including, but not limited to, legal
fees for placement agent’s legal counsel, that we have agreed to pay at the closing of the offering, up to $ .
3i, LP Participation in this Offering
3i, LP, the sole
holder of our Series A Preferred Stock and holder of our warrants to purchase 481,752 shares of Common Stock, subject to adjustment
upon closing of this offering, may participate in this offering on the same terms and conditions as other purchasers. We intend to
use a portion of the net proceeds of this offering (other than from 3i, L.P.), to pay off the 3i June Promissory Note. In addition, we intend to use the 3i Proceeds, if
any, to repurchase a portion of the outstanding shares of Series A Preferred Stock owned by 3i, LP. See section titled “Use of
Proceeds” on page 23 of this prospectus.
Lock-Up Agreements
With the exception of 3i,
LP, we and our directors, officers and shareholders who beneficially own 5.0% or more of our outstanding Common Stock have agreed with
the placement agent, for a period of ninety (90) days after the closing of this offering, not to offer for sale, issue, sell, contract
to sell, pledge grant any option to purchase, make any short sale or otherwise dispose of, directly or indirectly any shares of our Common
Stock or any securities convertible into or exchangeable for our Common Stock either owned as of the date of the placement agent agreement
or thereafter acquired without the prior written consent of the placement agent, subject to certain exceptions. The placement agent may,
in its sole discretion and at any time or from time to time before the termination of the lock-up period, without notice, release all
or any portion of the securities subject to lock-up agreements.
Indemnification
We have agreed to indemnify
the placement agent against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the
placement agent may be required to make for these liabilities.
Determination of Offering Price and Warrant
Exercise Price
The actual combined public
offering price of the Common Stock and common warrants, and pre-funded warrants and common warrants, we are offering, and the exercise
price of the common warrants that we are offering, will be negotiated between us, the placement agent and the investors in the offering
based on the trading price of our Common Stock prior to the offering, among other things, including a to be negotiated discount to the
trading price. Other factors considered in determining the combined public offering price of the Common Stock and common warrants, and
pre-funded warrants and common warrants, we are offering, as well as the exercise price of the common warrants that we are offering, include
our history and prospects, the stage of development of our business, our business plans for the future and the extent to which they have
been implemented, an assessment of our management, the general conditions of the securities markets at the time of the offering and such
other factors as were deemed relevant.
Right of First Refusal and Certain Post-Offering Investments
There is an ongoing right
of first refusal in favor of A.G.P., as set forth in that certain placement agency agreement by and between the Company and A.G.P., dated
April 19, 2023, which shall remain in place until April 21, 2024. In addition to (and separately from) such ongoing right of first refusal,
subject to the closing of this offering and certain conditions to be set forth in the placement agent agreement, for a period of twelve
(12) months after the closing of the offering, A.G.P. shall have a right of first refusal to act as sole managing underwriter and sole
book runner, sole placement agent, or sole sales agent, for any and all future public or private equity, equity-linked offerings for
which we retain the service of an underwriters, agent, advisor, finder or other person or entity in connection with such offering during
such twelve month period, or any successor to us or any subsidiary of ours, on terms that are the same or more favorable to us comparing
to terms offered us by an institution other than A.G.P. If we receive terms from an institution other than A.G.P., A.G.P. will have the
first right to match the terms. If A.G.P. is unsuccessful in matching said terms, we will not be bound by such right of first refusal
and will be allowed to engage the offering institution without any obligations to A.G.P.
Regulation M
The placement agent may be
deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit
realized on the resale of the securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions
under the Securities Act. As an underwriter, the placement agent would be required to comply with the requirements of the Securities Act
and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may
limit the timing of purchases and sales of our securities by the placement agent acting as principal. Under these rules and regulations,
the placement agent (i) may not engage in any stabilization activity in connection with our securities and (ii) may not bid for or purchase
any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act,
until it has completed its participation in the distribution.
Trading; The Nasdaq Capital Market
Our Common Stock is listed
on The Nasdaq Capital Market under the symbol “ALLR.” The pre-funded warrants and common warrants are not and will not be
listed on an exchange and there will be no public market for the pre-funded warrants nor common warrants.
Electronic Distribution
A prospectus in electronic
format may be made available on a website maintained by the placement agent. In connection with the offering, the placement agent or selected
dealers may distribute prospectuses electronically.
Other than the prospectus
in electronic format, the information on the placement agent’s website and any information contained in any other website maintained
by the placement agent is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been
approved and/or endorsed by us or the placement agent in its capacity as placement agent and should not be relied upon by investors.
Certain Relationships
The placement agent and its
affiliates may in the future provide, from time to time, investment banking and financial advisory services to us in the ordinary course
of business, for which they may receive customary fees and commissions.
LEGAL MATTERS
The validity of securities
offered hereby will be passed upon for us by Lewis Brisbois Bisgaard & Smith LLP, Los Angeles, California. Sullivan & Worcester
LLP, New York, New York is acting as counsel to the placement agent in connection with certain legal matters related to this offering.
EXPERTS
The consolidated financial
statements of Allarity Therapeutics, Inc. appearing in our Annual Report on Form 10-K for the years ended December 31, 2022, and 2021
have been included herein by reference in reliance on the report of Wolf & Company, P.C., independent registered public accounting
firm, given on the authority of such firm as experts in accounting and auditing.
CHANGE IN REGISTERED PUBLIC ACCOUNTING FIRMS
Current Auditor
On
September 9, 2022, our Audit Committee approved the engagement of Wolf & Company, P.C. (“Wolf”) as our independent registered
public accounting firm for the fiscal year ending December 31, 2022. Subsequently, the Board approved the engagement of Wolf as our independent
registered public accounting firm for the fiscal year ending December 31, 2021. During the two most recent fiscal years ended December
31, 2020 and December 31, 2021 and through the subsequent interim period to September 9, 2022, neither the Company, nor anyone on its
behalf, consulted with Wolf regarding any accounting or auditing issues involving the Company, including (i) the application of accounting
principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect
to the consolidated financial statements of the Company; or (ii) any matter that was the subject of a “disagreement” (as defined
in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as that term is defined in
Item 304(a)(1)(v) of Regulation S-K).
Former Auditor
On
August 8, 2022, our former independent registered public accounting firm, Marcum LLP (“Marcum”) notified us in writing that
our client-auditor relationship had ceased to be effective as of August 5, 2022. Marcum’s reports on the financial statements for
the year ended December 31, 2021, did not contain an adverse opinion or a disclaimer of opinion, nor was it qualified or modified as to
uncertainty, audit scope, or accounting principles but it included an explanatory paragraph concerning the uncertainty of the Company’s
ability to continue as a going concern.
In
our Form 8-K filed with the SEC on August 12, 2022, we reported that during the fiscal year ended December 31, 2021, and subsequent interim
period preceding Marcum’s resignation on August 5, 2022, there were no disagreements with Marcum on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction
of Marcum, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report. Additionally,
during this time period, there were no reportable events as described in Item 304(a)(1)(v) of Regulation S-K, except that, as previously
disclosed in our Form 10-K for the year ended December 31, 2021, and Form 10-Q for the quarterly period ended March 31, 2022, we identified
material weaknesses in our internal controls over financial reporting because we did not have a formal process for period end financial
closing and reporting, we historically had insufficient resources to conduct an effective monitoring and oversight function independent
from our operations and we lacked accounting resources and personnel to properly account for accounting transactions such as the issuance
of warrants with a derivative liability component.
On
August 12, 2022, we provided Marcum with a copy of the disclosures that we were making in response to Item 4.01 on the Form 8-K, and requested
that Marcum furnish us with a letter addressed to the SEC stating whether it agrees with our statements contained in the Form 8-K and,
if not, stating the respects in which it does not agree.
On
August 23, 2022, Marcum provided a letter regarding our disclosure contained in our Form 8-K filed on August 12, 2022, which agreed with
our statements made in the third sentence of the preceding paragraph regarding the existence of material weaknesses in our internal control
over financial reporting; however, Marcum disagreed regarding the description of such material weaknesses. Marcum indicated that the material
weaknesses as disclosed in our Form 10-K for the year ended December 31, 2021, and Form 10-Q for the quarterly period ended March 31,
2022, were as follows: (i) a lack of accounting resources required to fulfill US GAAP and SEC reporting requirements; (ii) a lack of comprehensive
US GAAP accounting policies and financial reporting procedures; (iii) lack of adequate procedures and controls to appropriately account
for accounting transactions including liability and the valuation allowance on the deferred tax asset relating to the net operating losses;
and (iv) a lack of segregation of duties given the size of the finance and accounting team. In addition, Marcum stated that our disclosure
did not include any reference to its resignation because of the impairment of its independence. Finally, Marcum indicated that our disclosure
did not provide disclosure of a reportable event under Item 304(a)(1)(v)(C) of Regulation S-K, as Marcum indicated that information had
come to its attention during the time period covered by Item 304(a)(1)(iv) of Regulation S-K, that if further investigated may have caused
Marcum to be unwilling to rely on management’s representations or be associated with our financial statements; however, due to the
Marcum’s resignation as a result of the impairment of its independence, Marcum did not conduct such further investigation.
With
regards to Marcum’s August 23, 2022, letter as it relates to material weaknesses in our internal controls over financial reporting,
we believe that we have provided the information required under Item 304(a)(1)(v)(A) in the Form 8-K. With regards Marcum’s statement
in its August 23, 2022, letter regarding management’s representations, we respectfully disagree that there were events that occurred
that rose to a level that would have impaired independence, or there was information, if further investigated, would require disclosure
under Item 304(a)(1)(v)(C). Prior to its resignation, Marcum did not inform the Audit Committee of the information stated in their letter
and if they had done so, we believe that we would have addressed any issues Marcum would have raised with the Audit Committee to the satisfaction
of Marcum. A copy of Marcum’s letter to the SEC required by Item 304(a) of Regulation S-K is included as Exhibit 16.1 to the registration
statement of which this prospectus forms a part.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC
a registration statement on Form S-1 under the Securities Act with respect to the Common Stock, pre-funded warrants, and common warrants
and the Common Stock issuable upon exercise of the pre-funded warrants and Common Stock warrants offered by this prospectus. This prospectus,
which constitutes a part of the registration statement, does not contain all the information set forth in the registration statement,
some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further
information with respect to us and our securities, we refer you to the registration statement, including the exhibits filed as a part
of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other documents
are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy
of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit
is qualified in all respects by the filed exhibit. The SEC maintains an Internet site that contains reports, proxy and information statements,
and other information regarding issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
We are subject to the information
reporting requirements of the Exchange Act, and we file reports, proxy statements and other information with the SEC. These reports, proxy
statements and other information will be available at website of the SEC referred to above.
We also maintain a website
at www.allarity.com. Information contained in, or accessible through, our website is not a part of this prospectus, and the inclusion
of our website address in this prospectus is only as an inactive textual reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” information that we file with them. Incorporation by reference allows us to disclose important information to you
by referring you to those other documents. The information incorporated by reference is an important part of this prospectus, and information
that we file later with the SEC will automatically update and supersede this information. Statements in this prospectus regarding the
provisions of certain documents filed with, or incorporated by reference in, the registration statement are not necessarily complete and
each statement is qualified in all respects by that reference. The documents we are incorporating by reference into this prospectus are:
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 13, 2023; |
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our Quarterly Report on Form 10-Q for the period ended March 31, 2023, filed with the SEC on May 11, 2023; |
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our Current Reports
on Form 8-K filed with the SEC on June 30, 2023; June 28, 2023; June 23, 2023; June 20, 2023; June
1, 2023; May 26, 2023;
May 2, 2023; April
25, 2023; April 12, 2023;
March 24, 2023; March
20, 2023 (related to amendment to certificate of incorporation and votes at Special Meeting); February
28, 2023; February 10, 2023;
February 6, 2023; January
23, 2023; January 20, 2023;
January 19, 2023
and January 18, 2023 ; and |
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our Definitive Proxy Statement on Schedule 14A, filed with the
SEC on June 6, 2023.
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In addition, all documents
subsequently filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) on or after the date of the initial filing
of the registration statement of which this prospectus is a part and prior to effectiveness of the registration statement, and (ii) on
or after the date of this prospectus but before the completion or termination of this offering (excluding any information not deemed “filed”
with the SEC), are deemed to be incorporated by reference into, and to be a part of, this prospectus. In no event, however, will any of
the information, including exhibits, that we disclose under Item 2.02 and Item 7.01 of any Current Report on Form 8-K that has been or
may, from time to time, be furnished to the SEC to be incorporated into or otherwise become a part of this prospectus.
Any statement contained in
a previously filed document is deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained
in this prospectus or in a subsequently filed document incorporated by reference herein modifies or supersedes the statement, and any
statement contained in this prospectus is deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained in a subsequently filed document incorporated by reference herein modifies or supersedes the statement. Any statement so modified
or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You should rely only on information
contained in, or incorporated by reference into, this prospectus. We have not authorized anyone to provide you with information different
from that contained in this prospectus or incorporated by reference therein. We are not making offers to sell the securities in any jurisdiction
in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to
do so or to anyone to whom it is unlawful to make such offer or solicitation.
Up
to 2,049,180 Shares of Common Stock
Up to 2,049,180 Warrants to purchase up to
2,049,180 Shares of Common Stock
Up to 2,049,180 Pre-Funded Warrants to purchase
up to 2,049,180 Shares of Common Stock
Up to 2,049,180 Shares of Common Stock Issuable
Upon Exercise of Common Warrants
ALLARITY THERAPEUTICS, INC.
Preliminary Prospectus
Sole Placement Agent
A.G.P.
, 2023
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth
all costs and expenses, other than placement agent fees, payable by us in connection with the sale of the securities being registered.
All amounts shown are estimates except for the SEC registration and FINRA filing fees.
| |
Amount | |
SEC registration fee | |
$ | 3,306 | |
FINRA filing fee | |
| 5,000 | |
Accountants’ fees and expenses | |
| 55,000 | |
Legal fees and expenses | |
| 250,000 | |
Transfer agent and registrar fees | |
| 10,000 | |
Printing fees | |
| 5,000 | |
Miscellaneous fees and expenses | |
| 11,694 | |
Total Expense | |
$ | 340,000 | |
Item 14. Indemnification of Directors and Officers.
Delaware law, our Certificate
of Incorporation and our bylaws provide that we will, in certain situations, indemnify its directors and officers and may indemnify other
employees and other agents, to the fullest extent permitted by law. Any indemnified person is also entitled, subject to certain limitations,
to advancement, direct payment, or reimbursement of reasonable expenses (including attorneys’ fees and disbursements) in advance
of the final disposition of the proceeding.
Our Certificate of Incorporation
limits a director’s liability to the fullest extent permitted under the Delaware General Corporation Law, or DGCL. The DGCL provides
that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors,
except for liability:
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for any breach of the director’s duty of loyalty to the corporation or its stockholders; |
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for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
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for unlawful payment of dividend or unlawful stock purchase or redemption pursuant to the provisions of Section 174 of the DGCL; and |
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for any transaction from which the director derived an improper personal benefit. |
Section 145(a) of the DGCL
provides, in general, that a corporation may indemnify any person who was or is a party to or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation), because he or she is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Section 145(b) of the
DGCL provides, in general, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor because the person
is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including
attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit
if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation,
except that no indemnification shall be made with respect to any claim, issue or matter as to which he or she shall have been adjudged
to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that,
despite the adjudication of liability but in view of all of the circumstances of the case, he or she is fairly and reasonably entitled
to indemnity for such expenses that the Court of Chancery or other adjudicating court shall deem proper.
Section 145(g) of the
DGCL provides, in general, that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred
by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power
to indemnify the person against such liability under Section 145 of the DGCL.
If the DGCL is amended to
authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the directors will
be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
In addition, we intend to
enter into separate indemnification agreements with our directors and officers. These agreements, among other things, require us to indemnify
our directors and officers for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by
a director or officer in any action or proceeding arising out of their services as one of our directors or officers or any other company
or enterprise to which the person provides services at our request.
We anticipate maintaining
a directors’ and officers’ insurance policy pursuant to which our directors and officers are insured against liability for
actions taken in their capacities as directors and officers. We believe these provisions in the Certificate of Incorporation and bylaws
and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers, or control persons, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 15. Recent Sales of Unregistered Securities.
All share and per share
information presented in this Part II, Item 15 gives effect to the 1-for-35 share consolidation of our common stock effective March 24,
2023, and the 1-for-40 share consolidation of our common stock effective June 28, 2023.
On May 20, 2021, we entered
into a securities purchase agreement to sell 20,000 shares of our Series A Convertible Preferred Stock, par value $0.0001 per share (the
“Series A Preferred Stock”) and a warrant to purchase 1,443 shares of common stock at an initial exercise price of $13,868.40
(the “PIPE Warrant”) to 3i, LP, for an aggregate purchase price of $20 million.
From December 23, 2021
to June 29, 2023, pursuant to a series of exercise of conversion by 3i, LP, we issued a total of 247,480 shares of common stock to 3i,
LP upon the conversion of 18,466 shares of Series A Preferred Stock based on exercise prices ranging from $13,868.40 to $30.00.
In July 2022, in connection
with the appointment of Dr. Roth as our independent director, we granted him options to purchase 16 shares of common stock at an exercise
price of $1,792 per share, subject to vesting of 1/36 per month over thirty-six (36) months following the grant date. The expiration
date for the options is five (5) years from date of grant.
In October 2022, in connection
with the appointment of Mr. McLaughlin as our independent director, we granted him options to purchase 16 shares of common stock at an
exercise price of $1,540 per share, subject to vesting of 1/36 per month over thirty-six (36) months following the grant date. The expiration
date for the options is five (5) years from date of grant.
On January 12, 2023, in connection
with entering into a new employment contract, Mr. Cullem may elect to receive up to thirty thousand dollars ($30,000.00) of his base salary
in restricted stock grants. Any such restricted stock grants will be made quarterly, at the start of each calendar quarter, at the stock
fair market value on the 1st day of each calendar quarter. In addition, subject to achieving certain conditions, Mr. Cullem was granted
stock options which will have an exercise price equal to the fair market value of the Company’s shares on the grant date and a term
of ten (10) years, in an amount as follows: (i) three and one-half percent (3.5%) of the Company’s issued and outstanding shares
of common stock immediately after a financing; provided, however, that such amount will not exceed fifty percent (50%) of the options
available to be granted under the Company’s 2021 Equity Incentive Plan (“Grant Limitation”); and (ii) two percent (2.0%)
of the Company’s issued and outstanding shares of common stock immediately after a financing; provided however, that such grant
will not exceed the Grant Limitation.
On January 12, 2023, in connection
with entering into a new employment contract, Ms. Brown received stock options in the amount of three quarters of one percent (0.75%)
of the Company’s issued and outstanding shares of common stock immediately after a financing granted pursuant to the 2021 Equity
Incentive Plan. The exercise price will be the fair market value of Company’s shares on the date of grant. The stock options will
vest ratably over a forty-eight (48) month period commencing July 1, 2022, and have a term of ten (10) years.
On February 28, 2023, we entered
into a securities purchase agreement with 3i, LP for the purchase and sale of 50,000 shares of Series C Convertible Redeemable Preferred
Stock, par value of $0.0001 (the “Series C Shares”) per share at a purchase price of $24.00 per share, for a subscription
receivable in the aggregate amount equal to the total purchase price of $1.2 million.
From November 2022 to April
12, 2023, pursuant to the terms of a Secured Note Purchase Agreement dated November 22, 2022, we sold 3i, LP the following four secured
promissory notes (collectively the “3i, LP Promissory Notes”): the first note was for an aggregate principal amount of $350,000
(which purchase price was paid in form of cash was received in November 2022); the second note was for the principal amount of $1,666,640
and which represents the payment of $1,666,640 due to 3i, LP in Alternative Conversion Floor Amounts, as defined in the Certificate of
Designations of Series A Preferred Stock, par value of $0.0001 per share (the “Original Series A COD”) that began to accrue
on July 14, 2022; the third note was for an aggregate principal amount of $650,000 which purchase price was paid in cash on December 30,
2022; and the fourth note was for the aggregate principal amount of $350,000 (which purchase price was paid in cash on April 11, 2023).
On April 19, 2023, 3i, LP, provided the Company with a loan for $350,000,
evidenced by a Secured Promissory Note dated April 19, 2023 (the “April Note”), which required a mandatory conversion of the
principal into 486 shares of Series A Preferred Stock (the “Note Conversion Shares”) subject to and upon the closing of the
April Offering. On April 21, 2023, the Note Conversion Shares were issued to 3i, LP and the April Note was cancelled.
On
April 20, 2023, we entered into a Modification and Exchange Agreement with 3i, LP pursuant
to which we agreed to, among other things, (i) amend and restate the Certificate of Designations
for the Series A Convertible Preferred Stock, which among other things, eliminates the Series
A Preferred Stock redemption right and dividend (except for certain exceptions as specified
in the Amended and Restated Certificate of Designations for the Series A Preferred Stock
filed with the Secretary of State of the State of Delaware), and provides for the conversion
of Series A Preferred Stock into Common Stock at a conversion price of $30.00 which is equal
to the price for a share of Common Stock sold in the April 21, 2023 public offering, (ii)
exchange 50,000 shares of Series C Preferred Stock beneficially owned by 3i, LP for 5,577
shares of Series A Preferred Stock (the “Exchange Shares”), and (iii) issue a
new warrant (“Exchange Warrant”) which reflects an exercise price of $30.00 and
represents a right to acquire 315,085 shares of Common Stock in exchange for the PIPE Warrant,
which is subject to further adjustment upon closing of this offering.
On June 29, 2023, the
Company entered into a Secured Note Purchase Agreement with 3i, LP (the “June 2023 Purchase Agreement”) for a bridge loan
in order to provide the Company with more time to secure additional financings. On June 30, 2023, 3i, LP purchased a secured promissory
note for a principal amount of $350,000 (“3i June Promissory Note”) which purchase price
was paid in cash. Such note matures on July 31, 2023, and carries an interest rate of at 5% per annum, and is secured by all of the Company’s
assets pursuant to the security agreement dated June 29, 2023. Under the 3i June Promissory Note, the outstanding obligations thereunder,
including accrued interest will be paid in full at the next financing from the gross proceeds of such financing; provided, however, that
if the gross proceeds from such financing are insufficient to settle the payment of the outstanding principal balance of the 3i June
Promissory Note, together with all accrued interest thereon, in full, then the Company will instead be obligated to convert all of the
unpaid principal balance of the 3i June Promissory Note, together with all accrued interest thereon, into Four Hundred Eighty-Six (486)
shares of the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share (the “Repayment Shares”).
In connection with the Repayment Shares, the June 2023 Purchase Agreement provides that if the closing sale price of the shares of Common
Stock of the trading day immediately prior to the execution of the June 2023 Purchase Agreement (the “Current Closing Price”)
is lower than the initial conversion price of $30.00 as set forth in Certificate of Designation of Series A Preferred Stock, as amended
and currently in effect (the “Series A COD”) then the conversion price will be reduced to the Current Closing Price, pursuant
to the voluntary adjustment provision of Section 8 of the Series A COD (“Downward Adjustment to Conversion Price”) and of
the Company shall file a second certificate of amendment to the Series A COD with the Delaware Secretary of State to amend the Series
A COD to reflect the Downward Adjustment to Conversion Price.
The offers, sales, and issuances of the 3i June Promissory Note,
the Repayment Shares and common issuable upon conversion of the Repayment Shares, and options to Dr. Roth, Mr. McLaughlin, Mr. Cullem
and Ms. Brown; and Series A Preferred Stock and PIPE Warrant, 3i, LP Promissory Notes, Series C Preferred Stock, the April Note, the
Note Conversion Shares to 3i, LP were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of
the Securities Act or Rule 506 of Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. Each
of the recipients of securities in these transactions was an accredited investor within the meaning of Rule 501 of Regulation D under
the Securities Act. The conversions of Series A Preferred Stock into Common Stock, and the issuance of the Exchange Shares and Exchange
Warrant were exempt from registration pursuant to Section 3(a)(9).
Item 16. Exhibits and Financial Statement Schedules.
The exhibits listed below are filed as part of
this registration statement:
Exhibit No. |
|
Description |
|
|
|
1.1* |
|
Form of Placement Agency Agreement |
2.1(e) |
|
Amended and Restated Plan of Reorganization and Asset Purchase Agreement by and among Allarity Therapeutics, Inc. a Delaware corporation, Allarity Acquisition Subsidiary, a Delaware corporation and Allarity Therapeutics A/S, an Aktieselskab organized under the laws of Denmark, dated as of September 23, 2021 |
3.1(a) |
|
Certificate of Incorporation of Allarity Therapeutics, Inc. |
3.2(b) |
|
Certificate of Amendment to the Certificate of Incorporation of Allarity Therapeutics, Inc. |
3.3(c) |
|
Amended and Restated Bylaws of Allarity Therapeutics, Inc. |
3.4(m) |
|
Amendment No. 1 to Amended and Restated Bylaws of Allarity Therapeutics, Inc. |
3.5(g) |
|
Certificate of Designations of Allarity Therapeutics, Inc. relating to the Series A Convertible Preferred Stock |
3.6(q) |
|
Amendment to Certificate of Designation of the Series A Convertible Preferred Stock |
3.7(q) |
|
Certificate of Designation of the Series B Preferred Stock |
3.8(s) |
|
Certificate of Designation of the Series C Preferred Stock |
3.9(s) |
|
Certificate of Amendment to Certificate of Designation of Series C Preferred Stock |
3.10(u) |
|
Second Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc. |
3.11(v) |
|
Third Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc. |
3.12(aa) |
|
Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock of Allarity Therapeutics, Inc. |
3.13(bb) |
|
First Certificate of Amendment
to Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock |
3.14(cc) |
|
Fourth Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc.
|
3.15(dd) |
|
Second Amendment to Certificate of Designation (Series A Preferred Stock) |
4.1(b) |
|
Specimen Common Stock Certificate of Allarity Therapeutics, Inc. |
4.2(aa) |
|
Warrant to Purchase Common Stock (3i, LP) |
4.3(aa) |
|
Form of Pre-Funded Warrant (April 2023) |
4.4(aa) |
|
Form of Common Warrant (April 2023) |
4.5(aa) |
|
Modification and Exchange
Warrant |
4.6* |
|
Form of Pre-Funded Warrant |
4.7* |
|
Form of Common Warrant |
5.1* |
|
Opinion of Lewis Brisbois Bisgaard & Smith LLP |
10.1#(e) |
|
Allarity Therapeutics, Inc. 2021 Equity Incentive Plan |
10.2†(a) |
|
Exclusive License Agreement between Oncology Venture A/S and Smerud Medical Research International As Dated as of June 26, 2020 |
10.3†(a) |
|
Amended and Restated License Agreement between Allarity Therapeutics A/S and LiPlasome Pharma ApS, dated January 2021 |
10.4†(a) |
|
Exclusive License Agreement between Oncology Venture, APS and 2-BBB Medicines BV, dated as of March 27, 2017 |
10.5†(c) |
|
Development, Option and License Agreement between Oncology Venture ApS and R-Pharm US Operating LLC, dated March 1, 2019 |
10.6†(c) |
|
Exclusive License Agreement between Oncology Venture, ApS and Eisai, Inc., dated as of July 6, 2017 |
10.7†(c) |
|
License Agreement between Novartis Pharma Ag and Oncology Venture, ApS, dated April 6, 2018 |
10.8+(a) |
|
Securities Purchase Agreement dated May 20, 2021 between Allarity Therapeutics, Inc. and 3i, LP |
10.9(a) |
|
Registration Rights Agreement dated May 20, 2021 between Allarity Therapeutics, Inc. and 3i, LP |
10.10†(a) |
|
Asset Purchase Agreement dated July 23, 2021 between Allarity Therapeutics A/S and Lantern Pharma Inc. |
10.11(c) |
|
First Amendment to the Exclusive License Agreement between Eisai and Allarity Therapeutics A/S dated December 20, 2020. |
10.12(d) |
|
Second Amendment to Exclusive License Agreement between Oncology Venture, ApS and Eisai, Inc. dated as of August 3, 2021. |
10.13#(f) |
|
Employment Agreement by and between Allarity Therapeutics, Inc. and James G. Cullem |
10.14#(f) |
|
Employment Agreement by and between Allarity Therapeutics, Inc. and Marie Foegh, M.D. |
10.15(h) |
|
Asset Purchase Agreement between Allarity Therapeutics, Inc. and Allarity Therapeutics A/S dated December 17, 2021 |
10.16(k) |
|
Assignment and Assumption Agreement between Allarity Therapeutics, Inc. and Allarity A/S |
10.17†(k) |
|
Exclusive License Agreement with Oncoheroes Bioscience, Inc. dated January 2, 2022 (Stenoparib) |
10.18†(k) |
|
Exclusive License Agreement with Oncoheroes Bioscience, Inc. dated January 2, 2022 (Dovitnib) |
10.19†(k) |
|
Amended and Restated License Agreement among Allarity Therapeutics Europe ApS, LiPlasome Pharma ApS, and Chosa ApS dated March 28, 2022 |
10.20†(k) |
|
Support Agreement between Allarity Therapeutics A/S and LiPlasome Pharma ApS, dated March 28, 2022 |
10.21(i) |
|
First Amendment to License Agreement between Novartis Pharma Ag and Allarity Therapeutics Europe ApS |
10.22(i) |
|
Convertible Promissory Note |
10.23(j) |
|
Forbearance Agreement and Waiver |
10.24(l) |
|
First Amendment to Forbearance and Waiver |
10.25†#(o) |
|
Separation Agreement with Steve Carchedi |
10.26†#(o) |
|
Separation Agreement with Jens Knudsen |
10.27(o) |
|
Second Amendment to Development Option & License Agreement |
10.28†(p) |
|
Second Amendment to License Agreement with Novartis Pharma AG |
10.29(q) |
|
Secured Note Purchase Agreement |
10.30(q) |
|
Form of Secured Promissory Note |
10.31(q) |
|
Security Agreement |
10.32(r) |
|
Employment Agreement with James G. Cullem |
10.33(r) |
|
Employment Agreement with Joan Brown |
10.34(t) |
|
Letter Agreement with 3i, LP dated December 8, 2022 |
10.35(t) |
|
Letter Agreement with 3i, LP dated January 23, 2023 |
10.36(s) |
|
Form of Securities Purchase Agreement Series C Preferred Stock |
10.37(s) |
|
Form of Registration Rights Agreement |
10.38(s) |
|
Limited Waiver Agreement |
10.39(aa) |
|
Form
of Securities Purchase Agreement (April Offering) |
10.40(y) |
|
Form
of Lock- Up Agreement (April Offering) |
10.41(z) |
|
First Amendment to Secured Note Purchase Agreement |
10.42(z) |
|
First Amendment to Security Agreement |
10.43(z) |
|
Form of Secured Promissory Note (2023) |
10.44(aa) |
|
Secured Promissory Note |
10.45(aa) |
|
Modification and Exchange Agreement |
10.46(aa) |
|
Cancellation of Debt Agreement |
10.47(aa) |
|
First Amendment to Registration Rights Agreement |
10.48(aa) |
|
Limited Waiver Agreement |
10.49(bb) |
|
Amendment to Modification
and Exchange Agreement |
10.50* |
|
Form of Securities Purchase Agreement |
10.51(bb) |
|
Fourth
Amendment to the Exclusive License Agreement with Eisai, Inc. |
10.52** |
|
Third Amendment to the Exclusive License Agreement with Eisai, Inc. |
10.53** |
|
Form of Limited Waiver and Amendment Agreement |
10.54** |
|
3i, LP - Limited Waiver and Amendment Agreement |
10.55(dd) |
|
June 2023 Secured Note Purchase Agreement |
10.56(dd) |
|
Security Agreement |
10.57(dd) |
|
Secured Promissory Note |
10.58* |
|
Form of Lock-Up Agreement |
16.1(n) |
|
Letter from Marcum, LLP dated August 23, 2022, regarding Change in Independent Registered Public Accounting Firm |
21.1(x) |
|
Subsidiaries of the Registrant |
23.1* |
|
Consent of Wolf & Company, P.C. |
23.2* |
|
Consent of Lewis Brisbois Bisgaard & Smith LLP (included in Exhibit 5.1) |
24.1** |
|
Power of Attorney (included on the signature page to the previously filed registration statement filed) |
101.INS* |
|
Inline XBRL Instance Document |
101.SCH* |
|
Inline XBRL Taxonomy Extension Schema Document |
101.CAL* |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104* |
|
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension
information contained in Exhibits 101) |
107** |
|
Calculation of Filing Fee Table |
(a) |
|
Incorporated by reference from the Registration Statement on Form S-4 filed with the SEC on August 20, 2021. |
(b) |
|
Incorporated by reference from Amendment No. 1 to Registration Statement on Form S-4 as refiled with the SEC on October 20, 2021. |
(c) |
|
Incorporated by reference from Amendment No. 2 to Registration Statement on Form S-4 as refiled with the SEC on October 20, 2021. |
(d) |
|
Incorporated by reference from Amendment No. 4 to Registration Statement on Form S-4 as filed with the SEC on November 2, 2021. |
(e) |
|
Incorporated by reference from Amendment No. 2 to Registration Statement on Form S-1 as filed with the SEC on December 6, 2021. |
(f) |
|
Incorporated by reference from Form 8-K as filed with the SEC on December 10, 2021. |
(g) |
|
Incorporated by reference from Form 8-K as filed with the SEC on December 20, 2021. |
(h) |
|
Incorporated by reference from Form 8-K filed with the SEC on December 22, 2021. |
(i) |
|
Incorporated by reference from Form 8-K filed with the SEC on April 18, 2022. |
(j) |
|
Incorporated by reference from Form 8-K filed with the SEC on May 6, 2022. |
(k) |
|
Incorporate by reference from Form 10-K filed with the SEC on May 17, 2022. |
(l) |
|
Incorporated by reference from Form 8-K filed with the SEC on June 10, 2022. |
(m) |
|
Incorporated by reference from Form 8-K filed with the SEC on July 11, 2022. |
(n) |
|
Incorporated by reference from Form 8-K filed with the SEC on August 12, 2022, as amended on August 24, 2022. |
(o) |
|
Incorporated by reference from Form 10-Q filed with the SEC on October 7, 2022. |
(p) |
|
Incorporated by reference from Form 8-K filed with the SEC on September 30, 2022. |
(q) |
|
Incorporated by reference from Form 8-K filed with the SEC on November 25, 2022. |
(r) |
|
Incorporated by reference from Form 8-K filed with the SEC on January 19, 2023. |
(s) |
|
Incorporated by reference from Form 8-K filed with the SEC on February 28, 2023. |
(t) |
|
Incorporated by reference from Form 10-K filed with the SEC on March 13, 2023. |
(u) |
|
Incorporated by reference from Form 8-K filed with the SEC on March 20, 2023. |
(v) |
|
Incorporated by reference from Form 8-K filed with the SEC on March 24, 2023. |
(x) |
|
Incorporated by reference from Form S-1 filed with the SEC on March 14, 2023. |
(y) |
|
Incorporated by reference from Form S-1 filed with the SEC on March 28, 2023. |
(z) |
|
Incorporated by reference from Form 8-K filed with the SEC on April 12, 2023. |
(aa) |
|
Incorporated by reference from Form 8-K filed with the SEC on April 25, 2023. |
(bb) |
|
Incorporated by reference from Form 8-K filed with the SEC on June 1, 2023. |
(cc) |
|
Incorporated by reference from Form 8-K filed with the SEC on June 28, 2023. |
(dd) |
|
Incorporated by reference from Form 8-K filed with the SEC on June 30, 2023. |
|
|
|
† |
|
Certain portions of this exhibit were be omitted because they are not material and would likely cause competitive harm to the registrant if disclosed. |
* |
|
Filed herewith. |
** |
|
Previously filed. |
# |
|
Indicates management contract or compensatory plan or arrangement. |
Item 17. Undertakings
The undersigned registrant
hereby undertakes:
|
A. |
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
|
(i) |
To include any prospectus required by section 10(a)(3) of the Securities Act; |
|
(ii) |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
|
(iii) |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
|
B. |
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
|
C. |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
|
D. |
That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
|
E. |
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
|
(i) |
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
|
(ii) |
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
|
|
|
|
(iii) |
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
|
(iv) |
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
|
F. |
That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to re-offerings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
|
G. |
That every prospectus (i) that is filed pursuant to paragraph (F) immediately preceding or (ii) that purports to meet the requirements of section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
|
H. |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
|
I. |
The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
|
J. |
To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, Commonwealth of Massachusetts on June 30, 2023.
|
ALLARITY THERAPEUTICS, INC. |
|
|
|
By: |
/s/ James G. Cullem |
|
Name: |
James G. Cullem |
|
Title: |
Chief Executive Officer |
Pursuant to the
requirements of the Securities Act of 1933, as amended, this registration statement on Form S-1 has been signed below by the
following persons in the capacities indicated and on the dates indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ James G. Cullem |
|
Chief Executive Officer and Director |
|
June 30, 2023 |
James
G. Cullem |
|
(Principal Executive
Officer) |
|
|
|
|
|
|
|
/s/ Joan Brown |
|
Chief Financial Officer |
|
June 30, 2023 |
Joan
Brown |
|
(Principal Financial
and Accounting Officer) |
|
|
|
|
|
|
|
* |
|
Chairman of the Board |
|
June 30, 2023 |
Gerald
McLaughlin |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
June 30, 2023 |
David
A. Roth |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
June 30, 2023 |
Thomas
Jensen |
|
|
|
|
*By: |
/s/
James G. Cullem |
|
|
James G. Cullem |
|
|
Attorney-in-Fact |
|
II-9
S-1/A
true
0001860657
0001860657
2023-01-01
2023-03-31
Exhibit 1.1
July [●], 2023
Allarity Therapeutics, Inc.
24 School Street, 2nd Floor
Boston, MA 02108
Attn: Chief Executive Officer
Dear Mr. Cullem:
This letter (the “Agreement”)
constitutes the agreement between A.G.P./Alliance Global Partners, as placement agent (the “Placement Agent”), and
Allarity Therapeutics, Inc., a company incorporated under the laws of the State of Delaware (the “Company”), that the
Placement Agent shall serve as the exclusive placement agent for the Company, on a “reasonable best efforts” basis, in connection
with the proposed placement (the “Placement”) of (i) [●] shares (a “Share” and, collectively,
the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”),
(ii) warrants to purchase [●] shares of Common Stock of the Company (the “Common Warrants”), and/or (iii) pre-funded
warrants to purchase [●] shares of Common Stock (the “Pre-Funded Warrants”, and together with the Common Warrants,
the “Warrants,” and collectively with the Shares, the “Securities”), depending on the beneficial
ownership percentage of the purchaser of the Common Stock following its purchase. The Securities shall be offered and sold under the Company’s
registration statement on Form S-1 (File No. 333-272469) (the “Registration Statement”). The Securities actually placed
by the Placement Agent are referred to herein as the “Placement Agent Securities.” The terms of the Placement shall
be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”);
provided, however, that nothing herein shall obligate the Company to issue any Securities or complete the Placement. The Company
expressly acknowledges and agrees that the Placement Agent’s obligations hereunder are on a reasonable best efforts basis only and
that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase the Securities and does not ensure
the successful placement of the Securities or any portion thereof or the success of the Placement Agent with respect to securing any other
financing on behalf of the Company. The Placement Agent shall act solely as the Company’s agent and not as principal. The Placement
Agent shall have no authority to bind the Company with respect to any prospective offer to purchase the Securities and the Company shall
have the sole right to accept offers to purchase the Securities and may reject any such offer, in whole or in part. The Placement Agent
may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Placement. Certain affiliates
of the Placement Agent may participate in the Placement by purchasing some of the Placement Agent Securities. The sale of Placement Agent
Securities to any Purchaser will be evidenced by a securities purchase agreement (the “Purchase Agreement”) between
the Company and such Purchaser, in a form reasonably acceptable to the Company and the Purchaser. Capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Purchase Agreement. Prior to the signing of any Purchase Agreement, officers
of the Company will be available to answer inquiries from prospective Purchasers.
Notwithstanding anything herein
to the contrary, in the event that the Placement Agent determines that any of the terms provided for hereunder do not comply with a FINRA
rule, including but not limited to FINRA Rule 5110, then the Company shall agree to amend this Agreement in writing upon the request of
the Placement Agent to comply with any such rules; provided that any such amendments shall not provide for terms that are less favorable
to the Company than the terms of this Agreement or that such terms are adverse to the Company.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.
A. Representations
of the Company. With respect to the Placement Agent Securities, each of the representations and warranties (together with any related
disclosure schedules thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement in connection with the Placement,
is hereby incorporated herein by reference into this Agreement (as though fully restated herein) and is, as of the date of this Agreement
and as of the Closing Date, hereby made to, and in favor of, the Placement Agent. In addition to the foregoing, the Company represents
and warrants that there are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge
of the Company, any five percent (5.0%) or greater stockholder (excluding 3i, LP) of the Company, except as set forth in the Purchase
Agreement and SEC Reports.
B. Covenants
of the Company. The Company further covenants and agrees with the Placement Agent as follows:
| (a) | Registration Statement Matters. The Company will advise the Placement Agent promptly after it receives
notice thereof of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the
Prospectus has been filed and will furnish the Placement Agent with copies thereof. The Company will file promptly all reports and any
definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 14 or 15(d)
of the Exchange Act subsequent to the date of any Prospectus and for so long as the delivery of a prospectus is required in connection
with the Offering. The Company will advise the Placement Agent, promptly after it receives notice thereof (i) of any request by the Commission
to amend the Registration Statement or to amend or supplement any Prospectus or for additional information, and (ii) of the issuance by
the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or
any order directed at any Transaction Document, if any, or any amendment or supplement thereto or any order preventing or suspending the
use of the Preliminary Prospectus or the Prospectus or any prospectus supplement or any amendment or supplement thereto or any post-effective
amendment to the Registration Statement, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction,
of the institution or threatened institution of any proceeding for any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or a Prospectus or for additional information. The Company shall use its best efforts to
prevent the issuance of any such stop order or prevention or suspension of such use. If the Commission shall enter any such stop order
or order or notice of prevention or suspension at any time, the Company will use its best efforts to obtain the lifting of such order
at the earliest possible moment, or will file a new registration statement and use its best efforts to have such new registration statement
declared effective as soon as practicable. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b),
430A, 430B and 430C, as applicable, under the Securities Act, including with respect to the timely filing of documents thereunder, and
will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) are received in a timely manner
by the Commission. |
| (b) | Blue Sky Compliance. The Company shall, with the cooperation of the Placement Agent, be responsible
for qualifying the Securities for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent
and the Purchasers may reasonably request and will make such applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided the Company shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent, and provided further
that the Company shall not be required to produce any new disclosure document. The Company will, from time to time, prepare and file such
statements, reports and other documents as are or may be required to continue such qualifications in effect for so long a period as the
Placement Agent may reasonably request for distribution of the Securities. The Company will advise the Placement Agent promptly of the
suspension of the qualification or registration of (or any such exemption relating to) the Securities for offering, sale or trading in
any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending
such qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest
possible moment. |
| (c) | Amendments and Supplements to a Prospectus and Other Matters. The Company will comply with the
Securities Act and the Exchange Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement, any Prospectus and any documents incorporated therein. If during the
period in which a prospectus is required by law to be delivered in connection with the distribution of Securities contemplated by the
Transaction Documents or any Prospectus (the “Prospectus Delivery Period”), any event shall occur as a result of which,
in the judgment of the Company or in the opinion of the Placement Agent or counsel for the Placement Agent, it becomes necessary to amend
or supplement the Transaction Documents or any Prospectus in order to make the statements therein, in light of the circumstances under
which they were made, as the case may be, not misleading, or if it is necessary at any time to amend or supplement the Transaction Documents
or any Prospectus or to file under the Exchange Act any Transaction Document to comply with any law, the Company will promptly prepare
and file with the Commission, and furnish at its own expense to the Placement Agent and to dealers, an appropriate amendment to the Registration
Statement or supplement to the Registration Statement, the Transaction Documents or any Prospectus that is necessary in order to make
the statements in the Transaction Documents and any Prospectus as so amended or supplemented, in light of the circumstances under which
they were made, as the case may be, not misleading, or so that the Registration Statement, the Transaction Documents or any Prospectus,
as so amended or supplemented, will comply with law. Before amending the Registration Statement or supplementing the Transaction Documents
or any Prospectus in connection with the Offering, the Company will furnish the Placement Agent with a copy of such proposed amendment
or supplement and will not file any such amendment or supplement to which the Placement Agent reasonably objects. |
| (d) | Copies of any Amendments and Supplements to a Prospectus. The Company will furnish the Placement
Agent, without charge, during the period beginning on the date hereof and ending on the Closing Date, as many copies of any Prospectus
or prospectus supplement and any amendments and supplements thereto, as the Placement Agent may reasonably request. |
| (e) | Free Writing Prospectus. The Company covenants that it will not, unless it obtains the prior written
consent of the Placement Agent, make any offer relating to the Securities that would constitute an issuer free writing prospectus or that
would otherwise constitute a “free writing prospectus” as defined in Rule 405 of the Securities Act (each, an “Issuer
Free Writing Prospectus”) required to be filed by the Company with the Commission or retained by the Company under Rule 433
of the Securities Act. In the event that the Placement Agent expressly consents in writing to any such free writing prospectus (a “Permitted
Free Writing Prospectus”), the Company covenants that it shall (i) treat each Permitted Free Writing Prospectus as an Issuer
Free Writing Prospectus, and (ii) comply with the requirements of Rule 164 and 433 of the Securities Act applicable to such Permitted
Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping. |
| (f) | Transfer Agent. The Company will maintain, at its expense, a competent transfer agent with respect
to the Placement Agent Securities for a period of three (3) years after the Closing Date. |
| (g) | Earnings Statement. As soon as practicable and in accordance with applicable requirements under
the Securities Act, but in any event not later than 18 months after the Closing Date, the Company will make generally available to its
security holders and to the Placement Agent an earnings statement, covering a period of at least 12 consecutive months beginning after
the last Closing Date, that satisfies the provisions of Section 11(a) and Rule 158 under the Securities Act. |
| (h) | Periodic Reporting Obligations. During the Prospectus Delivery Period, the Company will duly file,
on a timely basis, with the Commission and the Trading Market all reports and documents required to be filed under the Exchange Act within
the time periods and in the manner required by the Exchange Act. |
| (i) | Additional Documents. The Company will enter into any subscription, purchase or other
customary agreements as the Placement Agent or the Purchasers deem necessary or appropriate to consummate the Offering, all of which will
be in form and substance reasonably acceptable to the Placement Agent and the Purchasers. The Company agrees that the Placement Agent
may rely upon, and each is a third party beneficiary of, the representations and warranties, and applicable covenants, set forth in any
such purchase, subscription or other agreement with Purchasers in the Offering. |
| (j) | No Manipulation of Price. The Company will not take, directly or indirectly, any action designed
to cause or result in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company. |
| (k) | Auditors. The Company will retain, at its expense, a PCAOB registered firm of independent certified
public accountants for a period at least three (3) years after the Closing Date. |
| (l) | Acknowledgment. The Company acknowledges that any advice given by the Placement Agent to the Company
is solely for the benefit and use of the Board of Directors of the Company and may not be used, reproduced, disseminated, quoted or referred
to, without the Placement Agent’s prior written consent. |
| (m) | Reliance on Others. The Company confirms that it will rely on its own counsel and accountants for
legal and accounting advice. |
| (n) | Research Matters. By entering into this Agreement, the Placement Agent does not provide any promise,
either explicitly or implicitly, of favorable or continued research coverage of the Company and the Company hereby acknowledges and agrees
that the Placement Agent’s selection as a placement agent for the Offering was in no way conditioned, explicitly or implicitly,
on the Placement Agent providing favorable or any research coverage of the Company. In accordance with the FINRA Rules, the parties acknowledge
and agree that the Placement Agent has not directly or indirectly offered favorable research, a specific rating or a specific price target,
or threatened to change research, a rating or a price target, to the Company or inducement for the receipt of business or compensation. |
| (o) | Trading Market. The Company will use its best efforts to maintain the listing of its Common Stock
on the Trading Market for a period of at least three (3) years after the Closing Date. |
| (p) | Lock-Up. The Company covenants and agrees that for ninety (90) days after the closing date of the
Placement, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce the issuance or proposed
issuance of any shares of Common Stock or Common Stock Equivalents or (ii) file any registration statement or amendment or supplement
thereto, other than the Prospectus Supplement or filing a registration statement on Form S-8 in connection with any employee benefit plan. |
SECTION 2. REPRESENTATIONS
OF THE PLACEMENT AGENT. The Placement Agent represents and warrants that it (i) is a member in good standing of FINRA, (ii) is registered
as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the laws of the United States of America, applicable
to the offers and sales of the Placement Agent Securities by the Placement Agent, (iv) is and will be a corporate body validly existing
under the laws of its place of incorporation, (v) has full power and authority to enter into and perform its obligations under this Agreement.
The Placement Agent will immediately notify the Company in writing of any change in its status with respect to subsections (i) through
(v) above. The Placement Agent covenants that it will use its reasonable best efforts to conduct the Placement hereunder in compliance
with the provisions of this Agreement and the requirements of applicable law.
SECTION 3. COMPENSATION.
In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agent or its respective designees
a total cash fee equal to seven percent (7.0%) of the gross proceeds from the total amount of Placement Agent Securities sold in the Placement
(the “Cash Fee”). The Cash Fee shall be paid on the Closing Date. The Company shall not be required to pay the Placement
Agent any fees or expenses except for the Cash Fee, the reimbursement of accountable legal fees incurred by the Placement Agent in connection
with the transaction in the amount of up to $125,000, and a non-accountable expense allowance equal to $25,000. The Placement Agent reserves
the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be
made by FINRA to the effect that the Placement Agent’s aggregate compensation is in excess of FINRA Rules or that the terms thereof
require adjustment.
SECTION 4. INDEMNIFICATION.
A. To
the extent permitted by law, with respect to the Placement Agent Securities, the Company will indemnify the Placement Agent and its affiliates,
and the respective stockholders, directors, officers, employees, members and controlling persons (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) of any of the foregoing (collectively, the “Indemnified Persons”)
against all losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable fees and expenses of
counsel), that (A) relate to or arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any
statements omitted to be made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection
with the Company’s engagement of the Placement Agent, or (B) otherwise relate to or arise out of the Placement Agent’s activities
on the Company’s behalf under the Placement Agent’s engagement, except to the extent that any losses, claims, damages, expenses
or liabilities (or actions in respect thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted
from a Placement Agent’s fraud, willful misconduct or gross negligence in executing this Agreement or performing the services described
herein. For the avoidance of doubt, this Section 4 is not intended to govern claims between the parties hereto.
B. Promptly
after receipt by the Placement Agent of notice of any claim or the commencement of any action or proceeding with respect to which the
Placement Agent is entitled to indemnity hereunder, the Placement Agent will notify the Company in writing of such claim or of the commencement
of such action or proceeding, but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder,
except and only to the extent such failure results in the forfeiture by the Company of substantial rights or defenses or prejudice to
the Company’s substantial rights or defenses . If the Company so elects or is requested by the Placement Agent, the Company will
assume the defense of such action or proceeding and will employ counsel reasonably satisfactory to the Placement Agent and will pay the
fees and expenses of such counsel. Notwithstanding the preceding sentence, the Placement Agent will be entitled to employ its own counsel
separate from counsel for the Company and from any other party in such action if counsel for the Placement Agent reasonably determines
that it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company
and the Placement Agent. In such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by
the Company, in addition to fees of local counsel. The Company will have the right to settle the claim or proceeding, provided that the
Company will not settle any such claim, action or proceeding without the prior written consent of the Placement Agent, which will not
be unreasonably withheld or delayed.
C. The
Company agrees to notify the Placement Agent promptly of the assertion against it or any other person of any claim or the commencement
of any action or proceeding relating to a transaction contemplated by this Agreement.
D. If
for any reason the foregoing indemnity is unavailable to the Placement Agent or insufficient to hold the Placement Agent harmless, then
the Company shall contribute to the amount paid or payable by the Placement Agent as a result of such losses, claims, damages or liabilities
in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and the Placement
Agent on the other, but also the relative fault of the Company on the one hand and the Placement Agent on the other that resulted in such
losses, claims, damages or liabilities, as well as any relevant equitable considerations. The amounts paid or payable by a party in respect
of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees and expenses incurred
in defending any litigation, proceeding or other action or claim. Notwithstanding the provisions hereof, the liable Placement Agent’s
share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received, by the Placement Agent
under this Agreement (excluding any amounts received as reimbursement of expenses incurred by the Placement Agent).
E. These
indemnification provisions shall remain in full force and effect whether or not the transaction contemplated by this Agreement is completed
and shall survive the termination of this Agreement, and shall be in addition to any liability that the Company might otherwise have to
any indemnified party under this Agreement or otherwise.
SECTION 5. ENGAGEMENT
TERM. The Placement Agent’s engagement hereunder will be until the earlier of (i) August 9, 2023 and (ii) the Closing Date.
The date of termination of this Agreement is referred to herein as the “Termination Date.” In the event, however, in
the course of the Placement Agent’s performance of due diligence it deems, it necessary to terminate the engagement, the Placement
Agent may do so prior to the Termination Date. The Company may elect to terminate the engagement hereunder for any reason prior to the
Termination Date but will remain responsible for fees pursuant to Section 3 hereof with respect to the Placement Agent Securities if sold
in the Placement. Notwithstanding anything to the contrary contained herein, the provisions concerning the Company’s obligation
to pay any fees actually earned pursuant to Section 3 hereof and the provisions concerning confidentiality, indemnification and contribution
contained herein will survive any expiration or termination of this Agreement. If this Agreement is terminated prior to the completion
of the Placement, all fees due to the Placement Agent shall be paid by the Company to the Placement Agent on or before the Termination
Date (in the event such fees are earned or owed and expenses incurred as of the Termination Date). The Placement Agent agrees not to use
any confidential information concerning the Company provided to the Placement Agent by the Company for any purposes other than those contemplated
under this Agreement.
SECTION 6. PLACEMENT
AGENT INFORMATION. The Company agrees that any information or advice rendered by the Placement Agent in connection with this engagement
is for the confidential use of the Company only in its evaluation of the Placement and, except as otherwise required by law, the Company
will not disclose or otherwise refer to the advice or information in any manner without the Placement Agent’s prior written consent.
SECTION 7. NO
FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by any person or
entity not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof. The Company acknowledges and
agrees that the Placement Agent are not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities
to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of the Placement
Agent hereunder, all of which are hereby expressly waived.
SECTION 8. CLOSING.
The obligations of the Placement Agent, and the closing of the sale of the Placement Agent Securities hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties on the part of the Company contained herein and in the Purchase
Agreement, to the performance by the Company of its obligations hereunder, and to each of the following additional terms and conditions,
except as otherwise disclosed to and acknowledged and waived by the Placement Agent:
A. All
corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of this Agreement,
the Placement Agent Securities, and all other legal matters relating to this Agreement and the transactions contemplated hereby with respect
to the Placement Agent Securities shall be reasonably satisfactory in all material respects to the Placement Agent.
B. The
Placement Agent shall have received from outside counsel to the Company such counsel’s written opinion with respect to the Placement
Agent Securities, addressed to the Placement Agent and the Purchasers and dated as of the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent.
C. The
Common Stock shall be registered under the Exchange Act and, as of the Closing Date, the Placement Agent Securities shall be listed and
admitted and authorized for trading on the Trading Market or other applicable U.S. national exchange and satisfactory evidence of such
action shall have been provided to the Placement Agent. The Company shall have taken no action designed to, or likely to have the effect
of terminating the registration of the Common Stock under the Exchange Act or removing or suspending from trading the Common Stock from
the Trading Market or other applicable U.S. national exchange, nor has the Company received any information suggesting that the Commission
or the Trading Market or other U.S. applicable national exchange is contemplating terminating such registration or listing.
D. No
action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or sale of the Placement Agent Securities or materially and adversely
affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance or sale of the Placement Agent Securities or materially and adversely affect or potentially and adversely affect the business
or operations of the Company.
E. The
Company shall have entered into a Purchase Agreement with each of the Purchasers of the Placement Agent Securities and such agreements
shall be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed upon between the
Company and the Purchasers.
F. FINRA
shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition, the Company
shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, any
filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, if applicable, with respect to the Placement and pay
all filing fees required in connection therewith.
If any of the conditions specified
in this Section 8 shall not have been fulfilled when and as required by this Agreement, all obligations of the Placement Agent hereunder
may be cancelled by the Placement Agent at, or at any time prior to, the Closing Date. Notice of such cancellation shall be given to the
Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.
SECTION 9.
GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York
applicable to agreements made and to be performed entirely in such State. This Agreement may not be assigned by either party without the
prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their
respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any
transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought into the courts of the
State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this Agreement, the Company
hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each party
hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to
it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall
commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
SECTION 10. ENTIRE
AGREEMENT/MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes
all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined to be
invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision
of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except
by an instrument in writing signed by the Placement Agent and the Company. The representations, warranties, agreements and covenants contained
herein shall survive the Closing Date of the Placement and delivery of the Placement Agent Securities. This Agreement may be executed
in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or .pdf signature page were an original thereof.
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 (a) the date of transmission, if such notice or communication is sent to the email
address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the next business
day after the date of transmission, if such notice or communication is sent to the email address on the signature pages attached hereto
on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third business day following
the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages hereto.
SECTION 12. PRESS
ANNOUNCEMENTS. The Company agrees that the Placement Agent shall, on and after the Closing Date, have the right to reference the Placement
and the Placement Agent’s role in connection therewith in the Placement Agent’s marketing materials and on its website and
to place advertisements in financial and other newspapers and journals, in each case at its own expense.
SECTION 13. RIGHT
OF FIRST REFUSAL. The parties hereto acknowledge that there is an ongoing right of first refusal in favor of the Placement Agent,
as set forth in that certain placement agency agreement by and between the Company and the Agent, dated April 19, 2023, which shall remain
in place until April 21, 2024, and that nothing in this Agreement is intended to, nor shall be deemed to supersede, amend or obviate such
right of first refusal. In addition to (and separately from) such ongoing right of first refusal, the Company grants the Placement Agent
(or any affiliate designated by the Placement Agent) the right of first refusal to act as sole book-running manager, sole underwriter
or sole placement agent in any public offering (including at-the-market facility) or private placement or any other capital-raising financing
of equity, equity-linked or debt securities, by the Company or any of its subsidiaries, for the period commencing on the date hereof and
ending on the 12-month anniversary of the Closing Date. If the Placement Agent or one of its affiliates decides to accept any such engagement,
the agreement governing such engagement will contain, among other things, provisions for customary fees for transactions of similar size
and nature and the provisions of this Agreement, including indemnification, which are appropriate to such a transaction. Notwithstanding
the foregoing, in accordance with FINRA Rule 5110(g)(6)(a), in no event will this right of first refusal have a duration of more than
three (3) years from the commencement of sales in this offering. This right of first refusal shall be subject to FINRA Rule 5110(g)(5)(B),
including that (i) the right of first refusal may be terminated by the Company for “cause”, which shall include the material
failure by the Placement Agent to provide the services contemplated by this Agreement, and (ii) the Company’s exercise of its right
of “termination for cause” eliminates any obligations with respect to the payment of any termination fee or provision of any
right of first refusal.
[The remainder of this page
has been intentionally left blank.]
Please confirm that the foregoing correctly sets
forth our agreement by signing and returning to the Placement Agents the enclosed copy of this Agreement.
|
Very truly yours, |
|
|
|
A.G.P./ALLIANCE GLOBAL PARTNERS |
|
|
|
By: |
|
|
Name: |
Thomas Higgins |
|
Title: |
Managing Director |
|
|
|
Address for notice: |
|
590 Madison Avenue 28th Floor |
|
New York, New York 10022 |
|
Attn: Thomas Higgins |
|
Email: thiggins@allianceg.com |
[Signature Page to Placement Agency Agreement]
Accepted and Agreed to as of
the date first written above:
ALLARITY THERAPEUTICS, INC. |
|
By: |
|
|
Name: |
James G. Cullem |
|
Title: |
Chief Executive Officer |
|
Address for notice:
24 School Street, 2nd Floor
Boston, MA
Attention: James G. Cullem
Email: jcullem@allarity.com
[Signature Page to Placement Agency Agreement]
Exhibit 4.6
Pre-Funded
WARRANT
To purchase
Shares of Common Stock
ALLARITY
THERAPEUTICS, INC.
Warrant Shares: _______ |
Initial Exercise Date: July [●], 2023 |
THIS Pre-Funded
WARRANT to Purchase Shares of Common Stock (the “Warrant”) certifies that, for value received, _____________
or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) until this Warrant is
exercised in full (the “Termination Date”), but not thereafter, to subscribe for and purchase from Allarity Therapeutics,
Inc., a Delaware corporation (the “Company”), up to ______ shares of common stock, par value $0.0001 per share
(the “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, for all purposes of this Warrant, the following terms have the meanings set
forth 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.
“Board of Directors”
means the board of directors of the Company.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to the Purchase Agreement and the Prospectus.
“Commission”
means the United States Securities and Exchange Commission.
“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.
“Prospectus”
means the prospectus in the form first filed with the Commission pursuant to and within the time limits described in Rule 424(b) under
the Securities Act, included in the registration statement on Form S-1 (File No. 333-272469), which registers the sale of the Securities.
“Purchase Agreement”
means that certain securities purchase agreement, dated as of June [●], 2023, among the Company and the purchasers signatory thereto
(each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
“Securities”
means the (i) the shares of Common Stock issued and issuable to the Purchasers, (ii) the common warrants delivered to the Purchasers at
Closing, which common warrants shall be exercisable immediately upon issuance and may be exercised during a period of five years commencing
from their issuance, (iii) the pre-funded warrants delivered to the Purchasers at Closing, which pre-funded warrants shall be exercisable
immediately upon issuance and shall expire when exercised in full, and (iv) shares of Common Stock issuable upon exercise of the warrants
and pre-funded warrants in the preceding (ii) and (iii), respectively, pursuant to the Purchase Agreement and Prospectus.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary”
means any subsidiary of the Company as set forth in the Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2022 and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after
the date hereof.
“Trading Market”
means any of the following markets or exchanges on which the shares of Common Stock are listed or quoted for trading on the date in question:
the NYSE American, The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market, or the New York Stock Exchange
(or any successors to any of the foregoing).
Section 2. Exercise.
(a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy
or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto as Exhibit A (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 number of Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn
on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of
Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares purchasable hereunder and the Warrant has
been exercised in full, at which time 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 purchasable hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder by the number of Warrant Shares equal to the applicable number of Warrant Shares purchased in connection
with such partial exercise. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date
of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice.
Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 9:00 a.m. (New York City time) on the
Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to
deliver, or cause to be delivered, 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. 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 will be
less than the amount stated on the face hereof.
(b) Exercise
Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.001 per Warrant Share, was pre-funded
to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise
price of $0.001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The
Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance
or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining
unpaid exercise price per Warrant Share under this Warrant shall be $0.001, subject to adjustment hereunder (the “Exercise Price”).
(c) Cashless
Exercise. Notwithstanding anything to the contrary set forth herein, 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 only be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as
applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise
is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)
of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the
VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on
the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution
of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day
and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours”
on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such
Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the
close of “regular trading hours” on such Trading Day;
(B) = the
Exercise Price, as adjusted hereunder; and
(X) = the
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise
were by means of a cash exercise rather than a cashless exercise.
If Warrant Shares are issued in such a cashless
exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take
on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section
2(c).
“Bid Price” means, for any
date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading
Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m.
(New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the VWAP 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 Common Stock so reported, or (d) in all other cases, the fair market value of a share
of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Trading Day” means any day
on which the Trading Market is open for trading, including any day on which the Trading Market is open for trading for a period of time
less than the customary time.
“VWAP” means, for any date,
the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading
Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market
on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time)
to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for
trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers
of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which
shall be paid by the Company.
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 Transfer
Agent (as defined below) to the Holder by crediting the account of the Holder’s or its designee’s balance account with The
Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to, or resale
of, the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of the
Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant
Shares set forth in the Notice of Exercise to the address specified by the Holder in such Notice of Exercise by the date that is the earliest
of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the
aggregate Exercise Price to the Company, and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery
to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice
of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate
Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise
(based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading
Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until
such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent (the “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. Except in connection with an exercise on the Initial Exercise Date, if the Company fails to cause the Transfer Agent to transmit
to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to
rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the Warrant Shares 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 shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants with an aggregate sale
price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In and, upon request of the Company, evidence satisfactory to the Company with respect to 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
Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.
v. No
Fractional Shares or Scrip. No fractional Warrant Shares or scrip representing fractional Warrant Shares shall be issued upon the
exercise of this Warrant. As to any fraction of a Warrant Share which the Holder would otherwise be entitled to purchase upon such exercise,
the Company shall, at its election and in lieu of the issuance of such fractional Warrant Share, either (i) pay cash in an amount equal
to such fraction multiplied by the Exercise Price or (ii) round up to the next whole Warrant Share.
vi. Charges,
Taxes and Expenses. The issuance and delivery 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,
the Notice of Exercise shall be accompanied by the Assignment Form, attached hereto as Exhibit B, duly executed by the Holder and
the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto
and this Warrant shall be surrendered to the Company and, if any portion of this Warrant remains unexercised, a new Warrant in the form
hereof shall be delivered to the assignee. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice
of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required
for same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
(e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
all or any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance upon exercise
as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates, (ii) any other Persons
acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership
of the shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section 13(d) (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 the Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents)
subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any
of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any
group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice
by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall
be [4.99%/9.99%] of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares
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 Warrant Shares 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 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 Warrant Shares 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 remains 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 reclassification.
(b) [RESERVED]
(c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without
limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale
of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined
for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result
of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
(d) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the
record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however,
that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership
of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance
for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).
(e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by
the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their
shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding shares of Common
Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more
related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company,
directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or
group of Persons whereby such other Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the
voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise
of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately
prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e)
on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if
it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result
of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives
upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a
Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any
time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public
announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash
equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, that if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity, the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of
this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given
the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further,
that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders
of Common Stock will be deemed to have received common stock of the Successor Entity (which entity may be the Company following such Fundamental
Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable
contemplated Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination
Date, (B) an expected volatility equal to the greater of (1) the 30-day volatility, (2) the 100 day volatility or (3) the 365-day volatility,
each of clauses (1)-(3) as obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization factor) as of the
Trading Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price
per share used in such calculation shall be the highest VWAP during the period beginning on the Trading Day immediately preceding the
public announcement of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction,
if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e), (D) a remaining option time equal
to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date,
and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or
such other consideration) within the later of (i) five (5) Business Days of the Holder’s election and (ii) the date of consummation
of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not
the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant
and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and
substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction
and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number
of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately
prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder.
Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this
Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant
and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor
Entity or Successor Entities, jointly andseverally), and the Successor Entity or Successor Entities, jointly and severally with the Company,
may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the
obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company
and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt,
the Holder shall be entitled to the benefits of the provisions of this Section 3(e) regardless of (i) whether the Company has sufficient
authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the
Initial Exercise Date.
(f) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share of Common Stock, as the case
may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(g) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
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 declares a dividend (or any other distribution in whatever form) on the shares of
Common Stock, (B) the Company declares a special nonrecurring cash dividend on or a redemption of the shares of Common Stock, (C) the
Company authorizes the granting to all holders of the shares of 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 shareholders of the Company is required in connection with a Fundamental
Transaction, or (E) the Company authorizes 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.
(h) Voluntary
Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time while this Warrant
is outstanding, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors
of the Company in its sole discretion.
Section 4. Transfer
of Warrant.
(a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto as Exhibit B duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
(b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the 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 Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
(d) Authorized
Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued
shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares underlying 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, and the Warrant Shares, delivered, 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 underlying this Warrant, which may be issued upon the exercise of the purchase rights represented by
this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company
in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as
waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to
protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company
will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such
increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain
all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable
the Company to perform its obligations under this Warrant.
Before taking any action which
would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company
shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
(e) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
(f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and if the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
(g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this
Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder
in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(h) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement.
(i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any share of Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors
of the Company.
(j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
(k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
(l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
(m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
(n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
ALLARITY THERAPEUTICS, INC. |
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EXHIBIT A
NOTICE OF EXERCISE
TO: ALLARITY
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:
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The Warrant Shares shall be delivered to the following DWAC Account Number: |
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[SIGNATURE OF HOLDER] |
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Name of Investing Entity: |
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Signature of Authorized Signatory of Investing Entity: |
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this
form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to
Name: |
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Dated: _______________ ____, _______ |
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Exhibit 4.7
COMMON STOCK PURCHASE WARRANT
ALLARITY
THERAPEUTICS, INC.
Warrant Shares: _______ |
Issue Date: July [●], 2023 |
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”)
certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any time or times on or after June [●], 2023 (the “Initial
Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on the five-year anniversary of the Initial Exercise Date
(the “Termination Date”) but not thereafter, to subscribe for and purchase from Allarity Therapeutics, Inc.,
a Delaware corporation (the “Company”), up to ______ shares of common stock, par value $0.0001 per share (the “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, for all purposes of this Warrant, the following terms have the meanings set forth 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.
“Board of Directors”
means the board of directors of the Company.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to the Purchase Agreement and the Prospectus.
“Commission”
means the United States Securities and Exchange Commission.
“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.
“Prospectus”
means the prospectus in the form first filed with the Commission pursuant to and within the time limits described in Rule 424(b) under
the Securities Act, included in the registration statement on Form S-1 (File No. 333-272469), which registers the sale of the Securities.
“Purchase Agreement”
means that certain securities purchase agreement, dated as of June [●], 2023, among the Company and the purchasers signatory thereto
(each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
“Securities”
means the (i) the shares of Common Stock issued and issuable to the Purchasers, (ii) the common warrants delivered to the Purchasers at
Closing, which common warrants shall be exercisable immediately upon issuance and may be exercised during a period of five years commencing
from their issuance, (iii) the pre-funded warrants delivered to the Purchasers at Closing, which pre-funded warrants shall be exercisable
immediately upon issuance and shall expire when exercised in full, and (iv) shares of Common Stock issuable upon exercise of the warrants
and pre-funded warrants in the preceding (ii) and (iii), respectively, pursuant to the Purchase Agreement and Prospectus.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary”
means any subsidiary of the Company as set forth in the Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2022 and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after
the date hereof.
“Trading Market”
means any of the following markets or exchanges on which the shares of Common Stock are listed or quoted for trading on the date in question:
the NYSE American, The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market, or the New York Stock Exchange
(or any successors to any of the foregoing).
Section 2. Exercise.
(a) Exercise of Warrant.
Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted
by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto as Exhibit A (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
number of Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States
bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of
Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full,
at which time, 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 purchasable hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder by the number of Warrant Shares equal to the applicable number of Warrant Shares purchased in connection with such partial exercise.
The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The
Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any
assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase
of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less
than the amount stated on the face hereof.
(b) Exercise Price.
The exercise price per share of Common Stock under this Warrant shall be $[●], subject to adjustment hereunder (the “Exercise
Price”).
(c) Cashless Exercise.
Notwithstanding anything to the contrary set forth herein, 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 only be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled
to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable: (i) the
VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed
and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section
2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS
promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable
Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered
within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day)
pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise
is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular
trading hours” on such Trading Day;
(B) = the Exercise Price of
this Warrant, as adjusted hereunder; and
(X) = the number of Warrant
Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means
of a cash exercise rather than a cashless exercise.
If Warrant Shares are issued in such a cashless
exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take
on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section
2(c).
“Bid Price” means, for any
date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading
Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m.
(New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the VWAP 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 Common Stock so reported, or (d) in all other cases, the fair market value of a share
of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Trading Day” means any day
on which the Trading Market is open for trading, including any day on which the Trading Market is open for trading for a period of time
less than the customary time.
“VWAP” means, for any date,
the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading
Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market
on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time)
to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for
trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers
of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which
shall be paid by the Company.
(d) Mechanics of Exercise.
i. Delivery of Warrant Shares
Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent (as defined
below) to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of the Warrant Shares,
registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares set forth
in the Notice of Exercise to the address specified by the Holder in such Notice of Exercise by the date that is the earliest of (i) two
(2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate
Exercise Price to the Company, and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the
Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise,
the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise
Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason
to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay
to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based
on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading
Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until
such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent (the “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 9:00 a.m. (New York City time) on the Initial Exercise
Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver, or cause
to be delivered, 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. 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 will be less
than the amount stated on the face hereof.
ii. Delivery of New Warrants
Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender
of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights
of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
iii. Rescission Rights.
If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant
Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In
on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company
fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase
(in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the Warrant Shares 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 shares of Common Stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants with an aggregate sale price giving rise to such purchase
obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000.
The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request
of the Company, evidence satisfactory to the Company with respect to 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 Warrant Shares upon exercise of the
Warrant as required pursuant to the terms hereof.
v. No Fractional Shares or
Scrip. No fractional Warrant Shares or scrip representing fractional Warrant Shares shall be issued upon the exercise of this Warrant.
As to any fraction of a Warrant Share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election and in lieu of the issuance of such fractional Warrant Share, either (i) pay cash in an amount equal to such fraction
multiplied by the Exercise Price or (ii) round up to the next whole Warrant Share.
vi. Charges, Taxes and Expenses.
The issuance and delivery 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, the Notice of Exercise shall be accompanied
by the Assignment Form, attached hereto as Exhibit B, duly executed by the Holder and the Company may require, as a condition thereto,
the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto and this Warrant shall be surrendered to the Company
and, if any portion of this Warrant remains unexercised, a new Warrant in the form hereof shall be delivered to the assignee. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing of Books.
The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant
to the terms hereof.
(e) Holder’s Exercise
Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise all or any
portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance upon exercise as
set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates, (ii) any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership of
the shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section 13(d) (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 the Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents)
subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any
of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any
group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice
by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall
be [4.99%/9.99%] of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares
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 Warrant Shares 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 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 Warrant Shares 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 remains 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 reclassification.
(b) [RESERVED]
(c) Subsequent Rights Offerings.
In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents
or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase
Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation).
(d) Pro Rata Distributions.
During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant,
then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent
that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares
of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the
benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).
(e) Fundamental Transaction.
If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly, effects
any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the its assets in one or
a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more of the outstanding shares of Common Stock or 50% or more
of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common
equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder
shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor
Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the
consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction),
purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of
the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however,
that if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of
Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity, the same type or form of consideration
(and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to
the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of
cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative
forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company
are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received
common stock of the Successor Entity (which entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction.
“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg determined as of the day of consummation of the applicable contemplated Fundamental Transaction for pricing purposes
and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of
the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater
of (1) the 30-day volatility, (2) the 100 day volatility or (3) the 365-day volatility, each of clauses (1)-(3) as obtained from the HVT
function on Bloomberg (determined utilizing a 365-day annualization factor) as of the Trading Day immediately following the public announcement
of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the highest
VWAP during the period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated Fundamental
Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s
request pursuant to this Section 3(e), (D) a remaining option time equal to the time between the date of the public announcement of the
applicable contemplated Fundamental Transaction and the Termination Date, and (E) a zero cost of borrow. The payment of the Black Scholes
Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five (5) Business
Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in
writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions
of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder
(without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent
to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of
protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall
be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental
Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall
refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity
or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the
Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other
Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had
been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section
3(e) regardless of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or
(ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
(f) Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share of Common Stock, as the case may
be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(g) Notice to Holder.
i. Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly 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 declares a dividend (or any other distribution in whatever form) on the shares of Common Stock, (B)
the Company declares a special nonrecurring cash dividend on or a redemption of the shares of Common Stock, (C) the Company authorizes
the granting to all holders of the shares of 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 shareholders of the Company is required in connection with a Fundamental Transaction,
or (E) the Company authorizes 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.
(h) Voluntary Adjustment
By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time while this Warrant is outstanding,
reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company
in its sole discretion.
Section 4. Transfer of Warrant.
(a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto as Exhibit B duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
(b) New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with
a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.
All Warrants issued on transfers or exchanges shall be dated the 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 Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
(d) Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common
Stock a sufficient number of shares to provide for the issuance of the Warrant Shares underlying 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, and the Warrant Shares, delivered, 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 underlying this Warrant, which may be issued upon the exercise of the purchase rights represented by
this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company
in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as
waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to
protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company
will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such
increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain
all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable
the Company to perform its obligations under this Warrant.
Before taking any action which
would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company
shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
(e) Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with
the provisions of the Purchase Agreement.
(f) Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and if the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
(g) Nonwaiver and Expenses.
No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right
or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase
Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages
to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts
due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(h) Notices. Any notice,
request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance
with the notice provisions of the Purchase Agreement.
(i) Limitation of Liability.
No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of
any share of Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
(j) Remedies. The Holder,
in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance
of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for
specific performance that a remedy at law would be adequate.
(k) Successors and Assigns.
Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and
be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder
or holder of Warrant Shares.
(l) Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
(m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if
any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
(n) Headings. The headings
used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company has caused this
Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
ALLARITY
THERAPEUTICS, INC.
EXHIBIT A
NOTICE OF EXERCISE
TO: ALLARITY
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:
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The Warrant Shares shall be delivered to the following DWAC Account Number: |
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[SIGNATURE OF HOLDER] |
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Name of Investing Entity: |
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Signature of Authorized Signatory of Investing Entity: |
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Title of Authorized Signature: |
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this
form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to
Name: |
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(Please Print) |
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Address: |
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Dated: _______________ ____, _______ |
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Holder’s Signature _______________________ |
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Holder’s Address _______________________ |
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Exhibit 5.1
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633 West 5th Street, Suite 4000
Los Angeles, CA 90071 |
June 30, 2023
Allarity Therapeutics, Inc.
24 School Street, 2nd Floor,
Boston, MA 02108
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| Re: | Registration Statement on Form S-1 (File No. 333-272469) |
Ladies and Gentlemen:
We act as counsel to Allarity
Therapeutics, Inc., a Delaware corporation (the “Company”), in connection with the filing and preparing of the registration
statement on Form S-1 (File No. 333-272469), and as may be further amended or supplemented (the “Registration Statement”),
originally filed on June 7, 2023 with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities
Act of 1933, as amended (the “Act”), relating to the registration of the proposed offer and sale of up to a maximum
aggregate offering price of $30,000,000 of (a)(i) shares (the “Shares”) of the Company’s common stock, par value
$0.0001 per share (the “Common Stock”) or (ii) pre-funded warrants to purchase shares of Common Stock (the “Prefunded
Warrants” and each share of Common Stock underlying a Pre-Funded Warrant, a “Prefunded Warrant Share”) in
lieu thereof to purchase shares of Common Stock upon exercise of the Pre-Funded Warrants, and (b) accompanying Common Stock purchase warrants
(the “Common Warrants,” and together with the Prefunded Warrants, the “Warrants”) to purchase shares
of Common Stock (the shares issuable upon exercise of the Common Warrants, the “Common Warrant Shares,” and together
with the Prefunded Warrants Shares, the “Warrant Shares”).
In rendering the opinions
set forth herein, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate
records, certificates of public officials and other instruments as we have deemed necessary or advisable. In such examination, we have
assumed without verification the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals
of such copies. As to questions of fact material to this opinion, we have relied on certificates or comparable documents of public officials
and of officers and representatives of the Company.
We express no opinions other
than as specifically set forth herein. We are opining solely on as to the General Corporation Law of the State of Delaware (the “DGCL”)
and we express no opinion as to whether the laws of any jurisdiction are applicable to the subject matter hereof. We are not rendering
any opinion as to compliance with any federal or state law, rule or regulation relating to securities, or to the sale or issuance thereof.
This opinion letter deals only with the specified legal issues expressly addressed herein, and you should not infer any opinion that is
not explicitly stated herein from any matter addressed in this opinion letter.
ARIZONA
● CALIFORNIA ● COLORADO ● CONNECTICUT ● DELAWARE ● FLORIDA ● GEORGIA ● ILLINOIS ● INDIANA ●
KANSAS ● KENTUCKY ● LOUISIANA MARYLAND ● MASSACHUSETTS ● MINNESOTA ● MISSOURI ● NEVADA ● NEW JERSEY
● NEW MEXICO ● NEW YORK ● NORTH CAROLINA ● OHIO OREGON ● PENNSYLVANIA ● RHODE ISLAND ● TENNESSEE ●
TEXAS ● UTAH ● VIRGINIA ● WASHINGTON ● WASHINGTON D.C. ● WEST VIRGINIA
Allarity Therapeutics, Inc.
June 30, 2023
Page 2
On the basis of the foregoing,
and in reliance thereon, we are of the opinion that:
| 1. | The Shares, when issued and delivered against payment of the consideration therefor, will be validly issued,
fully paid and non-assessable. |
| 2. | The Warrants, when executed, issued and delivered against payment of the consideration therefor, will
constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. |
| 3. | The Warrant Shares, when issued and delivered upon exercise of the Warrants in accordance with the respective
terms of the Warrants and for the consideration stated therein, will be validly issued, fully paid and non-assessable. |
In rendering the foregoing
opinions, we have assumed that at or prior to the time of the delivery of any Shares, Warrants and Warrant Shares (collectively, the “Securities”),
(i) the Registration Statement will have been declared effective under the Act and that the registration will apply to all of the Securities
and will not have been modified or rescinded and that there will not have occurred any change in law affecting the validity of the issuance
of such Securities, (ii) upon the delivery of the Warrants, the Warrants will conform to the forms thereof filed as an exhibit to the
Registration Statement, and (iii) the due execution, countersignature, authentication, issuance and delivery of the Warrants and, as applicable,
the related agreements, and upon payment of the applicable consideration.
We hereby consent to the filing
of this opinion as an exhibit to the Registration Statement and to the references to our firm therein under the caption “Legal Matters.”
In giving our consent, we do not thereby admit that we are experts with respect to any part of the Registration Statement within the meaning
of the term “expert,” as used in Section 11 of the Securities Act or the rules and regulations promulgated thereunder by the
Commission, nor do we admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or
the rules and regulations thereunder.
This opinion is furnished
to you in connection with the filing of the Registration Statement and is not to be used, circulated, quoted or otherwise relied upon
for any other purpose.
|
Very truly yours, |
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/s/ Lewis Brisbois Bisgaard & Smith LLP |
LEWIS
BRISBOIS BISGAARD & SMITH LLP
www.lewisbrisbois.com
Exhibit 10.50
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE
AGREEMENT (this “Agreement”) is dated as of [●], 2023, between Allarity Therapeutics, Inc., a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns,
a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act (as defined below),
the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each Purchaser agree as follows:
Section 1.
DEFINITIONS
1.1
Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms
have the meanings set forth in this Section 1.1:
“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“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.
“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 banking institutions in the State of New York are authorized or required
by law to remain closed.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date”
means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and
all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount at the Closing and (ii) the Company’s
obligations to deliver the Securities, in each case, at the Closing have been satisfied or waived, but in no event later than the second
(2nd) Trading Day following the date hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common Stock”
means the common stock of the Company, par value $0.0001 per share.
“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.
“Common Warrants”
means the common warrants delivered to the Purchasers at Closing in accordance with Section 2.2(a) hereof, which common warrants shall
be exercisable immediately upon issuance and may be exercised during a period of five years commencing from their issuance, in the form
of Exhibit A attached hereto.
“Company Counsel”
means Lewis Brisbois Bisgaard & Smith LLP, with offices located at 633 West 5th Street, Suite 4000, Los Angeles, California 90071.
“Company’s
IP Counsel” means Clark + Elbing, with offices located at Boston, Massachusetts.
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure Time”
means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight
(New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless
otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City
time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise
instructed as to an earlier time by the Placement Agent.
“DVP” shall
have the meaning ascribed to such term in Section 2.1(v).
“Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(r).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock, restricted share units or options to employees, consultants, officers, or directors
of the Company pursuant to any share or option plan in existence as of the date hereof, provided that such issuances to consultants are
issued as “restricted securities” (as defined in Rule 144) and carry no registration rights; (b) shares of Common Stock upon
the exercise or exchange of or conversion of securities exercisable or exchangeable for or convertible into shares of Common Stock issued
and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to
increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other
than in connection with stock splits or combinations) or to extend the term of such securities; and (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities
are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the
filing of any registration statement in connection therewith during the prohibition period in Section 4.10(a) herein, and provided that
any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating
company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is investing in securities (for avoidance of doubt, securities
issued to a venture arm of a strategic investor shall be deemed an “Exempt Issuance”).
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP”
means generally accepted accounting principles in the United States.
“General Disclosure
Package” means the Preliminary Prospectus.
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(z).
“Intellectual Property
Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up Agreement”
means the Lock-Up Agreement, dated as of the date hereof, by and among the Company and the directors, executive officers and 5% stockholders
of the Company (excluding 3i, LP), in the form of Exhibit C attached hereto.
“Material Adverse
Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material Permits”
shall have the meaning ascribed to such term in Section 3.1(m).
“Per Share Purchase
Price” equals $[●], subject to adjustment for reverse and forward share splits, share dividends, share combinations and
other similar transactions of shares of Common Stock that occur between the date hereof and the Closing Date.
“Per Pre-Funded Warrant
Purchase Price” equals $0.001, subject to adjustment for reverse and forward share splits, share dividends, share combinations
and other similar transactions relating to shares of Common Stock that occur after the date of this Agreement.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement Agency
Agreement” means that certain placement agency agreement, dated as of even date hereof, by and between the Company and the Placement
Agent.
“Placement Agent”
means A.G.P./Alliance Global Partners.
“Placement Agent
Counsel” means Sullivan & Worcester LLP with offices located at 1633 Broadway, New York, New York 10019.
“Pre-Funded Warrants”
means, collectively, the pre-funded warrants delivered to the Purchasers at Closing in accordance with Section 2.2(a) hereof, which pre-funded
warrants shall be exercisable immediately upon issuance and shall expire when exercised in full, in the form of Exhibit B attached
hereto.
“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.16(b).
“Preliminary Prospectus”
means the preliminary prospectus included in the Registration Statement at the time the Registration Statement is declared effective.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Prospectus”
means the final prospectus filed pursuant to the Registration Statement.
“Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.
“Registration Statement”
means the effective registration statement on Form S-1 (File No. 333-272469), as amended, filed with the Commission, which registers the
sale of the Securities and includes any Rule 462(b) Registration Statement.
“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 462(b) Registration
Statement” means any registration statement prepared by the Company registering additional Securities, which was filed with
the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by the Commission
pursuant to the Securities Act.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Shares, the Warrants, and the Warrant Shares.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock issued and issuable to each Purchaser pursuant to this Agreement.
“Short Sales”
means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include
locating and/or borrowing shares of Common Stock).
“Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for shares of Common Stock, and Pre-Funded Warrants, purchased hereunder
as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth in the Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2022 and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after
the date hereof.
“Trading Day”
means a day on which the principal Trading Market is open for trading.
“Trading Market”
means any of the following markets or exchanges on which the shares of Common Stock are listed or quoted for trading on the date in question:
the NYSE American, The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market, or the New York Stock Exchange
(or any successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Warrants, the Lock-Up Agreements, the Placement Agency Agreement and all exhibits and schedules thereto and
hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent”
means Computershare Trust Company, N.A., the current transfer agent of the Company, with a mailing address of 150 Royal Street, Canton,
MA 02021 and any successor transfer agent of the Company.
“Variable Rate Transaction”
shall have the meaning ascribed to such term in Section 4.10(b).
“Warrants”
means, collectively, the Common Warrants and the Pre-Funded Warrants.
“Warrant Shares”
means, collectively, the shares of Common Stock issuable upon exercise of the Warrants.
Section 2.
PURCHASE AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, (i) the number of shares of Common Stock set forth under the heading “Subscription Amount”
on the Purchaser’s signature page hereto, at the Per Share Purchase Price, and (ii) Common Warrants exercisable for shares of Common
Stock as calculated pursuant to Section 2.2(a); provided, however, that, to the extent that a Purchaser determines, in its sole
discretion, that such Purchaser (together with such Purchaser’s Affiliates, and any Person acting as a group together with such
Purchaser or any of such Purchaser’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation, or as
such Purchaser may otherwise choose, in lieu of purchasing shares of Common Stock, such Purchaser may elect to purchase Pre-Funded Warrants
in such manner to result in the full Subscription Amount being paid by such Purchaser to the Company. The “Beneficial Ownership
Limitation” shall be 4.99% (or, at the election of the Purchaser, 9.99%) of the number of shares of Common Stock, in each case,
outstanding immediately after giving effect to the issuance of the Securities on the Closing Date.
Each Purchaser’s Subscription
Amount as set forth on the signature page hereto executed by such Purchaser shall be made available for Delivery Versus Payment (“DVP”)
settlement with the Company or its designees. The Company shall deliver to each Purchaser its respective Shares and Warrants as determined
pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 at the Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur remotely via the exchange
of documents and signatures or such other location as the parties shall mutually agree. Unless otherwise directed by the Placement Agent,
settlement of the Shares shall occur via DVP (i.e., on the Closing Date, the Company shall issue the Shares registered in the Purchasers’
names and addresses and released by the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser;
upon receipt of such Shares, the Placement Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment
therefor shall be made by the Placement Agent (or its clearing firm) by wire transfer to the Company). Notwithstanding anything herein
to the contrary, if at any time on or after the time of execution of this Agreement by the Company and an applicable Purchaser through,
and including the time immediately prior to the Closing (the “Pre-Settlement Period”), such Purchaser sells to any
Person all, or any portion, of any Securities to be issued hereunder to such Purchaser at the Closing (collectively, the “Pre-Settlement
Shares”), such Person shall, automatically hereunder (without any additional required actions by such Purchaser or the Company),
be deemed to be a Purchaser under this Agreement unconditionally bound to purchase, and the Company shall be deemed unconditionally bound
to sell, such Pre-Settlement Shares to such Person at the Closing; provided, that the Company shall not be required to deliver any Pre-Settlement
Shares to such Purchaser prior to the Company’s receipt of the Subscription Amount for such Pre-Settlement Shares hereunder; and
provided, further, that the Company hereby acknowledges and agrees that the forgoing shall not constitute a representation or covenant
by such Purchaser as to whether or not such Purchaser will elect to sell any Pre-Settlement Shares during the Pre-Settlement Period. The
decision to sell any shares of Common Stock by such Purchaser shall solely be made at the time such Purchaser elects to effect any such
sale, if any. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise (as defined in the Prefunded Warrants) delivered
on or prior to 9:00 a.m. (New York City time) on the Closing Date, which may be delivered at any time after the time of execution of the
this 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 Closing
Date and the Closing Date shall be the Warrant Share Delivery Date (as defined in the Prefunded Warrants) for purposes hereunder.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) the
Company’s wire instructions, on Company letterhead and executed by the Company’s Chief Executive Officer or Chief Financial
Officer;
(iii) subject
to the provision of Section 2.1 that settlement of the Shares shall occur via DVP, a copy of the irrevocable instructions to the Transfer
Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian
system shares of Common Stock equal to the portion of such Purchaser’s Subscription Amount divided by the Per Share Purchase Price,
registered in the name of such Purchaser;
(iv) for
each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, a Pre-Funded Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to Pre-Funded Warrants
divided by the sum of the Per Pre-Funded Warrant Purchase Price, subject to adjustment therein;
(v) the
Preliminary Prospectus and the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act);
(vi) a
Common Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of such Purchaser’s
shares of Common Stock and Pre-Funded Warrants, as applicable, with an exercise price equal to $[●] per share, subject to adjustment
therein;
(vii) the
duly executed Lock-Up Agreements;
(viii) a
cold comfort letter, addressed to the Placement Agent, in form and substance reasonably acceptable to the Placement Agent and the Purchasers,
from the Company’s independent registered public accounting firm;
(ix) a
legal opinion of Company Counsel, in form reasonably acceptable to the Placement Agent and the Purchasers;
(x) a
legal opinion of the Company’s IP Counsel, in form reasonably acceptable to the Placement Agent and the Purchasers;
(xi) duly
executed Officers’ Certificate in customary form reasonably acceptable to the Placement Agent;
(xii) duly
executed Secretary’s Certificate in customary form reasonably acceptable to the Placement Agent;
(xiii) duly
executed Chief Financial Officer Certificate in customary form reasonably acceptable to the Placement Agent; and
(xiv) the
Preliminary Prospectus and the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act).
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) such
Purchaser’s Subscription Amount with respect to the Shares and Warrants purchased by such Purchaser, which shall be made available
for DVP settlement with the Company or its designees.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v) from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or any Trading Market,
and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended
or limited, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there
have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its
effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the Closing.
Section 3.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section
of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly or indirectly,
all of the capital shares or other equity interests of each Subsidiary, free and clear of any Liens, except as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus, and all of the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing,
and, if applicable under the laws of the jurisdiction in which they are formed, in good standing under the laws of the jurisdiction of
its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective
memorandum of association, articles of association, certificate or articles of incorporation, bylaws, operating agreement, or other organizational
or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected
to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) material adverse
effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents to which the Company is a party and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part
of the Company and no further action is required by the Company, the Board of Directors, a committee of the Board of Directors or the
Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement
and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.
(d) No
Conflicts. Except as set forth on Schedule 3.1 (d), the execution, delivery and performance by the Company of this Agreement
and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or
any Subsidiary’s memorandum of association, articles of association, certificate or articles of incorporation, bylaws, operating
agreement, or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the
Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property
or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not
have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant
to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus, (iii) notices and/or application(s) to and approvals
by each applicable Trading Market for the listing of the applicable Securities for trading thereon in the time and manner required thereby,
and (iv) filings required by the Financial Industry Regulatory Authority (“FINRA”) (collectively, the “Required
Approvals”).
(f) Issuance
of the Securities; Registration. The Shares and Warrant Shares are duly authorized and, when issued and paid for in accordance with
the applicable Transaction Documents, will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed
by the Company. The Warrants are duly authorized and binding obligations of the Company under the law of the jurisdiction governing the
Warrants, and, when issued in accordance with this Agreement, will be duly and validly issued, and free and clear of all Liens imposed
by the Company. The Company has reserved from its duly authorized share capital the maximum number of shares of Common Stock issuable
pursuant to this Agreement and the Warrants. The Company has prepared and filed the Registration Statement in conformity with the requirements
of the Securities Act, which became effective on April 18, 2023, including the Preliminary Prospectus, and such amendments and supplements
thereto as may have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and
no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Preliminary
Prospectus or the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge
of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file
the Preliminary Prospectus or the Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any
amendments thereto became effective as determined under the Securities Act, at the date of this Agreement and at the Closing Date, the
Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and the Preliminary Prospectus and the Prospectus and any amendments
or supplements thereto, at the time the Preliminary Prospectus or the Prospectus, as applicable, or any amendment or supplement thereto
was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and
did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall
also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof.
The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant
to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees
pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the Exchange Act. Except as set forth on Schedule 3.1(g),
no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. The Shares and the Warrant Shares will not be subject to the preemptive rights of any holders
of any security of the Company or similar contractual rights granted by the Company. Except as set forth on Schedule 3.1(g), or
as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable
for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock
Equivalents. Except as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not result in a right of any
holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. Except as set forth
on Schedule 3.1(g), there are no outstanding securities or instruments of the Company or any Subsidiary with any provision that
adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company
or any Subsidiary. Except as set forth on Schedule 3.1(g), there are no outstanding securities or instruments of the Company or
any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does
not have any share appreciation rights or “phantom share” plans or agreements or any similar plan or agreement. All of the
outstanding shares of the Company are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance with
all federal and state securities laws where applicable, and none of such outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals, no further approval or authorization
of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders
agreements, voting agreements or other similar agreements with respect to the Company’s share capital to which the Company is a
party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
(h) SEC
Reports; Financial Statements. Except as set forth on Schedule 3.1(h), the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the one year preceding the date hereof (or such shorter period as the Company was required by law
or regulation to file such materials) (the foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, together with the Preliminary Prospectus and the Prospectus, being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities
Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have
been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows
for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements
and documents described in the Registration Statement, the Prospectus and the SEC Reports conform in all material aspects to the descriptions
thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations
thereunder to be described in the Registration Statement, the Prospectus or the SEC Reports or to be filed with the Commission as exhibits
to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or
described) to which the Company is a party or by which it is or may be bound and is material to the Company’s business (each, a
“Material Agreement”), has been duly authorized and validly executed by the Company, is in full force and effect in
all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance
with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities
laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefore may be brought. No Material Agreement has been assigned
by the Company, and neither the Company nor, to the best of the Company’s knowledge, any other party is in default thereunder and,
to the best of the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would
constitute a default thereunder that has had or that could reasonably be expected to result in a Material Adverse Effect. To the best
of the Company’s knowledge, performance by the Company of the material provisions of the Material Agreements will not result in
a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic
or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to
environmental laws and regulations. The other financial and statistical information included in the SEC Reports present fairly, in all
material respects, the information included therein and have been prepared on a basis consistent with that of the financial statements
that are included in the SEC Reports and the books and records of the respective entities presented therein.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Except as set forth on Schedule 3.1(i), since the date of the latest
financial statements filed by the Company with the SEC, the General Disclosure Package and the Prospectus, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has
not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course
of business consistent with past practice and strategic acquisitions and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any of its shares and (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company equity incentive plans. The Company does not have pending before the
Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement
or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or
is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties,
operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the
time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that
this representation is made. Unless otherwise disclosed in an SEC Report filed prior to the date hereof, the Company has not: (i) issued
any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend
or made any other distribution on or in respect to its capital stock.
(j) Litigation.
Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”). To the knowledge of the Company, none of the Actions set forth on Schedule 3.1(j),
(i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents, the Shares or the Warrant
Shares, or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of fiduciary duty, which could result in a Material Adverse
Effect. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. 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 Exchange Act or the
Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority
or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters, except in each case of (i), (ii) and (iii) as could not have or reasonably be expected to
result in a Material Adverse Effect.
(m) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as
all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received
all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and
(iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the Registration Statement,
the General Disclosure Package and the Prospectus, except where the failure to possess such certificates, authorizations or permits could
not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor
any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit or the noncompliance
with any ordinance, law, rule or regulation applicable to the Company. The disclosures in the Registration Statement, if any, concerning
the effects of federal, state, local and all foreign regulation on the Company’s business as currently contemplated are correct
in all material respects. The Company is and has been in material compliance with any term of any such Material Permit, except for any
violations which would not reasonably be expected to have a Material Adverse Effect. The Company has not received notice of any claim,
action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any governmental authority or body or
third party alleging that any product, operation or activity is in violation of any applicable laws or Material Permits or has any knowledge
that any such entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding,
nor, to the Company’s knowledge, has there been any material noncompliance with or violation of any Material Permits by the Company
that could reasonably be expected to require the issuance of any such communication or result in an investigation, corrective action,
or enforcement action by any governmental body or entity.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights to
lease or otherwise use, all real property and all personal property owned or used by them that is material to the business of the Company
and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii)
Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP
and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company
and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in
compliance in all material respects.
(p) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective businesses as described in the Registration Statement, the General Disclosure
Package and the Prospectus and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). Except as set forth on Schedule 3.1(p), none of, and neither the Company nor any Subsidiary has received
a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected
to expire or terminate or be abandoned, within two (2) years from the date of this Agreement except as would not reasonably be expected
to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial
statements included within the Registration Statement, the General Disclosure Package or the Prospectus, a written notice of a claim or
otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not
have or reasonably be expected to not have a Material Adverse Effect. To the actual knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company
and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual
properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage in an amount deemed commercially reasonable. Neither the Company nor any Subsidiary has
any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(r) Transactions
with Affiliates and Employees. 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, shareholder,
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 or a Subsidiary and (iii) other employee benefits, including share option
agreements under any share option plan or equity incentive plans of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. Except as disclosed in the SEC Reports, the Company and the Subsidiaries are in material compliance
with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended (“SOX”), that are effective
as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as
of the date hereof and as of the Closing Date. Except for the material deficiencies disclosed in the SEC Reports, the Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have
established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries
and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports
it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of
the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act
(such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations
as of the Evaluation Date. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, since
the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange
Act) that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the
Company and its Subsidiaries.
(t) Certain
Fees. Except for fees payable to the Placement Agent pursuant to the terms of the Placement Agency Agreement, no brokerage or finder’s
fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents (for the avoidance
of doubt, the foregoing shall not include any fees and/or commissions owed to the Transfer Agent). Other than for Persons engaged by any
Purchaser, if any, the Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf
of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the
Transaction Documents.
(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be
or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(v) Registration
Rights. Except as set forth on Schedule 3.1(v), no Person has any right to cause the Company to effect the registration under
the Securities Act of any securities of the Company or any Subsidiary.
(w) Listing
and Maintenance Requirements. The shares of Common Stock are registered pursuant to Section 12(b) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
Except as set forth in the Registration Statement, the General Disclosure Package, the Prospectus and Schedule 3.1 (w), the Company
has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock are or have been
listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.
The shares of Common Stock are currently eligible for electronic transfer through The Depository Trust Company or another established
clearing corporation and the Company is current in payment of the fees to The Depository Trust Company (or such other established clearing
corporation) in connection with such electronic transfer.
(x) 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 the laws of its state of incorporation that is or could
become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights
under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’
ownership of the Securities.
(y) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the Preliminary
Prospectus or the Prospectus. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting
transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding
the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules
to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (a) have not
been filed as required pursuant to the Securities Act or (b) will not be filed within the requisite time period. There are no contracts
or other documents required to be described in the Prospectus, or to be filed as exhibits or schedules to the Registration Statement,
which have not been described or filed as required. The press releases disseminated by the Company during the twelve months preceding
the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made
and when made, not misleading. The statistical and market-related data included in the Prospectus, if any, are based on or derived from
sources that the Company reasonably and in good faith believes are reliable and accurate or represent the Company’s good faith estimates
that are made on the basis of data derived from such sources. The Company has obtained all consents required for the inclusion of such
statistical and market-related data in the Prospectus. No forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained in the Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith. The Company acknowledges and believes, to its best knowledge, that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section
3.2 hereof.
(z) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither
the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions of
any Trading Market on which any of the securities of the Company are listed or designated.
(aa) Solvency. Based on
the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds
from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required
to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they
mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as
proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted
by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the
Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt). 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 Date. Schedule 3.1(aa) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company
or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or
not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the
present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither
the Company nor any Subsidiary is in default with respect to any Indebtedness.
(bb) Tax Compliance. Except
for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the
Company and its Subsidiaries each (i) has made or filed all federal, state and local income and all foreign tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges, fines or
penalties that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside
on its financial statements provision reasonably adequate for the payment of all material tax liability of which has not been finally
determined and all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company
or of any Subsidiary know of no basis for any such claim.
(cc) Foreign Corrupt Practices.
Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf
of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which
is in violation of law, or (iv) violated in any material respect any provision of FCPA.
(dd) Illegal or Unauthorized
Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor any of the officers, directors, employees,
agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company
or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution or
gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person or (ii)
to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political
contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.
(ee) Accountants. The Company’s
independent registered public accounting firm is as set forth in the Prospectus. To the knowledge and belief of the Company, such accounting
firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) has expressed its opinion with respect to the
financial statements included in the Company’s Annual Report for the fiscal year ending December 31, 2022.
(ff) Acknowledgment Regarding
Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental
to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision
to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(gg) Acknowledgment Regarding
Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections
3.2(f) and 4.12 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company
to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market
or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions,
before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser
is a party, directly or indirectly, presently may have a “short” position in the shares of Common Stock, and (iv) each Purchaser
shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various
times during the period that the Securities are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing
stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The Company
acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(hh) Regulation M Compliance.
The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause
or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any
of the shares of Common Stock, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the shares
of Common Stock, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement
of the shares of Common Stock.
(ii) D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires most recently completed by each
of the Company’s directors and officers and beneficial owner of 5% or more of the Common Stock or Common Stock Equivalents 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
questionnaires become inaccurate and incorrect.
(jj) Stock Option Plans.
Each stock option granted by the Company under the Company’s stock option plan or equity incentive plan was granted (i) in accordance
with the terms of the Company’s stock option plan or equity incentive 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 or equity incentive 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.
(kk) Cybersecurity. Except
as would not, individually or in the aggregate, have a Material Adverse Effect, (i) the Company and the Subsidiaries are presently in
compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental
or regulatory authority, internal policies and contractual obligations relating to the privacy and security of 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 to the protection of such IT Systems and Data from unauthorized use, access, misappropriation
or modification; (ii) 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 (iii) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with commercially
reasonable industry standards and practices.
(ll) Office of Foreign Assets
Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate
of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”).
(mm) Money Laundering. The
operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes
and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit or
proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary
with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(nn) FINRA Affiliation.
No officer, director or any beneficial owner of 5% (to the knowledge of the Company with respect to such 5% or more beneficial owner)
or more of the Company’s Common Stock or Common Stock Equivalents has any direct or indirect affiliation or association with any
member of FINRA (as determined in accordance with the rules and regulations of FINRA) that is participating in the Offering. Except for
securities purchased on the open market, no Company Affiliate is an owner of stock or other securities of any member of FINRA. No Company
Affiliate has made a subordinated loan to any member of FINRA. No proceeds from the sale of the Securities (excluding compensation as
disclosed in the Prospectus to the Placement Agent) will be paid to any FINRA member, any persons associated with a FINRA member or an
affiliate of a FINRA member. Except as disclosed in the Registration Statement and Prospectus and except for securities issued to the
Placement Agent as disclosed in the Prospectus, no person to whom securities of the Company have been privately issued within the 180-day
period prior to the initial filing date of the Prospectus is a FINRA member, is a person associated with a FINRA member or is an affiliate
of a FINRA member. No FINRA member participating in the offering has a conflict of interest with the Company. For this purpose, a “conflict
of interest” exists when a FINRA member, the parent or affiliate of a FINRA member or any person associated with a FINRA member
in the aggregate beneficially own 5% or more of the Company’s outstanding subordinated debt or common equity, or 5% or more of the
Company’s preferred equity. “FINRA member participating in the offering” includes any associated person of a FINRA member
that is participating in the offering, any member of such associated person’s immediate family and any affiliate of a FINRA member
that is participating in the offering. “Any person associated with a FINRA member” means (1) a natural person who is registered
or has applied for registration under the rules of FINRA and (2) a sole proprietor, partner, officer, director, or branch manager of a
FINRA member, or other natural person occupying a similar status or performing similar functions, or a natural person engaged in the investment
banking or securities business who is directly or indirectly controlling or controlled by a FINRA member. When used in this Section 3.1(mm)
the term “affiliate of a FINRA member” or “affiliated with a FINRA member” means an entity that controls, is controlled
by or is under common control with a FINRA member. The Company will advise the Placement Agent and Sullivan & Worcester LLP if it
learns that any officer, director or owner of 5% or more of the Company’s outstanding Common Stock or Common Stock Equivalents is
or becomes an affiliate or associated person of a FINRA member firm.
(oo) Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Purchasers shall be deemed
a representation and warranty by the Company to the Purchasers as to the matters covered thereby.
(pp) Board of Directors.
Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, the qualifications of the persons
serving as board members and the overall composition of the Board of Directors comply with SOX and the rules promulgated thereunder
applicable to the Company and the rules of the Trading Market. At least one member of the Board of Directors qualifies as a “financial
expert” as such term is defined under SOX and the rules promulgated thereunder and the rules of the Trading Market. In
addition, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, at least a majority of
the persons serving on the Board of Directors qualify as “independent” as defined under the rules of the Trading Market.
(qq) Employee Plans. The
SEC Reports disclose, to the extent required by applicable securities laws, each plan for retirement, bonus, stock purchase, profit sharing,
stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave,
disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive or otherwise contributed to, or required to
be contributed to, by the Company for the benefit of any current or former director, officer, employee or consultant of the Company (the
“Employee Plans”), each of which has been maintained in all material respects with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations that are applicable to such Employee Plans.
(rr) U.S. Real Property Holding
Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(ss) 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, 5% or more of the outstanding shares of any class
of voting securities or 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.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate
as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership limited liability company
or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents to which such Purchaser
is a party and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by
all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each
Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance
with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
(b) Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty
not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with
applicable federal and state securities laws).
(c) [Reserved].
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
(e) [Reserved].
(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received
a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms, which terms
include definitive pricing terms, of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate
portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered
by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without
limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained
the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or
preclude any actions, with respect to locating or borrowing shares order to effect Short Sales or similar transactions in the future.
(g) Independent
Advice. Each Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company
to the Purchaser in connection with the purchase of the Securities constitutes legal, tax or investment advice.
The Company acknowledges and
agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any
other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation
of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute
a representation or warranty, or preclude any actions, except as set forth in this Agreement, with respect to locating or borrowing shares
in order to effect Short Sales or similar transactions in the future.
Section 4.
OTHER AGREEMENTS OF THE PARTIES
4.1 Legends.
The shares of Common Stock and the Warrant Shares shall be issued free of legends. If at any time following the date hereof the Registration
Statement is not effective or is not otherwise available for the sale of the Warrant Shares, the Company shall immediately notify the
holders of the Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify such holders
when the registration statement is effective again and available for the sale of the Warrant Shares (it being understood and agreed that
the foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance with
applicable federal and state securities laws). The Company shall use commercially reasonable best efforts to keep a registration statement
(including the Registration Statement) registering the issuance of the Warrant Shares effective during the term of the Warrants.
4.2 Furnishing
of Information; Public Information. Until the earliest of the time that (i) no Purchaser owns Securities, or (ii) the Warrants have
expired, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to
timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act, even if the Company is not then subject to the reporting requirements
of the Exchange Act, except in the event that the Company consummates (in each case on or after the date as of which the Purchasers may
sell all of their Securities without restriction or limitation pursuant to Rule 144): (a) any transaction or series of related transactions
as a result of which any Person (together with its Affiliates) acquires then outstanding securities of the Company representing more than
fifty percent (50%) of the voting control of the Company; (b) a merger or reorganization of the Company with one or more other entities
in which the Company is not the surviving entity; or (c) a sale of all or substantially all of the assets of the Company, where the consummation
of such transaction results in the Company no longer being subject to the reporting requirements of the Exchange Act.
4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of
any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval
is obtained before the closing of such subsequent transaction.
4.4 Securities
Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the
transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto,
with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents
to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the
Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and
agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any
of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers
or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing
any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any
such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release
of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly
provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall
not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory
agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection
with the filing of final Transaction Documents with the Commission, and (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause
(b) and reasonably cooperate with such Purchaser regarding such disclosure.
4.5 Stockholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.6 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding
the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company. To the extent that the Company, any of its Subsidiaries, or any of their
respective officers, directors, agents, employees or controlled Affiliates delivers any material, non-public information to a Purchaser
without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality
to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to
the Company, and of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the
basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that
any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The
Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.
4.7 Use
of Proceeds. Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s
debt (other than payment of trade payables in the ordinary course of the Company’s business or repayment of obligations outstanding
as of the date of this Agreement consistent with prior practices and to 3i, LP for its promissory notes, if applicable), (b) for the redemption
of any shares of Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of
FCPA or OFAC regulations or similar applicable regulations.
4.8 Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners
or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court
costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity (including a Purchaser
Party’s status as an investor), or any of them or their respective Affiliates, any stockholder of the Company who is not an Affiliate
of such Purchaser Party, arising out of or relating to any of the transactions contemplated by the Transaction Documents (unless such
action is based upon a material breach of such Purchaser Party’s representations, warranties, covenants or agreements made by such
Purchaser Party in any Transaction Document or any conduct by a Purchaser Party which is finally judicially determined to constitute fraud,
gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party in respect of which indemnity may
be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the
right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of counsel to the applicable Purchaser Party (which may be internal
counsel), a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which
case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will
not be liable to any Purchaser Party under this Agreement for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed, or the extent that a loss, claim, damage, or liability is
attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents. The indemnification and other payment obligations required by this Section
4.8 shall be made by periodic payments of the amount thereof during the course of the investigation, defense, collection, enforcement
or action, as and when bills are received or are incurred; provided, that if any Purchaser Party is finally judicially determined not
to be entitled to indemnification or payment under this Section 4.8, such Purchaser Party shall promptly reimburse the Company for any
payments that are advanced under this sentence. The indemnity agreements contained herein shall be in addition to any cause of action
or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9 Listing
of Shares. The Company hereby agrees to use best efforts to maintain the listing or quotation of the shares of Common Stock on the
Trading Market on which the Common Stock is currently listed, and concurrently with the Closing, the Company shall apply to list or quote
all of the shares of Common Stock on such Trading Market and promptly secure the listing of all of the shares of Common Stock on such
Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will
then include in such application all of the Shares and Warrant Shares, and will use its best efforts to cause all of the Shares and Warrant
Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary
to continue the listing and trading of the Common Stock on a Trading Market and will comply in all material respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to use commercially reasonable
efforts to maintain the eligibility of the Common Stock for electronic transfer through The Depository Trust Company or another established
clearing corporation, including, without limitation, by timely payment of fees to The Depository Trust Company or such other established
clearing corporation in connection with such electronic transfer.
4.10 Subsequent
Equity Sales.
(a) From the date hereof until ninety
(90) days after the Closing Date, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce
the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or (ii) file any registration statement or
amendment or supplement thereto, other than the Prospectus Supplement or filing a registration statement on Form S-8 in connection with
any employee benefit plan, or pursuant to certain Registration Rights Agreement dated May 20, 2021, as amended on April 20, 2023, by and
between the Company and 3i, LP.
(b) From the date hereof until the
six (6) month anniversary of the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect
any issuance by the Company or any of its Subsidiaries of shares 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 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 shares of Common Stock or (ii) enters into, or effects a transaction under, any agreement, including,
but not limited to, an equity line of credit or an “at-the-market offering”, 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. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect damages.
(c) Notwithstanding the foregoing,
this Section 4.10 shall not apply (1) in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance;
(2) with respect to Section 4.10(b), following the six (6) month anniversary of the Closing Date; and (3) any amendments, adjustments
or modifications with agreements with 3i, LP, including, but not limited to the issuances of Series C Preferred Stock and Series A Preferred
Stock, warrants and debt financings, and any issuances of capital stock of the Company related thereto.
4.11 Equal
Treatment of Purchasers. No consideration (including any modification of the Transaction Documents) shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers
as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition
or voting of the shares of Common Stock or otherwise.
4.12 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor
any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser
will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding the foregoing, and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance
with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty
not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described
in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
4.13 Exercise
Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers
in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers
to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise the
Warrants. The Company shall honor exercises of the Warrants and shall deliver shares of Common Stock and/or Warrant Shares in accordance
with the terms, conditions and time periods set forth in the Transaction Documents.
4.14 Reservations
of Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times,
free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue shares of Common
Stock pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.15 Lock-Up
Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements without the prior
written consent of the Placement Agent, except to extend the term of the lock-up period, and shall enforce the provisions of each Lock-Up
Agreement in accordance with its terms. If any party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company
shall promptly use its best efforts to seek specific performance of the terms of such Lock-Up Agreement.
4.16 [Reserved].
4.17 [Reserved].
Section 5.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated
on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination will affect
the right of any party to sue for any breach by any other party (or parties).
5.2 Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered
by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Preliminary Prospectus and the Prospectus,
contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile
at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading
Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages
attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public
information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and the Purchasers who own at least 50.1% in interest of the then sum of (i) the Shares and (ii)
the Pre-Funded Warrant Shares initially issuable upon exercise of the Pre-Funded Warrants based on the initial Subscription Amounts hereunder,
or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought; provided, that if any amendment,
modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of at least 50.1% in
interest of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any
party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately,
materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the
other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with
this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other
than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No
Third-Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person, except as otherwise set forth in Section 4.8, this Section 5.8 and the Placement Agency Agreement, as applicable.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party
shall commence an action, suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.8, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action
or proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities for the applicable statute
of limitations.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page was an original
thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of an exercise of a Warrant,
the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise notice concurrently
with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s
right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing
such restored right).
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would
be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
5.17 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.
Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For
reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through
the Placement Agent Counsel, the legal counsel of the Placement Agent. Placement Agent Counsel does not represent any of the Purchasers
and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood
and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser,
solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers. Notwithstanding anything
to the contrary in the foregoing, each of the Purchasers has been advised, and is being advised by this Agreement, to consult with an
attorney before executing this Agreement, and each Purchaser has consulted (or had an opportunity to consult) with counsel of such Purchaser’s
choice concerning the terms and conditions of this Agreement and the other Transaction Documents for a reasonable period of time prior
to the execution hereof and thereof.
5.18 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.19 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been
paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due
and payable shall have been canceled.
5.20 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions relating to shares of Common Stock that occur after the date of this
Agreement.
5.21 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY
AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES
FOREVER TRIAL BY JURY.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
ALLARITY THERAPEUTICS, INC. |
|
Address for Notice: |
|
|
24 School Street, 2nd Floor
Boston, Massachusetts 02108 |
By: |
|
|
|
Name: |
James G. Cullem |
|
Email: jcullem@allarity.com |
Title: |
Chief Executive Officer |
|
|
|
|
|
With a copy to (which shall not constitute notice): |
|
|
Lewis Brisbois Bisgaard & Smith LLP
633 West 5th Street, Suite 4000
Los Angeles, CA 92130
Attn: Scott E. Bartel
Email: scott.bartel@lewisbrisbois.com |
|
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGES FOR PURCHASERS FOLLOW.]
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE
AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser:
Signature of Authorized Signatory of Purchaser:
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Authorized Signatory:
Facsimile Number of Authorized Signatory:
Address for Notice to Purchaser:
Address for Delivery of Warrant Shares to the
Purchaser (if not same address for notice):
DWAC for Common Stock:
Subscription Amount: $___________________
Shares of Common Stock: ___________________
Shares of Common Stock underlying the Pre-Funded
Warrants: ________
Warrant Shares underlying the Common Warrants:
________
EIN Number: ___________________
☐ Notwithstanding anything contained
in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to purchase the securities set forth
in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company to sell such securities
to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the Closing shall occur on the
second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated by this Agreement (but
prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed of any agreement,
instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall instead be an
unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or
the like or purchase price (as applicable) to such other party on the Closing Date.
[SIGNATURE PAGES CONTINUE]
Exhibit A
Form of Common Warrant
(See Attached)
Exhibit B
Form of Pre-Funded Warrant
(See Attached)
Exhibit C
Form of Lock-Up Agreement
(See Attached)
Exhibit 10.58
LOCK-UP AGREEMENT
, 2023
| Re: | Securities Purchase Agreement, dated as of ___, 2023 (the
“Purchase Agreement”), between Allarity Therapeutics, Inc. (the “Company”) and the purchasers signatory
thereto |
Ladies and Gentlemen:
Defined terms not
otherwise defined in this letter agreement (the “Letter Agreement”) shall have the meanings set forth in the Purchase
Agreement. The undersigned irrevocably agrees with A.G.P./Alliance Global Partners (“AGP”) that, from the date hereof
until ninety (90) days from the Closing Date (as defined in the Purchase Agreement (such period, the “Restriction Period”)
the undersigned will not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which
is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the undersigned or any Affiliate of the undersigned or any person in privity with the undersigned
or any Affiliate of the undersigned), directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), with respect to, any shares of Common Stock of the Company or securities convertible, exchangeable or exercisable into,
shares of Common Stock of the Company beneficially owned, held or hereafter acquired by the undersigned (the “Securities”),
or make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect
to the registration of any shares of Common Stock or Common Stock Equivalents or publicly disclose the intention to do any of the foregoing.
Beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act.
Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may transfer the Securities provided that (1) AGP and the Company
receive a signed lock-up letter agreement (in the form of this Letter Agreement) for the balance of the Restriction Period from each donee,
trustee, distributee, or transferee, as the case may be, prior to such transfer, (2) any such transfer shall not involve a disposition
for value, (3) such transfer is not required to be reported with the Securities and Exchange Commission in accordance with the Exchange
Act and no report of such transfer shall be made voluntarily, and (4) neither the undersigned nor any donee, trustee, distributee
or transferee, as the case may be, otherwise voluntarily effects any public filing or report regarding such transfers, with respect to
transfer:
| i) | as a bona fide gift or gifts; |
| ii) | to any immediate family member or to any trust for the direct
or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this Letter Agreement, “immediate
family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin); |
| iii) | to any corporation, partnership, limited liability company,
or other business entity all of the equity holders of which consist of the undersigned and/or the immediate family of the undersigned; |
| iv) | if the undersigned is a corporation, partnership, limited
liability company, trust or other business entity (a) to another corporation, partnership, limited liability company, trust or other
business entity that is an Affiliate of the undersigned or (b) in the form of a distribution to limited partners, limited liability company
members or stockholders of the undersigned; |
| v) | if the undersigned is a trust, to the beneficiary of such
trust; |
| vi) | by will, other testamentary document or intestate succession
to the legal representative, heir, beneficiary or a member of the immediate family of the undersigned; or . |
| vii) | of securities purchased pursuant to the Purchase Agreement. |
In addition, notwithstanding
the foregoing, this Letter Agreement shall not restrict the delivery of shares of Common Stock to the undersigned upon (i) exercise any
options granted under any employee benefit plan of the Company; provided that any shares of Common Stock or Securities acquired in connection
with any such exercise will be subject to the restrictions set forth in this Letter Agreement, or (ii) the exercise of warrants; provided
that such shares of Common Stock delivered to the undersigned in connection with such exercise are subject to the restrictions set forth
in this Letter Agreement.
Furthermore, the
undersigned may enter into any new plan established in compliance with Rule 10b5-1 of the Exchange Act; provided that (i) such plan may
only be established if no public announcement or filing with the Securities and Exchange Commission, or other applicable regulatory authority,
is made in connection with the establishment of such plan during the Restriction Period and (ii) no sale of shares of Common Stock are
made pursuant to such plan during the Restriction Period.
The undersigned acknowledges
that the execution, delivery and performance of this Letter Agreement is a material inducement to AGP and the Company to complete the
transactions contemplated by the Purchase Agreement and AGP shall be entitled to specific performance of the undersigned’s obligations
hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and perform this Letter
Agreement, that the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from the
closing of the transactions contemplated by the Purchase Agreement.
This Letter Agreement may not
be amended or otherwise modified in any respect without the written consent of AGP and the undersigned. This Letter Agreement shall be
construed and enforced in accordance with the laws of the State of New York without regard to the principles of conflict of laws. The
undersigned hereby irrevocably submits to the exclusive jurisdiction of the United States District Court sitting in the Southern District
of New York and the courts of the State of New York located in Manhattan, for the purposes of any suit, action or proceeding arising out
of or relating to this Letter Agreement, and hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim
that (i) it is not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient
forum, or (iii) the venue of the suit, action or proceeding is improper. The undersigned hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at
the address in effect for notices to it under the Purchase Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. The undersigned hereby waives any right to a trial by jury. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
This Letter Agreement shall
be binding on successors and assigns of the undersigned with respect to the Securities and any such successor or assign shall enter into
a similar agreement for the benefit of AGP. This Letter Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any provisions hereof be enforced by, any of other Person.
It is understood that, this
Letter Agreement shall automatically terminate, and the undersigned shall be released from its obligations hereunder, upon the earliest
to occur, if any, of (i) prior to the execution of the Purchase Agreement, the Company advises AGP in writing that it has determined not
to proceed with the transaction, (ii) the Purchase Agreement is executed but is terminated prior to payment for and delivery of the securities
thereunder, or (iii) August 31, 2023, in the event that the Purchase Agreement has not been executed by such date.
*** SIGNATURE PAGE FOLLOWS***
This Letter Agreement may be
executed in two or more counterparts, all of which when taken together may be considered one and the same agreement.
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Signature |
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Print Name |
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Position in Company, if any |
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Address for Notice: |
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By signing below, AGP agrees
to enforce the restrictions on transfer set forth in this Letter Agreement.
A.G.P./Alliance
Global Partners
By: |
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Name: |
Thomas J. Higgins |
|
Title: |
Managing Director, Investment Banking |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the incorporation by reference in this Amendment No. 1 to the Registration Statement (No. 333-272469) on Form S-1 and related
Prospectus of Allarity Therapeutics, Inc. of our report dated March 9, 2023, relating to the consolidated financial statements of Allarity
Therapeutics, Inc. appearing in the Annual Report on Form 10-K of Allarity Therapeutics, Inc. for the year ended December 31, 2022.
We also consent to the reference to our firm under the heading “Experts”
in such Prospectus.
/s/ Wolf & Company, P.C.
Wolf & Company, P.C.
Boston, Massachusetts
June 30, 2023
v3.23.2
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