Prospectus
Supplement No. 2
(to
Prospectus dated April 25, 2024) |
Filed
Pursuant to Rule 424(b)(3)
Registration
No. 333-278673 |
BRAND
ENGAGEMENT NETWORK INC.
46,752,838
Shares of Common Stock (Inclusive of 21,190,316 Shares of Common Stock
Underlying
Warrants, 1,583,334 Shares of Common Stock Underlying Convertible Notes and 163,407 Shares of Common Stock Underlying Options)
6,126,010
Warrants to Purchase Common Stock
This
prospectus supplement updates and supplements the prospectus of Brand Engagement Network Inc., a Delaware corporation (the “Company,”
“we,” “us” or “our”), dated April 25, 2024, which forms a part of our Registration Statement on Form
S-1, as amended (Registration No. 333-278673) (the “Prospectus”). This prospectus supplement is being filed to update and
supplement the information in the Prospectus with the information contained in our Current Report on Form 8-K, filed with the Securities
and Exchange Commission (the “SEC”) on May 29, 2024. Accordingly, we have attached the Form 8-K to this prospectus supplement.
This
prospectus supplement should be read in conjunction with the Prospectus. This prospectus supplement updates and supplements the information
in the Prospectus. If there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should
rely on the information in this prospectus supplement.
Our
common stock, par value $0.0001 per share (the “Common Stock”) and the public warrants representing the right to acquire
one share of Common Stock for $11.50 (the “Public Warrants”), are listed on Nasdaq under the symbols “BNAI,”
and “BNAIW”, respectively. On May 29, 2024, the last reported sales price of the Common Stock was $2.64 per share,
and the last reported sales price of our Public Warrants was $0.1159 per Public Warrant. We are an “emerging growth company”
and a “smaller reporting company” as defined under the U.S. federal securities laws and, as such, may elect to comply with
certain reduced public company reporting requirements for this and future filings.
Investing
in our securities involves risk. See “Risk Factors” beginning on page 6 of the Prospectus to read about factors you should
consider before investing in shares of our Common Stock and 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.
The
date of this prospectus supplement is May 29, 2024
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or Section 15(d)
of
the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): May 28, 2024
BRAND
ENGAGEMENT NETWORK INC.
(Exact
name of registrant as specified in its charter)
Delaware |
|
001-40130 |
|
98-1574798 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(Commission
File
Number) |
|
(I.R.S.
Employer
Identification
No.) |
145
E. Snow King Ave
PO
Box 1045
Jackson,
WY 32001
(Address
of principal executive offices, including zip code)
Registrant’s
telephone number, including area code: (307) 699-9371
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, par value $0.0001 per share |
|
BNAI |
|
The
Nasdaq Stock Market LLC |
Redeemable
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share |
|
BNAIW |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
On
May 28, 2024, Brand Engagement Network Inc., a Delaware corporation (the “Company”) entered into a Securities Purchase Agreement
(the “Purchase Agreement”) with certain investors (the “Purchasers”), pursuant to which the Company will issue
and sell to the Purchasers an aggregate of 1,980,000 shares of common stock of the Company, par value $0.0001 per share (the “Common
Stock”) at a price per share of $2.50 (the “Shares”) and an aggregate of 3,960,000 warrants to purchase Common Stock,
which shall be divided into two tranches consisting of (i) 1,980,000 Warrants immediately exercisable for a term of one year from (the
“One-Year Warrants”) and (ii) 1,980,000 Warrants immediately exercisable for a term of five years (the “Five-Year Warrants,”
together with the One-Year Warrants, the “Warrants” and such shares underlying the Warrants, the “Warrant Shares”
and together with the Shares and the Warrants, the “Securities”)), each with an exercise price of $2.50 per share, subject
to customary adjustments, for an aggregate purchase price of $4,950,000 (collectively, the “Financing”). The Warrants are
currently exercisable for 3,960,000 Warrant Shares.
On
May 30, 2024 (the “Initial Closing Date”), the Company will issue to the Purchasers an aggregate of 200,000 Shares and 400,000
Warrants (consisting of 200,000 One-Year Warrants and 200,000 Five-Year Warrants) and the Purchasers shall pay to the Company an aggregate
of $500,000. Additionally, the Company will issue the remaining 1,780,000 Shares and 3,560,00 Warrants to an escrow account (the “Share
Escrow Account”) on the books of the Company’s transfer agent. Following the Initial Closing Date, the Purchaser shall be
required to pay to the Company monthly cash installments (each, a Required Funding”) in the amounts and on the dates (each, a “Funding
Deadline”) set forth below. For every $2.50 paid to the Company, the Company will release one Share and two Warrants from the Share
Escrow Account to the Purchasers.
Required Funding | | |
Funding Deadline |
$ | 800,000 | | |
June 27, 2024 |
$ | 800,000 | | |
July 29, 2024 |
$ | 800,000 | | |
August 29, 2024 |
$ | 1,300,000 | | |
September 27, 2024 |
$ | 750,000 | | |
October 29, 2024 |
In
the event a Purchaser fails to make its portion of any Required Funding by the Funding Deadline, the entirety of such Purchaser’s
commitment under the Purchase Agreement shall become immediately due and payable. For so long as the Purchasers continue to make all
Required Fundings by their respective Funding Deadlines, the Purchasers shall be entitled to designate one non-voting observer (the “Observer”)
to attend meetings of the Company’s board of directors (the “Board”). Upon funding to the Company the aggregate purchase
price of $4,950,000, the Purchasers shall be entitled to designate the Observer as a voting member of the Company’s Board.
The
Company has agreed to make commercially reasonable efforts to file a Registration Statement on Form S-1 with the Securities and Exchange
Commission (the “SEC”) covering the resale of the Shares and the Warrant Shares within 20 days of the execution of the Purchase
Agreement and will take commercially reasonable efforts to cause such registration statement to be declared effective as soon as possible
thereafter. The Purchase Agreement contains representations and warranties of the Company and the Purchasers that are typical for transactions
of this type. The Purchase Agreement also contains covenants on the part of the Company that are typical for transactions of this type.
The
Securities were offered and sold in reliance on the exemption from registration under the Securities Act of 1933, as amended (the “Securities
Act”) provided by Section 4(a)(2) and Regulation D (Rule 506) under the Securities Act.
In
connection with the Financing, on May 28, 2024, the Company also entered into that certain Letter Agreement to Exercise Warrants with
certain of the Purchasers (the “Required Warrant Parties”) (the “Warrant Exercise Agreement”). In the event the
Company uses commercially reasonable efforts to raise an additional $3,250,000 (not including amounts raised under the Purchase Agreement)
in additional capital but is unable to do so by October 31, 2024 (the “Exercise Condition”), the Required Warrant Parties
shall be required to exercise for cash certain of their Warrants on a monthly basis in the amounts and on the dates set forth below.
Number of Warrants | | |
Date |
| 100,000 | | |
October 31, 2024 |
| 300,000 | | |
November 30, 2024 |
| 300,000 | | |
December 31, 2024 |
| 300,000 | | |
January 31, 2025 |
| 300,000 | | |
February 28, 2025 |
In
consideration for each Warrant held by a Required Warrant Party so exercised, the Company shall issue to such Required Warrant Party
one new One-Year Warrant and one new Five-Year Warrant with an exercise price of $2.50.
The
foregoing summaries of the Purchase Agreement and the Warrant Exercise Agreement are not complete and are qualified in its entirety by
reference to the full text of the form of the Purchase Agreement and the Warrant Exercise Agreement attached hereto as Exhibits 10.1
and 10.2, respectively, to this Current Report on Form 8-K (the “Report”).
Item
3.02 Unregistered Sales of Equity Securities.
The
information contained in Item 1.01 of this Report in relation to the Financing Shares and the Warrants is incorporated herein by reference.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On
May 28, 2024, the Board appointed Paul Chang, the Company’s Global President, as the Co-Chief Executive Officer of the Company,
effective immediately, with full power and authority of a Chief Executive Officer as prescribed in the Bylaws of the Company, to serve
in such capacity until his successor is elected and qualified or until his earlier death, resignation, or removal, and concurrently with
such appointment, Mr. Michael Zacharski, who currently serves as the Company’s Chief Executive Officer, will become Co-Chief Executive
Officer.
Mr.
Chang, age 57, has served as the Company’s Global President since the Company’s business combination with DHC Acquisition
Corp., a Delaware corporation. Mr. Chang joined the Company in May 2021 as an advisor to the Company. Prior to joining the Company, Mr.
Chang served in various capacities with IBM Corporation since November 2004, most recently acting as Cognitive Solutions and Advanced
Analytics SME from January 2015 to February 2017, as Global Blockchain Industry Leader for the Distribution and Industrial Sectors from
February 2017 to March 2022 and as Global OEM Technology GTM Lead from March 2022 to May 2023. Mr. Chang earned his Bachelor of Science
from Carnegie Mellon University.
There will be no change
in compensation for Mr. Chang. There are no arrangements
or understandings between Mr. Chang and any other persons pursuant to which he was selected to serve as the Company’s Co-Chief
Executive Officer. There is no family relationship between Mr. Chang and any director or executive officer of the Company. Other
information regarding Mr. Chang required by Item 404(a) of Regulation S-K was previously filed as an exhibit to the Company’s
Quarterly Report on Form 10-Q, filed with the SEC on May 14, 2024, such information is incorporated by reference herein.
Item
7.01 Regulation FD Disclosure.
On
May 29, 2024, the Company issued a press release announcing the Financing and the appointment of Mr. Chang as Co-Chief Executive Officer.
A copy of the press release is attached as Exhibit 99.1 to this Report. The Company undertakes no obligation to update, supplement or
amend the materials attached hereto as Exhibit 99.1.
The
information included under Item 7.01 (including Exhibit 99.1) is furnished pursuant to Item 7.01 and shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise be subject to
the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in
such filing.
Item
9.01 Exhibits and Financial Statements.
(d)
Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
|
BRAND
ENGAGEMENT NETWORK INC. |
|
|
|
By: |
/s/
Paul Chang |
|
Name: |
Paul
Chang |
|
Title: |
Co-Chief
Executive Officer |
|
|
|
Dated:
May 29, 2024 |
Exhibit
10.1
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of May 28, 2024, between Brand Engagement Network 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” identified on the signature
page hereto.
WHEREAS,
subject to the terms and conditions set forth in this Agreement, 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:
ARTICLE
I.
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:
“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 commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
“Closing”
means, initially, the closing of the purchase and sale of the Initial Shares and the Initial Warrants pursuant to Section 2.1. Thereafter,
“Closing” shall mean the closing of the purchase and sale of the Shares and Common Warrants in consideration of a Required
Funding.
“Closing
Date” means, initially, the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto in connection with the initial Closing (which shall take place on May 30, 2024 and such Closing, the “Initial
Closing”), and to the extent applicable, all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Shares and the Common Warrants , in each case, have been satisfied or
waived, but in no event later than the second (2nd) Trading Day following the date hereof. Thereafter, “Closing Date”
shall mean the Trading Day on which the Shares and Common Warrants are issued to the Purchasers.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Warrants” means, collectively, the Common Stock purchase warrants delivered to the Purchasers and the Share Escrow Account,
as applicable, at the Closing in accordance with Section 2.2(a) hereof, which Common Warrants shall be divided into two tranches: (1)
Common Warrants exercisable from and after the date of issuance and have a term equal to one year (1) year (the “One-Year Warrants”)
and (2) Common Warrants exercisable from and after the date of issuance and have a term equal to five (5) years, (the “Five-Year
Warrants”) in the form of Exhibit A attached hereto, respectively.
“Common
Warrant Shares” means the shares of Common Stock issuable upon exercise of the Common Warrants.
“Company
Counsel” means Haynes and Boone LLP, with offices located at 2801 N. Harwood St., Dallas, TX 75201.
“Escrow
Warrants” has the meaning ascribed to it in Section 2.2.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Event
of Default” means any of the following events: (i) the delisting of the Company’s Common Stock on a Trading Market for
a period of thirty consecutive trading days or more; (ii) The failure by the Company to timely comply with the reporting requirements
of the Exchange Act with respect to its Annual Report on Form 10-K or its Quarterly Reports on Form 10-Q, including applicable extension
periods and an additional grace period of ten calendar days (this clause (ii) a “Reporting Default”); (iii) The failure
for any reason by the Company to issue Securities to a Purchaser within the required time periods; (iv) the Company files for bankruptcy
under Title 11 of the United States Code or receivership or any final order is filed against the Company for more than $500,000 and remains
unvacated, unbonded or unstayed for a period of twenty calendar days; and (v) Any cessation of operations by the Company.
“GAAP”
means generally accepting accounting principles in the U.S.
“Funding
Condition Certification” means a certification of the Company signed by the members of Audit Committee of the Company’s
Board of Directors that the Company continues to evaluate mergers, acquisitions
and strategic transactions in good faith.
“Initial
Warrants” has the meaning ascribed to it in Section 2.2.
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Per
Share Purchase Price” equals $2.50, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations
and other similar transactions of the 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.
“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.
“Purchaser”
shall have the meaning ascribed to it in the preamble.
“Registration
Statement” means any Registration Statement under which the Shares and Warrant Shares are registered.
“Representation
Letter” means that certain letter attached as Exhibit B hereto.
“Required
Warrant Parties” means Due Figlie LLC, Lucas Venture Partners, Patrick Carney, Stephen Birchall, Troy Budgen and BEN Capital
Fund I LLC.
“Risk
Factor Annex” means that certain Annex I attached hereto.
“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.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(g).
“Securities”
means the Shares, the Common 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 or issuable to each Purchaser pursuant to this Agreement, but excluding the Warrant Shares.
“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 the location and/or reservation of borrowable shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Shares and the Common Warrants purchased hereunder
as specified below such Purchaser’s name on the signature pages 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 SEC Reports, 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 Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York
Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the form of warrant governing the Common Warrants, the Warrant Exercise Agreement, all exhibits,
and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Continental Stock Transfer & Trust Company. the current transfer agent of the Company, with a mailing address
of 1 State Street, 30th Floor, New York, New York 10004, and any successor transfer agent of the Company.
“Warrant
Exercise Agreement” means that certain Warrant Exercise Agreement, dated the date hereof, substantially in form attached here
as Exhibit C hereto.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Common Warrants.
ARTICLE
II.
PURCHASE
AND SALE
2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the
Purchasers, severally and not jointly, agree to purchase an aggregate of 1,980,000 Shares at a price per share of $2.50 and 3,960,000
Common Warrants (consisting of 1,980,000 One-Year Warrants and 1,980,000 Five-Year Warrants) each with an exercise price of $2.50, for
an aggregate purchase price of $4,950,000. Each Purchaser’s Subscription Amount as set forth on Schedule 1 hereto shall be made
available for settlement with the Company or its designee in accordance with Section 2.2 below. The Company shall deliver to each Purchaser
its respective Shares and Common Warrants, subject to any Escrow Legends, as applicable, as determined pursuant to Section 2.2, and the
Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at each Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.3 and 2.4, each Closing shall take place remotely by electronic transmission of the
Closing documentation. Settlement of the Shares and Common Warrants shall occur on each Closing Date, on which the Company shall issue
the Shares and Common Warrants registered in each Purchaser’s names and addresses and released by the Transfer Agent directly to
the account identified by each Purchaser, subject to any Escrow Legends, as applicable; upon receipt of such Shares and the Common Warrants,
each Purchaser will promptly make payment therefor by wire transfer to the Company).
2.2
Escrow; Required Fundings.
(a)
On the Closing Date, in accordance with the breakout on Schedule 1, the Purchasers will pay an aggregate of $500,000 to the Company (the
“Initial Payment”) and the Company shall issue directly to the Purchasers an aggregate of 200,000 shares of Common
Stock (the “Initial Shares”) and 400,000 Common Warrants (consisting of 200,000 One-Year Warrants and 200,000 Five-Year
Warrants) (“Initial Warrants” and together with the Initial Shares, the “Initial Securities”).
The remaining 1,780,000 shares of Common Stock (the “Escrow Shares”) and 3,560,000 Common Warrants (the “Escrow
Warrants”) shall be issued on the books of the Company’s Transfer Agent in an escrow account (the “Share Escrow
Account”) and shall be annotated with a restrictive legend restricting the release of the securities to the Purchasers until
they are released from the Share Escrow Account in accordance with Section 2.2(b) below.
(b)
Following the Initial Issuance and subject to the conditions set forth in Section 2.4, each Purchaser shall deposit the amounts set forth
on Schedule 1 hereto on a monthly basis (each monthly deposit, a “Required Funding”) into an escrow account to be
established by the Company (the “Cash Escrow Account”) until an aggregate of $4,950,000 (including the Initial Payment)
shall have been paid to the Company (the “Required Amount”). Each Required Funding shall be funded into the Cash Escrow
Account no later than June 27, 2024; July 29, 2024; August 29, 2024; September 27, 2024; October 29, 2024 (the “Funding Deadline”)
and such funds shall be released from the Cash Escrow Account to the Company on the last business day of each month. Upon receipt by
the Company, for every $2.50 of the Required Amount received from each Purchaser, the Company shall cause its Transfer Agent to release
one share of Common Stock and two Common Warrants (consisting of one One-Year Warrant and one Five-Year Warrant) to such Purchaser, as
applicable, and remove any legends evidencing that such shares are subject to an escrow arrangement (the “Escrow Legends”)
borne by such securities.
(c)
In the event a Purchaser fails to make any Required Funding by the Funding Deadline and such failure to pay is not cured within five
business days, the entirety of such Purchaser’s portion of the Required Amount shall become immediately due and payable by such
Purchaser without any further action of the Company.
2.3
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, and
(iii)
subject to Section 2.1 and 2.2, an irrevocable letter of instruction to the Company’s Transfer Agent, instructing the Transfer
Agent to deliver in book-entry form the Initial Shares registered in the name of the respective Purchasers and the Escrow Shares in the
Share Escrow Account;
(iv)
the executed Initial Warrants registered in the name of the Purchasers and an unexecuted copy of the Escrow Warrants;
(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 each Purchaser (for the Initial Closing only);
(ii)
each Purchaser’s cash payment for the Securities to be purchased by it on the Closing Date;
(iii)
if an entity, duly executed copies of each Purchaser’s governing documents (for the Initial Closing only);
(iv)
duly executed copies of the accredited investor questionnaires completed by such Purchaser, and if an entity, such Purchaser’s
members, stockholders or other equity owners (for the Initial Closing only);
(v)
a duly executed copy of the Warrant Exercise Agreement by the Required Warrant Parties (for the Initial Closing only); and
(vi)
if an entity, duly executed copies of the Representation Letter from each
member, stockholder or other equity owner of such Purchaser.
2.4
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 on the applicable Closing Date (or, to the extent representations or warranties are qualified by
materiality or Material Adverse Effect, in all respects) of the representations and warranties of each Purchaser contained herein (unless
such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to
the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date);
(ii)
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the applicable Closing Date shall
have been performed; and
(iii)
the delivery by each Purchaser of the items set forth in Section 2.3(b) of
this Agreement.
(b)
The obligations of each Purchaser hereunder in connection with the Closing are
subject to the following conditions being met:
(i)
the accuracy in all material respects on the applicable Closing Date (or,
to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made of the
representations and warranties of the Company contained herein (unless such representation or warranty is as of a specific date therein
in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality
or Material Adverse Effect, in all respects) as of such date);
(ii)
all obligations, covenants and agreements of the Company required to
be performed at or prior to the applicable Closing Date shall have been performed;
(iii)
the delivery by the Company of the items set forth in Section 2.3(a) of
this Agreement; and
(iv)
there shall have been no Material Adverse Effect with respect to the Company
since the date hereof.
(c)
The obligations of a Purchaser hereunder in connection with the Required Fundings
are subject to the Company’s delivery of the Funding Condition Certification to such Purchaser, which shall be delivered to such
Purchaser two business days prior to the Required Funding Date.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1
Representations and Warranties of the Company. The Company hereby makes the following
representations and warranties to each Purchaser:
(a)
Organization and Qualification. The Company and each of its subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation
or organization (if a good standing concept exists in such jurisdiction), 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 certificate or articles of incorporation, bylaws or other organizational or charter documents.
Each of the Company and its 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
(if a good standing concept exists in such jurisdiction), except where the failure to be so qualified or in good standing, as the case
may be, would not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company and its subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”; provided, however, that changes in the trading price or trading volume of the Common Stock shall not, in and
of itself, constitute 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.
(b)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company
and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or
therewith. 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.
(c)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) 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 would not, individually
or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.
(d)
Filings, Consents and Approvals. The Company has timely filed all quarterly
and annual reports required to be filed by it with the SEC pursuant to the reporting requirements of the Exchange Act (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other
than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Reports”).
The Company has delivered to each Purchaser true and complete copies of the SEC Reports, except for such exhibits and incorporated documents,
and except as such Documents are available EDGAR filings on the SEC’s sec.gov website. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Reports, and none of the SEC Reports, at the time they were filed with the SEC, 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 light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Reports is, or
has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent
filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Reports complied
as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently
applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial
statements of the Company included in the SEC Reports, the Company has no liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to March 31, 2024, and (ii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial
statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company.
The Company is subject to the reporting requirements of the Exchange Act. For the avoidance of doubt, filing of the documents required
in this Section 3.1(d) via the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) shall satisfy
all delivery requirements of this Section 3.1(d).
(e)
Issuance of the Securities. 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
nonassessable, free and clear of all liens imposed by the Company and immediately after such issuance the Purchasers shall have title
to the Securities. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement and the Common Warrants. .
(f)
No Integrated Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities
to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market
on which any of the securities of the Company are listed or designated.
(g)
SEC Reports. 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 (the foregoing materials, including
the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension.
(h)
Litigation. There is no Action or Proceeding pending or, to the knowledge of the Company, threatened against or affecting the
Company or the transactions contemplated by this Agreement, and neither the Company nor any of its affiliates is subject to or bound
by any order, in either case that would prevent or otherwise materially interfere with the ability of the Company to consummate the transactions
contemplated by this Agreement or to otherwise perform its obligations under this Agreement to which the Company is or will be a party.
(i)
Equal Treatment of Purchasers. No consideration (including any modification
of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision
of this Agreement unless the same consideration is also offered to all of the parties to this Agreement. For clarification purposes,
this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and
is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert
or as a group with respect to the purchase, disposition or voting of Securities or otherwise.
(j)
Compliance. Neither the Company nor any of its subsidiaries: (i) is in default under or in violation of, nor has the Company or
any of its subsidiaries 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 (other
than those that have 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, other than tax payments related to payroll that are
late, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in
each case as could not have or reasonably be expected to result in a Material Adverse Effect.
(k)
D&O Insurance. The Company is 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, for directors and
officers insurance coverage at least equal to the aggregate Subscription Amount. The Company does not have 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.
(l)
Sarbanes-Oxley; Internal Accounting Controls. Except as may be disclosed in the SEC Reports, the Company is in compliance with
any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable
rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof and as of each Closing Date. Except
as disclosed in the SEC Reports, the Company and its 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 its subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and its 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 its 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. 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) of the
Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial
reporting of the Company and its subsidiaries.
(m)
No Disagreements with Accountants and Lawyers. There are no disagreements
of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers
formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers
which would affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.
(n)
Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that such Purchaser 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 such Purchaser is not 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 such
Purchaser or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby
is merely incidental to such Purchaser’s 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.
(o)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
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, (excluding long and short sales) securities of the Company, or to hold the Securities
for any specified term (other than as required by applicable law), (ii) past or future open market or other transactions by any Purchaser,
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.
(p)
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 Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection
with the placement of the Securities.
(q)
Registration Rights. The Company will take commercially reasonable efforts to file a Registration Statement on Form S-1 with the
Securities and Exchange Commission covering the resale of the Shares and the Warrant shares within 20 days of the execution of this Agreement
and will take commercially reasonable efforts to cause such registration statement to be declared effective as soon as possible thereafter.
3.2
Representations, Warranties and Acknowledgments 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 and as of the date of each Required Funding to the Company as
follows (unless as of a specific date therein, in which case they shall be accurate as of such date):
(a)
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance
by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to
which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof,
will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except:
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited
by applicable law.
(b)
Understandings or Arrangements. Such Purchaser is acquiring the Securities
as principal for its own account and has no direct or indirect arrangement or understandings with any other persons (other than managers
and/or members of an LLC) to distribute or regarding the distribution of such Securities. Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its personal and/or business.
(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each
date on which it exercises any Common Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act or (ii) a “qualified institutional buyer”
as defined in Rule 144A(a) under the Securities Act.
(d)
Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(e)
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and has read the SEC Reports and the Risk Factor Annex and has been afforded, (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms
and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information
about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.
(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 of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Other than to other Persons party
to this Agreement or to such Purchaser’s representatives that are bound by confidentiality obligations, including, without limitation,
its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality
of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions,
with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
(g)
General Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.
(h)
Litigation. There is no Action or Proceeding pending or, to the knowledge of such Purchaser, threatened against or affecting such
Purchaser or the transactions contemplated by this Agreement, and neither such Purchaser nor any of its affiliates is subject to or bound
by any order, in either case that would prevent or otherwise materially interfere with the ability of such Purchaser to consummate the
transactions contemplated by this Agreement or to otherwise perform its obligations under this Agreement to which such Purchaser is or
will be a party.
(i)
Finders’ Fees. There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized
to act on behalf of such Purchaser or any of its affiliates, who is entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
(j)
Sufficiency of Funds. Such Purchaser has sufficient capital on hand to enable such Purchaser to pay the Required Amount and consummate
the transactions contemplated by this Agreement.
(k)
Purchaser’s Investigation and Reliance. Such Purchaser is a sophisticated purchaser and has made its own independent investigation,
review and analysis regarding the Company, which investigation, review and analysis were conducted by such Purchaser together with expert
advisors, including legal counsel, that it has engaged for such purpose. Such Purchaser has been provided access to the facilities, books
and records of the Company and any other information that it has requested in connection with its investigation of the Company. Such
Purchaser is not relying on any statement, representation or warranty, oral or written, express or implied, made by the Company or any
of its representatives or any other person, except as set forth in this Article III. Such Purchaser acknowledges that neither the Company
nor any of its stockholders, affiliates or representatives is making, directly or indirectly, any representation or warranty with respect
to any estimates, projections or forecasts involving the Company.
(l)
Conduct of Company’s Business. Such Purchaser acknowledges that the Company intends to conduct its operations and
execute its business plan as described in the Company’s SEC Reports and represents that it is not purchasing the Securities in
contemplation of the Company’s entry into new lines of business or other activities not described in the Company’s SEC Reports.
(m)
Going Concern; Additional Fundraising Activities. Such Purchaser acknowledges that the Company requires substantial additional
capital in addition to the Required Amount to conduct its business and that the Company’s current liquidity position raises substantial
doubt about the Company’s ability to continue as a going concern. Such Purchaser further acknowledges that the Company is currently
engaged in seeking additional investments from various capital sources, including under terms that may be dilutive or otherwise materially
adverse to such Purchaser.
(n)
Securities Not Registered. Such Purchaser understands that (i) the sale or resale of the Securities has not been registered under
the Securities Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold
pursuant to an effective registration statement under the Securities Act, (b) such Purchaser shall have delivered to the Company an opinion
of counsel (which may be counsel to the Company) that shall be in form, substance and scope customary for opinions of counsel in comparable
transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such
registration (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the Securities
Act (or a successor rule) (“Rule 144”)) of such Purchaser who agrees to sell or otherwise transfer the Securities only in
accordance with this clause (n), (d) the Securities are sold pursuant to Rule 144 or other applicable exemption, or (e) the Securities
are sold pursuant to Regulation S under the Securities Act (or a successor rule) (“Regulation S”), and such Purchaser shall
have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary
for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made
in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale
of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules
and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities
under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each
case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged in connection with
a bona fide margin account or other lending arrangement secured by the Securities, and such pledge of Securities shall not be deemed
to be a transfer, sale or assignment of the Securities hereunder, and such Purchaser in effecting such pledge of Securities shall not
be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or
otherwise.
(a)
Acknowledgment of Representation. Such Purchaser acknowledges that Haynes and Boone LLP is counsel to the Company and such Purchaser
has obtained its only legal advice or consultation with respect to the Transaction Documents.
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1
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.
4.2
Reservation of Common Stock. 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 the Shares pursuant to this Agreement and the Warrant Shares pursuant to any exercise
of the Common Warrants.
4.3
Listing of Common Stock. For as long as the Common Warrants are outstanding and exercisable, the Company hereby agrees to use
commercially reasonable efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently
listed, and following the Closing, the Company shall apply to list all of the Shares and the Warrant Shares on such Trading Market and
promptly use commercially reasonable efforts to secure the listing of all of the Shares and the Warrant Shares 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 the Warrant Shares, and will take such other action as is reasonably necessary to cause all
of the Shares and the Warrant Shares to be listed on such other Trading Market as promptly as possible. .
4.4
Right to Participate. For so long as a Purchaser makes its Required Fundings by the Funding Deadline or the five day right to
cure thereafter, and for a period of 60 days following the execution of this Agreement, such Purchaser shall have a right of first refusal
to participate in any capital raising transaction of the Company on the same terms and conditions offered to the Company by third-parties
for an amount of up to 50% of its pro rata amount of the proposed aggregate investment amount of such capital raising transaction. Investors
shall be provided with written notice of any such capital raising transaction and shall be granted four business days to elect to exercise
its rights of first refusal and fund its investment amounts (provided that in the event of a registered offering of the Company’s
securities, such Purchaser shall be required to exercise its rights concurrently with the pricing of such offering).
4.5
Certain Transactions. Each Purchaser, severally 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 Short Sales of any of the Company’s securities for
a period of one year following this Agreement.
4.6
Governance Rights. For so long as the Purchasers make the Required Fundings by the Funding Deadline, the Purchasers, collectively,
shall be entitled to designate Dr. Ruy Carrasco to attend and participate in, as a non-voting observer (the “Observer”),
each meeting of the Board of Directors of the Company, whether such meeting is conducted in person or by telephone. The Observer shall
receive copies of all other notices, minutes, consents and other material items that the Company provides to its directors at the same
time and in the same manner as provided to such directors. Subject to and upon the funding of the Required Amount (including having funded
all Required Fundings by their respective Funding Deadlines (subject to the five business day cure period contained in Section 2.2(b)
hereof)), the Company shall appoint the Observer as a voting member to the Company’s Board of Directors.
ARTICLE
V.
MISCELLANEOUS
5.1
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 the Purchaser), stamp taxes and other taxes and duties levied in connection with
the delivery of any Securities to the Purchaser. The Company shall pay any and all Registrations fees, including any legal and accountant
fees associated with such Registrations of the Shares and Warrant Shares.
5.2
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.3
Notices. All notices, consents, waivers and other communications hereunder shall be
in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered by email, with affirmative confirmation
of receipt by Purchaser and only if such affirmative confirmation is given, (iii) one business day after being sent, if sent by
reputable, internationally recognized overnight courier service or (iv) three (3) business days after being mailed, if sent by registered
or certified mail, prepaid and return receipt requested, in each case to the applicable party at the following addresses (or at such
other address for a party as shall be specified by like notice):
5.4 Modifications
and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the Company and the Purchasers holding a majority of the Securities
issued hereunder.
5.5
Waivers and Consents. The terms and provisions of this Agreement may be waived,
or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms
or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms
or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance
and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.
5.6
Headings and Captions. The headings captions of the various sections of this Agreement
are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or 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. None of the Company nor any of the Purchasers may assign this Agreement or
any rights or obligations hereunder without the prior written consent of the Company or the Purchasers, as applicable.
5.8 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 Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any
such court, that such Action or Proceeding is improper or is an inconvenient venue for such Action or Proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a
copy thereof via nationally recognized 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.
5.9
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.10
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 e-mail delivery
(including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic
Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method, such signature shall be deemed
to have been duly and validly delivered and 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 “.pdf” signature page were an original thereof.
5.11
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.
5.12
Acknowledgment of Dilution of Voting Power. The Company acknowledges that the issuance of the Securities will result in dilution
of the voting power of the outstanding shares of Common Stock, which dilution will be substantial.
5.13
Publicity. The Company and the Purchasers shall consult with each other in issuing any
other press releases with respect to the transactions contemplated hereby, and neither the Company nor the Purchasers 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 the Purchasers, or without the prior consent of the Purchasers, 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.
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 Purchaser 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
Event of Default. Should an Event of Default occur, the Purchasers shall be relieved of their obligations hereunder to make the
Required Fundings. In the event of a Reporting Default, for each day such Reporting Default goes uncured, an additional day shall be
added to the applicable Funding Deadline for a Required Funding.
5.17
Blue Sky Filings. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain
an exemption for, or to qualify the Securities for, sale to the Purchaser under applicable securities or “Blue Sky” laws
of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.
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
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
of the Common Stock that occur after the date of this Agreement.
5.20
Indemnification.
(a)
Company agrees to indemnify and hold each Subscriber, each person, if any, who controls Subscriber within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of Subscriber within the meaning of Rule 405 under the
Securities Act, and each broker, placement agent or sales agent to or through which Subscriber effects or executes the resale of any
Shares or Warrant Shares (collectively, the “Subscriber Indemnified Parties”), harmless against any and all losses,
claims, damages and liabilities (including any reasonable out-of-pocket legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (collectively, “Losses”) incurred by Subscriber Indemnified Parties
directly that are caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement
or any other registration statement which covers the Shares and Warrant Shares (including, in each case, the prospectus contained therein)
or any amendment thereof (including the prospectus contained therein) or caused by any omission or alleged omission to state therein
a material fact necessary in order to make the statements therein (in the case of a prospectus, in the light of the circumstances under
which they were made), not misleading, except to the extent insofar as the same are caused by or contained in any information or affidavit
so furnished in writing to the Company by a Subscriber expressly for use therein. Notwithstanding the forgoing, the Company’s indemnification
obligations shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the prior written consent
of the Company (which consent shall not be unreasonably withheld, delayed or conditioned).
(b)
Each Subscriber agrees to, severally and not jointly with any other selling stockholders using the Registration Statement, indemnify
and hold the Company, and the officers, employees, directors, partners, members, attorneys and agents of the Company, each person, if
any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each
affiliate of the Company within the meaning of Rule 405 under the Securities Act (collectively, the “Company Indemnified Parties”),
harmless against any and all Losses incurred by Company Indemnified Parties directly that are caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or any other registration statement which covers the Shares
and Warrant Shares (including, in each case, the prospectus contained therein) or any amendment thereof (including the prospectus contained
therein) or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein
(in the case of a prospectus, in the light of the circumstances under which they were made), not misleading, to the extent insofar as
the same are caused by or contained in any information or affidavit so furnished in writing to the Company by each Subscriber expressly
for use therein. Notwithstanding the forgoing, Subscriber’s indemnification obligations shall not apply to amounts paid in settlement
of any Losses if such settlement is effected without the prior written consent of each Subscriber (which consent shall not be unreasonably
withheld, delayed or conditioned).
5.21
Restrictive Legends. Any certificates representing the Shares shall have endorsed thereon legends substantially as follows:
(a)
For so long as the Shares are not registered for resale pursuant to an effective registration statement or are unable to be sold in accordance
with an exemption from the registration requirements of the Securities Act:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES OR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS
OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL (IF THE COMPANY SO REQUEST), IS AVAILABLE.
(b)
For so long as the Shares are not yet paid for in accordance with Section 2.2 hereof and remain in the Share Escrow Account:
THE
SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS OF A STOCK ESCROW AGREEMENT AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED DURING THE TERM OF THE ESCROW AGREEMENT.”
5.22
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Brand
Engagement Network Inc.
|
|
Address
for Notice: |
|
|
|
|
By: |
/s/
Paul Chang |
|
Brand
Engagement Network Inc. |
Name: |
Paul Chang |
|
145
E. Snow King Ave. |
Title: |
Co-Chief Executive
Officer |
|
PO
Box 1045
Jackson,
WY 32001 |
With a copy to (which shall not constitute
notice): |
|
E-Mail:
mz@beninc.ai |
Haynes
and Boone LLP
2801
N. Harwood St. Suite 2300
Dallas,
TX 75201
Attention:
Matthew L. Fry, Esq.
Email:
matt.fry@haynesboone.com
|
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[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: BEN Capital Fund I LLC
Signature
of Authorized Signatory of Purchaser: /s/ James Irving
Name
of Authorized Signatory: James Irving
Title
of Authorized Signatory: Manager
Email
Address of Authorized Signatory: ****
Address
for Notice to Purchaser: ****
Subscription
Amount: $ 1,040,000
Shares:
416,000
Common
Warrants: 832,000
EIN
Number: ****
[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: DUE FIGLIE LLC
Signature
of Authorized Signatory of Purchaser: /s/ Shawn Lucas
Name
of Authorized Signatory: Shawn Lucas
Title
of Authorized Signatory: Managing Member
Email
Address of Authorized Signatory: ****
Address
for Notice to Purchaser: ****
Subscription
Amount: $ 888,750
Shares:
355,500
Common
Warrants: 711,000
EIN
Number: ****
[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: Jonathan Berzack
Signature
of Authorized Signatory of Purchaser: /s/ Jonathan Berzack
Name
of Authorized Signatory:__________________________________
Title
of Authorized Signatory:___________________________________
Email
Address of Authorized Signatory: ****
Address
for Notice to Purchaser: ****
Subscription
Amount: $ 150,000
Shares:
60,000
Common
Warrants: 120,000
EIN
Number: ****
[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: Joseph Bevash
Signature
of Authorized Signatory of Purchaser: /s/ Joseph Bevash
Name
of Authorized Signatory:__________________________________________
Title
of Authorized Signatory:___________________________________________
Email
Address of Authorized Signatory: ****
Address
for Notice to Purchaser: ****
Subscription
Amount: $ 500,000
Shares:
200,000
Common
Warrants: 400,000
EIN
Number: ****
[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: Lucas Venture Partners
Signature
of Authorized Signatory of Purchaser: /s/ Julie Lucas
Name
of Authorized Signatory: Julie Lucas
Title
of Authorized Signatory: Member
Email
Address of Authorized Signatory: ****
Address
for Notice to Purchaser: ****
Subscription
Amount: $ 741,250
Shares:
296,500
Common
Warrants: 593,000
EIN
Number: ****
[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: Patrick Carney
Signature
of Authorized Signatory of Purchaser: /s/ Patrick Carney
Name
of Authorized Signatory:____________________________________________
Title
of Authorized Signatory:_____________________________________________
Email
Address of Authorized Signatory: ****
Address
for Notice to Purchaser: ****
Subscription
Amount: $ 592,500
Shares:
237,000
Common
Warrants: 474,000
EIN
Number: ****
[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: Scott Wheeler
Signature
of Authorized Signatory of Purchaser: /s/ Scott Wheeler
Name
of Authorized Signatory:_____________________________________
Title
of Authorized Signatory:______________________________________
Email
Address of Authorized Signatory: ****
Address
for Notice to Purchaser: ****
Subscription
Amount: $ 50,000
Shares:
20,000
Common
Warrants: 40,000
EIN
Number: ****
[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: Stephen Birchall
Signature
of Authorized Signatory of Purchaser: /s/ Stephen Birchall
Name
of Authorized Signatory:___________________________________________
Title
of Authorized Signatory:____________________________________________
Email
Address of Authorized Signatory: ****
Address
for Notice to Purchaser: ****
Subscription
Amount: $ 493,750
Shares:
197,500
Common
Warrants: 395,000
EIN
Number: ****
[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: Troy Budgen
Signature
of Authorized Signatory of Purchaser: /s/ Troy Budgen
Name
of Authorized Signatory:_____________________________________
Title
of Authorized Signatory:______________________________________
Email
Address of Authorized Signatory: ****
Address
for Notice to Purchaser: ****
Subscription
Amount: $ 493,750
Shares:
197,500
Common
Warrants: 395,000
EIN
Number: ****
ANNEX
I
Risks
Related to this Offering
We
may issue additional equity or convertible debt securities in the future, which may result in additional dilution to investors.
To
raise additional capital in the future, we believe that we may offer and issue additional shares of our Common Stock or other securities
convertible into or exchangeable for our Common Stock in the future. We cannot assure you that we will be able to sell shares or other
securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in this
offering, and investors purchasing other securities in the future could have rights superior to existing stockholders. The price per
share at which we sell additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock
in future transactions may be higher or lower than the price per share in this offering. We also have a significant number of stock options
and warrants outstanding. To the extent that outstanding stock options or warrants have been or may be exercised or other shares issued,
you may experience additional dilution.
Further,
as we grow our business, we may seek to rely more heavily on capital raising transactions to fund our operations, raise capital to retire
any debt we may hereafter incur, for other corporate purposes, or due to market conditions or strategic considerations even if we believe
we have sufficient funds for our current or future operating plans.
There
is no public market for the Warrants to purchase shares of our Common Stock being offered in this offering.
There
is no established public trading market for the Warrants being offered in this offering, and we do not expect a market to develop. In
addition, we do not intend to apply to list the Warrants on any national securities exchange or other nationally recognized trading system,
including The Nasdaq Capital Market. Without an active trading market, the liquidity of the Warrants will be limited.
We
have broad discretion in the use of our available cash and other sources of funding, including the net proceeds from this offering.
Our
management has broad discretion in the use of our available cash and other sources of funding, including the net proceeds we receive
in this offering. The failure by our management to apply these funds effectively could result in financial losses that could have a material
adverse effect on our business, cause the price of our Common Stock to decline and. Pending use in our operations, we may invest our
available cash, including the net proceeds we receive in this offering, in a manner that does not produce income or that loses value.
The
Warrants purchased in this offering do not entitle the holder to any rights as common stockholders until the holder exercises the warrant
for shares of our Common Stock, except as set forth in the Warrants.
Until
you acquire shares of our Common Stock upon exercise of your Warrants purchased in this offering, such Warrants will not provide you
any rights as a common stockholder, except as set forth therein. Upon exercise of your Warrants purchased in this offering, you will
be entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs on or after the exercise
date.
Our
stock price is volatile, and your investment may suffer a decline in value.
As
a result of fluctuations in the price of our Common Stock, you may be unable to sell your shares at or above the price you paid for them.
The market price of our Common Stock is likely to continue to be volatile and subject to significant price and volume fluctuations in
response to market, industry and other factors. The market price of our Common Stock may also be dependent upon the valuations and recommendations
of the analysts who cover our business. If the results of our business do not meet these analysts’ forecasts, the expectations
of investors or the financial guidance we provide to investors in any period, the market price of our Common Stock could decline.
In
addition, the stock markets in general, and the markets for technology stocks in particular, have experienced significant volatility
that has often been unrelated to the financial condition or results of operations of particular companies. These broad market fluctuations
may adversely affect the trading price of our Common Stock and, consequently, adversely affect the price at which you could sell the
shares of Common Stock that you purchase in this offering. In the past, following periods of volatility in the market or significant
price declines, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against
us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely
affect our business, financial condition, results of operations and growth prospects.
Future
sales of our Common Stock in the public market or other financings could cause our stock price to fall, and a substantial number of shares
of Common Stock may be sold in the market following this offering, which may depress the market price for our Common Stock.
Sales
of a substantial number of shares of our Common Stock in the public market, the perception that these sales might occur, or other financings
could depress the market price of our Common Stock and could impair our ability to raise capital through the sale of additional equity
securities. In addition, shares of Common Stock issuable upon exercise of outstanding warrants and options, as well as shares reserved
for future issuance under our incentive stock plan, will be eligible for sale in the public market to the extent permitted by applicable
vesting requirements, if any, and, in some cases, subject to compliance with the requirements of Rule 144. As a result, these shares
will be eligible to be freely sold in the public market upon issuance, subject to restrictions under the securities laws.
Because
we do not currently intend to declare cash dividends on our shares of Common Stock in the foreseeable future, stockholders must rely
on appreciation of the value of our Common Stock for any return on their investment.
We
do not currently anticipate declaring or paying any cash dividends in the foreseeable future. In addition, the terms of any existing
or future debt agreements may preclude us from paying dividends. As a result, we expect that only appreciation of the price of our Common
Stock, if any, will provide a return to existing stockholders for the foreseeable future.
Resales
of our Common Stock in the public market during this offering by our stockholders may cause the market price of our Common Stock to fall.
We
may issue Common Stock from time to time. This issuance from time to time of these new shares of our Common Stock, or our ability to
issue these shares of Common Stock in this offering, could result in resales of our Common Stock by our current stockholders concerned
about the potential dilution of their holdings. In turn, these resales could have the effect of depressing the market price for our Common
Stock.
The
market price of our Common Stock may be adversely affected by market
conditions
affecting the stock markets in general, including price and trading fluctuations on Nasdaq.
Market
conditions may result in volatility in the level of, and fluctuations in, market prices of stocks generally and, in turn, our Common
Stock and sales of substantial amounts of our Common Stock in the market, in each case being unrelated or disproportionate to changes
in our operating performance. A weak global economy or other circumstances, such as changes in tariffs and trade, could also contribute
to extreme volatility of the markets, which may have an effect on the market price of our Common Stock.
SCHEDULE
1
Investor Name | |
Initial
Funding Amount | | |
June
Funding Amount | | |
July
Funding Amount | | |
August
Funding Amount | | |
September
Funding Amount | | |
October
Funding Amount | | |
Individual
Total Funding Amounts | |
Joe Bevash | |
$ | 250,000 | | |
$ | 50,000 | | |
$ | 50,000 | | |
$ | 50,000 | | |
$ | 50,000 | | |
$ | 50,000 | | |
$ | 500,000 | |
Jonathan Berzack | |
$ | 150,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | 150,000 | |
Scott Wheeler | |
$ | 50,000 | | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | 50,000 | |
Due Figlie LLC | |
| - | | |
$ | 168,750 | | |
$ | 168,750 | | |
$ | 168,750 | | |
$ | 281,250 | | |
$ | 101,250 | | |
$ | 888,750 | |
Lucas Venture Partners | |
$ | 50,000 | | |
$ | 131,250 | | |
$ | 131,250 | | |
$ | 131,250 | | |
$ | 218,750 | | |
$ | 78,750 | | |
$ | 741,250 | |
Patrick Carney | |
| - | | |
$ | 112,500 | | |
$ | 112,500 | | |
$ | 112,500 | | |
$ | 187,500 | | |
$ | 67,500 | | |
$ | 592,500 | |
Stephen Birchall | |
| - | | |
$ | 93,750 | | |
$ | 93,750 | | |
$ | 93,750 | | |
$ | 156,250 | | |
$ | 56,250 | | |
$ | 493,750 | |
Troy Budgen | |
| - | | |
$ | 93,750 | | |
$ | 93,750 | | |
$ | 93,750 | | |
$ | 156,250 | | |
$ | 56,250 | | |
$ | 493,750 | |
BEN Capital Fund I LLC | |
| - | | |
$ | 150,000 | | |
$ | 150,000 | | |
$ | 150,000 | | |
$ | 250,000 | | |
$ | 340,000 | | |
$ | 1,040,000 | |
Total Funding
Amounts | |
$ | 500,000 | | |
$ | 800,000 | | |
$ | 800,000 | | |
$ | 800,000 | | |
$ | 1,300,000 | | |
$ | 750,000 | | |
$ | 4,950,000 | |
EXHIBIT
A
Form
of Warrant
THIS
WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Dated:
May [ ], 2024
FORM
OF WARRANT
For
the Purchase of Shares of Common Stock
of
BRAND
ENGAGEMENT NETWORK INC.
Expiring
May [ ], 20[25//29]
THIS
IS TO CERTIFY THAT, for value received, [ ] (together with any permitted assigns, the “Holder”)
is entitled to purchase from BRAND ENGAGEMENT NETWORK INC., a Delaware corporation (the “Company”),
at any time or from time to time after 9:00 a.m., New York, New York time, on the date hereof and prior to 5:00 p.m., New York, New York
time, on May [ ], 20[25//29], at the place where the Company is located, at an exercise price per share of $2.50, [ ] shares of
common stock of the Company, par value $0.0001 per share (the “Shares”).
This
Warrant has been issued pursuant to that certain Securities Purchase Agreement (the “Securities Purchase Agreement”)
dated as of the date hereof by and among the Holder and the Company, and the Holder is entitled to certain benefits as set forth therein.
The Company shall keep a copy of the Securities Purchase Agreement and any amendments thereto and the Company shall furnish, without
charge, copies thereof to the Holder upon request.
1.1
Method of Exercise. To exercise this Warrant the Holder shall deliver on any Business Day
to the Company in accordance with the notice provisions of the Securities Purchase Agreement (a) this Warrant, (b) a written notice of
such Holder’s election to exercise this Warrant, and (c) payment of the Exercise Price with respect to such Shares in full in readily
available funds.
1.2
Delivery of Share Certificates or Book-Entry Position. The Company shall, as promptly as
practicable and in any event within two (2) days after receipt of such notice and payment, execute and deliver or cause to be executed
and delivered, in accordance with such notice, a share certificate or book-entry position with its transfer agent representing the aggregate
number of Shares specified in said notice.
1.3
Legend. Each certificate or book-entry position for Shares issued upon exercise of this Warrant,
unless at the time of exercise such Shares are registered under the Securities Act of 1933, as amended (the “Securities Act”),
shall bear the following legend (together with a similar legend for the securities laws of any other applicable state to the extent required
in the reasonable judgment of the Company’s counsel):
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OFFERED FOR SALE UNLESS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.
D-BEN Form of Warrant | 1 | Warrant |
Any
certificate or book-entry position issued at any time in exchange or substitution for any certificate or book-entry position bearing
such legend shall also bear such legend unless, in the opinion of counsel selected by the holder of such certificate or book-entry position
(who may be an employee of such holder) and reasonably acceptable to the Company, the securities represented thereby need no longer be
subject to restrictions on resale under the Securities Act.
1.4
Adjustments. If at any time or from time to time after the date upon which the this Warrant
is issued (the “Original Issue Date”), the shares of Common Stock issuable upon the exercise of this Warrant
shall be changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification,
reorganization, merger, exchange, consolidation, sale of assets or otherwise or a stock dividend or distribution), then, in any such
event, the Warrant shall thereafter convert into the kind and amount of stock and other securities and property receivable upon such
recapitalization, reclassification, reorganization, merger, exchange, consolidation, sale of assets or other change by a holder of the
number of shares of Common Stock into which such shares of Common Stock would have been exercised for immediately prior to such recapitalization,
reclassification, reorganization, merger, exchange, consolidation, sale of assets or other change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the terms thereof.
1.5
GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
[remainder
of page intentionally left blank]
D-BEN Form of Warrant | 2 | Warrant |
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed in its corporate name by one of its officers thereunto duly authorized.
|
BRAND
ENGAGEMENT NETWORK INC. |
|
|
|
|
By: |
|
|
Name:
|
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|
Title: |
|
Signature
Page to Warrant
EXHIBIT
B
Form
of Representation Letter
May
28, 2024
Ladies
and Gentlemen,
Reference
is hereby made to that certain Securities Purchase Agreement, dated May 28, 2024,
by and between Brand Engagement Network Inc. and _________________________________________ (the “Agreement”). The undersigned
hereby represents and warrants to the Company, and acknowledges and agrees with the Company, that it shall be bound by Section 3.2 of
the Agreement and shall be deemed to have made the same representations, warranties, acknowledgments and agreements therein as if it
were the Purchaser.
EXHIBIT
C
Form
of Warrant Exercise Agreement
BRAND
ENGAGEMENT NETWORK INC.
May
28, 2024
Re: |
Agreement to Exercise Warrants |
Dear
Holders:
You,
severally and not jointly, (“Holder”, “you” or similar terminology) hereby agree with Brand Engagement
Network Inc. (the “Company”) to, as a backstop to the Company’s intention to raise an additional $3,250,000
in equity or debt financing by the end of December 2024, subject to and to the extent the Exercise Condition has not been met (as defined
below), exercise for cash, warrants issued or to be issued to you under that certain Securities Purchase Agreement executed by you and
the Company as of the date hereof (the “Securities Purchase Agreement”), with an exercise price of $2.50 per share
(the “Existing Warrants”) and, upon such exercise, in consideration for each Existing Warrant so exercised, the Company
shall issue you one new One-Year Warrant and one new Five-Year Warrant (each as defined in the Securities Purchase Agreement) to purchase
shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Securities Purchase Agreement.
You
shall only be required to exercise the Existing Warrants hereunder, if and to the extent that, after using its commercially reasonable
efforts, the Company fails to raise additional capital (not including any capital raised under the Securities Purchase Agreement) from
third-parties in an amount of $3,250,000 since May 24, 2024 (the “Exercise Condition”). Five days prior to the end
of each calendar month, the Audit Committee of the Company’s Board of Directors, shall deliver a written certification certifying
as to whether the Company has utilized commercially reasonable efforts to raise additional capital and whether any additional amounts
have been so raised.
Subject
to the Exercise Condition, the transactions contemplated hereby shall automatically occur on the following schedule (the date as to each
tranche, the “Execution Time”), with each Holder participating on each tranches by the percentage set forth on such
Holder’s name on the signature pages hereto:
|
(i) |
100,000 Existing Warrants shall be exercised on October
31, 2024; |
|
|
|
|
(ii) |
300,000 Existing Warrants shall be exercised on November 30, 2024; |
|
|
|
|
(iii) |
300,000 Existing Warrants shall be exercised on December 31, 2024; |
|
|
|
|
(iv) |
300,000 Existing Warrants shall be exercised on January 31, 2025; and |
|
|
|
|
(v) |
300,000 Existing Warrants shall be exercised on February 28, 2025. |
In
consideration for exercising in each Existing Warrant issued or to be issued to the Holder at the stated Exercise Price (the “Warrant
Exercise”) on or before the Execution Time (as defined below), the Company hereby agrees to sell and issue you:
(a)
one new unregistered warrants to purchase one share of Common Stock with an expiration date of one year from the date of issuance (the
“New One-Year Warrants”), pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities
Act”), which New One-Year Warrants shall have an exercise price per share equal to $2.50, subject to adjustment as provided
in the New One-Year Warrants, and will be exercisable at any time on or after the date issued and expire one year following the issuance
thereof. Such New One-Year Warrants shall be substantially in the form as set forth in Exhibit A-1 hereto; and
(b)
one new unregistered warrants to purchase one share of Common Stock with an expiration date of five years from the date of issuance (the
“New Five-Year Warrants”), pursuant to Section 4(a)(2) of the Securities Act, which New Five-Year Warrants shall have
an exercise price per share equal to $2.50, subject to adjustment as provided in the New Five-Year Warrants, and will be exercisable
at any time on or after the date issued and expire one year following the issuance thereof. Such New Five-Year Warrants shall be substantially
in the form as set forth in Exhibit A-2 hereto
(c)
one New One-Year Warrant and Five-Year Warrant certificate(s) will be delivered at Closing (as defined below), and such New One-Year
Warrants and Five-Year Warrants, together with any underlying shares of Common Stock issued upon exercise of the Existing Warrants, will,
unless and until registered, contain customary restrictive legends and other language typical for an unregistered warrant and unregistered
shares.
Holder
represents and warrants that, as of the date hereof it is, and on each date on which it exercises any Existing Warrants, New One-Year
Warrants or New Five-Year Warrants, it will be, an “accredited investor” as defined in Rule 501 of Regulation D promulgated
under the Securities Act, and agrees that the New One-Year Warrants and New Five-Year Warrants will contain restrictive legends when
issued, and none of the New One-Year Warrants, the New Five-Year Warrants or the shares of Common Stock issuable upon exercise of the
New One-Year Warrants or New Five-Year Warrants will be registered under the Securities Act, except as provided in Annex A attached
hereto. Also, Holder represents and warrants that it is acquiring the New One-Year Warrants and New Five-Year Warrants 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 the New One-Year Warrants, New Five-Year Warrants or the shares of Common Stock for which the New One-Year Warrants and New Five-Year
Warrants are exercisable (this representation is not limiting Holder’s right to sell the shares of Common Stock for which the New
One-Year Warrants and New Five-Year Warrants are exercisable pursuant to an effective registration statement under the Securities Act
or otherwise in compliance with applicable federal and state securities laws).
The
Holder understands that the New One-Year Warrants, New Five-Year Warrants and the shares of Common Stock for which the New One-Year Warrants
and New Five-Year Warrants are exercisable are not, and may never be, registered under the Securities Act, or the securities laws of
any state and, accordingly, each certificate, if any, representing such securities shall bear a legend substantially similar to the following:
“THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.”
The
closing (“Closing”) shall occur at such location as the parties shall mutually agree at each Execution Time.
|
Sincerely
yours, |
|
|
|
|
BRAND
ENGAGEMENT NETWORK INC. |
|
|
|
|
By: |
|
|
Name:
|
|
|
Title: |
|
[Holder
Signature Page Follows]
Accepted
and Agreed to:
Name
of Holder:_____________________________
Signature
of Authorized Signatory of Holder:
Name
of Authorized Signatory:_________________
Title
of Authorized Signatory:__________________
Common
Warrants:
[Holder
signature page]
Exhibit
10.2
BRAND
ENGAGEMENT NETWORK INC.
May
28, 2024
_________________________
Re: |
Agreement
to Exercise Warrants |
Dear
Holders:
You,
severally and not jointly, (“Holder”, “you” or similar terminology) hereby agree with Brand Engagement
Network Inc. (the “Company”) to, as a backstop to the Company’s intention to raise an additional $3,250,000
in equity or debt financing by the end of December 2024, subject to and to the extent the Exercise Condition has not been met (as defined
below), exercise for cash, warrants issued or to be issued to you under that certain Securities Purchase Agreement executed by you and
the Company as of the date hereof (the “Securities Purchase Agreement”), with an exercise price of $2.50 per share
(the “Existing Warrants”) and, upon such exercise, in consideration for each Existing Warrant so exercised, the Company
shall issue you one new One-Year Warrant and one new Five-Year Warrant (each as defined in the Securities Purchase Agreement) to purchase
shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Securities Purchase Agreement.
You
shall only be required to exercise the Existing Warrants hereunder, if and to the extent that, after using its commercially reasonable
efforts, the Company fails to raise additional capital (not including any capital raised under the Securities Purchase Agreement) from
third-parties in an amount of $3,250,000 since May 24, 2024 (the “Exercise Condition”). Five days prior to the end
of each calendar month, the Audit Committee of the Company’s Board of Directors, shall deliver a written certification certifying
as to whether the Company has utilized commercially reasonable efforts to raise additional capital and whether any additional amounts
have been so raised.
Subject
to the Exercise Condition, the transactions contemplated hereby shall automatically occur on the following schedule (the date as to each
tranche, the “Execution Time”), with each Holder participating on each tranches by the percentage set forth on such
Holder’s name on the signature pages hereto:
| (i) | 100,000
Existing Warrants shall be exercised on October 31, 2024; |
| | |
| (ii) | 300,000
Existing Warrants shall be exercised on November 30, 2024; |
| | |
| (iii) | 300,000
Existing Warrants shall be exercised on December 31, 2024; |
| | |
| (iv) | 300,000
Existing Warrants shall be exercised on January 31, 2025; and |
| | |
| (v) | 300,000
Existing Warrants shall be exercised on February 28, 2025. |
In
consideration for exercising in each Existing Warrant issued or to be issued to the Holder at the stated Exercise Price (the “Warrant
Exercise”) on or before the Execution Time (as defined below), the Company hereby agrees to sell and issue you:
(a) one
new unregistered warrants to purchase one share of Common Stock with an expiration date of one year from the date of issuance (the “New
One-Year Warrants”), pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”),
which New One-Year Warrants shall have an exercise price per share equal to $2.50, subject to adjustment as provided in the New One-Year
Warrants, and will be exercisable at any time on or after the date issued and expire one year following the issuance thereof. Such New
One-Year Warrants shall be substantially in the form as set forth in Exhibit A-1 hereto; and
(b) one
new unregistered warrants to purchase one share of Common Stock with an expiration date of five years from the date of issuance (the
“New Five-Year Warrants”), pursuant to Section 4(a)(2) of the Securities Act, which New Five-Year Warrants shall have
an exercise price per share equal to $2.50, subject to adjustment as provided in the New Five-Year Warrants, and will be exercisable
at any time on or after the date issued and expire one year following the issuance thereof. Such New Five-Year Warrants shall be substantially
in the form as set forth in Exhibit A-2 hereto
(c) one
New One-Year Warrant and Five-Year Warrant certificate(s) will be delivered at Closing (as defined below), and such New One-Year Warrants
and Five-Year Warrants, together with any underlying shares of Common Stock issued upon exercise of the Existing Warrants, will, unless
and until registered, contain customary restrictive legends and other language typical for an unregistered warrant and unregistered shares.
Holder
represents and warrants that, as of the date hereof it is, and on each date on which it exercises any Existing Warrants, New One-Year
Warrants or New Five-Year Warrants, it will be, an “accredited investor” as defined in Rule 501 of Regulation D promulgated
under the Securities Act, and agrees that the New One-Year Warrants and New Five-Year Warrants will contain restrictive legends when
issued, and none of the New One-Year Warrants, the New Five-Year Warrants or the shares of Common Stock issuable upon exercise of the
New One-Year Warrants or New Five-Year Warrants will be registered under the Securities Act, except as provided in Annex A attached
hereto. Also, Holder represents and warrants that it is acquiring the New One-Year Warrants and New Five-Year Warrants 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 the New One-Year Warrants, New Five-Year Warrants or the shares of Common Stock for which the New One-Year Warrants and New Five-Year
Warrants are exercisable (this representation is not limiting Holder’s right to sell the shares of Common Stock for which the New
One-Year Warrants and New Five-Year Warrants are exercisable pursuant to an effective registration statement under the Securities Act
or otherwise in compliance with applicable federal and state securities laws).
The
Holder understands that the New One-Year Warrants, New Five-Year Warrants and the shares of Common Stock for which the New One-Year Warrants
and New Five-Year Warrants are exercisable are not, and may never be, registered under the Securities Act, or the securities laws of
any state and, accordingly, each certificate, if any, representing such securities shall bear a legend substantially similar to the following:
“THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.”
The
closing (“Closing”) shall occur at such location as the parties shall mutually agree at each Execution Time.
|
Sincerely
yours, |
|
|
|
BRAND
ENGAGEMENT NETWORK INC. |
|
|
|
By: |
/s/
Paul Chang |
|
Name: |
Paul
Chang |
|
Title: |
Co-Chief
Executive Officer |
[Holder
Signature Page Follows]
Accepted
and Agreed to:
Name
of Holder: BEN Capital Fund I LLC
Signature
of Authorized Signatory of Holder: /s/ James Irving
Name
of Authorized Signatory: James Irving
Title
of Authorized Signatory: Manager
Common
Warrants: 832,000
[Holder
signature page]
Accepted
and Agreed to:
Name
of Holder: DUE FIGLIE LLC
Signature
of Authorized Signatory of Holder: /s/ Shawn Lucas
Name
of Authorized Signatory: Shawn Lucas
Title
of Authorized Signatory: Managing Member
Common
Warrants: 711,000
[Holder
signature page]
Accepted
and Agreed to:
Name
of Holder: Jonathan Berzack
Signature
of Authorized Signatory of Holder: /s/ Jonathan Berzack
Name
of Authorized Signatory: _______________________________________________
Title
of Authorized Signatory: ________________________________________________
Common
Warrants: 120,000
[Holder
signature page]
Accepted
and Agreed to:
Name
of Holder: Joseph Bevash
Signature
of Authorized Signatory of Holder: /s/ Joseph Bevash
Name
of Authorized Signatory: _______________________________________________
Title
of Authorized Signatory: ________________________________________________
Common
Warrants: 400,000
[Holder
signature page]
Accepted
and Agreed to:
Name
of Holder: Lucas Venture Partners
Signature
of Authorized Signatory of Holder: /s/ Julie Lucas
Name
of Authorized Signatory: Julie Lucas
Title
of Authorized Signatory: Member
Common
Warrants: 593,000
[Holder
signature page]
Accepted
and Agreed to:
Name
of Holder: Patrick Carney
Signature
of Authorized Signatory of Holder: /s/ Patrick Carney
Name
of Authorized Signatory: _______________________________________________
Title
of Authorized Signatory: ________________________________________________
Common
Warrants: 474,000
[Holder
signature page]
Accepted
and Agreed to:
Name
of Holder: Scott Wheeler
Signature
of Authorized Signatory of Holder: /s/ Scott Wheeler
Name
of Authorized Signatory: _______________________________________________
Title
of Authorized Signatory: ________________________________________________
Common
Warrants: 40,000
[Holder
signature page]
Accepted
and Agreed to:
Name
of Holder: Stephen Birchall
Signature
of Authorized Signatory of Holder: /s/ Stephen Birchall
Name
of Authorized Signatory: _______________________________________________
Title
of Authorized Signatory: ________________________________________________
Common
Warrants: 395,000
[Holder
signature page]
Accepted
and Agreed to:
Name
of Holder: Troy Budgen
Signature
of Authorized Signatory of Holder: /s/ Troy Budgen
Name
of Authorized Signatory: _______________________________________________
Title
of Authorized Signatory: ________________________________________________
Common
Warrants: 395,000
[Holder
signature page]
Exhibit
99.1
BEN
Announces Private Placement at Premium to Market Price,
Promotion
of Paul Chang to Co-CEO
JACKSON,
WY – May 29, 2024 – Brand Engagement Network Inc. (“BEN”) (Nasdaq: BNAI), an emerging provider of personalized
customer engagement AI, today announced it has closed a private placement with existing investors of its common stock and warrants to
purchase common stock in the aggregate amount of $4.95 million, providing the Company with increased financial flexibility to continue
the development of its human-like, business-safe conversational AI assistants. Concurrently, BEN announced that Paul Chang has been promoted
to Co-CEO, bringing his unique perspective to the leadership team alongside Co-CEO Michael Zacharski.
“The
moves we are announcing today represent a powerful vote of confidence in our strategy from our Board, executive team, and our existing
investors,” said the Chairman of BEN’s Board of Directors, Chris Gaertner. “This investment will allow BEN to continue
to fund its business plan as it seeks to execute on its growth and revenue strategies.”
The
investment, which was backed by a group of existing BEN shareholders, includes a combination of stock and warrants to purchase common
stock and was priced at $2.50 per share, materially above the current trading price of the Company’s common stock. Certain members
of the investor group have also agreed to provide the Company with additional capital through the exercise of their warrants if the Company
is unable to raise an additional $3.25 million by October 31, bringing the total investment to $8.25 million.
Concurrently,
Paul Chang has been promoted to Co-CEO alongside Co-CEO Michael Zacharski. Mr. Chang joined BEN as its Global President in May 2023 after
18 years at IBM creating new markets for emerging technologies and roles at multiple start-ups. As Co-CEO, Mr. Chang will have responsibility
over the entire BEN commercial operations focused on market validation and commercial growth of the business. Mr. Zacharski will focus
on inorganic growth opportunities, including through M&A and other strategic transactions.
“I
am thrilled to take on the role of Co-CEO,” said Paul Chang, Co-CEO of BEN. “As we transition into delivering value to our
customers by commercializing our safe and comprehensive Gen AI Platform, BEN is well positioned both financially and technologically
to execute our plans. With our unique design and architecture as well as portfolio of patents, we hope to demonstrate to the market that
our AI Assistants are ready to contribute to businesses in areas that can increase CX, help to complete tasks, and fuel their growth.”
Michael
Zacharski, Co-CEO of BEN said, “This is a pivotal time for the AI industry, and we’re excited about the prospect of partnering
with organizations that complement our vision and capabilities. I am excited to focus on furthering the Company’s M&A strategy,
which we believe will be core to our business strategy moving forward.”
About
BEN
BEN
(Brand Engagement Network) is a leading provider of conversational AI technology and human-like AI avatars headquartered in Jackson,
WY. BEN delivers highly personalized, multi-modal (text, voice, and vision) AI engagement, with a focus on industries where there is
a massive workforce gap and an opportunity to transform how consumers engage with networks, providers, and brands. The backbone of BEN’s
success is a rich portfolio of conversational AI applications that drive better customer experience, increased automation and operational
efficiencies. Powered by a proprietary large language model developed based on years of research and development from leading experts
in AI and advanced security methodologies, BEN seeks to partner with companies with complementary capabilities and networks to enable
meaningful business outcomes.
Additional
information about BEN can be found here: https://beninc.ai/.
Forward-Looking
Statements
This
communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934 that are not historical facts, and involve risks and uncertainties that could cause actual
results of BEN to differ materially from those expected and projected. These forward-looking statements can be identified by the use
of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,”
“intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,”
“continue,” or “should,” or, in each case, their negative or other variations or comparable terminology.
These
forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from
the expected results. Most of these factors are outside BEN;’s control and are difficult to predict. Factors that may cause such
differences include, but are not limited to: failure to realize the anticipated benefits of the Business Combination; risks relating
to the uncertainty of the projected financial information with respect to BEN; BEN’s history of operating losses; BEN’s need
for additional capital to support its present business plan and anticipated growth; technological changes in BEN’s market; the
value and enforceability of BEN’s intellectual property protections; BEN’s ability to protect its intellectual property;
BEN’s material weaknesses in financial reporting; and BEN’s ability to navigate complex regulatory requirements; the ability
to maintain the listing of BEN’s securities on a national securities exchange; the ability to implement business plans, forecasts,
and other expectations; the effects of competition on BEN’s business; the risks of operating and effectively managing growth, including
through mergers and acquisitions and other inorganic growth opportunities, in evolving and uncertain macroeconomic conditions, such as
high inflation and recessionary environments; and continuing risks relating to the COVID 19 pandemic. The foregoing list of factors is
not exhaustive.
BEN
cautions that the foregoing list of factors is not exclusive. BEN cautions readers not to place undue reliance upon any forward-looking
statements, which speak only as of the date made. BEN does not undertake nor does it accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events,
conditions or circumstances on which any such statement is based and it does not intend to do so unless required by applicable law. Further
information about factors that could materially affect BEN, including its results of operations and financial condition, is set forth
under “Risk Factors” in BEN’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q subsequently filed with
the Securities and Exchange Commission.
BEN
Contacts
Investors:
Ryan
Flanagan, ICR
ryan.flanagan@icrinc.com
Media:
Dan
Brennan, ICR
dan.brennan@icrinc.com
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