As
filed with the Securities and Exchange Commission on February 9, 2024
Registration
No. 333-276174
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 2 to
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
Imunon,
Inc.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
2834 |
|
52-1256615 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(Primary
Standard Industrial
Classification
Code Number) |
|
(I.R.S.
Employer
Identification
No.) |
997
Lenox Drive, Suite 100
Lawrenceville,
NJ 08648 |
| (Address,
including zip code, and telephone number, including area code of registrant’s principal executive offices) |
Corinne
Le Goff
President
and Chief Executive Officer
997
Lenox Drive, Suite 100
Lawrenceville,
NJ 08648
(609)
896-9100
(Name,
address and telephone number, including area code, of agent for service)
Copies
to:
Megan
Gates, Esq.
Covington
& Burling LLP
One
International Place, Suite 1020
Boston,
MA 02110
(617)
603-8800 |
|
Michael
Riella, Esq.
Covington
& Burling LLP
850
10th St NW
Washington,
DC 20001
(202)
662-6000 |
|
Ron
Ben-Bassat, Esq.
Eric
Victorson, Esq.
Sullivan
& Worcester LLP
1633
Broadway
New
York, NY 10019
(212)
660-3000 |
Approximate
date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
| Non-accelerated
filer |
☒
|
Smaller
reporting company |
☒ |
| |
|
Emerging
growth company |
☐ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not
soliciting offers to buy these securities, in any state where the offer or sale of these securities is not permitted.
SUBJECT
TO COMPLETION, DATED FEBRUARY 9, 2024
PRELIMINARY
PROSPECTUS
IMUNON,
INC.
UP TO 14,035,087 SHARES OF COMMON STOCK
UP TO 14,035,087 SERIES A COMMON WARRANTS
TO PURCHASE 14,035,087 SHARES OF COMMON STOCK
UP TO 14,035,087 SERIES B COMMON WARRANTS TO
PURCHASE 14,035,087 SHARES OF COMMON STOCK
UP TO 14,035,087 PRE-FUNDED WARRANTS TO
PURCHASE UP TO 14,035,087 SHARES OF COMMON STOCK
UP TO 14,035,087 SHARES OF COMMON STOCK
UNDERLYING SERIES A COMMON WARRANTS
UP TO 14,035,087 SHARES OF COMMON STOCK UNDERLYING
SERIES B COMMON WARRANTS
UP TO 14,035,087 SHARES OF COMMON STOCK
UNDERLYING PRE-FUNDED WARRANTS
We are offering on a reasonable
best-efforts basis up to 14,035,087 shares of our common stock, par value $0.01 (“Common Stock”), together
with Series A warrants to purchase up to 14,035,087 shares of our Common Stock and Series B warrants to purchase 14,035,087
shares of our Common Stock, based on an assumed combined public offering price of $0.57 (which was the closing price of
our Common Stock on the Nasdaq Capital Market on February 6, 2024) per share of Common Stock, one accompanying Series A warrant
and one accompanying Series B warrant. Each share of Common Stock, or a pre-funded warrant in lieu thereof, is being sold together
with one Series A common warrant to purchase one share of Common Stock and one Series B warrant to purchase one share of Common
Stock. The Series A common warrants and Series B common warrants are collectively referred to herein as the “common warrants.”
The shares of Common Stock and common warrants are immediately separable and will be issued separately in this offering, but must
be purchased together in this offering. Each common warrant will have an assumed exercise price per share of $0.57, equal to the
assumed combined public offering price per share of Common Stock, accompanying Series A common warrant and accompanying Series
B warrant, and will be immediately exercisable. The Series A common warrants will expire on the five-year anniversary
of the original issuance date, and the Series B common warrants will expire 18 months following the original issuance date. This
prospectus also relates to the shares of Common Stock issuable upon exercise of the common warrants sold in this offering.
We are also offering to certain
purchasers whose purchase of shares of Common Stock in this offering would otherwise result in the purchaser, together with its affiliates
and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common
Stock immediately following the consummation of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded
warrants, in lieu of shares of Common Stock that would otherwise result in such purchaser’s beneficial ownership exceeding 4.99%
(or, at the election of the purchaser, 9.99%) of our outstanding Common Stock. The public offering price of each pre-funded warrant,
together with one accompanying Series A common warrant and one Series B common warrant, will be equal to the price at which
one share of Common Stock, one accompanying Series A warrant and Series B common warrant is sold to the public in this
offering, minus $0.0001, and the exercise price of each pre-funded warrant will be $0.0001 per share. The pre-funded warrants will be
immediately exercisable and may be exercised at any time until all of the pre-funded warrants are exercised in full. The pre-funded warrants
and common warrants are immediately separable and will be issued separately in this offering, but must be purchased together in this
offering. For each pre-funded warrant we sell, the number of shares of Common Stock we are offering will be decreased on a one-for-one
basis. This prospectus also relates to the shares of Common Stock issuable upon exercise of the
pre-funded warrants sold in this offering.
We
have engaged A.G.P./Alliance Global Partners (“A.G.P.”) and Brookline Capital Markets, a division of Arcadia Securities,
LLC (“Brookline”), to act as our placement agents (the “Placement Agents”),
to use their reasonable best efforts to arrange for the sale of the securities offered by this prospectus. The Placement Agents
are not purchasing or selling any of the securities we are offering, and the Placement Agents are not required to arrange
the purchase or sale of any specific number or dollar amount of securities. We have agreed to pay to the Placement Agents the
Placement Agent fees set forth in the table below, which assumes that we sell all of the securities offered by this prospectus.
We
refer to the Common Stock, common warrants and pre-funded warrants to be sold in this offering collectively as the “securities.”
The securities will be offered at a fixed price and
are expected to be issued in a single closing. The offering will terminate on March 31, 2024, unless (i) the closing occurs prior
thereto or (ii) we decide to terminate the offering prior thereto (which we may do at any time in our discretion),
except that the shares of Common Stock underlying the warrants and shares of Common Stock underlying the pre-funded warrants will be
offered on a continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).
Investors purchasing securities offered hereby will have the option to execute a securities purchase agreement with us. We expect that
the closing of the offering will occur two trading days after we price the securities offered hereby. When we price the securities, we
will simultaneously enter into securities purchase agreements relating to the offering with those investors who so choose. The offering
will settle delivery versus payment (“DVP”)/receipt versus payment (“RVP”). That is, on the closing
date, we will issue the shares of Common Stock directly to the account(s) at the Placement Agents identified by each purchaser; upon
receipt of such shares, the Placement Agents shall promptly electronically deliver such shares to the applicable purchaser, and payment
therefor shall be made by the Placement Agents (or their clearing firm) by wire transfer to us.
Since
we will deliver the securities to be issued in this offering upon our receipt of investor funds, we and the Placement Agents have
not made any arrangements to place investor funds in an escrow account or trust account. Because this is a best-efforts offering,
the Placement Agents do not have an obligation to purchase any securities, and, as a result, there is a possibility that we may
not be able to sell the securities. There is no minimum offering requirement as a condition of closing of this offering. Because there
is no minimum offering amount required as a condition to closing this offering, we may sell fewer than all of the securities offered
hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund
in the event that we do not sell an amount of securities sufficient to pursue our business goals described in this prospectus. In addition,
because there is no escrow account and no minimum offering amount, investors could be in a position where they have invested in our company,
but we are unable to fulfill all of our contemplated objectives due to a lack of interest in this offering. Further, any proceeds from
the sale of securities offered by us will be available for our immediate use, despite uncertainty about whether we would be able to use
such funds to effectively implement our business plan. See the section entitled “Risk Factors” for more information.
Our Common Stock is listed on
the Nasdaq Capital Market under the ticker symbol “IMNN.” On February 6, 2024, the last reported sale price per share
of our Common Stock on the Nasdaq Capital Market was $0.57 per share. The actual public offering price per share of Common Stock,
accompanying Series A common warrant and accompanying Series B common warrant, and per pre-funded warrant, accompanying Series
A common warrant and accompanying Series B common warrant, will be determined between us, the Placement Agents and the investors
in this offering at the time of pricing, may be at a discount to the current market price for our Common Stock, and the recent market
price for our Common Stock used throughout this prospectus may not be indicative of the final offering price per share of Common Stock,
accompanying Series A common warrant and accompanying Series B common warrant, and per pre-funded warrant, accompanying
Series A common warrant and accompanying Series B common warrant. There is no established public trading market for the common
warrants or the pre-funded warrants, and we do not expect such a market to develop. Without an active trading market, the liquidity of
the pre-funded warrants and the common warrants will be limited. In addition, we do not intend to list the pre-funded warrants or the
common warrants on the Nasdaq Capital Market, any other national securities exchange or any other trading system.
You
should read this prospectus and any prospectus supplement, together with additional information described under the headings “Incorporation
of Certain Documents by Reference” and “Where You Can Find More Information,” carefully before you invest
in any of our securities.
Investing
in our securities involves a high degree of risk. See “Risk Factors” on page 6 of this prospectus and the section
entitled “Risk Factors” included in our most recent Annual Report on Form 10-K, as revised or supplemented by our
subsequent Quarterly Reports on Form 10-Q, which are incorporated herein by reference, for a discussion of information that you should
consider before investing in our securities.
Neither
the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved
of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
| | |
Per
Share,
Accompanying
Series A Common Warrant and Accompanying Series B Common
Warrant | | |
Per
Pre-Funded
Warrant,
Accompanying
Series A Common Warrant and Accompanying Series B Common
Warrant | | |
Total | |
| Public offering
price(1) | |
$ | | | |
$ | | | |
$ | | |
| Placement Agent
fees(2) | |
$ | | | |
$ | | | |
$ | | |
| Proceeds to us, before
expenses(3) | |
$ | | | |
$ | | | |
$ | | |
| (1) | The
combined public offering price is [●] per share of Common Stock, accompanying Series
A common warrant and accompanying Series B common warrant and [●] per pre-funded
warrant, accompanying Series A common warrant and accompanying Series B common
warrant. See “Plan of Distribution” for additional disclosure regarding
compensation payable to the Placement Agents. |
| (2) | Represents
a cash fee equal to seven percent (7.0%) of the aggregate purchase price paid by investors
in this offering. We have also agreed to reimburse the Placement Agents for their
accountable offering-related legal expenses in an amount up to $100,000 and $25,000 for non-accountable
expenses. See “Plan of Distribution.” |
Because
there is no minimum number of securities or amount of proceeds required as a condition to closing this offering, the actual public offering
amount, Placement Agent fees, and proceeds to us, if any, are not presently determinable and may be substantially less than the total
maximum offering amounts set forth above. See “Plan of Distribution” for more information.
| (3) | Does
not include proceeds from the exercise of the common warrants and/or pre-funded warrants
in cash, if any. |
Delivery
of the securities is expected to be made on or about , 2024, subject to satisfaction of certain
conditions.
Lead
Placement Agent
A.G.P.
Co-Placement Agent
Brookline
Capital Markets
a division of Arcadia Securities,
LLC
The
date of this prospectus is , 2024.
TABLE
OF CONTENTS
CAUTIONARY
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain
statements contained or incorporated by reference in this prospectus and in any related free writing prospectus may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 and releases issued by the SEC and within the meaning
of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-looking statements may relate to such matters as anticipated financial performance, business prospects, technological developments,
product pipelines, clinical trials and research and development activities, the adequacy of capital reserves and anticipated operating
results and cash expenditures, current and potential collaborations, strategic alternatives and other aspects of our present and future
business operations and similar matters. These statements involve known and unknown risks, uncertainties and other factors that may cause
our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Such statements include,
without limitation:
| |
● |
any
statements regarding future operations, plans, regulatory filings or approvals, including the plans and objectives of management
for future operations or programs or proposed new products or services; |
| |
● |
any
statements regarding the performance, or likely performance, or outcomes or economic benefit of any of our research and development
activities, proposed or potential clinical trials or new drug filing strategies or timelines, including whether any of our clinical
trials will be completed successfully within any specified time period or at all; |
| |
● |
any
projections of earnings, cash resources, revenue, expense or other financial terms; |
| |
● |
any
statements regarding the initiation, timing, progress and results of our research and development programs, preclinical studies,
any clinical trials and Investigational New Drug application, New Drug Application and other regulatory submissions; |
| |
● |
any
statements regarding cost and timing of development and testing, capital structure, financial condition, working capital needs and
other financial items; |
| |
● |
any
statements regarding the implementation of our business model and integration of acquired technologies, assets or businesses and
existing or future collaborations, mergers, acquisitions or other strategic transactions; |
| |
● |
any
statements regarding approaches to medical treatment, any introduction of new products by others, any possible licenses or acquisitions
of other technologies, assets or businesses, or possible actions by customers, suppliers, strategic partners, potential strategic
partners, competitors or regulatory authorities; |
| |
● |
any
statements regarding development or success of our collaboration arrangements or future payments that may come due to us under these
arrangements; |
| |
● |
any
statements regarding compliance with the listing
standards of The Nasdaq Capital Market; and |
| |
● |
any
statements regarding future economic conditions or performance and any statement of assumptions underlying any of the foregoing. |
In
some cases, you can identify forward-looking statements by terminology such as “expect,” “anticipate,” “estimate,”
“continue,” “plan,” “believe,” “could,” “intend,” “predict,”
“may,” “should,” “will,” “would” and words of similar import regarding our expectations.
Forward-looking statements are only predictions. Actual events or results may differ materially. Although we believe that our expectations
are based on reasonable assumptions within the bounds of our knowledge of our industry, business and operations, we cannot guarantee
that actual results will not differ materially from our expectations. In evaluating such forward-looking statements, you should specifically
consider various factors, including, but not limited
to, the inherent uncertainty in the drug development process, our ability to raise additional capital to fund our planned future operations,
our ability to obtain or maintain FDA and foreign regulatory approvals for our drug candidates, potential impact of the COVID-19 pandemic,
Russian invasion of Ukraine and the unrest in the Middle East on our business, our ability to enroll patients in our clinical trials,
risks relating to third parties conduct of our clinical trials, risks relating to government, private health insurers and other third-party
payers coverage or reimbursement, risks relating to commercial potential of a drug candidate in development, changes in technologies
for the treatment of cancer, impact of development of competitive drug candidates by others, risks relating to intellectual property,
volatility in the market price of our Common Stock, potential inability to maintain compliance with The Nasdaq Capital Market Rules and
the impact of adverse capital and credit market conditions. These and other risks and assumptions are
outlined under “Risk Factors” contained in this prospectus and any related free writing prospectus, and in our most
recent Annual Report on Form 10-K and our most recent filed Quarterly Reports on Form 10-Q, incorporated by reference into this prospectus,
as well as any amendments thereto reflected in subsequent filings with the SEC. The discussion of risks and uncertainties set forth in
this prospectus or referenced in those filings is not necessarily a complete or exhaustive list of all risks facing us at any particular
point in time. We operate in a highly competitive, highly regulated and rapidly changing environment, and our business is in a state
of evolution. Therefore, it is likely that new risks will emerge and the nature and elements of existing risks will change. It is not
possible for management to predict all such risk factors or changes therein or to assess either the impact of all such risk factors on
our business or the extent to which any individual risk factor, combination of factors or new or altered factors may cause results to
differ materially from those contained in any forward-looking statement. Forward-looking statements represent our estimates and assumptions
only as of the date such forward-looking statements are made. You should carefully read this prospectus, any prospectus supplement and
any related free writing prospectus, together with the information incorporated herein or therein by reference as described under the
section titled “Incorporation of Certain Information By Reference,” and with the understanding that
our actual future results may materially differ from what we expect.
Except
as required by law, forward-looking statements speak only as of the date they are made, and we assume no obligation to update any forward-looking
statements publicly, or to update the reasons why actual results could differ materially from those anticipated in any forward-looking
statements, even if new information becomes available.
ABOUT
THIS PROSPECTUS
As
used in this prospectus, unless the context otherwise requires or indicates, references to “the Company,” “we,”
“our,” “ourselves,” and “us” refer to Imunon, Inc.
You
should rely only on the information contained in this prospectus and any free writing prospectus prepared by us or on our behalf that
we have referred you to. Neither we nor the Placement Agents have authorized anyone to provide you with additional or different
information. If anyone provides you with additional, different, or inconsistent information, you should not rely on it. We and the Placement
Agents take no responsibility for, and can provide no assurance as to, the reliability of any other information that others may
give you. This prospectus is an offer to sell only the securities offered hereby and only under circumstances and in jurisdictions where
it is lawful to do so. We and the Placement Agents are not making an offer of these securities in any state, country, or other
jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus or any free writing prospectus
is accurate as of any date other than the date of the applicable document regardless of its time of delivery or the time of any sales
of our securities. Our business, financial condition, results of operations and cash flows may have changed since the date of the applicable
document.
This
prospectus describes the specific details regarding this offering and the terms and conditions of our securities being offered hereby
and the risks of investing in our securities. For additional information, please see the section entitled “Where You Can Find
More Information.”
You
should not interpret the contents of this prospectus or any free writing prospectus to be legal, tax advice, business, or financial advice.
You should consult with your own advisors for that type of advice and consult with them about the legal, tax, business, financial, and
other issues that you should consider before investing in our securities.
The
Company’s brand and product names contained in this prospectus are trademarks, registered trademarks, or service marks of Imunon,
Inc. or its subsidiary in the United States (“U.S.”) and certain other countries.
All
other trademarks, trade names and service marks appearing in this prospectus or the documents incorporated by reference herein are the
property of their respective owners. Use or display by us of other parties’ trademarks, trade dress or products is not intended
to and does not imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owner. Solely for convenience,
trademarks, tradenames and service marks referred to in this prospectus appear without the ® and ™ symbols, but those references
are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the
applicable owner will not assert its rights, to these trademarks and trade names.
PROSPECTUS
SUMMARY
This
summary highlights certain information about us, this offering and selected information contained elsewhere in this prospectus. Because
this is only a summary, it does not contain all of the information that may be important to you or that you should consider before investing
in our securities. You should read the entire prospectus carefully, especially the information under “Risk Factors” set forth
in this prospectus and the information in the documents incorporated by reference into this prospectus.
This prospectus contains forward-looking statements, based on current expectations and related to future events and our future financial
performance, that involve risks and uncertainties. Our actual results may vary materially from those discussed in the forward-looking
statements as a result of various factors, including, without limitation, those set forth under “Risk Factors” in this prospectus
and under similar captions in the documents incorporated by reference into this prospectus.
See “Cautionary Notice Regarding Forward-Looking Statements.”
Business
Overview
Imunon
is a fully integrated, clinical-stage biotechnology company focused on advancing a portfolio of innovative treatments that harness the
body’s natural mechanisms to generate safe, effective and durable responses across a broad array of human diseases, constituting
a differentiating approach from conventional therapies. Imunon is developing its non-viral DNA technology across four modalities. The
first modality, TheraPlas®, is being developed for the coding of proteins and cytokines in the treatment of solid tumors
where an immunological approach is deemed promising. The second modality, PlaCCine®, is being developed for the coding
of viral antigens that can elicit a strong immunological response. This technology may represent a promising platform for the development
of vaccines in infectious diseases. The third modality, FixPlas®, concerns the application of Imunon’s DNA technology
to produce universal cancer vaccines, also called tumor associated antigen cancer vaccines. The fourth modality, IndiPlas®,
is in the discovery phase and will focus on the development of personalized cancer vaccines, or neoepitope cancer vaccines.
The
Company’s lead clinical program, IMNN-001, is a DNA-based immunotherapy for the localized treatment of advanced ovarian cancer
currently in Phase 2 development. IMNN-001 works by instructing the body to produce safe and durable levels of powerful cancer-fighting
molecules, such as interleukin-12 and interferon gamma, at the tumor site. Additionally, the Company is conducting Investigational
New Drug (IND)-enabling preclinical studies for the development of a COVID-19 booster vaccine (IMNN-101) and a treatment for the
LASSA virus (IMNN-102). The Company has also initiated preclinical work to develop a Trp2 tumor associated antigen cancer vaccine in
melanoma (IMNN-201). Imunon will continue to leverage these modalities and to advance the technological frontier of plasmid DNA to better
serve patients with difficult-to-treat conditions.
On
September 19, 2022, Celsion Corporation announced a corporate name change to Imunon, Inc., reflecting the evolution of the Company’s
business focus and its commitment to developing cutting-edge immunotherapies and next-generation vaccines to treat cancer and infectious
diseases. The Company’s Common Stock trades on the Nasdaq Capital Market under the ticker symbol “IMNN.”
Recent
Developments
On
December 26, 2023, we received a notice from the staff (the “Staff”)
of The Nasdaq Stock Market LLC notifying us that, based upon the closing bid price of our Common Stock, for the 30 consecutive business
days prior to the notice, we no longer met the requirement to maintain a minimum closing bid price of $1.00 per share, as set forth in
Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been
provided an initial period of 180 calendar days, or until June 24, 2024, to regain compliance with the minimum bid price rule.
To regain compliance, the closing bid price of our Common Stock must be $1.00 per share or more for a minimum of 10 consecutive business
days at any time before June 24, 2024. If we do not regain compliance with Rule 5550(a)(2) by June 24, 2024, we may be eligible for an
additional 180 calendar day compliance period. To qualify, we will be required to meet the continued listing requirement for market value
of publicly held shares and all other Nasdaq initial listing standards, except the bid price requirement, and would need to provide written
notice to Nasdaq of our intention to cure the deficiency during the second compliance period. If it appears to the Staff that we will
not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq would notify us that our securities will be subject to
delisting. In the event of such notification, we may appeal the Staff’s determination to delist our securities, but there can be
no assurance the Staff would grant our request for continued listing. We intend to actively monitor the minimum bid price of our Common
Stock and may, as appropriate, consider available options to regain compliance.
Corporate
Information
We
were founded in 1982 and are a Delaware corporation. Our principal executive offices are located at 997 Lenox Drive, Suite 100, Lawrenceville,
NJ 08648. Our telephone number is (609) 896-9100. Our website is www.imunon.com. The information contained on or that can be accessed
through our website is not incorporated by reference into this prospectus, and you should not consider information on our website to
be part of this prospectus or in deciding to purchase our Common Stock.
We
are a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700 million
and our annual revenue was less than $100 million during our most recently completed fiscal year. We may continue to be a smaller reporting
company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less
than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than
$700 million. For so long as we remain a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure
and other requirements that are applicable to other public companies that are not smaller reporting companies.
THE
OFFERING
| Common
Stock and common warrants offered by us |
|
Up
to 14,035,087 shares of Common Stock (or pre-funded warrants to purchase shares of Common Stock), Series A common warrants
to purchase up to 14,035,087 shares of Common Stock and Series B common warrants to purchase up to 14,035,087 shares
of Common Stock on a “reasonable best-efforts” basis at an assumed combined offering price of $0.57
(which was the closing price of our Common Stock on the Nasdaq Capital Market on February 6, 2024) per share of Common
Stock, accompanying Series A common warrant and accompanying Series B common warrant or $0.57 per pre-funded warrant,
accompanying Series A common warrant and accompanying Series B common warrant. The shares of Common Stock or pre-funded
warrants, respectively, and common warrants are immediately separable and will be issued separately in this offering, but must initially
be purchased together in this offering. The common warrants are exercisable immediately, have an assumed exercise price of $0.57,
equal to the assumed combined public offering price per share of Common Stock, accompanying Series A common warrant
and accompanying Series B common warrant. The Series A common warrants will expire five years after the date of issuance,
and the Series B common warrants will expire 18 months after the date of issuance. This prospectus also relates to the offering
of the shares of Common Stock issuable upon exercise of the common warrants and pre-funded warrants. For more information regarding
the common warrants and pre-funded warrants, you should carefully read the section titled “Description of Securities to
be Registered” in this prospectus. |
| |
|
|
| Pre-funded
warrants offered by us in this offering |
|
We
are also offering to each purchaser whose purchase of shares in this offering would otherwise
result in the purchaser, together with its affiliates and certain related parties, beneficially
owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common
Stock immediately following the consummation of this offering, the opportunity to purchase,
if the purchaser so chooses, pre-funded warrants (each pre-funded warrant to purchase one
share of our Common Stock) in lieu of shares that would otherwise result in the purchaser’s
beneficial ownership exceeding 4.99% of our outstanding Common Stock (or, at the election
of the purchaser, 9.99%). The purchase price of each pre-funded warrant, accompanying
Series A common warrant and accompanying Series B common warrant will equal the
price at which one share of Common Stock, accompanying Series A common warrant and
accompanying Series B common warrant are being sold to the public in this offering,
minus $0.0001, and the exercise price of each pre-funded warrant will be $0.0001 per share.
The pre-funded warrants will be exercisable immediately and may be exercised at any time
until all of the pre-funded warrants are exercised in full. For each pre-funded warrant we
sell, the number of shares of Common Stock we are offering will be decreased on a one-for-one
basis.
|
| Reasonable
best-efforts offering |
|
We
have agreed to issue and sell the securities offered hereby to the purchasers through the Placement Agents. The Placement
Agents are not required to buy or sell any specific number or dollar amount of the securities offered hereby, but will use
their reasonable best efforts to solicit offers to purchase the securities offered by this prospectus. See “Plan of Distribution”
beginning on page 48 of this prospectus. |
| |
|
|
| Common
Stock to be outstanding after the offering: |
|
23,402,994
shares (assuming all of the securities we are
offering under this prospectus are sold, and assuming no sale of pre-funded warrants, which, if sold, would reduce the number of
shares of Common Stock that we are offering on a one-for-one basis, and no exercise of the Series A or Series B common warrants
issued in this offering.). |
| Use of proceeds |
|
We expect to use the net proceeds from this offering for general corporate purposes, including potential acquisition
of new technologies or products, capital expenditures and working capital. See “Use of Proceeds.” |
| |
|
|
| Lock-Up Agreements |
|
Our
directors and officers have agreed with the Placement Agents, subject to certain exceptions, not to sell, transfer or dispose
of, directly or indirectly, any of our Common Stock or securities convertible into or exercisable or exchangeable for our Common
Stock for a period of 90 days after the completion of this offering. See “Plan of Distribution” for more information. |
| |
|
|
| Nasdaq Symbol |
|
Our Common Stock is listed on the Nasdaq Capital Market under the symbol “IMNN.” |
| |
|
|
| Risk Factors |
|
Investing in our securities involves a high degree of risk. You should carefully review and consider the “Risk
Factors” section of this prospectus and in the documents incorporated by reference in
this prospectus for a discussion of factors to consider before deciding to invest in our securities. |
The
number of shares of our Common Stock outstanding is based on an aggregate of 9,367,907
shares of our Common Stock outstanding as of September 30, 2023 and
excludes:
| ● |
969,548
shares of Common Stock issuable upon the exercise of outstanding options as of September
30, 2023, having a weighted average exercise price of $2.86 per
share; |
| ● |
18,350
shares of Common Stock issuable upon the vesting of Common Stock awards as of September
30, 2023, having a weighted average grant day fair value of $1.70 per share; |
| ● |
160,060
shares of Common Stock issuable upon the exercise of outstanding warrants as of September
30, 2023 having a weighted average exercise price of $18.86 per share; and |
| ● |
1,172,710
shares of Common Stock reserved for future issuance pursuant to our existing stock incentive
plan. |
Except
as otherwise noted, the above information reflects and assumes no sale of pre-funded warrants in this offering, which, if sold, would
reduce the number of shares of Common Stock that we are offering on a one-for-one basis, and no exercise of any common warrants issued
in this offering.
Risk
Factors
In
evaluating the Company, its business and any investment in the Company, you should carefully consider the following information about
risks, together with the other information described in or incorporated by reference in this prospectus, before making an investment
in our securities, including the additional risk factors incorporated by reference from Item 1A of the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on March 30, 2023, any subsequent Quarterly Reports on
Form 10-Q or Current Reports on Form 8-K, and all other documents incorporated by reference into this prospectus (see “Incorporation
of Certain Information by Reference”). If any of the circumstances or events described below actually arises or occurs, our business,
results of operations, cash flows and financial condition could be harmed. In any such case, the market price of our Common Stock could
decline, and you may lose all or part of your investment.
Risks
Related to this Offering and Our Securities
Future
sales and issuances of our Common Stock or other securities might result in significant dilution and could cause the price of our Common
Stock to decline.
To
raise capital, we may sell Common Stock, convertible securities or other equity securities in one or more transactions, at prices and
in a manner we determine from time to time. We may sell shares or other securities in any other offering at a price per share that is
less than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could
have rights superior to existing stockholders. The price per share at which we sell additional shares of our Common Stock, or securities
convertible or exchangeable into Common Stock, in future transactions may be higher or lower than the price per share paid by investors
in this offering.
We
cannot predict what effect, if any, sales of shares of our Common Stock in the public market or the availability of shares for sale will
have on the market price of our Common Stock. However, future sales of substantial amounts of our Common Stock in the public market,
including shares issued upon exercise of outstanding options, or the perception that such sales may occur, could adversely affect the
market price of our Common Stock.
If
you purchase shares of our Common Stock in this offering, you may incur immediate and substantial dilution in the book value
of your shares.
Investors
purchasing shares of our securities in this offering may pay a price per share that substantially exceeds the net tangible book value
per share. As a result, investors purchasing shares of our Common Stock in this offering will incur immediate dilution of $(0.43)
per share, representing the difference between the assumed public offering price per share of Common Stock of $0.57, the last
reported sale price of our Common Stock on the Nasdaq Capital Market on February 6, 2024, together with one accompanying Series
A common warrant and one accompanying Series B common warrant and our net tangible book value per share as of September 30,
2023. To the extent outstanding options or warrants to purchase our Common Stock are exercised, new investors may incur further dilution.
For more information on the dilution you may experience as a result of investing in this offering, see the section of this prospectus
entitled “Dilution.”
Management
will have broad discretion as to the use of the proceeds from the offering, and uses may not improve our financial condition or market
value.
Because
we have not designated the amount of net proceeds from the offering to be used for any particular purpose, our management will have broad
discretion as to the application of such net proceeds and could use them for purposes other than those contemplated hereby. Our management
may use the net proceeds for corporate purposes that may not improve our financial condition or market value.
There
is no public market for the common warrants or pre-funded warrants being offered in this offering.
There
is no established public trading market for the common warrants or pre-funded 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 common warrants or pre-funded warrants on any securities
exchange or nationally recognized trading system, including The Nasdaq Capital Market. Without an active market, the liquidity of the
common warrants and pre-funded warrants will be limited.
Holders
of common warrants or pre-funded warrants purchased in this offering will have no rights as Common Stockholders until such holders exercise
their warrants or pre-funded warrants and acquire our Common Stock.
Until
holders of common warrants acquire shares of our Common Stock upon exercise thereof, holders of warrants will have no rights with respect
to the shares of our Common Stock underlying such warrants. Upon exercise of the common warrants, the holders will be entitled to exercise
the rights of a Common Stockholder only as to matters for which the record date occurs after the exercise date.
If
we do not maintain a current and effective prospectus relating to the common stock issuable upon exercise of the common warrants and
pre-funded warrants, public holders will only be able to exercise such common warrants and pre-funded warrants on a “cashless
basis.”
If
we do not maintain a current and effective prospectus relating to the shares of common stock issuable upon exercise of the common warrants
and pre-funded warrants at the time that holders wish to exercise such warrants, they will only be able to exercise them on a “cashless
basis,” and under no circumstances would we be required to make any cash payments or net cash settle such warrants to the holders.
As a result, the number of shares of common stock that holders will receive upon exercise of the common warrants and pre-funded warrants
will be fewer than it would have been had such holders exercised their common warrants or pre-funded warrants for cash. We will do our
best efforts to maintain a current and effective prospectus relating to the shares of common stock issuable upon exercise of such warrants
until the expiration of such warrants. However, we cannot assure you that we will be able to do so. If we are unable to do so, the potential
“upside” of the holder’s investment in our company may be reduced.
The
common warrants and pre-funded warrants are speculative in nature.
The
common warrants and pre-funded warrants offered hereby do not confer any rights of Common Stock ownership on their holders, such as voting
rights, but rather merely represent the right to acquire shares of our Common Stock at a fixed price. Specifically, commencing on the
date of issuance, holders of the common warrants and pre-funded warrants may exercise their right to acquire the shares of our Common
Stock upon the payment of an exercise price, which we assume here to be $0.57 per share, equal to the assumed combined
public offering price per share of Common Stock, accompanying Series A common warrant and accompanying Series B common
warrant (the closing price of our Common Stock on the Nasdaq Capital Market on February 6, 2024), in the case of common warrants
and an exercise price of $0.0001 per share in the case of pre-funded warrants. Moreover, following this offering, the market value of
the common warrants and pre-funded warrants is uncertain and there can be no assurance that the market value of the common warrants or
pre-funded warrants will equal or exceed their imputed public offering prices. Furthermore, each Series A common warrant will
expire five years from the original issuance date; each Series B common warrant will expire 18 months from the original issuance date;
and each pre-funded warrant will not expire until it has been exercised in full. In the event the price of our Common Stock does
not exceed the exercise price of the common warrants during the period when such common warrants are exercisable, the common warrants
may not have any value. There is no established public trading market for common warrants and pre-funded 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 common warrants or pre-funded
warrants on any securities exchange or nationally recognized trading system, including the Nasdaq Capital Market. Without an active market,
the liquidity of the common warrants and pre-funded warrants will be limited.
This
is a reasonable best-efforts offering, with no minimum amount of securities required to be sold, and we may sell fewer than all of the
securities offered hereby.
The
Placement Agents have agreed to use their reasonable best efforts to solicit offers to purchase the securities in this offering.
The Placement Agents have no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific
number or dollar amount of the securities. There is no required minimum number of securities that must be sold as a condition to completion
of this offering, and there can be no assurance that the offering contemplated hereby will ultimately be consummated. Even if we sell
securities offered hereby, because there is no minimum offering amount required as a condition to closing of this offering, the actual
offering amount is not presently determinable and may be substantially less than the maximum amount set forth on the cover page of this
prospectus. We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received
by us. Thus, we may not raise the amount of capital we believe is required for our operations in the short-term and may need to raise
additional funds, which may not be available or available on terms acceptable to us.
Because
there is no minimum required for the offering to close, investors in this offering will not receive a refund in the event that we do
not sell an amount of securities sufficient to pursue the business goals outlined in this prospectus.
We
have not specified a minimum offering amount nor have or will we establish an escrow account in connection with this offering. Because
there is no escrow account and no minimum offering amount, investors could be in a position where they have invested in our company,
but we are unable to fulfill our objectives due to a lack of interest in this offering. Further, because there is no escrow account in
operation and no minimum investment amount, any proceeds from the sale of securities offered by us will be available for our immediate
use, despite uncertainty about whether we would be able to use such funds to effectively implement our business plan. Investor funds
will not be returned under any circumstances whether during or after the offering.
This offering may cause the trading price of our Common Stock to decrease.
The
price per share, together with the number of shares of Common Stock we issue if this offering is completed, may result in an immediate
decrease in the market price of our Common Stock. This decrease may continue after the completion of this offering.
Purchasers
who purchase our securities in this offering pursuant to a securities purchase agreement may have rights not available to purchasers
that purchase without the benefit of a securities purchase agreement.
In
addition to rights and remedies available to all purchasers in this offering under federal securities and state law, the purchasers that
enter into a securities purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue
a claim for breach of contract provides those investors with the means to enforce the covenants uniquely available to them under the
securities purchase agreement.
We
have never paid dividends on our capital stock, and we do not anticipate paying dividends in the foreseeable future.
We
have never paid dividends on any of our capital stock and currently intend to retain any future earnings to fund the growth of our business.
We may also enter into credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay
cash dividends on our common stock. Any determination to pay dividends in the future will be at the discretion of our board of directors
(“Board of Directors” or the “Board”) and will depend on our financial condition, operating results, capital
requirements, general business conditions and other factors that our Board of Directors may deem relevant. As a result,
capital appreciation, if any, of the securities will be the sole source of gain, if any, for the foreseeable future.
We
received a deficiency notice from the Nasdaq Capital Market. If we are unable to cure the deficiency and meet the Nasdaq continued listing
requirements, we could be delisted from the Nasdaq Capital Market, which would negatively impact the trading of our Common Stock.
On
December 26, 2023, we received a notice from the Staff of the Nasdaq Stock Market LLC notifying
us that, based upon the closing bid price of our Common Stock, for the 30 consecutive business days prior to the notice, we no longer
met the requirement to maintain a minimum closing bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2). In
accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were granted 180 calendar days, or until June
24, 2024, to regain compliance with the minimum bid price rule.
To
regain compliance, the closing bid price of our Common Stock must be $1.00 per share or more for a minimum of 10 consecutive business
days at any time before June 24, 2024. If we do not regain compliance with Rule 5550(a)(2) by June 24, 2024, we may be eligible for an
additional 180 calendar day compliance period. To qualify, we will be required to meet the continued listing requirement for market value
of publicly held shares and all other Nasdaq initial listing standards, except the bid price requirement, and would need to provide written
notice to Nasdaq of our intention to cure the deficiency during the second compliance period. If it appears to the Staff that we will
not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq would notify us that our securities will be subject to
delisting. In the event of such notification, we may appeal the Staff’s determination to delist our securities, but there can be
no assurance the Staff would grant our request for continued listing.
If
our Common Stock is delisted by Nasdaq, it may be eligible for quotation on an over-the-counter quotation system or on the pink sheets.
Upon any such delisting, our Common Stock would become subject to the regulations of the SEC relating to the market for penny stocks.
A penny stock is any equity security not traded on a national securities exchange that has a market price of less than $5.00 per share.
The regulations applicable to penny stocks may severely affect the market liquidity for our Common Stock and could limit the ability
of stockholders to sell securities in the secondary market. In such a case, an investor may find it more difficult to dispose of or obtain
accurate quotations as to the market value of our Common Stock, and there can be no assurance that our Common Stock will be eligible
for trading or quotation on any alternative exchanges or markets.
Delisting
from Nasdaq could adversely affect our ability to raise additional financing through public or private sales of equity securities, would
significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our Common
Stock. Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional
investor interest and fewer business development opportunities.
CAPITALIZATION
The
following table sets forth our consolidated cash and cash equivalents and capitalization as of September 30, 2023:
| ● | on
an actual basis; and |
| ● | on
an as adjusted basis to give effect to the sale of 14,035,087 shares of Common Stock
and accompanying common warrants in the offering at
the assumed combined public offering price of $0.57 (which was the last reported
sales price on Nasdaq of our Common Stock on February 6, 2024) per share of Common Stock,
accompanying Series A common warrant and accompanying Series B common warrant,
after deducting Placement Agent fees and estimated offering expenses payable by us, and assuming
no sale of any pre-funded warrants in this offering and no exercise of the common warrants
issued in connection with this offering. |
You
should read the following table in conjunction with the sections entitled “Use of Proceeds,” included elsewhere in
this prospectus, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and our unaudited condensed consolidated financial statements and related notes included in our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2023, incorporated herein by reference.
| | |
Actual
(unaudited) | | |
As
Adjusted | |
| | |
| |
| Cash and
cash equivalents | |
$ | 12,884,199 | | |
$ | 19,932,157 | |
| Stockholders’ equity: | |
| | | |
| | |
| Preferred stock, par value $0.01 per share; 100,000 shares authorized;
0 shares issued and outstanding | |
| - | | |
| - | |
Common
stock, par value $0.01 per share; 112,500,000 shares authorized, 9,367,907 shares issued and outstanding,
actual, shares issued and outstanding, 23,402,994 as adjusted(1) | |
| 93,679 | | |
| 234,030 | |
| Additional paid-in capital | |
| 401,337,485 | | |
| 408,245,093 | |
| Accumulated deficit | |
| (383,294,669 | ) | |
| (383,294,669 | ) |
| Accumulated other comprehensive
income | |
| 20,435 | | |
| 20,435 | |
| Treasury stock | |
| (85,188 | ) | |
| (85,188 | ) |
| Total stockholders’
equity | |
$ | 18,071,742 | | |
$ | 25,119,700 | |
| | |
| | | |
| | |
| Total capitalization | |
$ | 18,071,742 | | |
$ | 25,119,700 | |
A $0.10
increase (decrease) in the assumed combined public offering price per share of Common Stock, accompanying Series A common warrant
and accompanying Series B common warrant of $0.57, the last reported sale price of our Common Stock on the Nasdaq Capital
Market on February 6, 2024, would increase (decrease) the as adjusted amount of additional paid-in capital, total stockholders’
equity and total capitalization by approximately $1.4 million ($1.2 million), assuming that the number of shares of Common
Stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated Placement Agent
fees and estimated offering expenses payable by us and assuming no exercise of common warrants or sale of pre-funded warrants. An increase
(decrease) of 1,000,000 in the number of shares of Common Stock, accompanying Series A common warrant and accompanying Series
B common warrant offered by us would increase (decrease) the as adjusted amount of additional paid-in capital, total stockholders’
equity and total capitalization by approximately $0.7 million ($0.4 million), assuming no change in the public offering
price per share of Common Stock, accompanying Series A common warrant and accompanying Series B common warrant, and after
deducting estimated Placement Agent fees and estimated offering expenses payable by us.
(1)
As adjusted reflects the number of shares of our Common Stock that will be outstanding immediately after this offering is based on 9,367,907
shares outstanding as of September 30, 2023 and excludes the following:
| ● | 969,548
shares of Common Stock issuable upon the exercise of outstanding options as of September
30, 2023, having a weighted average exercise price of $2.86 per share; |
| ● | 18,350
shares of Common Stock issuable upon the vesting of Common Stock awards as of September 30,
2023, having a weighted average grant day fair value of $1.70 per share; |
| ● | 160,060
shares of Common Stock issuable upon the exercise of outstanding warrants as of September
30, 2023 having a weighted average exercise price of $18.86 per share; and |
| ● | 1,172,710
shares of Common Stock reserved for future issuance pursuant to our existing stock incentive
plan. |
dILUTION
If
you purchase securities in this offering, your ownership interest will be diluted to the extent of the difference between the public
offering price per share of our Common Stock and the as adjusted net tangible book value per share of our Common Stock immediately after
giving effect to this offering.
Our
net tangible book value as of September 30, 2023 was approximately $16.4 million, or approximately $1.75 per share of our Common Stock.
Our net tangible book value is the amount of our total tangible assets minus total liabilities. Net tangible book value per share as
of September 30, 2023 is our net tangible book value divided by the number of shares of Common Stock outstanding as of September 30,
2023.
After
giving effect to the sale of the maximum number of securities offered hereby, or 14,035,087 shares of Common Stock (assuming no
sale of any pre-funded warrants and no exercise of the common warrants) in this offering at an assumed combined public offering
price of $0.57 per share of Common Stock, accompanying Series A common warrant and accompanying Series B common
warrant (the last reported sale price of our Common Stock on the Nasdaq Capital Market on February 6, 2024), and after deducting
estimated Placement Agent fees and estimated offering expenses payable by us, our as adjusted net tangible book value as of September
30, 2023 would have been approximately $23.5 million, or approximately $1.00 per share of Common Stock. This amount represents
an immediate decrease in as adjusted net tangible book value of $0.75 per share of Common Stock to our existing stockholders and
an immediate dilution of $(0.43) per share of Common Stock to investors participating in this offering. We determine dilution per share
of Common Stock to investors participating in this offering by subtracting as adjusted net tangible book value per share of Common Stock
after giving effect to this offering from the public offering price per share of Common Stock and accompanying common warrant paid by
investors participating in this offering.
| Assumed combined public
offering price per share of Common Stock, accompanying Series A common warrant and accompanying Series B common warrant | |
$ | 0.57 | |
| Historical net tangible book value per share as of September 30, 2023 | |
$ | 1.75 | |
| Decrease
in net tangible book value per share attributable to this offering | |
$ | (0.75 | ) |
| As adjusted tangible book value per share,
after giving effect to this offering | |
$ | 1.00 | |
| Dilution per share to investors in this offering | |
$ | (0.43 | ) |
A $0.10 increase (decrease) in
the assumed combined public offering price per share of Common Stock, accompanying Series A common warrant and accompanying
Series B common warrant of $0.57 would increase (decrease) the as adjusted net tangible book value by approximately $0.06
($0.06) per share and the dilution to new investors by $0.04 ($0.04) per share, assuming that the number of shares of Common
Stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated Placement Agent
fees and estimated offering expenses payable by us and assuming no exercise of common warrants or sale of pre-funded warrants. An increase
of 1,000,000 in the number of shares of Common Stock and accompanying common warrants offered by us would decrease the as adjusted net
tangible book value by approximately $0.02 per share and increase the dilution to new investors by $0.02 per share, and a decrease of
1,000,000 in the number of shares of Common Stock and accompanying common warrants offered by us would increase the as adjusted net tangible
book value by approximately $0.02 per share and decrease the dilution to new investors by $0.02 per share, assuming no change in the
public offering price per share of Common Stock, accompanying Series A common warrant and accompanying Series B common
warrant, and after deducting estimated Placement Agent fees and estimated offering expenses payable by us.
The
number of shares of our Common Stock outstanding is based on an aggregate of 9,367,907
shares of our Common Stock outstanding as of September 30, 2023 and
excludes:
| ● |
969,548
shares of Common Stock issuable upon the exercise of outstanding options as of September
30, 2023, having a weighted average exercise price of $2.86 per
share; |
| ● |
18,350
shares of Common Stock issuable upon the vesting of Common Stock awards as of September
30, 2023, having a weighted average grant day fair value of $1.70 per share; |
| ● |
160,060
shares of Common Stock issuable upon the exercise of outstanding warrants as of September
30, 2023 having a weighted average exercise price of $18.86 per share; and |
| ● |
1,172,710
shares of Common Stock reserved for future issuance pursuant to our existing stock incentive
plan. |
To
the extent that any outstanding options or warrants are exercised, new options are issued under our stock incentive plans, or we otherwise
issue additional shares of Common Stock in the future, at a price less than the public offering price, there will be further dilution
to new investors.
The
information discussed above is illustrative only and will adjust based on the actual public offering price and other terms of this offering
determined at pricing. Except as indicated otherwise, the discussion and table above assume no exercise of common warrants offered hereby
and no sale of pre-funded warrants, which, if sold, would reduce the number of shares of Common Stock that we are offering on a one-for-one
basis.
USE
OF PROCEEDS
We estimate that we will receive
net proceeds from this offering of approximately $7.0 million (assuming the sale of the maximum number of securities offered hereby),
based upon an assumed combined public offering price of $0.57 (which is the last reported sale price of our Common Stock on
Nasdaq on February 6, 2024) per share of Common Stock, accompanying Series A common warrant and accompanying Series B
common warrant, after deducting the estimated Placement Agent fees and estimated offering expenses payable by us and assuming no issuance
of any pre-funded warrants and no exercise of the common warrants. However, because this is a reasonable best-efforts offering with no
minimum number of securities or amount of proceeds as a condition to closing, the actual offering amount, Placement Agent fees, and net
proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth on the cover page of this
prospectus, and we may not sell all or any of the securities we are offering. As a result, we may receive significantly less in net proceeds.
Based on the assumed offering price set forth above, we estimate that our net proceeds from the sale of 75% and 50% of the securities
offered in this offering would be approximately $5.2 million and $3.3 million, respectively, after deducting the estimated Placement
Agent fees and estimated offering expenses payable by us, and assuming no issuance of any pre-funded warrants and assuming no exercise
of the common warrants. We will only receive additional proceeds from the exercise of the common warrants we are selling in this offering
if the common warrants are exercised for cash. We cannot predict when or if these common warrants will be exercised. It is possible that
these common warrants may expire and may never be exercised.
Each $0.10 increase (decrease)
in the assumed combined public offering price of $0.57 per share of Common Stock, accompanying Series A common warrant
and accompanying Series B common warrant would increase (decrease) our net proceeds from this offering by approximately $1.3
million ($1.3 million), assuming that the number of shares of Common Stock offered by us remains the same, and after deducting estimated
Placement Agent fees and estimated offering expenses payable by us. An increase (decrease) of 1,000,000 in the number of shares of Common
Stock, accompanying Series A common warrant and accompanying Series B common warrant offered by us would increase (decrease)
our net proceeds from this offering by approximately $0.5 million ($0.5 million), assuming no change in the public offering price
per share of Common Stock and accompanying common warrant, and after deducting estimated Placement Agent fees and estimated offering
expenses payable by us.
These estimates exclude the proceeds,
if any, from the exercise of common warrants offered hereby. If all of the Series A and Series B common warrants offered hereby
were to be exercised in cash at the exercise price of $0.57 per share (the assumed combined offering price per share of
Common Stock, accompanying Series A common warrant and accompanying Series B common warrant), we would receive additional
proceeds of approximately $16.0 million. We cannot predict when or if these common warrants will be exercised. It is possible
that these common warrants may expire and may never be exercised. Additionally, these common warrants contain a cashless exercise provision
that permit exercise of such warrants on a cashless basis at any time when there is no effective registration statement under the Securities
Act covering the issuance of the underlying shares.
We
intend to use the net proceeds of this offering for general corporate purposes, including potential acquisition of new technologies or
products, capital expenditures and working capital.
Our
expected use of net proceeds from the offering represents our current intentions based upon our present plans and business condition.
Investors are cautioned, however, that expenditures may vary substantially from these uses. Investors will be relying on the judgment
of our management, who will have broad discretion regarding the application of the proceeds of this offering. The amounts and timing
of our actual expenditures will depend upon numerous factors, including the amount of cash necessary to run our operations, the amount
of competition and other operational factors. Pending the uses described above, we may invest the net proceeds from this offering in
short-and intermediate-term, interest-bearing obligations, investment-grade instruments, demand deposits, certificates of deposit or
direct or guaranteed obligations of the U.S. government.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our
Board of Directors currently consists of seven members and is divided into three classes of directors serving staggered three-year terms.
Directors for each class are elected at the Annual Meeting of Stockholders held in the year in which the term for their class expires
and hold office for a three-year term and until their successors are duly elected and qualified, or their earlier death, resignation
or removal. In accordance with our amended and restated certificate of incorporation and bylaws, our Board may fill any vacancy on the
Board by appointment.
Set
forth below is certain information regarding our Company’s current directors, as well as our non-director executive officers.
| NAME |
|
AGE |
|
POSITION(S) |
|
CLASS |
| Frederick
J. Fritz |
|
73 |
|
Director |
|
I |
| Christine
Pellizzari |
|
55 |
|
Director |
|
I |
| James
E. Dentzer |
|
57 |
|
Director |
|
II |
| Stacy
R. Lindborg, Ph.D. |
|
53 |
|
Director |
|
II |
| Donald
P. Braun, Ph.D. |
|
73 |
|
Director |
|
III |
| Michael
H. Tardugno |
|
73 |
|
Executive
Chairman |
|
III |
| Corinne
Le Goff, Pharm.D. |
|
58 |
|
President,
Chief Executive Officer and Director |
|
II |
| Khursheed
Anwer, Ph.D. |
|
64 |
|
Executive
Vice President and Chief Scientific Officer |
|
|
| Sébastien
Hazard, M.D. |
|
52 |
|
Executive
Vice President and Chief Medical Officer |
|
|
| Jeffrey
W. Church |
|
66 |
|
Executive
Vice President and Chief Financial Officer |
|
|
Directors
Mr.
Frederick J. Fritz. Mr. Fritz was appointed to our Board of Directors in July 2011. Mr. Fritz has served as CEO and Founder of NeuroDx,
a development stage diagnostic device company focused on the neurosurgery market, since 2006. Mr. Fritz joined NeuroDx from Valeo Medical,
a biotechnology company he founded in 2003 to develop the world’s first non-invasive diagnostic test for endometriosis. Prior to
that, Mr. Fritz was President and CEO of Songbird Hearing, Inc., a medical device company spun out of Sarnoff Corporation. Mr. Fritz
began his career in marketing management and new product development. He joined Schering Plough’s Wesley Jessen in 1985 as VP Marketing
and Sales in 1986. He was promoted to general manager of Schering’s Over the Counter pharmaceutical business in 1988 and of the
podiatric products business in 1990. He was President of Coleman North America from 1995 to 1997. Mr. Fritz holds a bachelor’s
degree in engineering (summa cum laude) from University of Illinois and an MBA degree from Harvard University.
Ms.
Christine A. Pellizzari. Ms. Pellizzari was appointed to our Board of Directors in June 2021. Ms. Pellizzari joined Insmed Incorporated
(Nasdaq: INSM) in 2013 as General Counsel and Corporate Secretary and was named Chief Legal Officer in 2018. She has global responsibility
for legal and government affairs including corporate governance, regulatory compliance, contracting, alliance management, clinical trial
oversight, labor and employment, litigation management and intellectual property strategy and portfolio management. From 2007 through
2012, Ms. Pellizzari held various legal positions of increasing responsibility at Aegerion Pharmaceuticals, Inc., most recently as Executive
Vice President, General Counsel and Corporate Secretary. Prior to joining Aegerion, Ms. Pellizzari was Senior Vice President, General
Counsel and Secretary at Dendrite International, Inc., a formerly publicly traded company that provided sales effectiveness, promotional
and compliance solutions to the pharmaceutical industry. Ms. Pellizzari received a J.D. from the University of Colorado School of Law
and a B.A. from the University of Massachusetts (Amherst). She is a member of Executive Women in Bio, Women Corporate Directors, National
Association of Corporate Directors, Association of Corporate Counsel, Society for Corporate Governance and National Association of Stock
Plan Professionals.
Mr.
James E. Dentzer. Mr. Dentzer was appointed to our Board of Directors in September 2022. He has been President and Chief Executive
Officer and a member of the Board of Directors of Curis, Inc. (Nasdaq: CRIS) since September 2018. From March 2018 to September 2018,
Mr. Dentzer served as Curis’ Chief Operating Officer and Chief Financial Officer. From March 2016 to March 2018, Mr. Dentzer served
as Curis’ Chief Administrative Officer and Chief Financial Officer. Mr. Dentzer has also held the positions of Secretary and Treasurer
from March 2016 to March 2019. Prior to joining Curis, Mr. Dentzer served as Chief Financial Officer of Dicerna Pharmaceuticals, Inc.,
a formerly publicly traded biotechnology company, from December 2013 to December 2015. Prior to that, he was the Chief Financial Officer
of Valeritas, Inc., a formerly publicly traded medical technology company, from March 2010 to December 2013. Prior to joining Valeritas,
Inc., he was the Chief Financial Officer of Amicus Therapeutics, Inc. (Nasdaq: FOLD), a biotechnology company, from October 2006 to October
2009. In prior positions, he spent six years as Corporate Controller of Biogen Inc. (Nasdaq: BIIB), a biotechnology company, and six
years in various senior financial roles at E.I. du Pont de Nemours and Company, a chemical, petroleum and biotechnology company, in the
U.S. and Asia. Mr. Dentzer holds a B.A. degree in Philosophy from Boston College and an M.B.A. from the University of Chicago.
Dr.
Stacy R. Lindborg. Dr. Lindborg was appointed to our Board of Directors in June 2021. Dr. Lindborg brings to Imunon more than 25
years of pharmaceutical industry experience with a particular focus on R&D, executive management and strategy. She has worked with
biologics, small molecules and cell therapies to address a broad range of diseases and disorders, including multiple Orphan drug products,
along with extensive experience in early-stage development having taken molecules from first in man studies into the clinic through approval
and launch. Dr. Lindborg’s holds the position of co-Chief Executive Officer at Brainstorm Cell Therapeutics (Nasdaq: BCLI), which
she joined in 2020. From 2012 to 2020, she held positions of increasing responsibility at Biogen, Inc. (Nasdaq: BIIB), where she worked
in biostatistics and biometrics, and served as Vice President for Global Analytics and Data Sciences. Dr. Lindborg joined Eli Lilly and
Company (NYSE: LLY) in 1996 moving through the organization to serve from 2010 to 2012 as Head of R&D Strategy with responsibility
for characterizing the productivity of the portfolio and driving key R&D strategy projects including the annual R&D Long-Range
Plan. Dr. Lindborg is a graduate of Baylor University where she received a Ph.D. and M.A. in statistics and a B.A. in psychology with
a minor in mathematics. She has authored more than fifty abstracts, 200 presentations and 45 manuscripts that have been published in
peer-reviewed journals. She serves on several industry advisory boards related to statistics and biotechnology.
Dr.
Donald P. Braun. Dr. Braun was appointed to our Board of Directors in December 2015. Dr. Braun has over 35 years of research experience
in oncology, cancer immunology, cancer immunotherapy, and inflammatory diseases. He is the author of more than 120 published peer-reviewed
manuscripts, twenty-five reviews and book chapters, and co-editor of a book on the role of prostaglandins and other COX 2 metabolites
in cancer patient immunity and immunotherapy. He served from 2006 to 2014 as Vice President Clinical Research, after which he served
as Vice President Translational Research and Chief Science Officer at the Cancer Treatment Centers of America until his retirement in
May 2016. Prior to this role, he was the Scientific Director of the Cancer Center and Professor of Medicine and Immunology at Rush Medical
College in Chicago from 1978 to 1999, and the Administrative Director of the Cancer Institute and a Professor of Surgery with tenure
at the Medical College of Ohio from 1999 to 2006. He received his Ph.D. in Immunology and Microbiology from the University of Illinois
at the Medical Center in Chicago. Dr. Braun has served as an advisor to numerous public agencies and private corporations concerned with
cancer therapeutics and diagnostics. At the National Cancer Institute, Dr. Braun served as a member of the Experimental Therapeutics
Study Section; the Small Business Innovation Grant Review Study Section; and the Experimental Therapy program for “Molecular Targets
in Lung Cancer.” He served as a member of the Immunology and Immunotherapy Study Section of the American Cancer Society-National
Division; as a Member of the Ohio Cancer Incidence Surveillance System; as a Member of the Biomedical Research Technology Transfer Commission
for the State of Ohio; and as an advisor to the State of Arizona’s Disease Research Control Commission. Dr. Braun has also served
as a consultant to numerous pharmaceutical and biotechnology companies developing cancer treatments and diagnostics including Pfizer
Inc. (NYSE: PFE), Sterling Winthrop, Abbott Laboratories (NYSE: ABT), Boehringer Mannheim, Serono Corporation, Biomira Inc., Centocor
and Merck KGA.
Mr.
Michael H. Tardugno. Mr. Tardugno was appointed President and Chief Executive Officer of the Company on January 3, 2007, and was
elected to the Board of Directors on January 22, 2007. In October of 2014, Mr. Tardugno was appointed by our Board of Directors as our
Chairman. Effective July 18, 2022, Mr. Tardugno transitioned from the roles of President, Chief Executive Officer and Chairman to the
position of Executive Chairman of the Board. Prior to joining the Company and for the period from February 2005 to December 2006, Mr.
Tardugno served as Senior Vice President and General Manager of Mylan Technologies, Inc., a subsidiary of Mylan Inc. From 1998 to 2005,
Mr. Tardugno was Executive Vice President of Songbird Hearing, Inc., a medical device company spun out of Sarnoff Corporation. From 1996
to 1998, he was Senior Vice President of Technical Operations worldwide for a division of Bristol-Myers Squibb (NYSE: BMY), and from
1977 to 1995, he held increasingly senior executive positions including Senior Vice President of Worldwide Technology Development with
Bausch & Lomb (NYSE, TSX: BLCO) and Abbott Laboratories (NYSE: ABT). Mr. Tardugno holds a B.S. degree from St. Bonaventure University
and completed the Harvard Business School Program for Management Development.
Dr.
Corinne Le Goff. Dr. Le Goff was appointed to our Board of Directors and as our President and Chief Executive Officer on July 18,
2022. Prior to joining the Company, Dr. Le Goff served as Chief Commercial Officer of Moderna, Inc. (Nasdaq: MRNA) from January 2021
through January 2022. Dr. Le Goff served as Senior Vice President and General Manager of the U.S. Business Organization at Amgen, Inc.
(Nasdaq: AMGN) from March 2019 to January 2021. During her tenure at Amgen, she also served as Senior Vice President of Global Product
Strategy from June 2018 to March 2019, and Senior Vice President of the Europe Region from June 2015 to May 2018. Dr. Le Goff held various
positions within the Roche Group, a publicly traded Swiss multinational healthcare company, including President of Roche’s French
affiliate from May 2012 to May 2015. Dr. Le Goff served on the board of directors of the Pacific Council on International Policy from
October 2019 to December 2020. Dr. Le Goff also served on the board of directors of CFAO, a trading company, from October 2014 until
October 2020, where she served as a member of the Nomination and Compensation Committee, the Sustainable Development Committee and the
Audit Committee. Dr. Le Goff has served on the board of directors of Longboard Pharmaceuticals, Inc. (Nasdaq: LBPH) since March 2021,
where she serves as a member of the Compensation Committee and the Audit Committee. Dr. Le Goff resigned from her director positions
at Acticor Biotech and EuroAPI in December 2022, as per her contractual obligations following her appointment as Imunon’s President
and CEO. Dr. Le Goff received a Pharm. D. from the University Paris V and an M.B.A. in Marketing from La Sorbonne University, France
Our
Board of Directors concluded that all directors have the requisite experience, qualifications, attributes and skill necessary to serve
as a member of the Board of Directors based on, among other things, their:
| ● | Leadership
attributes and experience; |
| ● | Management
experience in the pharmaceutical industry and/or business experience in countries in which
we are conducting clinical trials; and |
| ● | Professional
and educational background. |
Executive
Officers
The
following are the biographical summaries for each of our executive officers. Each executive officer is elected by, and serves at the
pleasure of, our Board of Directors.
Corinne
Le Goff, Pharm.D. Dr. Le Goff’s biographical information appears above under the heading “Directors.”
Khursheed
Anwer, Ph.D. Dr. Anwer joined us in June 2014 as Executive Vice President and Chief Scientific Officer, in connection with our acquisition
of all the assets of EGWU, Inc. (formerly known as Egen, Inc.), an Alabama corporation (“EGEN”). Before joining the Company,
Dr. Anwer served as EGEN’s President and Chief Scientific Officer, a position he held since 2009. He joined EGEN in July 2002 as
Vice President of Research and Development and directed EGEN’s clinical and research and development functions. Before joining
EGEN, Dr. Anwer was Director of Pre-Clinical Development at Valentis, Inc. from July 2000 to June 2002. From 1993 to 1999, he served
in several positions at GeneMedicine, Inc., where he led several research projects in the area of non-viral gene therapy. He has authored
more than 40 publications in the area of non-viral gene therapy, resulting from his active career in research and development. Dr. Anwer
holds a Ph.D. in physiology/pharmacology from Ohio University and received post-doctoral training from the University of Texas Health
Science Center at Houston. Dr. Anwer also has a master’s in business administration from the University of Alabama.
Sébastien
Hazard, M.D. On December 7, 2023, Dr. Hazard was appointed to the positions of Executive Vice President and Chief Medical Officer
of the Company, effective as of December 11, 2023. Immediately prior to joining the Company, Dr. Hazard served as Senior Vice President,
Head of Clinical Development at Bicycle Therapeutics plc (Nasdaq: BCYC) from April 2021 through September 2023. Prior to joining Bicycle
Therapeutics, Dr. Hazard served as Clinical Development Lead at GSK from June 2019 to April 2021. He also served as Senior Medical Director
of Clinical Development from July 2018 to May 2019, and Senior Medical Director of Global Medical Affairs from August 2016 to July 2018
at TESARO, Inc. Dr. Hazard held various positions within Genentech, including Medical Director in Lung Cancer of U.S. Medical Affairs
from November 2012 to July 2016. Earlier in his career, Dr. Hazard served as an advisor to the head of the French Drug Agency and to
the French Health Minister’s cabinet. Dr. Hazard holds a Doctorate in Medicine, Internal Medicine and Public Health from Paris
VI Pitie Salpetriere, an Executive M.B.A. from INSEAD and a Master’s degree in epidemiology and statistics applied to clinical
research from Paris VI University.
Mr.
Jeffrey W. Church. Mr. Church joined us in July 2010 as Vice President, Chief Financial Officer and Corporate Secretary. Mr. Church
was appointed as our Senior Vice President, Corporate Strategy and Investor Relations in July 2011. In July 2013, Mr. Church was reappointed
as Senior Vice President and Chief Financial Officer. In December 2018, Mr. Church was promoted to Executive Vice President. Immediately
prior to joining the Company, Mr. Church served as Chief Financial Officer and Corporate Secretary of Alba Therapeutics Corporation,
a privately held life science company from 2007 until 2010. From 2006 until 2007, he served as Vice President, Chief Financial Officer
and Corporate Secretary for Novavax, Inc. (Nasdaq: NVAX), a vaccine development company listed on The Nasdaq Global Select Market. From
1998 until 2006, he served as Vice President, CFO and Corporate Secretary for GenVec, Inc., a biotechnology company formerly listed on
The Nasdaq Capital Market. Prior to that, he held senior financial positions at BioSpherics Corporation (Nasdaq: DOMH) and Meridian Medical
Technologies, both publicly traded or formerly publicly traded companies. He started his career with Price Waterhouse from 1979 until
1986. Mr. Church holds a B.S. degree in accounting from the University of Maryland.
Legal
Proceedings
On
October 29, 2020, a putative securities class action was filed against the Company and certain of its officers and directors (the “Spar
Individual Defendants”) in the U.S. District Court for the District of New Jersey, captioned Spar v. Celsion Corporation, et
al., Case No. 1:20-cv-15228 (the “Spar Action”). The plaintiff alleged that the Company and Spar Individual Defendants
made false and misleading statements regarding one of the Company’s drug candidates, ThermoDox®, and brought claims for damages
under Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder against all defendants, and under Section 20(a) of the
Exchange Act of 1934 against the Spar Individual Defendants. On February 6, 2023, the U.S. District Court granted a Motion to Dismiss
filed by the Company and Spar Individual Defendants and granted the plaintiff leave to file an amended complaint within 30 days. The
plaintiff did not file an amended complaint within the 30-day deadline. In September 2023, the U.S. District Court issued an Order for
Dismissal without prejudice.
In
February 2021, a derivative shareholder lawsuit was filed against the Company, as the nominal defendant, and certain of its directors
and officers as defendants in the U.S. District Court for the District of New Jersey, captioned Fidler v. Michael H. Tardugno, et
al., Case No. 3:21-cv-02662. The plaintiff alleged breach of fiduciary duty and other claims arising out of alleged statements made
by certain of the Company’s directors and/or officers regarding ThermoDox®. The Company believes it has meritorious
defenses to these claims and intends to vigorously contest this suit. At this stage of the case, neither the likelihood that a loss,
if any, will be realized, nor an estimate of possible loss or range of loss, if any, can be determined.
EXECUTIVE
AND DIRECTOR COMPENSATION
This
section describes the material elements of compensation awarded to, earned by, or paid to the following Executive Officers of the Company:
| ● | Michael
H. Tardugno, our Executive Chairman |
| ● | Corinne
Le Goff, Pharm. D., our President and Chief Executive Officer |
| ● | Khursheed
Anwer, Ph.D., our Executive Vice President and Chief Science Officer |
| ● | Jeffrey
W. Church, our Executive Vice President and Chief Financial Officer |
These
individuals are listed in the 2023 Summary Compensation Table below and are referred to in this discussion as the “Named Executive
Officers.”
Dr.
Le Goff was appointed to the positions of President and Chief Executive Officer of the Company effective as of July 18, 2022. Michael
H. Tardugno served as Chairman, President and Chief Executive Officer prior to such date and transitioned effective July 18, 2022, to
the position of Executive Chairman of the Board.
2023
SUMMARY COMPENSATION TABLE
The
following table sets forth information regarding the total compensation for services rendered in all capacities during the years ended
December 31, 2023 and 2022, awarded to, paid to, or earned by each Named Executive Officer serving as of December 31, 2023. All compensation
awarded to, earned by, or paid to IMUNON’s Named Executive Officers is included in the table below for the years ended December
31, 2023 and 2022:
| Name and Principal Position | |
Year | |
Salary | | |
Bonus | | |
Stock
Awards | | |
Option
Awards
(1)(2) | | |
Non-Equity
Incentive
Plan
Compensation
(2) | | |
All Other
Compensation
(3) | | |
Total
($) | |
| | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Michael H. Tardugno (4) | |
2023 | |
$ | 370,000 | | |
$ | – | | |
$ | – | | |
$ | 29,938 | | |
$ | - | | |
$ | 13,500 | | |
$ | 413,438 | |
| Executive Chairman | |
2022 | |
$ | 573,649 | | |
$ | – | | |
$ | – | | |
$ | 506,500 | | |
$ | 382,697 | | |
$ | 622,545 | | |
$ | 2,085,391 | |
| Corinne Le Goff (5) | |
2023 | |
$ | 658,080 | | |
$ | – | | |
$ | – | | |
$ | 107,775 | | |
$ | – | | |
$ | 15,000 | | |
$ | 780,855 | |
| President & CEO | |
2022 | |
$ | 264,000 | | |
$ | – | | |
$ | 97,500 | | |
$ | 308,564 | | |
$ | 157,250 | | |
$ | 56,480 | | |
$ | 883,794 | |
| Khursheed Anwer (6) | |
2023 | |
$ | 412,760 | | |
$ | – | | |
$ | | | |
$ | 47,900 | | |
$ | – | | |
$ | 19,218 | | |
$ | 479,878 | |
| Executive VP & CSO | |
2022 | |
$ | 382,629 | | |
$ | – | | |
$ | 19,500 | | |
$ | 118,286 | | |
$ | 139,737 | | |
$ | 18,506 | | |
$ | 678,658 | |
| Jeffrey Church | |
2023 | |
$ | 441,296 | | |
$ | – | | |
$ | – | | |
$ | 47,900 | | |
$ | – | | |
$ | – | | |
$ | 489,196 | |
| Executive VP & CFO | |
2022 | |
$ | 409,822 | | |
$ | – | | |
$ | – | | |
$ | 87,715 | | |
$ | 139,094 | | |
$ | – | | |
$ | 636,631 | |
| (1) |
The
value reported for option awards is the aggregate grant date fair value of stock options granted to the Named Executive Officers
in the years shown, determined in accordance with FASB ASC Topic 718, disregarding adjustments for forfeiture assumptions. The assumptions
for making the valuation determinations are set forth in Note 12 to the Company’s Financial Statements for the year ended December
31, 2022 |
| |
|
| (2) |
Executives’
bonuses under our annual incentive program are based on the achievement of specific performance measures established at the beginning
of the fiscal year by our Compensation Committee. Historically, our Compensation Committee has awarded the annual incentive bonus
for each year in the first quarter of the following year. Our Compensation Committee has not approved the amount and the payment
of the incentive bonus for 2023 for each of the Named Executive Officers in the form of stock awards and Non-Equity (Cash) Incentive
Plan Compensation. |
| (3) |
This
column includes other compensation as indicated below and matching and discretionary contributions made by the Company for the Named
Executive Officers under our 401(k) plan. Our matching contribution is equal to 50% of the employee’s deferrals under the plan
up to 6% of the employee’s compensation, subject to applicable IRS limitations, and are made in shares of our common stock. |
| |
|
| (4) |
Mr.
Tardugno served as the Company’s Chairman, President and Chief Executive Officer until July 18, 2022, when he transitioned
to the position of Executive Chairman of the Board. For Mr. Tardugno, “All Other Compensation” for 2023 consists of a
401(k)-plan matching contribution of $13,500 in our common stock. |
| |
|
| (5) |
Dr.
Le Goff joined the Company as President and Chief Executive Officer and as a director effective as of July 18, 2022. For Dr. Le Goff,
“All Other Compensation” for 2023 consists of a 401(k)-plan matching contribution of $15,000 in our common stock. |
| |
|
| (6) |
For
Dr. Anwer, “All Other Compensation” for 2023 consists of $6,237 for discretionary spending allowance and a 401(k)-plan
matching contribution of $12,981 in our common stock. |
Narrative
Disclosure to Summary Compensation Table
Imunon
is a fully integrated, clinical-stage biotechnology company focused on advancing a portfolio of innovative treatments that harness the
body’s natural mechanisms to generate safe, effective and durable responses across a broad array of human diseases, constituting
a differentiating approach from conventional therapies. Imunon is developing its non-viral DNA technology across four modalities. The
first modality, TheraPlas®, is being developed for the coding of proteins and cytokines in the treatment of solid tumors
where an immunological approach is deemed promising. The second modality, PlaCCine®, is being developed for the coding
of viral antigens that can elicit a strong immunological response. This technology may represent a promising platform for the development
of vaccines in infectious diseases. The third modality, FixPlas®, concerns the application of Imunon’s DNA technology
to produce universal cancer vaccines, also called tumor associated antigen cancer vaccines. The fourth modality, IndiPlas®,
is in the discovery phase and will focus on the development of personalized cancer vaccines, or neoepitope cancer vaccines.
The
Company’s lead clinical program, IMNN-001, is a DNA-based immunotherapy for the localized treatment of advanced ovarian cancer
currently in Phase 2 development. IMNN-001 works by instructing the body to produce safe and durable levels of powerful cancer-fighting
molecules, such as interleukin-12 and interferon gamma, at the tumor site. Additionally, the Company is conducting IND-enabling preclinical
studies for the development of a COVID-19 booster vaccine (IMNN-101) and a treatment for the LASSA virus (IMNN-102). The Company has
also initiated preclinical work to develop a Trp2 tumor associated antigen cancer vaccine in melanoma (IMNN-201). Imunon will continue
to leverage these modalities and to advance the technological frontier of plasmid DNA to better serve patients with difficult-to-treat
conditions.
As
a result of our drug development status, it is unlikely, in the short term, to generate revenues and income sufficient to cover product
development costs. As a result, our executive compensation philosophy is to align the interests of management and stockholders by emphasizing
rewards for Company performance, while remaining competitive with compensation paid by other clinical stage biotechnology companies.
The
compensation practices that we have outlined below have been implemented because we believe that they are consistent with our stockholders’
interests:
What
we do:
| ● | A
significant portion of our executive compensation is based on actual Company performance
compared to absolute and relative measures and is therefore “at risk;” |
| ● | Multiple
performance metrics between the annual and long-term incentive plans discourage excessive
risk-taking by removing any incentive to focus on a single performance goal to the detriment
of the Company; |
| ● | Balance
between annual and long-term compensation to discourage short-term risk taking at the expense
of long-term results; |
| ● | Our
executives are encouraged to acquire and maintain meaningful ownership positions in our Company’s
common stock; those executives who are also directors are subject to our stock ownership
guidelines for directors discussed above; |
| ● | Use
relevant competitive compensation information compiled from compensation surveys; and |
| ● | Provide
reasonable, double trigger change in control arrangements. |
Following
is a list of compensation practices that we have not engaged in because we do not believe that they are consistent with our stockholders’
interests:
What
we don’t do:
| ● | Re-pricing
or backdating of stock options; |
| ● | Hedging
or derivate transactions by our executive officers or directors; |
| ● | Excessive
perquisites for executives; |
| ● | Single
trigger or modified single trigger cash severance benefits followed by a change in control;
and |
| ● | Provision
for excise tax gross ups. |
We
prohibit hedging or engaging in collars, short sales, or other derivative transactions by our executive officers or directors.
We
adopted an executive compensation clawback policy in October 2023 to comply with the Nasdaq listing standards to be issued in connection
with the SEC rules promulgated under the Dodd-Frank Act. In the event of a material restatement of the Company’s financial results,
the Board is authorized to take such actions as it deems necessary and appropriate, including the recoupment of all or part of any bonus
or other compensation paid to an executive officer. The Board will consider whether any executive officer received compensation based
on the original financial statements because it appeared that the executive achieved financial performance targets that in fact were
not achieved based on the restatement. The Board will also consider the accountability of any executive officer whose acts or omissions
were responsible in whole or in part for the events that led to the restatement and whether such actions or omissions constituted misconduct.
In the event of significant misconduct resulting in a violation of a significant company policy, law, or regulation that causes material
harm to the Company, the Board is authorized to recoup compensation from senior executives.
Stockholder
Say-on-Pay Votes
We
provide our stockholders with the opportunity to cast an advisory vote to approve our executive compensation program (referred to as
a “say-on-pay proposal”). In general, the Compensation Committee believes the program in place, as in prior years, includes
a number of features that further the goals of the Company’s executive compensation program. The Compensation Committee will continue
to consider the outcome of the Company’s say-on-pay proposals when making future compensation decisions for the Named Executive
Officers.
The
Compensation Committee has adopted the following executive compensation approaches, which the Company believes help to achieve the objectives
for the executive compensation program and are generally favored by stockholders:
| ● | A
significant amount of the executives’ compensation is at risk. For fiscal year 2023,
target total direct compensation
was performance-based (annual cash incentive awards) and/or linked to the value of our stock
price (long-term equity incentive awards). |
| ● | Executives’
bonuses under our annual incentive program are principally based on the achievement of specific
performance objectives established at the beginning of the fiscal year by the Compensation
Committee. Historically the Compensation Committee has awarded the annual incentive bonus
for each year in the first quarter of the following year. |
| ● | Executives’
2023 annual equity awards were granted in the form of stock option awards. We believe the
grant of stock option awards further aligns the executives’ interests with those of
stockholders as the awards will not have value unless the Company’s stock price appreciates
after the award is granted. The stock option awards also provide a retention incentive as
they vest over a multi-year period. |
| ● | Executives
are also granted stock options and restricted stock awards at the time they join the Company
as these provide the same incentives as annual equity awards. These stock option grants and
restricted stock awards generally vest over a three or four-year period beginning on the
first-year anniversary of the date of grant. |
The
following table provides the components of Mr. Tardugno’s compensation for the last two years, reflecting his transition to Executive
Chairman in mid-2022:
| (In 000’s) | |
2023 | | |
Change | | |
2022 | | |
Change | |
| | |
| | |
| | |
| | |
| |
| Base Salary | |
$ | 370 | | |
| | | |
$ | 574 | | |
| | |
| Cash Incentive Awards | |
| - | | |
| | | |
| 383 | | |
| | |
| Cash Total | |
| 370 | | |
| | | |
| 956 | | |
| | |
| Option and Stock Awards | |
| 30 | | |
| | | |
| 507 | | |
| | |
| All Other Compensation | |
| 14 | | |
| | | |
| 623 | | |
| | |
| Total | |
$ | 414 | | |
| (80 | )% | |
$ | 2,086 | | |
| (10 | )% |
The
following table provides the components of Dr. Le Goff’s compensation for the last two years, reflecting her partial year of service
in 2022:
| (In 000’s) | |
2023 | | |
Change | | |
2022 | |
| | |
| | |
| | |
| |
| Base Salary | |
$ | 658 | | |
| | | |
$ | 264 | |
| Cash Incentive Awards | |
| - | | |
| | | |
| 157 | |
| Cash Total | |
| 658 | | |
| | | |
| 421 | |
| Option and Stock Awards | |
| 108 | | |
| | | |
| 406 | |
| All Other Compensation | |
| 15 | | |
| | | |
| 56 | |
| Total | |
$ | 781 | | |
| (12 | )% | |
$ | 883 | |
Executive
Compensation Philosophy and Procedures
The
Compensation Committee attempts to design executive compensation programs to achieve three principal objectives.
| ● | The
program is intended to attract, motivate, and retain talented executives with total compensation
that is competitive within the drug development and broader pharmaceutical and biotechnology
industry; |
| | | |
| ● | The
program is intended to create an alignment of interests between our executives and stockholders
such that a significant portion of each executive’s compensation varies with business
performance and is dependent on stock price appreciation; and |
| | | |
| ● | The
program is designed to award behavior which results in optimizing the commercial potential
of our development program. |
The
Compensation Committee’s philosophy is to pay competitive total compensation, comprised of annual salaries, annual cash incentives
and long-term equity awards (primarily stock options), with a significant percentage of total compensation directly linked with the Company’s
performance. The Compensation Committee considers the elements of the compensation package to be reflective of compensation packages
given to executives of companies of similar size in our industry. Compensation packages generally are designed to pay competitive salaries
at the median of the industry compensation surveys as described below, reward superior annual performance through incentive compensation
awards and allow executives to participate in increases in stockholder value through stock option and other stock-based grants.
In
determining executives’ compensation levels, the Compensation Committee relies primarily on its experience and judgment to provide
a package that it believes appropriately balances the need to attract and retain key executive talent with the creation of incentives
that will (i) enhance the growth of the Company, (ii) align the interests of management and stockholders by emphasizing rewards for Company
performance, while remaining competitive with compensation paid by other clinical stage biotechnology companies and (iii) provide value
for stockholders.
As
part of its decision-making process, the Compensation Committee takes into account the role and experience of each executive and reviews
industry surveys (specifically, the Radford Global Life Sciences Survey, which covers a broad cross-section of the biotechnology, pharmaceuticals
and life science industries and in which the Company participates) for information on the compensation paid to executive officers by
companies in our industry that are similar in size, breadth, stage of development or complexity to the Company. The Compensation Committee
also reviews custom surveys comparing executive compensation with that of specific peer groups (for example, pre-commercial biopharma
public companies, biopharma companies with under fifty employees, biopharma companies with a market cap above $100 million and biopharma
companies with a market cap below $100 million).
The
Compensation Committee has utilized Mercer as its independent compensation advisor to compare the Company’s executive and non-employee
director compensation levels, policies, practices and procedures to a set of peer companies selected by the Compensation Committee. Mercer
reported directly to the Compensation Committee and performed no work for management that was not under the Compensation Committee’s
purview. The Compensation Committee assessed the independence of Mercer pursuant to the relevant SEC rules and the Nasdaq Listing Rules
and concluded that no conflicts of interest exist. The Compensation Committee and Mercer reviewed the compensation surveys as summarized
above as it relates to elements of yearly performance and compensation of all members of the executive management team. As part of their
engagement, Mercer prepared and submitted to the Compensation Committee a report on the audit of the Company’s current compensation
benchmarking practices and its recommendations relating to executive and non-employee director compensation. Mercer concluded that the
Company uses appropriate market data sources to evaluate the competitive positioning of the top executives’ and the Board of Directors’
compensation packages and market positioning relative to those data sources is reasonable.
The
Compensation Committee believes that an appropriate level of input from our Executive Chairman and our Chief Executive Officer provides
a necessary and valuable perspective in helping the Compensation Committee formulate its own independent views on compensation. The Compensation
Committee takes measures to ensure its independence with respect to our Named Executive Officers’ compensation, excusing them from
portions of meetings to freely discuss their and the other Named Executive Officers performance and compensation. The Compensation Committee
made all final determinations on the compensation levels for all Named Executive Officers in 2023 and 2022.
A
discussion of each individual element of compensation and the compensation for each Named Executive Officer for 2023 follows:
Annual
Salaries
We
participate in an ongoing industry survey, the Radford Global Life Sciences Survey, as described above. The Compensation Committee compares
base salary for our executives with the levels provided to similarly situated executives and generally targets base salaries at levels
in the median of the survey data.
In
2023, the Compensation Committee reviewed each executive’s job responsibilities, individual performance, our corporate performance,
competitive market data, our total compensation expense and the base salaries of Mr. Tardugno, Dr. Le Goff, Dr. Anwer and Mr. Church
and approved the following annualized salary adjustments for each Named Executive Officer:
| Named Executive Officer | |
Fiscal 2023
Salary | | |
Fiscal 2022
Salary | | |
Change from
Previous Year | |
| Michael H. Tardugno | |
$ | 350,000 | | |
$ | 546,711 | | |
| (36.0 | )% |
| Corinne Le Goff | |
$ | 636,480 | | |
$ | 624,000 | | |
| 2.0 | % |
| Khursheed Anwer | |
$ | 400,899 | | |
$ | 385,480 | | |
| 4.0 | % |
| Jeffrey W. Church | |
$ | 428,615 | | |
$ | 412,130 | | |
| 4.0 | % |
Incentive
Compensation
We
have an incentive compensation plan in which all members of our senior management participate. The plan is performance-driven based on
Company and individual personal operational objectives established at the beginning of the year by the Compensation Committee in consultation
with our Chief Executive Officer. These operational objectives include the completion of certain development projects, capital raising,
cost controls, business development and profit and loss goals, which we believe are ultimately linked to creating stockholder value.
These objectives are designed to achieve timely and efficient product development including completion of clinical studies and regulatory
approvals. Each member of senior management is individually evaluated based on the achievement of the Company’s overall operational
objectives and each individual’s personal performance against these objectives. This component of compensation is provided, among
other reasons, to create incentives for members of senior management to meet short-term and medium-term performance goals of the Company,
without regard to stock price. Objectives are weighted in terms of overall importance to meeting the Company’s operating plan.
The
total annual incentive compensation a member of senior management can earn is based on his or her level within management, with more
senior members of management eligible to earn a higher percentage of their base salary as incentive compensation than less senior members.
We believe it is appropriate for executives to have a greater percentage of their compensation “at-risk” based on performance
as they generally have a greater role in the achievement of objectives that we believe promote the growth of the Company and the creation
of value for stockholders. The actual amount of incentive compensation paid to any member of senior management is determined on a sliding
scale dependent on how successful such member of senior management was in achieving the objectives upon which his or her incentive compensation
was targeted and the relative importance to the Company of the objectives achieved. The Compensation Committee retains complete discretion
to adjust any incentive compensation down and retains discretion as to whether to grant any incentive compensation to any individual
member of senior management at all.
Under
the incentive compensation plan for 2023, the Compensation Committee established a number of annual corporate goals that include research
and development, regulatory, manufacturing, organizational and financial goals which we believe are essential to building stockholder
value. The relative weighting of these corporate goals is based upon our assessment of the importance of each goal in creating value
for the Company and our stockholders. Each corporate goal was established so that significant levels of achievement were required to
meet the goal. Following the conclusion of the annual performance period, the level of achievement for each corporate goal was assessed
by the Compensation Committee in March each year. The Compensation Committee will determine whether each corporate goal had been met,
exceeded, or not satisfied. In addition, in assessing corporate performance, the Compensation Committee had the discretion to factor
in other significant corporate events that occurred during the performance period, which could have resulted in an upward or downward
adjustment in the determination of corporate performance. After considering the level of attainment of each corporate goal and other
appropriate corporate performance factors, the Compensation Committee will assign the overall corporate performance rating, which could
have ranged from 0% to 130%. A maximum bonus pool is established by multiplying the overall corporate performance rating by the aggregate
target bonuses for all individuals in the incentive plan. Certain individual downward adjustments may be made at the discretion of the
Compensation Committee. The aggregate of all individual bonuses awarded under the policy cannot exceed the maximum bonus pool available
such that the cost of bonuses ultimately reflects our overall performance and is not inflated by any individual performance rating.
After
the corporate performance rating is determined by the Compensation Committee, the individual performance of each Named Executive Officer
is reviewed by the Compensation Committee in order to determine the appropriate annual performance percentage rating to be assigned to
the executive for the performance period. Each Named Executive Officer’s actual annual performance-based incentive compensation
payment is based on a combination of our corporate performance rating and their individual performance rating. The actual annual performance
bonus compensation award for each Named Executive Officer is determined in the Compensation Committee’s sole discretion, and the
maximum payout for each Named Executive Officer could be up to 130% of his target annual performance-based compensation target.
The
Named Executive Officers were each assigned a target annual incentive for 2023 ranging from 45% to 100% of base salary. The table below
shows the target annual incentive assigned to each Named Executive Officer for 2023 both as a dollar amount and as a percentage of base
salary.
| Name | |
Target Annual
Incentive
for 2023 | | |
Target
Annual
Incentive for 2023 (%
of Base Salary) | |
| Michael H. Tardugno | |
$ | 350,000 | | |
| 100 | % |
| Corinne Le Goff | |
$ | 458,266 | | |
| 72 | % |
| Khursheed Anwer | |
$ | 200,450 | | |
| 50 | % |
| Jeffrey W. Church | |
$ | 192,877 | | |
| 45 | % |
Corporate
goals and targets are set at the beginning of the fiscal year and are approved by the Compensation Committee and Board. Executives’
bonuses under the Company’s annual incentive program are based on the achievement of specific performance measures established
at the beginning of the fiscal year.
For
2023, the following corporate objectives were set and will be assessed in March 2024.
| 1. | GEN-1
Development Objectives (20%) – (i) Monitor OVATION 2 study and statistical analysis
of one additional data cut at 75% of events, (ii) Complete enrollment of Break Through Cancer
Study, MRD< Phase 1 study, and (iii) Define registrational strategy and amend MRD protocol
accordingly. |
| 2. | PlaCCine®
Modality Research & Development Objectives (40%) – (i) Strengthen PlaCCine®
vectors and backbone, including collaborations with The Wistar Institute, INOVIO Pharmaceuticals,
Inc., Acuitas Therapeutics Inc. and ZY Therapeutics Inc.; (ii) file IND for COVID-19 booster,
which will commence with First Patient In in the last quarter of 2023; (iii) Develop PlaCCine®
with next pathogen (pre-IND preparation has been completed); and (iv) Develop pre-clinical
mouse data evidence of new modality in cancer vaccines. |
| 3. | Technology
Development Objectives (20%) – (i) Finalize a merger agreement and subsequent integration
or develop an internal program for cancer vaccine; and (ii) Proactively search for and identify
synergistic technology, product candidates and/or target companies for acquisition. |
| 4. | Financing
Objectives (20%) – (i) Raise above $4 million before the end of 2023 through (x) equity
financing, (y) sales under the at-the-market offering program, and (z) sale of New Jersey
Net Operating Losses and/or non-dilutive partnerships, and (ii) Achieve objectives within
budget or latest budget updates. |
| 5. | Bonus
Objective (30%) – (i) Monetize PlaCCine® modality through an out-license
or collaboration with pharma or through a major grant program and (ii) file IND for PlaCCine®
with next pathogen by December 31, 2023. |
Previously
for 2022, the corporate objectives and relative weightings assigned to each objective included the completion of certain development
objectives, capital raising, cost controls, business development and profit and loss goals, which we believe are ultimately linked to
creating stockholder value. The following 2022 corporate goals and targets were heavily weighted toward the clinical development of IMNN-001
for ovarian cancer, including targets for the timely completion of enrollment of the OVATION 2 Study, initiation of a second clinical
study with IMNN-001 in combination with Avastin® and expansion of the Company’s development pipeline with a new product candidate
(PlaCCine). The corporate goals also included targets for corporate development objectives related to the transition of the Company to
an immuno-oncology and vaccine focus including the successful rebranding of the Company, the addition of key competencies to support
vaccine clinical trials and the implementation of an executive succession plan to transition leadership with immuno-oncology and vaccine
experience. There were also a series of financial and business development goals to ensure strong cash management and that sufficient
levels of cash will be available to extend the Company’s operating roadway for at least twenty-four months.
The
following 2022 objectives were designed to achieve timely and efficient product development including completion of clinical studies
and regulatory approvals and in total represent a potential payout at 130% of the executive’s bonus target if all objectives are
achieved. The Board, upon the recommendation of the Compensation Committee, reviewed our achievement against our 2022 corporate goals
and determined the achievement level to have been 70% of target.
| 1. | Research
& Development Objectives (35%) – (i) Complete enrollment of the OVATION 2 Study
by the third quarter of 2022 within budget while maintaining key quality metrics (15%), (ii)
Initiate a second clinical study with IMNN-0011 in combination with Avastin® which will
be principally funded (~50%) by a research foundation (10%) and (iii) Add at least one new
product technology to the company’s development pipeline by the fourth quarter of 2022
(10%). (THE FIRST AND THIRD R&D OBJECTIVES WERE MET, RESULTING IN 25% of 35% OF OBJECTIVES
MET) |
| 2. | Business
Development Objectives (20%) - Develop and implement a strategy to achieve 25% of common
stock ownership by institutional investors. (OBJECTIVES NOT MET) |
| 3. | Financial
Objectives (25%) - Manage cash and operating expenses, ensure cash flows are within the operating
budget and maintain sufficient levels of cash to extend operating roadway into 2025. (ALL
OBJECTIVES MET) |
| 4. | Corporate
Development Objectives (20%) - Successfully rebrand the Company, develop key competencies
to support vaccine clinical trials, and implement the executive succession plan to effectively
transition leadership with immuno-oncology and vaccine experience. (ALL OBJECTIVES MET) |
| 5. | Bonus
Objective (30%) - Monetize GEN-1 asset through an out-license or collaboration with pharma
or through a major grant program. (OBJECTIVE NOT MET) |
Each
of the Named Executive Officers will participate in the annual incentive plan for 2023. The initial target bonus amount for each executive
was established pursuant to their employment agreement and is adjusted periodically by the Board. Historically the Compensation Committee
has awarded the annual incentive bonus for each year in the first quarter of the following year. In the first quarter of 2023, the Compensation
Committee approved the amount and the payment of the incentive bonus for 2022 for each of the Named Executive Officers. Please see the
“Non-Equity Incentive Plan Compensation” column in the 2023 Summary Compensation Table.
Stock-Based
Compensation
We
grant long-term equity awards to its executives and other employees that are designed to align the interests our Company employees and
stockholders, encouraging participants to maintain and increase their ownership our Company common stock with the opportunity to benefit
from our long-term performance. Our equity program has generally consisted of grants of stock options and occasional grants of stock
awards. Because the exercise price of the options is based on the market price of our common stock on the date of grant, the Compensation
Committee believes that options help to align the interests of our executives with those of its stockholders as the options will not
have value unless there is appreciation in our stock price. The options also serve as a retention tool since they generally vest over
a three to four-year period following the grant date. This approach is designed to focus key employees on sustainable growth of the Company
and the creation of stockholder value over the long term.
Annual
grants to the Named Executive Officers are generally made during the first half of the fiscal year. Annual grants are determined by the
Compensation Committee based on review of each individual’s past performance as well as their potential impact on the Company’s
future performance. Grants may also be made at other times during the fiscal year in certain circumstances (such as a grant in connection
with the hiring or promotion of an executive or other special circumstance as deemed appropriate by the Compensation Committee).
Material
Terms of Option Grants During 2023
Each
of the stock options awarded to the Named Executive Officers in 2023 and reported in the 2023 Grants of Plan-Based Awards Table below
was granted under, and is subject to, the terms of the IMUNON, INC. 2018 Stock Incentive Plan (the “2018 Plan”). The 2018
Plan is administered by the Compensation Committee, which has authority to interpret the plan provisions and make all required determinations
under the plan. This authority includes making required proportionate adjustments to outstanding awards upon the occurrence of certain
corporate events such as reorganizations, mergers, and stock splits, and making provision to ensure that any tax withholding obligations
incurred in respect of awards are satisfied. Awards granted under the plan are generally only transferable to a beneficiary of a Named
Executive Officer upon his death. Under the terms of the 2018 Plan, if there is a change in control of the Company, each Named Executive
Officer’s outstanding awards granted under the plan will generally terminate, unless the Compensation Committee provides for the
substitution, assumption, exchange or other continuation or settlement (in cash, securities, or property) of the outstanding awards.
The Compensation Committee has the discretion to provide for outstanding awards to become vested in connection with a change in control.
Each
option granted to the Named Executive Officers in 2023 was granted with a per-share exercise price equal to the closing price of our
common stock on the grant date. Each option is scheduled to vest in three installments, with one-third vesting on the date of grant and
the balance vesting in equal annual installments over each of the next two years, subject in each case to the executive’s continued
employment through the applicable vesting date and has a maximum term of ten years. However, vested options may terminate earlier in
connection with a change in control transaction or a termination of the Named Executive Officer’s employment. Subject to any accelerated
vesting that may apply in the circumstances, the unvested portion of the option will immediately terminate upon a termination of the
Named Executive Officer’s -employment.
2023
OUTSTANDING EQUITY AWARDS AT YEAR-END
The
following table summarizes the unexercised stock options held by each of the Named Executive Officers as of December 31, 2023. None of
the Named Executive Officers held any other outstanding stock awards as of December 31, 2023.
| | |
| |
Option Awards | | |
|
| Name | |
Grant Date | |
No. of Securities
Underlying
Unexercised
Options (#)
Exercisable | | |
No. of Securities
Underlying
Unexercised
Options (#)
Unexercisable | | |
Option
Exercise
Price ($) | | |
Option
Expiration
Date |
| | |
| |
| | |
| | |
| | |
|
| Michael H. Tardugno | |
10/3/2019 | |
| 4,332 | | |
| - | | |
$ | 25.80 | | |
10/3/2029 |
| Executive Chairman | |
3/04/2022 | |
| 53,333 | | |
| 26,667 | (1) | |
$ | 4.60 | | |
3/04/2032 |
| | |
6/13/2022 | |
| 60,000 | | |
| 30,000 | (1) | |
$ | 1.93 | | |
6/13/2032 |
| | |
3/17/2023 | |
| 8,334 | | |
| 16,666 | (1) | |
$ | 1.32 | | |
3/17/2033 |
| Corinne Le Goff | |
7/18/2022 | |
| 44,250 | | |
| 132,750 | (2) | |
$ | 1.95 | | |
7/18/2032 |
| President & CEO | |
3/17/2023 | |
| 30,000 | | |
| 60,000 | (1) | |
$ | 1.32 | | |
3/17/2033 |
| Khursheed Anwer | |
10/3/2019 | |
| 2,832 | | |
| - | | |
$ | 25.80 | | |
10/3/2029 |
| Executive VP & CSO | |
3/04/2022 | |
| 13,333 | | |
| 6,667 | (1) | |
$ | 4.60 | | |
3/04/2032 |
| | |
6/13/2022 | |
| 13,333 | | |
| 6,667 | (1) | |
$ | 1.93 | | |
6/13/2032 |
| | |
3/17/2023 | |
| 13,334 | | |
| 26,666 | (1) | |
$ | 1.32 | | |
3/17/2033 |
| Jeffrey W. Church | |
10/3/2019 | |
| 2,334 | | |
| - | | |
$ | 25.80 | | |
10/3/2029 |
| Executive VP & CFO | |
6/13/2022 | |
| 33,333 | | |
| 16,6673 | (1) | |
$ | 1.93 | | |
6/13/2032 |
| | |
3/17/2023 | |
| 13,334 | | |
| 26,666 | (1) | |
$ | 1.32 | | |
3/17/2033 |
| (1) |
Each
of these stock option grants vest in three equal installments, with one-third of the grant vesting each immediately, on the first
anniversary, and on the second anniversary of the date of grant. |
| (2) |
Each
of these stock option grants vest in four equal installments, with one-fourth of the grant vesting each on the first, second, third,
and fourth anniversary of the date of grant. |
2023
Option Exercises and Stock Vested
During
2023, none of the Named Executive Officers exercised any of their vested stock options. Dr. Le Goff’s Restricted Stock vested in
2023. No other officers were awarded shares of stock during 2023.
Other
Compensation
Executive
officers are eligible to participate in our medical and other welfare benefit plans and for other benefits, in each case on generally
the same basis as other employees. We maintain a 401(k) plan for our employees. Other than the 401(k) plan, we do not offer any of our
employees a pension plan, retirement plan or other forms of compensation paid out upon retirement. The Company matches up to 50% of the
first 6% of employee contributions. Dr. Anwer received a $6,000 discretionary spending allowance. During 2022, in his capacity as President
and Chief Executive Officer Chief, Mr. Tardugno received a $23,000 discretionary spending allowance. Mr. Tardugno does not receive a
discretionary spending allowance as Executive Chairman.
Post-Employment
Obligations
We
believe that severance protections, particularly in the context of a change in control transaction, can play a valuable role in attracting
and retaining key executive officers. Under their employment agreements, each of the Named Executive Officers would be entitled to severance
benefits in the event of a termination of employment by the Company without cause. We have determined that it is appropriate to provide
the executives with severance benefits under these circumstances in light of their positions with us and as part of their overall compensation
package.
We
believe that the occurrence, or potential occurrence, of a change in control transaction will create uncertainty regarding the continued
employment of our executive officers as many change in control transactions result in significant organizational changes, particularly
at the senior executive level. In order to encourage the Company’s executive officers to remain employed with us during an important
time when their prospects for continued employment following the transaction may be uncertain, we provide each of Mr. Tardugno, Dr. Le
Goff, Dr, Anwer, and Mr. Church with enhanced severance benefits if his employment is actually or constructively terminated by the Company
without cause in connection with a change in control.
Tax
Considerations
Section
162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), provides that annual compensation in excess of $1,000,000
paid to the Chief Executive Officer or certain of the Company’s other executive officers will not be deductible by a publicly held
corporation for federal income tax purposes. Historically, there was an exception to this annual deduction limit for compensation meeting
the definition of “performance-based compensation” under Section 162(m) of the Code. With the enactment of tax reform in
December 2017, the performance-based compensation exception under Section 162(m) of the Code has been repealed, except with respect to
certain grandfathered arrangements. The Compensation Committee considers the anticipated tax treatment to the Company when determining
executive compensation and, historically, has sought to structure its executive compensation program in a way that preserved the deductibility
of compensation payments and benefits, subject to the satisfaction of other applicable regulatory requirements. It should be noted, however,
that tax deductibility is one of many factors considered by the Compensation Committee in determining executive compensation and the
Compensation Committee maintains the flexibility to compensate the Named Executive Officers in a manner it deems appropriate to attract,
retain, and motivate highly qualified executive officers.
Employment
Agreement with Michael H. Tardugno
In
March 2016, the Company and Mr. Tardugno entered into an employment agreement, effective March 30, 2016 (the “March 2016 Agreement”),
which superseded the previous employment agreement with Mr. Tardugno. Subject to earlier termination pursuant to the terms of the March
2016 Agreement, the initial term of the agreement ended on January 31, 2018, with automatic one-year renewals thereafter, unless either
party provides a notice of non-renewal. Mr. Tardugno’s March 2016 Agreement provided for an annual base salary of $547,342 subject
to annual adjustment by the Board or the Compensation Committee. Mr. Tardugno was also eligible for an annual performance bonus from
the Company, pursuant to the Company’s management incentive bonus program in effect from time to time. The Company agreed to reimburse
Mr. Tardugno for all reasonable business expenses and to provide a discretionary spending allowance. Under the March 2016 Agreement,
the Company agreed to grant to Mr. Tardugno, at the time of its usual annual grant to employees, annual stock options to purchase shares
of the Company’s common stock as the Board of Directors or the Compensation Committee shall determine.
Effective
July 18, 2022, Mr. Tardugno transitioned from his roles as Chairman, President and Chief Executive Officer to the position of Executive
Chairman of the Board. Mr. Tardugno and the Company entered into an employment agreement effective as of July 18, 2022 that supersedes
the March 2016 Agreement. The agreement has a term ending on December 31, 2024, with the option for a one-year extension. Under the agreement,
Mr. Tardugno will receive a base salary of $500,000 (prorated to $240,000) for 2022 and a base salary of $350,000 for 2023 and 2024.
Mr. Tardugno will remain eligible for annual performance bonuses and equity awards and may participate in all compensation and benefit
programs generally made available to other senior executives. The Company will reimburse Mr. Tardugno for all reasonable business expenses
but he will no longer have a discretionary spending allowance. In the event of termination by the Company other than for cause, Mr. Tardugno
will receive an amount equal to one year’s salary as a severance payment.
Employment
Agreement with Corinne Le Goff
The
Company and Dr. Le Goff entered into an employment agreement effective as of July 18, 2022, in connection with her appointment as President
and Chief Executive Officer, Pursuant to the employment agreement, the Company will pay Dr. Le Goff an initial salary of $624,000 and
a signing bonus $50,000. Dr. Le Goff’s targeted annual performance bonus is 72% of her annual base salary (pro-rated for the year
ended December 31, 2022). Dr. Le Goff also received (i) an option to purchase 177,000 shares of the Company’s common stock that
will vest with respect to 25% of the subject shares on July 18, 2023 and the remaining 75% percent will vest in equal quarterly installments
thereafter such that the stock option will be fully vested and exercisable as of the fourth anniversary of July 18, 2022, and (ii) a
restricted stock award of 53,000 restricted shares that will vest on July 18, 2023. Dr. Le Goff will not receive any additional compensation
for her service on the Board. The agreement has no set term of employment. In the event of termination by the Company other than for
cause, Dr. Le Goff will receive an amount equal to one year’s salary as a severance payment.
Employment
Agreements with Other Named Executed Officers
Jeffrey
Church
The
Company and Mr. Church entered into an employment offer letter on June 15, 2010. Mr. Church’s employment is “at-will;”
however, subject to Mr. Church’s promotion to Executive Vice President in January 2019, if we terminate Mr. Church’s employment
for any reason other than just cause, we will pay Mr. Church a salary continuation and COBRA premiums for up to twelve months. The salary
and COBRA premiums will cease at the end of the twelve-month period or if he finds new employment prior to the twelve-month period, the
benefit will be reduced by the amount of compensation which he will receive from any new employer. Mr. Church’s right to receive
these severance benefits is subject to his providing a release of claims in favor of the Company.
Khursheed
Anwer
The
Company and Dr. Anwer entered into an employment offer letter effective as of June 20, 2014. Dr. Anwer’s employment with us is
“at-will”; however, subject to the retention and severance agreement between the Company and Dr. Anwer dated as of May 28,
2014, if we terminate Dr. Anwer’s employment without cause (as such term is defined in the retention and severance agreement),
he will be entitled to receive cash severance equal to 12 months of his base salary and reimbursement of his COBRA premiums for up to
12 months. Dr. Anwer’s right to receive these severance benefits is subject to his providing a release of claims in favor of the
Company.
CIC
Agreements
We
have entered into amended and restated double-trigger change in control severance agreements (CIC Agreements) with each of the Named
Executive Officers (other than Dr. Anwer, who is not subject to such an agreement) to provide severance benefits to these executives
should their employment terminate in certain circumstances in connection with a change in control of the Company (a “CIC”).
Under
the amended and restated CIC Agreements, in the event that, on or within two years after a CIC, we terminate the executive’s employment
without cause or in the event that the executive terminates his employment for good reason, the executive would be entitled to receive
a cash lump sum payment equal to two (2) times the sum of (1) the executive’s annual base salary and (2) the executive’s
target annual bonus for the fiscal year in which the termination occurs. (For these purposes, the terms “cause,” “good
reason” and “change in control” are each defined in the CIC Agreement.) In addition, we will pay or reimburse the executive
for the cost of COBRA premiums and life insurance coverage for the executive and his eligible dependents, in each case for a period of
up to two years following the termination. The executive would also be entitled to full acceleration of his then-outstanding equity awards
granted to him by us. However, as to any equity award agreement that is subject to performance-based vesting requirements, the vesting
of such an award will continue to be governed by its terms. In the case of options or similar awards, the award would generally remain
exercisable for the remainder of the original term of the award (or, in the case of awards that vested after the date of the CIC, for
the lesser of 12 months following the last day such award would have been exercisable under the applicable award agreement and the remainder
of the original term). The benefits provided under the CIC Agreement are in addition to, and not in lieu of, any severance benefits the
executive may be entitled to receive in connection with the termination of his employment under any other agreement with the Company.
The executive’s right to benefits under the CIC Agreement is subject to his execution of a release of claims in favor of the Company
upon the termination of his employment. The CIC Agreements do not provide for any tax gross ups.
Potential
Payments Upon Termination or Change in Control
As
described above under “Narrative Disclosure to Summary Compensation Table,” the Company has entered into agreements with
each of the Named Executive Officers currently employed by the Company that provide benefits that may become payable to the executives
in connection with a termination of their employment. The Company has also entered into agreements with Mr. Tardugno, Dr. Le Goff and
Mr. Church that provide benefits that may become payable to the executives in connection with a termination of employment following a
CIC of the Company. If in the event the Named Executive Officer is entitled to receive severance benefits in connection with a termination
of employment under both their severance agreement and their CIC agreement, the executive shall be entitled to receive the benefits from
both agreements. The first table below indicates the benefits that would be payable to each Named Executive Officer if a termination
of employment in the circumstances described above had occurred on December 31, 2023 outside of a CIC. The second table below indicates
the benefits that would be payable to each executive if a change in control of the Company and such a termination of employment had occurred
on that date.
| Severance Benefits (Outside of a Change in Control) | |
| | |
| | |
| | |
| |
| Name | |
Cash Severance | | |
Continuation of
Health/Life Benefit | | |
Equity Acceleration | | |
Total | |
| | |
| | |
| | |
| | |
| |
| Michael H. Tardugno | |
$ | 350,000 | | |
$ | – | | |
| – | | |
$ | 350,000 | |
| Corinne Le Goff | |
$ | 477,360 | | |
$ | 30,189 | | |
| – | | |
$ | 507,549 | |
| Khursheed Anwer | |
$ | 400,899 | | |
$ | 28,242 | | |
| – | | |
$ | 429,141 | |
| Jeffrey W. Church | |
$ | 428,615 | | |
$ | 12,921 | | |
| – | | |
$ | 441,536 | |
| Change of Control Severance Benefits | |
| | |
| | |
| | |
| |
| Name | |
Cash Severance | | |
Continuation of
Health/Life Benefit | | |
Equity Acceleration | | |
Total | |
| | |
| | |
| | |
| | |
| |
| Michael H. Tardugno | |
$ | 350,000 | | |
$ | – | | |
| – | | |
$ | 350,000 | |
| Corinne Le Goff | |
$ | 477,360 | | |
$ | 30,189 | | |
| – | | |
$ | 507,549 | |
| Jeffrey W. Church | |
$ | 1,242,984 | | |
$ | 25,842 | | |
| – | | |
$ | 1,268,826 | |
DIRECTOR
COMPENSATION
2023
Director Compensation Table
The
following table sets forth the cash and noncash compensation paid to the Company’s directors who are not employed by the Company
or any of its subsidiaries (“Non-Employee Directors”) for the year ended December 31, 2023. Other than as set forth in the
table, we did not pay any compensation, make any equity awards or non-equity awards to, or pay any other compensation to any of the Non-Employee
Directors in 2023. The compensation paid to any director who was also one of our employees during fiscal year 2023 is presented in the
“2023 Summary Compensation Table” and the information that follows that table. Such employee directors do not receive separate
compensation for their service on the Board of Directors or any of its Committees.
| Name (1) | |
Fees Earned
($) | | |
Option Awards
($) (2) | | |
Total
($) | |
| James E. Dentzer | |
| 58,800 | | |
| 2,395 | | |
| 61,195 | |
| Frederick J. Fritz | |
| 55,800 | | |
| 2,395 | | |
| 58,195 | |
| Donald P. Braun | |
| 70,500 | | |
| 2,395 | | |
| 72,895 | |
| Stacy R. Lindborg | |
| 41,700 | | |
| 2,395 | | |
| 44,095 | |
| Christine A. Pellizzari | |
| 45,300 | | |
| 2,395 | | |
| 47,695 | |
| (1) |
Compensation
earned by Michael H. Tardugno and Corinne Le Goff for the year ended December 31, 2023 is presented in the Summary Compensation Table.
Employee directors do not receive separate compensation for their service on the Board of Directors or any of its Committees. |
| |
|
| (2) |
The
value reported for Option Awards is the aggregate grant date fair value of stock options granted to each Director in 2023, determined
in accordance with FASB ASC Topic 718. The assumptions for making the valuation determinations are set forth in Note 12 in the Financial
Statements. As of December 31, 2023, Mr. Dentzer had 4,667 option awards outstanding; Mr. Fritz had 18,333 option awards outstanding;
Dr. Braun had 15,833 option awards outstanding; and Dr. Lindborg and Ms. Pellizzari each had 9,666 option awards outstanding. |
The
following table sets forth stock option grants awarded to the Company’s Non-Employee Directors for the year ended December 31,
2023. Stock option grants to any director who was also one of our employees during fiscal year 2023 are presented in the “2023
Grants of Plan-Based Awards Table” and the information that follows that table. Employee directors do not receive separate equity
awards for service on the Board of Directors or any of the Board committees.
| | |
Non-Employee Director Stock Option
and Grant Awards Table | |
| Name | |
Number
of
Options
Granted (#)
(1) | | |
Exercise Price ($) | | |
Grant Date | |
Expiration
Date | |
Grant Date
Fair Value
($) | |
| | |
| | |
| | |
| |
| |
| |
| James E. Dentzer | |
| 2,000 | | |
$ | 1.32 | | |
3/17/2023 | |
3/17/2033 | |
$ | 1.20 | |
| Frederick J. Fritz | |
| 2,000 | | |
$ | 1.32 | | |
3/17/2023 | |
3/17/2033 | |
$ | 1.20 | |
| Donald P. Braun | |
| 2,000 | | |
$ | 1.32 | | |
3/17/2023 | |
3/17/2033 | |
$ | 1.20 | |
| Stacy R. Lindborg | |
| 2,000 | | |
$ | 1.32 | | |
3/17/2023 | |
3/17/2033 | |
$ | 1.20 | |
| Christine A. Pellizzari | |
| 2,000 | | |
$ | 1.32 | | |
3/17/2023 | |
3/17/2033 | |
$ | 1.20 | |
(1)
|
Each
of these stock option grants vest in three equal installments, with one-third of the grant vesting on the date of grant and one third
of the grant vesting on each of the first and second anniversary of the date of grant, subject to the applicable director’s
continued service as a member of our Board through each applicable vesting date. |
NARRATIVE
DISCLOSURE TO DIRECTOR COMPENSATION TABLE
During
the year ended December 31, 2023, each Non-Employee Director of the Company received annual cash compensation in the amount of $30,500
payable in quarterly installments, and an additional $2,200 for attendance at regular meetings of the Board of Directors and $1,200 for
each meeting of a committee of the Board of Directors that was not held in conjunction with a meeting of the Board of Directors. Each
Non-Employee director is reimbursed for the out-of-pocket costs of attending meetings of the Board of Directors and of committees of
the Board of Directors. In 2023, the Chairman of the Audit Committee received an additional annual cash fee of $13,500 and the Chairman
of the Compensation Committee received an additional annual cash fee of $10,500.
Acting
on behalf of our Board of Directors, Dr. Braun also received fees totaling $30,000 in 2023 for his role as a strategic advisor to our
Executive Chairman and our Chief Executive Officer. Dr. Braun’s responsibilities as a strategic advisor include the following:
(i) provide strategic and tactical advice to our Chief Executive Officer; (ii) evaluate international subsidiary options; (iii) develop
strategies to secure business relationships other than in the U.S.; and (iv) having done both (ii) and (iii), develop high potential
ex-US market strategies that address the objectives for broad and profitable sales of its commercial products.
EQUITY
COMPENSATION PLAN INFORMATION
The
following table provides certain aggregate information with respect to all of our equity compensation plans in effect as of December
31, 2023.
| Plan Category | |
(a) Number of securities
to
be issued upon
exercise of outstanding
options, warrants and rights | | |
(b) Weighted-
average exercise
price
of outstanding
options,
warrants and
rights | | |
(c) Number of
Securities remaining
available for
future issuance
under equity compensation
plans (excluding securities reflected in
column (a) | |
| | |
| | |
| | |
| |
| Equity compensation plans approved by security holders | |
| 772,297 | (1) | |
$ | 3.09 | | |
| 1,202,776 | (2) |
| Equity compensation plans not approved by security holders | |
| 294,751 | (3) | |
| 1.59 | | |
| – | |
| Total | |
| 1,067,048 | | |
$ | 2.68 | | |
| 1,202,776 | |
| (1) |
Includes
both vested and unvested options to purchase common stock and unvested stock grants under the 2018 Plan. These awards have a weighted
average remaining term of 8.7 years. |
| |
|
| (2) |
Represents
shares available for award grant purposes under the 2018 Plan. Subject to certain express limits of the plan, shares available under
the plan generally may be used for any type of award authorized under that plan including options, stock appreciation rights, restricted
stock and other forms of awards granted or denominated in shares of our common stock or units of our common stock. |
| |
|
| (3) |
Includes
both vested and unvested options to purchase common stock and unvested stock grants under inducement grants provided certain employees
as an inducement to accept employment with the Company. These awards have a weighted average remaining term of 9.0 years. These grants
are similar to those granted under the 2018 Plan. |
BENEFICIAL
OWNERSHIP OF COMMON STOCK
The
following table is furnished by the Company and sets forth certain information known to the Company regarding the beneficial ownership
of the Company’s common stock as of December 31, 2023 by:
| ● | each
person or group known by us to own beneficially more than five percent of the outstanding
common stock; |
| ● | each
of our directors, as well as each executive officer named in the 2023 Summary Compensation
Table appearing under the heading “Executive and Director Compensation;” and |
| ● | our
directors and executive officers as a group. |
We
determine beneficial ownership in accordance with the rules of the SEC. Under SEC rules, beneficial ownership for purposes of this table
takes into account shares as to which the individual has voting or investment power as well as shares that may be acquired within 60
days. Shares of common stock subject to options that are currently exercisable or that become exercisable within 60 days of December
31, 2023, are treated as outstanding and beneficially owned by the holder of such options. However, these shares are not treated as outstanding
for purposes of computing the percentage ownership of any other person. Unless otherwise indicated or as to the interests of spouses,
the persons included in the table have sole voting and investment power with respect to all shares beneficially owned thereby.
| NAME OF BENEFICIAL OWNER | |
NUMBER OF
SHARES OF
COMMON
STOCK
BENEFICIALLY
OWNED | | |
PERCENT OF
SHARES OF
COMMON
STOCK
OUTSTANDING | |
| James E. Dentzer*
(1) | |
| 2,445 | | |
| ** | |
| Stacy R. Lindborg* (2) | |
| 6,666 | | |
| ** | |
| Frederick J. Fritz*
(3) | |
| 23,766 | | |
| ** | |
| Donald P. Braun* (4) | |
| 10,930 | | |
| ** | |
| Christine Pellizzari*
(5) | |
| 6,666 | | |
| ** | |
| Michael H. Tardugno*
(6) | |
| 142,513 | | |
| 1.52 | % |
| Corinne Le Goff* (7) | |
| 73,950 | | |
| ** | |
| Khursheed Anwer* (8) | |
| 45,688 | | |
| ** | |
| Jeffrey W. Church* (9) | |
| 365,241 | | |
| ** | |
| Directors and Executive Officers as a group (10 persons) (10) | |
| 365,241 | | |
| 3.89 | % |
| * |
The
address of each of the individuals named is c/o IMUNON, INC., 997 Lenox Drive, Suite 100, Lawrenceville, NJ 08648. |
| |
|
| ** |
Less
than one percent. |
| |
|
| (1) |
Includes
2,445 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
| |
|
| (2) |
Includes
6,666 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
| |
|
| (3) |
Includes
23,766 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
| |
|
| (4) |
Includes
10,930 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
| (5) |
Includes
6,666 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
| |
|
| (6) |
Includes
142,513 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
| |
|
| (7) |
Includes
73,950 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
| |
|
| (8) |
Includes
45,688 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
| |
|
| (9) |
Includes
52,617 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
| |
|
| (10) |
Includes
365,241 shares of common stock underlying options currently exercisable or exercisable within 60 days of December 31, 2023. |
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our
Code of Ethics requires all of our directors, officers and employees to give their complete loyalty to the best interests of the Company
and to avoid any action that may involve, or that even may appear to involve, a conflict of interest with the Company. The Code of Ethics
also requires any of our directors, officers or employees who become aware of a conflict or potential conflict to bring it to the attention
of supervisor, manager or other appropriate personnel or consult the compliance procedures provided in the Code of Ethics. The Board
of Directors reviews and approves or ratifies all relationships and transactions between us and (i) any of our directors or executive
officers, (ii) any nominee for election as a director, (iii) any security holder who is known to us to own beneficially or of record
more than five percent of our common stock or (iv) any member of the immediate family of any of the foregoing.
On
November 16, 2022, the Company entered into a Convertible Note Purchase Agreement with Transomic Technologies, Inc. (“Transomic”)
whereby the Company purchased $375,000 of convertible notes secured by certain assets held by Transomic and warrants. The notes, which
are included in other assets, bear interest at 5% per annum, with interest and principal due on December 31, 2026. The notes are classified
as available for sale. The warrants are exercisable upon closing and expire 36 months from the date of issuance or November 22, 2025.
As a result of Mr. Tardugno’s appointment to the Board of Transomic, the Company is disclosing the notes receivable as a related
party transaction.
DESCRIPTION
OF CAPITAL STOCK
The
following summary of the general terms and provisions of our registered capital stock of Imunon, Inc. (“Imunon”, “we”,
“our”) does not purport to be complete and is subject to, and qualified in its entirety by, reference to our Amended and
Restated Certificate of Incorporation (“Certificate of Incorporation”) and our Amended and Restated Bylaws (“Bylaws”),
each of which is incorporated by reference as an exhibit to our most recent Annual Report on Form 10-K filed with the SEC, and applicable
provisions of the Delaware General Corporation Law (the “DGCL”). Our Common Stock, par value $0.01 per share is registered
pursuant to Section 12(b) of the Exchange Act and trades on the Nasdaq Capital Market under the symbol “IMNN.” The summaries
below do not purport to be complete statements of the relevant provisions of the Certificate of Incorporation, the Bylaws or the DGCL.
Authorized
Capital Stock
Our
authorized capital stock consists of 112,500,000 shares of Common Stock, par value $0.01 per share and 100,000 shares of preferred stock,
par value $0.01 per share, all of which preferred stock is undesignated.
Common
Stock
Holders
of Common Stock to be registered hereunder are entitled to one vote for each share held of record on all matters submitted to a vote
of stockholders and do not have cumulative voting rights. Subject to any preferential rights of any outstanding preferred stock, holders
of Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our board of directors
out of funds legally available therefor. In the event of a dissolution, liquidation or winding-up of the Company, holders of Common Stock
are entitled to share ratably in all assets remaining after payment of liabilities and any preferential rights of any outstanding preferred
stock.
Holders
of Common Stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions
applicable to our Common Stock. All outstanding shares of Common Stock are fully paid and non-assessable. The rights, preferences and
privileges of the holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any
series of preferred stock which may be designated and issued in the future.
Our
Common Stock is listed on the Nasdaq Capital Market under the symbol “IMNN.”
Transfer
Agent and Registrar
The
transfer agent and registrar for our Common Stock is Equiniti Trust Company, LLC. Equiniti Trust Company, LLC is located at 6201 15th
Avenue, Brooklyn, NY 11219. Their telephone number is (888) 999-0032.
Preferred
Stock
Undesignated
Preferred Stock
Pursuant
to our Certificate of Incorporation, our board of directors has the authority, without further action by the stockholders (unless such
stockholder action is required by applicable law or Nasdaq rules), to designate and issue shares of preferred stock in one or more series,
to establish from time to time the number of shares to be included in each such series, to fix the designations, powers (including voting),
privileges, preferences and relative participating, optional or other rights, if any, of the shares of each such series and the qualifications,
limitations or restrictions thereof and to increase or decrease the number of shares of any such series, but not below the number of
shares of such series then outstanding.
We
will fix the designations, powers (including voting), privileges, preferences and relative participating, optional or other rights, if
any, of the preferred stock of each series, as well as the qualifications, limitations or restrictions thereof, in the certificate of
designation relating to that series. The certificate of designation will describe the terms of the series of preferred stock. This description
will include:
| |
● |
the
title and stated value; |
| |
● |
the
number of shares we are offering; |
| |
|
|
| |
● |
the
liquidation preference per share; |
| |
|
|
| |
● |
the
purchase price; |
| |
|
|
| |
● |
the
dividend rate, period and payment date and method of calculation for dividends; |
| |
|
|
| |
● |
whether
dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate; |
| |
|
|
| |
● |
the
procedures for any auction or remarketing, if any; |
| |
|
|
| |
● |
the
provisions for a sinking fund, if any; |
| |
|
|
| |
● |
the
provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and repurchase
rights; |
| |
|
|
| |
● |
any
listing of the preferred stock on any securities exchange or market; |
| |
|
|
| |
● |
whether
the preferred stock will be convertible into or exchangeable for other securities and, if applicable, the conversion price, or how
it will be calculated, and the conversion period; |
| |
|
|
| |
● |
voting
rights, if any, of the preferred stock; |
| |
|
|
| |
● |
preemptive
rights, if any; |
| |
|
|
| |
● |
restrictions
on transfer, sale or other assignment, if any; |
| |
|
|
| |
● |
liability
as to further calls or to assessment by the Company, if any; |
| |
|
|
| |
● |
a
discussion of any material United States federal income tax considerations applicable to the preferred stock; |
| |
|
|
| |
● |
the
relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our
affairs; |
| |
|
|
| |
● |
any
limitations on the issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred
stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; and |
| |
|
|
| |
● |
any
other specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock. |
The
DGCL provides that the holders of preferred stock will have the right to vote separately as a class or, in some cases, as a series on
an amendment to our Certificate of Incorporation if the amendment would change the par value or, unless our Certificate of Incorporation
provides otherwise, the number of authorized shares of the class or the powers, preferences or special rights of the class or series
so as to adversely affect the class or series, as the case may be. This right is in addition to any voting rights that may be provided
in the applicable certificate of designation.
Our
board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting
power or other rights of the holders of our Common Stock or other securities. Preferred stock could be issued quickly with terms designed
to delay or prevent a change in control of our company or make removal of management more difficult. Additionally, the issuance of preferred
stock may have the effect of decreasing the market price of our Common Stock.
Anti-Takeover
Considerations and Special Provisions of Our Certificate of Incorporation, Our Bylaws and the Delaware General Corporation Law
Certificate
of Incorporation and Bylaws
A
number of provisions of our Certificate of Incorporation and Bylaws concern matters of corporate governance and the rights of our stockholders.
Provisions that grant our board of directors the ability to issue shares of preferred stock and to set the voting rights, preferences
and other terms thereof may discourage takeover attempts that are not first approved by our board of directors, including takeovers that
may be considered by some stockholders to be in their best interests, such as those attempts that might result in a premium over the
market price for the shares held by stockholders. Certain provisions could delay or impede the removal of incumbent directors even if
such removal would be beneficial to our stockholders, such as the classification of our board of directors and the lack of cumulative
voting.
Since
our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing
stockholders or another party to effect a change in management.
These
provisions may have the effect of deterring hostile takeovers or delaying changes in our control or in our management. These provisions
are intended to enhance the likelihood of continued stability in the composition of our board of directors and in the policies they implement
and to discourage certain types of transactions that may involve an actual or threatened change of our control. These provisions are
designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics
that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for
our shares and, as a consequence, they also may inhibit fluctuations in the market price of our shares that could result from actual
or rumored takeover attempts.
These
provisions also could discourage or make more difficult a merger, tender offer or proxy contest, even if they could be favorable to the
interests of stockholders, and could potentially depress the market price of our Common Stock. Our board of directors believes that these
provisions are appropriate to protect our interests and the interests of our stockholders.
Classification
of Board; No Cumulative Voting.
Our
Certificate of Incorporation and Bylaws provide for our board of directors to be divided into three classes, with staggered three-year
terms. Only one class of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder
of their respective three-year terms. Because our stockholders do not have cumulative voting rights, our stockholders representing a
majority of the shares of Common Stock outstanding will be able to elect all of our directors due to be elected at each annual meeting
of our stockholders.
Meetings
of and Actions by Stockholders.
Our
Bylaws provide that annual meetings of our stockholders may take place at the time and place designated by our board of directors. A
special meeting of our stockholders may be called at any time by our board of directors, the chairman of our board of directors or the
president. Our Bylaws provide that (i) our board of directors can fix separate record dates for determining stockholders entitled to
receive notice of a stockholder meeting and for determining stockholders entitled to vote at the meeting; (ii) we may hold a stockholder
meeting by means of remote communications; (iii) any stockholder seeking to have the stockholders authorize or take corporate action
by written consent shall, by written notice to the secretary of the Company, request that the board fix a record date and the board shall
adopt a resolution fixing the record date in all events within ten calendar days after a request is received; and (iv) a written consent
of stockholders shall not be effective unless a written consent signed by a sufficient number of stockholders to take such action is
received by us within 60 calendar days of the earliest dated written consent received.
Advance
Notice Requirements for Stockholder Proposals and Director Nominations.
Our
Bylaws provide that stockholders seeking to bring business before an annual meeting of stockholders or to nominate candidates for election
as directors at an annual meeting of stockholders must provide timely notice in writing. To be timely, a stockholder’s notice must
be delivered to, or mailed and received by, the secretary of the Company at our principal executive offices not later than the close
of business on the 90th calendar day, nor earlier than the close of business on the 120th calendar day in advance of the date specified
in the Company’s proxy statement released to stockholders in connection with the previous year’s annual meeting of stockholders.
If the date of the annual meeting is more than 30 calendar days before or after such anniversary date, notice by the stockholder to be
timely must be so not earlier than the close of business on the 120th calendar day in advance of such date of annual meeting and not
later than the close of business on the later of the 90th calendar day in advance of such date of annual meeting or the tenth calendar
day following the date on which public announcement of the date of the meeting is made. In no event shall the public announcement of
an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of an advance
notice by any stockholder. Any stockholder that proposes director nominations or other business must be a stockholder of record at the
time the advance notice is delivered by such stockholder to us and entitled to vote at the meeting. Our Bylaws also specify requirements
as to the form and content of a stockholder’s notice. These provisions may preclude stockholders from bringing matters before an
annual meeting of stockholders or from making nominations for the election of directors at an annual meeting of stockholders. Unless
otherwise required by law, any director nomination or other business shall not be made or transacted if the stockholder (or a qualified
representative of the stockholder) does not appear at the meeting to present the director nominee or other proposed business.
Filling
of Board Vacancies.
Our
Certificate of Incorporation and Bylaws provide that the authorized size of our board of directors shall be determined by the board by
board resolution from time to time and that our board of directors has the exclusive power to fill any vacancies and newly created directorships
resulting from any increase in the authorized number of directors and the stockholders do not have the power to fill such vacancies.
Vacancies in our board of directors and newly created directorships resulting from any increase in the authorized number of directors
on our board of directors may be filled by a majority of the directors remaining in office, even though that number may be less than
a quorum of our board of directors, or by a sole remaining director. A director so elected to fill a vacancy shall serve for the remaining
term of the predecessor he or she replaced and until his or her successor is elected and has qualified, or until his or her earlier resignation,
removal or death.
Amendment
of the Certificate of Incorporation.
Our
Certificate of Incorporation may be amended, altered, changed or repealed at a meeting of our stockholders entitled to vote thereon by
the affirmative vote of a majority of the outstanding stock entitled to vote thereon and a majority of the outstanding stock of each
class entitled to vote thereon as a class, in the manner prescribed by the DGCL.
Amendment
of the Bylaws.
Our
Bylaws may be amended or repealed, or new Bylaws may be adopted, by either our board of directors or the affirmative vote of at least
66 2/3 percent of the voting power of our outstanding shares of capital stock.
Section
203 of the Delaware General Corporation Law
We
are subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with any interested
stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:
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before
such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in
the stockholder becoming an interested stockholder; |
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upon
completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned
at least 85 percent of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes
of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares
owned (i) by persons who are directors and also officers and (ii) pursuant to employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange
offer; and |
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on
or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting
of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3 percent of the outstanding voting stock
that is not owned by the interested stockholder. |
In
general, Section 203 defines a business combination to include the following:
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any
merger or consolidation involving the corporation and the interested stockholder; |
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any
sale, lease, transfer, pledge or other disposition of ten percent or more of the assets of the corporation to or with the interested
stockholder; |
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subject
to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder; |
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any
transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series
of the corporation beneficially owned by the interested stockholder; and |
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the
receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial benefits by or
through the corporation. |
In
general, Section 203 of the DGCL defines an “interested stockholder” as an entity or person who, together with the entity’s
or person’s affiliates and associates, beneficially owns, or is an affiliate of the corporation and within three years prior to
the time of determination of interested stockholder status did own, 15 percent or more of the outstanding voting stock of the corporation.
A
Delaware corporation may “opt out” of these provisions with an express provision in its Certificate of Incorporation. We
have not opted out of these provisions, which may as a result, discourage or prevent mergers or other takeover or change of control attempts
of us.
DESCRIPTION
OF SECURITIES TO BE REGISTERED
We are offering up to 14,035,087
shares of our Common Stock or pre-funded warrants in lieu of shares of Common Stock along with Series A common warrants to
purchase up to 14,035,087 shares of Common Stock and Series B warrants to purchase up to 14,035,087 shares of common stock,
based on an assumed combined public offering price of $0.57 per share of Common Stock, accompanying Series A common
warrant and accompanying Series B common warrant, which was the closing price of our Common Stock on the Nasdaq Capital Market
on February 6, 2024. For each pre-funded warrant we sell, the number of shares of Common Stock we are offering will be decreased
on a one-for-one basis. Each share of Common Stock or pre-funded warrant is being sold together with one Series A common warrant to
purchase one share of Common Stock and one Series B common warrant to purchase one share of Common Stock. The shares of Common Stock
or pre-funded warrants and accompanying Series A and Series B common warrants will be issued separately. We are also registering
the shares of Common Stock issuable from time to time upon exercise of the pre-funded warrants offered hereby.
Common
Stock
See
the description above under “Description of our Capital Stock - Common Stock.”
Pre-Funded
Warrants
The
following summary of certain terms and provisions of pre-funded warrants that are being offered hereby is not complete and is subject
to, and qualified in its entirety by, the provisions of the pre-funded warrant, the form of which is filed as an exhibit to the registration
statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the form of
pre-funded warrant for a complete description of the terms and conditions of the pre-funded warrants.
Duration
and Exercise Price
Each
pre-funded warrant offered hereby will have an initial exercise price per share equal to $0.0001. The pre-funded warrants will
be immediately exercisable and may be exercised at any time until the pre-funded warrants are exercised in full. The exercise price and
number of shares of Common Stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits,
reorganizations or similar events affecting our shares of Common Stock and the exercise price. Subject to the rules and regulations of
the applicable trading market, we may at any time during the term of the pre-funded warrant, subject to the prior written consent of
the holders, reduce the then current exercise price to any amount and for any period of time deemed appropriate by our board of directors.
The pre-funded warrants will be issued separately from the common warrants.
Exercisability
The
pre-funded warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise (except in the case of
a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the pre-funded warrant
to the extent that the holder would own more than 4.99% of the outstanding Common Stock immediately after exercise (the “Beneficial
Ownership Limitation”), except that upon at least 61 days’ prior notice from the holder to us, the holder may increase
the Beneficial Ownership Limitation to a percentage not to exceed 9.99%. No fractional shares of Common Stock will be issued in connection
with the exercise of a pre-funded warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional
amount multiplied by the exercise price.
Cashless
Exercise
If,
at the time a holder exercises its pre-funded warrants, a registration statement registering the issuance of the shares of Common Stock
underlying the pre-funded warrants under the Securities Act is not then effective or available for the issuance of such shares, then
in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price,
the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined
according to a formula set forth in the pre-funded warrants.
Fundamental
Transaction
In
the event of a fundamental transaction, as described in the pre-funded warrants and generally including any merger or consolidation
of the Company or the sale of all or substantially all of the Company’s capital stock or assets, the holders of the pre-funded
warrants will be entitled to receive upon exercise of the pre-funded warrants the kind and amount of securities, cash or other property
that the holders would have received had they exercised the pre-funded warrants immediately prior to such fundamental transaction.
Transferability
Subject
to applicable laws, a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded warrant to us
together with the appropriate instruments of transfer and funds sufficient to pay any transfer taxes payable upon such transfer.
Trading
Market
There
is no trading market available for the pre-funded warrants on any securities exchange or nationally recognized trading system, and we
do not expect a trading market to develop. We do not intend to list the pre-funded warrants on any securities exchange or nationally
recognized trading market. Without a trading market, the liquidity of pre-funded warrants will be extremely limited. The shares of Common
Stock issuable upon exercise of the pre-funded warrants are currently traded on the Nasdaq Capital Market.
Exchange
Listing
We
do not intend to list the pre-funded warrants on any securities exchange or nationally recognized trading system.
Rights
as a Stockholder
Except
as otherwise provided in the pre-funded warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holders
of the pre-funded warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, until they
exercise their pre-funded warrants. The pre-funded warrants will provide that holders have the right to participate in distributions
or dividends paid on Common Stock.
Series
A and Series B Common
Warrants
The
following summary of certain terms and provisions of the common warrants that are being offered hereby is not complete and is subject
to, and qualified in its entirety by, the provisions of the common warrants, the form of which is filed as an exhibit to the registration
statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the forms
of common warrants for a complete description of the terms and conditions of the common warrants.
Duration
and Exercise Price
Each
Series A and Series B common warrant offered hereby will have an initial exercise price per share equal to the combined
public offering price per share of Common Stock, accompanying Series A common warrant and accompanying Series B common
warrant, which is assumed here to be $0.57 per share (the closing price of our Common
Stock on the Nasdaq Capital Market on February 6, 2024). The Series A common warrants will be immediately exercisable and
will expire on the fifth anniversary of the original issuance date. The Series B common warrants will be immediately exercisable and
will expire 18 months following the original issuance date. The exercise price and number of shares of Common Stock issuable upon
exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting
our Common Stock and the exercise price. Subject to the rules and regulations of the applicable trading market, we may at any
time during the term of the Series A or Series B common warrant, subject to the prior written consent of the holders, reduce the
then current exercise price to any amount and for any period of time deemed appropriate by our board of directors. The
Series A and Series B common warrants will be issued separately from the Common Stock and pre-funded warrants and may be transferred
separately immediately thereafter. One Series A common warrant to purchase one share of our Common Stock and one Series B common
warrant to purchase one share of our Common Stock will be issued for every one share of Common Stock (or pre-funded warrants, as
applicable) purchased in this offering.
Exercisability
The
Series A and Series B common warrants will be exercisable, at the option of each holder, in whole or in part, by delivering a
duly executed exercise notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise.
Except as agreed with individual holders of warrants, a holder (together with its affiliates) may not exercise any portion of the Series
A or Series B common warrant to the extent that the holder would own more than 4.99% (or, at the election of the holder, 9.99% of
the outstanding Common Stock immediately after exercise (the “Beneficial Ownership Limitation”), except that upon at least
61 days’ prior notice from the holder to us, the holder may increase the Beneficial Ownership Limitation to a percentage not to
exceed 9.99%. No fractional shares of Common Stock will be issued in connection with the exercise of a Series A or Series B common
warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise
price.
Cashless
Exercise
If,
at the time a holder exercises its Series A and Series B common warrants, a registration statement registering the issuance of the shares
of Common Stock underlying the Series A and Series B common warrants under the Securities Act is not then effective or available for
the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment
of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number
of shares of Common Stock determined according to a formula set forth in the Series A and Series B common warrants.
Fundamental
Transaction
In
the event of a fundamental transaction, as described in the Series A and Series B common warrants and generally including merger
or consolidation of the Company or the sale of all or substantially all of the Company’s capital stock or assets, the holders of
the Series A and Series B common warrants will be entitled to receive upon exercise of the Series A and Series B common
warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Series
A and Series B common warrants immediately prior to such fundamental transaction. Notwithstanding the foregoing, in the event
of a fundamental transaction, the holders of the Series A and Series B common warrants have the right to require the Company or a successor
entity to redeem the Series A and Series B common warrants for cash in the amount of the Black Scholes Value (as defined in the Series
A and Series B common warrants) of the unexercised portion of the Series A and Series B common warrants concurrently with or within 30
days following the consummation of a fundamental transaction.
However,
in the event of a fundamental transaction which is not in the Company’s control, including a fundamental transaction not approved
by the Company’s board of directors, the holders of the Series A and Series B common warrants will only be entitled to receive
from the Company or its successor entity, as of the date of consummation of such fundamental transaction, the same type or form of consideration
(and in the same proportion), at the Black Scholes Value of the unexercised portion of the Series A and Series B common warrants that
is being offered and paid to the holders of the Company’s Common Stock in connection with the fundamental transaction, whether
that consideration is in the form of cash, stock or any combination of cash and stock, or whether the holders of the Company’s
Common Stock are given the choice to receive alternative forms of consideration in connection with the fundamental transaction. If holders
of the Company’s Common Stock are not offered or paid any consideration in a fundamental transaction, such holders of the Company’s
Common Stock will be deemed to have received shares of the successor entity in such fundamental transaction, and holders of the Series
A and Series B Warrants will receive shares of the successor entity in the amount of the Black Scholes Value.
Transferability
Subject
to applicable laws, a Series A or Series B common warrant may be transferred at the option of the holder upon surrender of the
Series A or Series B common warrant, as applicable, together with the appropriate instruments of transfer and funds sufficient
to pay any transfer taxes payable upon such transfer.
Trading
Market
There
is no trading market available for the Series A or Series B common warrants on any securities exchange or nationally recognized
trading system, and we do not expect a trading market to develop. We do not intend to list the Series A or Series B common warrants
on any securities exchange or nationally recognized trading market. Without a trading market, the liquidity of the Series A and Series
B common warrants will be extremely limited. The shares of Common Stock issuable upon exercise of the Series A and Series B
common warrants are currently traded on the Nasdaq Capital Market.
Exchange
Listing
We
do not intend to list the Series A or Series B common warrants on any securities exchange or nationally recognized trading system.
Right
as a Stockholder
Except
as otherwise provided in the Series A and Series B common warrants or by virtue of such holder’s ownership of shares of
our Common Stock, the holders of the Series A and Series B common warrants do not have the rights or privileges of holders of
our Common Stock, including any voting rights, until they exercise their common warrants. The common warrants will provide that holders
have the right to participate in distributions or dividends paid on Common Stock.
MATERIAL
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The
following is a summary of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of our common
stock, and the acquisition, ownership, exercise, expiration or disposition of the common warrants and pre-funded warrants, but does not
purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the provisions
of the Internal Revenue Code of 1986, as amended (the ‘‘Code”), Treasury Regulations promulgated thereunder,
administrative rulings and judicial decisions, all as of the date hereof. These authorities may be changed or subject to differing interpretations,
possibly with retroactive effect, so as to result in U.S. federal income tax consequences different from those set forth below. We have
not sought and will not seek any ruling from the Internal Revenue Service (the “IRS”) with respect to the statements
made and the conclusions reached in the following summary, and there can be no assurance that the IRS or a court will agree with such
statements and conclusions.
This
summary also does not address the tax considerations arising under the laws of any U.S. state or local or any non-U.S. jurisdiction,
estate or gift tax, the 3.8% Medicare tax on net investment income or any alternative minimum tax consequences. In addition, this discussion
does not address tax considerations applicable to a holder’s particular circumstances or to a holder that may be subject to special
tax rules, including, without limitation:
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banks,
insurance companies or other financial institutions; |
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tax-exempt
or government organizations; |
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brokers
or dealers in securities or currencies; |
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traders
in securities that elect to use a mark-to-market method of accounting for their securities holdings; |
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persons
that own, or are deemed to own, more than five percent of our capital stock; |
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certain
U.S. expatriates, citizens or former long-term residents of the United States; |
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persons
who hold our common stock, pre-funded warrants or common warrants as a position in a hedging transaction, “straddle,”
“conversion transaction,” synthetic security, other integrated investment, or other risk reduction transaction; |
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persons
who do not hold our common stock, pre-funded warrants and common warrants as a capital asset within the meaning of Section 1221 of
the Code (generally, for investment purposes); |
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persons
deemed to sell our common stock, pre-funded warrants or common warrants under the constructive sale provisions of the Code; |
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pension
plans; |
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partnerships,
S corporations, or other entities or arrangements treated as partnerships for U.S. federal income tax purposes, or investors in any
such entities; |
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persons
for whom our stock constitutes “qualified small business stock” within the meaning of Section 1202 of the Code; |
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integral
parts or controlled entities of foreign sovereigns; |
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controlled
foreign corporations; |
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passive
foreign investment companies and corporations that accumulate earnings to avoid U.S. federal income tax; or |
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persons
that acquire our common stock, pre-funded warrants or common warrants as compensation for services. |
In
addition, if a partnership, including any entity or arrangement classified as a partnership for U.S. federal income tax purposes, holds
our common stock, pre-funded warrants or common warrants, the tax treatment of a partner generally will depend on the status of the partner,
the activities of the partnership, and certain determinations made at the partner level. Accordingly, partnerships that hold our common
stock, pre-funded warrants or common warrants, and partners in such partnerships, should consult their tax advisors regarding the U.S.
federal income tax consequences to them of the purchase, ownership, and disposition of our common stock, pre-funded warrants or common
warrants.
You
are urged to consult your tax advisor with respect to the application of the U.S. federal income tax laws to your particular situation,
as well as any tax consequences of the purchase, ownership and disposition of our common stock or common warrants arising under the U.S.
federal estate or gift tax rules or under the laws of any U.S. state or local or any non-U.S. or other taxing jurisdiction or under any
applicable tax treaty.
Definition
of a U.S. Holder
For
purposes of this summary, a “U.S. Holder” is any beneficial owner of our common stock, pre-funded warrants or common warrants
that is a “U.S. person,” and is not a partnership, or an entity treated as a partnership or disregarded from its owner, each
for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any
of the following:
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individual who is a citizen or resident of the United States; |
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corporation created or organized under the laws of the United States, any state thereof,
or the District of Columbia; |
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estate, the income of which is subject to U.S. federal income tax regardless of its source;
or |
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trust that (1) is subject to the primary supervision of a U.S. court and the control of one
or more U.S. persons (within the meaning of Section 7701(a)(30) of the Code), or (2) has
a valid election in effect to be treated as a U.S. person for U.S. federal income tax purposes. |
For
purposes of this summary, a “Non-U.S. Holder” is any beneficial owner of our common stock, pre-funded warrants or common
warrants that is not a U.S. Holder or a partnership, or other entity treated as a partnership or disregarded from its owner, each for
U.S. federal income tax purposes.
Treatment
of Pre-funded Warrants
Although
it is not entirely free from doubt, a pre-funded warrant should be treated as a share of our common stock for U.S. federal income tax
purposes and a holder of pre-funded warrants should generally be taxed in the same manner as a holder of common stock, as described below.
Accordingly, no gain or loss should be recognized upon the exercise of a pre-funded warrant and, upon exercise, the holding period of
a pre-funded warrant should carry over to the share of common stock received. Similarly, the tax basis of the pre-funded warrant should
carry over to the share of common stock received upon exercise, increased by the exercise price of $0.0001. Each holder should
consult his, her or its own tax advisor regarding the risks associated with the acquisition of pre-funded warrants pursuant to this offering
(including potential alternative characterizations). The balance of this discussion generally assumes that the characterization described
above is respected for U.S. federal income tax purposes.
Allocation
of Purchase Price for Investment Units
Each pre-funded warrant will
be sold as a unit with one Series A common warrant and one Series B common warrant, and each share of common stock will
be sold as a unit with one Series A common warrant and one Series B common warrant, and each of the items is referred to
as a component of a unit. The purchase price for each investment unit should be allocated between the two components in proportion to
their relative fair market values at the time the unit is purchased by the holder. This allocation of the purchase price for each unit
will establish the holder’s initial tax basis for U.S. federal income tax purposes in the components included in each unit; the
pre-funded warrants and common warrants in one case, and the common stock and common warrants in the other. Each holder should consult
his, her or its own tax advisor regarding the allocation of the purchase price for a unit.
Tax
Consequences to U.S. Holders
Distributions
on Common Stock
As
discussed in ‘‘Dividend Policy,” we do not currently expect to make distributions on our common stock.
In the event that we do make distributions of cash or other property, distributions paid on common stock, other than certain pro rata
distributions of common stock, will be treated as a dividend to the extent paid out of our current or accumulated earnings and profits
and will be includible in income by the U.S. Holder and taxable as ordinary income when received. If a distribution exceeds our current
and accumulated earnings and profits, the excess will be first treated as a tax-free return of the U.S. Holder’s investment, up
to the U.S. Holder’s tax basis in the common stock. Any remaining excess will be treated as a capital gain. Subject to applicable
limitations, dividends paid to certain non-corporate U.S. Holders may be eligible for taxation as “qualified dividend income”
and therefore may be taxable at rates applicable to long-term capital gains. U.S. Holders should consult their tax advisers regarding
the availability of the reduced tax rate on dividends in their particular circumstances. Dividends received by a corporate U.S. Holder
will be eligible for the dividends-received deduction if the U.S. Holder meets certain holding period and other applicable requirements.
Constructive
Dividends on Common Warrants
Under
Section 305 of the Code, an adjustment to the number of shares of common stock that will be issued on the exercise of the common warrants,
or an adjustment to the exercise price of the common warrants, may be treated as a constructive distribution to a U.S. Holder of the
common warrants if, and to the extent that, such adjustment has the effect of increasing such U.S. Holder’s proportionate interest
in our “earnings and profits” or assets, depending on the circumstances of such adjustment (for example, if such adjustment
is to compensate for a distribution of cash or other property to our stockholders). Adjustments to the exercise price of a common warrant
made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing dilution of the interest of the holders
of the warrants should generally not result in a constructive distribution. Any constructive distributions would generally be subject
to the tax treatment described above under “— Distributions on Common Stock”.
Sale
or Other Disposition of Common Stock
For
U.S. federal income tax purposes, gain or loss realized on the sale or other disposition of common stock will be capital gain or loss,
and will be long-term capital gain or loss if the U.S. Holder held the common stock for more than one year. The amount of the gain or
loss will equal the difference between the U.S. Holder’s tax basis in the common stock disposed of and the amount realized on the
disposition. Long-term capital gains recognized by non-corporate U.S. Holders will be subject to reduced tax rates. The deductibility
of capital losses is subject to limitations.
Sale
or Other Disposition, Exercise or Expiration of Common Warrants
For
U.S. federal income tax purposes, gain or loss realized on the sale or other disposition of a common warrant (other than by exercise)
will be capital gain or loss and will be long-term capital gain or loss if the U.S. Holder held the common warrant for more than one
year at the time of the sale or other disposition. The amount of the gain or loss will equal the difference between the U.S. Holder’s
tax basis in the common warrant disposed of and the amount realized on the disposition.
In
general, a U.S. Holder will not be required to recognize income, gain or loss upon the exercise of a common warrant by payment of the
exercise price, except to the extent of cash paid in lieu of a fractional share. A U.S. Holder’s tax basis in a share of common
stock received upon exercise will be equal to the sum of (1) the U.S. Holder’s tax basis in the common warrant and (2) the exercise
price of the common warrant. A U.S. Holder’s holding period in the stock received upon exercise will commence on the day or the
day after such U.S. Holder exercises the common warrant. No discussion is provided herein regarding the U.S. federal income tax treatment
on the exercise of a common warrant on a cashless basis, and U.S. Holders are urged to consult their tax advisors as to the exercise
of a warrant on a cashless basis.
If
a common warrant expires without being exercised, a U.S. Holder will recognize a capital loss in an amount equal to such U.S. Holder’s
tax basis in the common warrant. This loss will be long-term capital loss if, at the time of the expiration, the U.S. Holder’s
holding period in the common warrant is more than one year. The deductibility of capital losses is subject to limitations.
Sale
or Other Disposition, Exercise or Expiration of Pre-funded Warrants
For
U.S. federal income tax purposes, gain or loss realized on the sale or other disposition of pre-funded warrants will be capital gain
or loss, and will be long-term capital gain or loss if the U.S. Holder held the pre-funded warrant for more than one year. A U.S. Holder’s
holding period in the stock received upon exercise will commence on the day or the day such U.S. Holder purchased the pre-funded warrant.
The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the pre-funded warrant or common
stock disposed of and the amount realized on the disposition. Long-term capital gains recognized by non-corporate U.S. Holders will be
subject to reduced tax rates. The deductibility of capital losses is subject to limitations.
In
general, a U.S. Holder will not be required to recognize income, gain or loss upon the exercise of a pre-funded warrant by payment of
the exercise price, except to the extent of cash paid in lieu of a fractional share. A U.S. Holder’s tax basis in a share of common
stock received upon exercise will be equal to the sum of (1) the U.S. Holder’s tax basis in the pre-funded warrant and (2) the
exercise price of the pre-funded warrant. No discussion is provided herein regarding the U.S. federal income tax treatment on the exercise
of a pre-funded warrant on a cashless basis, and U.S. Holders are urged to consult their tax advisors as to the exercise of a pre-funded
warrant on a cashless basis.
If
a pre-funded warrant expires without being exercised, a U.S. Holder will recognize a capital loss in an amount equal to such U.S. Holder’s
tax basis in the pre-funded warrant. This loss will be long-term capital loss if, at the time of the expiration, the U.S. Holder’s
holding period in the pre-funded warrant is more than one year. The deductibility of capital losses is subject to limitations.
Tax
Consequences to Non-U.S. Holders
Distributions
As
discussed in ‘‘Dividend Policy,” we do not anticipate paying any dividends on our common stock in the foreseeable future.
If we make distributions on our common stock or are constructively deemed to have made distributions on our pre-funded warrants or common
warrants (as described above under “— Constructive Dividends on Common Warrants and Pre-funded Warrants”), those payments
will constitute dividends for U.S. federal income tax purposes to the extent we have current or accumulated earnings and profits, as
determined under U.S. federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings
and profits, they will constitute a return of capital and will first reduce a Non-U.S. Holder’s basis in our common stock or common
warrants or pre-funded warrants, as applicable, but not below zero. Any excess will be treated as capital gain and will be treated as
described below under the “— Gain on Sale or Other Disposition of Common Stock or Common Warrants” section. Any such
distributions would be subject to the discussions below regarding back-up withholding and Foreign Account Tax Compliance Act (‘‘FATCA”).
Subject
to the discussion below on effectively connected income, any dividend paid or constructively deemed to have been paid to a Non-U.S. Holder
generally will be subject to U.S. withholding tax either at a rate of 30% of the gross amount of the dividend or such lower rate as may
be specified by an applicable income tax treaty. To receive a reduced treaty rate, a Non-U.S. Holder must provide us or our agent with
an IRS Form W-8BEN, IRS Form W-8 BEN-E or another appropriate version of IRS Form W-8 (or a successor form), which must be updated periodically,
and which, in each case, must certify qualification for the reduced rate. Non-U.S. Holders should consult their tax advisors regarding
their entitlement to benefits under any applicable income tax treaty.
Dividends
paid to a Non-U.S. Holder that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United
States and that are not eligible for relief from U.S. (net basis) income tax under an applicable income tax treaty, generally are exempt
from the (gross basis) withholding tax described above. To obtain this exemption from withholding tax, the Non-U.S. Holder must provide
the applicable withholding agent with an IRS Form W-8ECI or successor form or other applicable IRS Form W-8 certifying under penalty
of perjury that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United
States. Such effectively connected dividends, if not eligible for relief under a tax treaty, would not be subject to a withholding tax,
but would be taxed at the same graduated rates applicable to U.S. persons, net of certain deductions and credits and if, in addition,
the Non-U.S. Holder is a corporation, may also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified
by an applicable income tax treaty).
If
you are eligible for a reduced rate of withholding tax pursuant to a tax treaty, you may be able to obtain a refund of any excess amounts
withheld if you timely file an appropriate claim for refund with the IRS.
Exercise
or Expiration of Common Warrants and Pre-funded Warrants
In
general, a Non-U.S. Holder will not be required to recognize income, gain or loss upon the exercise of a common warrant or pre-funded
warrant by payment of the exercise price, except to the extent of cash paid in lieu of a fractional share. However, no discussion is
provided herein regarding the U.S. federal income tax treatment on the exercise of a common warrant or pre-funded warrant on a cashless
basis, and Non-U.S. Holders are urged to consult their tax advisors as to the exercise of a common warrant or pre-funded warrant on a
cashless basis.
If
a common warrant or pre-funded warrant expires without being exercised, a Non-U.S. Holder that is engaged in a U.S. trade or business
to which any income from the common warrant or pre-funded warrant would be effectively connected or who is present in the United States
for a period or periods aggregating 183 days or more during the calendar year in which the expiration occurs (and certain other conditions
are met) will recognize a capital loss in an amount equal to such Non-U.S. Holder’s tax basis in the common warrant or pre-funded
warrant.
Gain
on Sale or Other Disposition of Common Stock or Common Warrants
Subject
to the discussion below regarding backup withholding and FATCA, a Non-U.S. Holder generally will not be required to pay U.S. federal
income tax on any gain realized upon the sale or other disposition of our common stock, pre-funded warrant or common warrants unless:
| ● | the
gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business
within the United States and not eligible for relief under an applicable income tax treaty,
in which case the Non-U.S. Holder will be required to pay tax on the net gain derived from
the sale under regular graduated U.S. federal income tax rates, and for a Non-U.S. Holder
that is a corporation, such Non-U.S. Holder may be subject to the branch profits tax at a
30% rate (or such lower rate as may be specified by an applicable income tax treaty) on such
effectively connected gain, as adjusted for certain items; |
| ● | the
Non-U.S. Holder is an individual who is present in the United States for a period or periods
aggregating 183 days or more during the calendar year in which the sale or disposition occurs
and certain other conditions are met, in which case the Non-U.S. Holder will be required
to pay a flat 30% tax on the gain derived from the sale, which tax may be offset by U.S.
source capital losses (even though the Non-U.S. Holder is not considered a resident of the
United States) (subject to applicable income tax or other treaties); or |
| ● | we
are a “U.S. real property holding corporation” (a ‘‘USRPHC”)
for U.S. federal income tax purposes, or a USRPHC, at any time within the shorter of the
five-year period preceding the disposition or the Non-U.S. Holder’s holding period
for our common stock, pre-funded warrant or common warrants. We believe we are not currently
and do not anticipate becoming a USRPHC. However, because the determination of whether we
are a USRPHC depends on the fair market value of our United States real property interests
relative to the fair market value of our other business assets, there can be no assurance
that we will not become a USRPHC in the future. Even if we become a USRPHC, however, gain
arising from the sale or other taxable disposition by a Non-U.S. Holder of our common stock
will not be subject to United States federal income tax if (A) in the case of our common
stock, (a) shares of our common stock are “regularly traded,” as defined by applicable
Treasury Regulations, on an established securities market, such as Nasdaq, and (b) the Non-U.S.
Holder owns or owned, actually and constructively, 5% or less of the shares of our common
stock throughout the five-year period ending on the date of the sale or exchange; and (B)
in the case of our common warrants or pre-funded warrants, either (a)(i) shares of our common
stock are “regularly traded,” as defined by applicable Treasury Regulations,
on an established securities market, such as Nasdaq, (ii) our common warrants or pre-funded
warrants, as the case may be, are not considered regularly traded on an established securities
market and the Non-U.S. Holder does not own, actually or constructively, common warrants
and pre-funded warrants with a fair market value greater than the fair market value of 5%
of the shares of our common stock, determined as of the date that such Non-U.S. Holder acquired
its common warrants or pre-funded warrants, as applicable,, or (b)(i) our common warrants
or pre-funded warrants are considered regularly traded on an established securities market,
and (ii) the Non-U.S. Holder owns or owned, actually and constructively, 5% or less of our
common warrants or pre-funded warrants throughout the five-year period ending on the date
of the sale or exchange. Our common warrants and pre-funded warrants are not expected to
be regularly traded on an established securities market. If the foregoing exceptions do not
apply, such Non-U.S. Holder’s proceeds received on the disposition of shares will generally
be subject to withholding at a rate of 15% and such Non-U.S. Holder will generally be taxed
on any gain in the same manner as gain that is effectively connected with the conduct of
a U.S. trade or business, except that the branch profits tax generally will not apply. |
Information
Reporting and Backup Withholding
Information
returns may be filed with the IRS in connection with distributions on common stock or constructive dividends on common warrants and pre-funded
warrants, and the proceeds of a sale or other disposition of common stock or pre-funded warrants or common warrants. A non-exempt U.S.
Holder may be subject to U.S. backup withholding on these payments if it fails to provide its taxpayer identification number to the withholding
agent and comply with certification procedures or otherwise establish an exemption from backup withholding.
A
Non-U.S. Holder may be subject to U.S. information reporting and backup withholding on these payments unless the Non-U.S. Holder complies
with certification procedures to establish that it is not a U.S. person (within the meaning of the Code). The certification requirements
generally will be satisfied if the Non-U.S. Holder provides the applicable withholding agent with a statement on the applicable IRS Form
W-8BEN or IRS Form W-8BEN-E (or suitable substitute or successor form), together with all appropriate attachments, signed under penalties
of perjury, stating, among other things, that such Non-U.S. Holder is not a U.S. Person. Applicable Treasury Regulations provide alternative
methods for satisfying this requirement. In addition, the amount of distributions on common stock or constructive dividends on common
stock paid to a Non-U.S. Holder, and the amount of any U.S. federal tax withheld therefrom, must be reported annually to the IRS and
the holder. This information may be made available by the IRS under the provisions of an applicable tax treaty or agreement to the tax
authorities of the country in which the Non-U.S. Holder resides.
Payment
of the proceeds of the sale or other disposition of common stock, pre-funded warrants or common warrants to or through a non-U.S. office
of a U.S. broker or of a non-U.S. broker with certain specified U.S. connections generally will be subject to information reporting requirements,
but not backup withholding, unless the Non-U.S. Holder certifies under penalties of perjury that it is not a U.S. person or an exemption
otherwise applies. Payments of the proceeds of a sale or other disposition of common stock, pre-funded warrants or common warrants to
or through a U.S. office of a broker generally will be subject to information reporting and backup withholding, unless the Non-U.S. Holder
certifies under penalties of perjury that it is not a U.S. person or otherwise establishes an exemption.
Backup
withholding is not an additional tax. The amount of any backup withholding from a payment generally will be allowed as a credit against
the holder’s U.S. federal income tax liability and may entitle the holder to a refund, provided that the required information is
timely furnished to the IRS.
Foreign
Account Tax Compliance Act
FATCA
imposes withholding tax on certain types of payments made to foreign financial institutions and certain other non-U.S. entities. The
legislation imposes a 30% withholding tax on dividends on, or, subject to the discussion of certain proposed Treasury Regulations below,
gross proceeds from the sale or other disposition of, our common stock, pre-funded warrants or common warrants paid to a “foreign
financial institution” or to certain “non-financial foreign entities” (each as defined in the Code), unless (i) the
foreign financial institution undertakes certain diligence and reporting obligations, (ii) the non-financial foreign entity either certifies
it does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying information regarding
each substantial United States owner, or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies
for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements
in (i) above, it must enter into an agreement with the U.S. Treasury requiring, among other things, that it undertake to identify accounts
held by “specified United States persons” or “United States-owned foreign entities” (each as defined in the Code),
annually report certain information about such accounts, and withhold 30% on payments to account holders whose actions prevent it from
complying with these reporting and other requirements. If the country in which a payee is resident has entered into an “intergovernmental
agreement” with the United States regarding FATCA, that agreement may permit the payee to report to that country rather than to
the U.S. Department of the Treasury. The U.S. Treasury recently released proposed Treasury Regulations which, if finalized in their present
form, would eliminate the federal withholding tax of 30% applicable to the gross proceeds of a sale or other disposition of our common
stock. In its preamble to such proposed Treasury Regulations, the U.S. Treasury stated that taxpayers may generally rely on the proposed
regulations until final regulations are issued. Prospective investors should consult their own tax advisors regarding the possible impact
of these rules on their investment in our common stock, pre-funded warrants or common warrants, and the possible impact of these rules
on the entities through which they hold our common stock, pre-funded warrants or common warrants, including, without limitation, the
process and deadlines for meeting the applicable requirements to prevent the imposition of this 30% withholding tax under FATCA.
THE
PRECEDING DISCUSSION OF U.S. FEDERAL TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY. IT IS NOT TAX ADVICE. EACH PROSPECTIVE INVESTOR
SHOULD CONSULT ITS TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, HOLDING
AND DISPOSING OF OUR COMMON STOCK, PRE-FUNDED WARRANTS OR COMMON WARRANTS, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE
LAWS.
DIVIDEND
POLICY
We
have never declared or paid any cash dividends on our Common Stock and we do not currently intend to pay any cash dividends on our Common
Stock in the foreseeable future. We expect to retain all available funds and future earnings, if any, to fund the development and growth
of our business. Any future determination to pay dividends, if any, on our Common Stock will be at the discretion of our board of directors
and will depend on, among other factors, the terms of any outstanding preferred stock, our results of operations, financial condition,
capital requirements and contractual restrictions.
PLAN
OF DISTRIBUTION
A.G.P.
and Brookline have agreed to act as our Placement Agents in connection with this offering subject to the terms and conditions of the
placement agency agreement dated [●], 2024. The placement agency agreement provides that the Placement Agent obligations are subject
to conditions contained in the placement agency agreement. The Placement Agents are not purchasing or selling any such securities, nor
are they required to arrange for the purchase and sale of any specific number or dollar amount of such securities, other than to use
their “reasonable best efforts” to arrange for the sale of such securities by us. Therefore, we may not sell all of the shares
of Common Stock, pre-funded warrants and common warrants being offered. The terms of this offering are subject to market conditions and
negotiations between us, the Placement Agents and prospective investors. The securities will be offered at a fixed price and are expected
to be issued in a single closing. The offering will terminate on March 31, 2024, unless (i) the closing occurs prior thereto or
(ii) we decide to terminate the offering prior thereto (which we may do at any time in our discretion), except
that the shares of Common Stock underlying the warrants and shares of Common Stock underlying the pre-funded warrants will be offered
on a continuous basis pursuant to Rule 415 under the Securities Act. We will enter into a securities purchase agreement directly
with certain investors, at the investor’s option, who purchase our securities in this offering. Investors who do not enter into
a securities purchase agreement shall rely solely on this prospectus in connection with the purchase of our securities in this offering.
This
is a best-efforts offering, and there is no minimum offering amount required as a condition to the closing of this offering. The actual
amount of gross proceeds, if any, in this offering could vary substantially from the gross proceeds from the sale of the maximum amount
of securities being offered in this prospectus. The Placement Agents may retain sub-agents and selected dealers in connection
with this offering.
We
will deliver the securities being issued to the investors upon receipt of investor funds for the purchase of the securities offered pursuant
to this prospectus. We expect to deliver the securities being offered pursuant to this prospectus DVP/RVP on or about two trading days
after we price the securities being offered hereby. When we price the securities, we will simultaneously enter into securities purchase
agreements relating to the offering with those investors who so choose. Since we will deliver the securities to be issued in this offering
upon our receipt of investor funds, we and the Placement Agents have not made any arrangements to place investor funds in an escrow
account or trust account.
We
have agreed to indemnify the Placement Agents against specified liabilities, including liabilities under the Securities Act, and
to contribute to payments the Placement Agents may be required to make in respect thereof.
Determination
of Offering Price and Warrant Exercise Price
The
actual offering price of the securities we are offering, and the exercise price of the common warrants and pre-funded warrants that we
are offering, were negotiated between us, the Placement Agents and the investors in the offering based on the trading of our shares
of Common Stock prior to the offering, among other things. Other factors considered in determining the public offering price of the securities
we are offering, as well as the exercise price of the common warrants that we are offering include our history and prospects, the stage
of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of
our management, the general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.
Fees
and Expenses
We
have agreed to pay the Placement Agents an aggregate fee equal to 7.0% of the purchase price paid by all purchasers in the offering.
In addition, we have agreed to reimburse the Placement Agents for their legal fees in an amount up to $100,000 for their accountable
offering-related legal expenses and for non-accountable expenses of up to $25,000. We estimate the total expenses of this offering paid
or payable by us, exclusive of the Placement Agent fees, will be approximately $0.4 million.
The
following table shows the per share price and total cash fees to be paid to the Placement Agents in connection with the sale of the Common
Stock, common warrants and shares of Common Stock underlying the pre-funded warrants pursuant to this prospectus.
| | |
Per
Share of
Common
Stock, Series A Common Warrant and Series B
Common
Warrant | | |
Per
Pre-Funded
Warrant,
Series A Common Warrant and Series B
Common
Warrant | | |
Total | |
| Offering price (1) | |
$ | | | |
$ | | | |
$ | | |
| Placement Agent
fees (2) | |
$ | | | |
$ | | | |
$ | | |
| Proceeds, before expenses,
to us (3) | |
$ | | | |
$ | | | |
$ | | |
| |
(1) |
The
combined public offering price is $[●] per share of Common Stock, accompanying Series A common warrant and accompanying
Series B common warrant and $[●] per pre-funded warrant, accompanying Series A common warrant and accompanying
Series B common warrant. |
| |
(2) |
Represents
a cash fee equal to seven percent (7.0%) of the aggregate purchase price paid by investors in this offering. We have also agreed
to reimburse the Placement Agents for their accountable offering-related legal expenses in an amount up to $100,000 and for non-accountable
expenses of up to $25,000. |
| |
(3) |
Does
not include proceeds from the exercise of the common warrants and/or pre-funded warrants in cash, if any. |
Indemnification
We
have agreed to indemnify the Placement Agents and other specified persons against certain liabilities, including liabilities under the
Securities Act and liabilities arising from breaches of representations and warranties contained in the underwriting agreement, or to
contribute to payments that the Placement Agents may be required to make in respect of those liabilities.
Lock-up
Agreements
Our
directors and executive officers have entered into lock-up agreements. Under these agreements, these individuals have
agreed, subject to specified exceptions, not to sell or transfer any shares of Common Stock or securities convertible into, or exchangeable
or exercisable for, our shares of Common Stock during a period ending 90 days after the date of this prospectus, without first obtaining
the written consent of the Placement Agents. Specifically, these individuals have agreed, in part, not to:
| |
● |
offer,
pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of (or enter into any transaction or device that is designed
to, or could be expected to, result in the transfer or disposition by any person at any time in the future of), any shares of capital
stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; |
| |
● |
make
any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect
to the registration of any of our securities; |
| |
● |
complete
any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank; or |
| |
● |
enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of capital stock of the Company. |
Notwithstanding
these limitations, these shares of Common Stock may be transferred under limited circumstances, including, without limitation, by gift,
will or intestate succession.
In
addition, we have agreed that, subject to certain exceptions, we will not (i) for a period of 90 days following the closing
of this offering, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of our
shares of Common Stock or any securities convertible into or exercisable or exchangeable for our shares of Common Stock; (ii) enter
into a variable rate transaction (as defined in the purchase agreement), for a period of 180 days following the
closing date of the offering, provided that starting on the 91st day following the closing date of the
offering, the Company may enter into or effect transactions under an at-the-market offering; (iii) for a period of 90 days following the closing date of this offering, except as provided in the lock-up agreement, make any demand for or exercise
any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares
or securities convertible into or exercisable or exchangeable for shares or any other of our securities; or (iv) publicly disclose the
intention to do any of the foregoing for a period commencing on the date hereof and ending 90 days following the
closing date of the offering.
Discretionary
Accounts
The
Placement Agents do not intend to confirm sales of the securities offered hereby to any accounts over which it has discretionary authority.
Other
Activities and Relationships
The
Placement Agents and certain of their affiliates are full service financial institutions engaged in various activities, which may include
securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment,
hedging, financing and brokerage activities. The Placement Agents and certain of their affiliates have, from time to time, performed,
and may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for
which they received or will receive customary fees and expenses.
In
the ordinary course of their various business activities, the Placement Agents and certain of their affiliates may make or hold a broad
array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including
bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve
securities and/or instruments issued by us and our affiliates. If the Placement Agents or their affiliates have a lending relationship
with us, they routinely hedge their credit exposure to us consistent with their customary risk management policies. The Placement Agents
and their affiliates may hedge such exposure by entering into transactions that consist of either the purchase of credit default swaps
or the creation of short positions in our securities or the securities of our affiliates, including potentially the Common Stock offered
hereby. Any such short positions could adversely affect future trading prices of the Common Stock offered hereby. The Placement Agents
and certain of their affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish
or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients
that they acquire, long and/or short positions in such securities and instruments.
As
stated above, the Placement Agents and their respective affiliates have and may in the future provide, from time to time, investment
banking and financial advisory services to us in the ordinary course of business, for which they may receive customary fees and commissions.
The
foregoing does not purport to be a complete statement of the terms and conditions of the placement agency agreement or the securities
purchase agreement entered into in connection with this offering, copies of which have been filed as exhibits to the registration statement
of which this prospectus is a part. See “Where You Can Find More Information.”
Listing
Our
Common Stock on is listed The Nasdaq Capital Market under the symbol “IMNN.”
LEGAL
MATTERS
The
validity of the securities being offered hereby will be passed upon by Covington & Burling LLP, Boston, Massachusetts. The
Placement Agents are being represented by Sullivan & Worcester LLP, New York, New York, in connection with this offering.
EXPERTS
WithumSmith+Brown,
PC (“Withum”), an independent registered public accounting firm, has served as our independent accountants since 2017
and audited our consolidated financial statements included in our Annual Report on Form 10-K, as set forth in their report, which are
incorporated by reference in this prospectus. Our financial statements are incorporated herein by reference in reliance on Withum’s
report, given on their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
file reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information
statements and other information about issuers, such as us, who file electronically with the SEC. The address of that website is http://www.sec.gov.
Our
web site address is http://www.imunon.com. There we make available free of charge, on or through the investor relations section
of our website, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports
filed pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material
with the SEC. The information on our web site, however, is not, and should not be deemed to be, a part of this prospectus. All website
addresses in this prospectus are intended to be inactive textual references only.
This
prospectus is part of a registration statement that we filed with the SEC and does not contain all of the information in the registration
statement. The full registration statement may be obtained from the SEC or us, as provided below. You may inspect a copy of the registration
statement through the SEC’s website, as provided above.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose
important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference
is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede
that information. We incorporate by reference into this
prospectus the documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act (1) after the date of this prospectus and prior to the time that all of the securities offered by this prospectus are sold
or the earlier termination of the offering, and (2) after the date of the initial registration statement of which this prospectus forms
a part and prior to the effectiveness of the registration statement (except in each case in which the information contained in such documents
is “furnished” and not “filed”).
This
prospectus incorporates by reference the documents set forth below that have previously been filed with the SEC:
| |
● |
Our
Annual Report on Form
10-K for the fiscal year ended December 31, 2022 filed on March 30, 2023; |
| |
|
|
| |
● |
our
Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 2023, filed with the SEC on May 11, 2023; |
| |
|
|
| |
● |
our
Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 2023, filed with the SEC on August 10, 2023;
|
| |
|
|
| |
● |
our
Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 2023, filed with the SEC on November
14, 2023;
|
| |
|
|
| |
● |
the
portions of our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 28, 2023 that are deemed “filed” with
the SEC under the Exchange Act;
|
| |
|
|
| |
● |
our
Current Reports on Form 8-K filed with the SEC on January
3, 2023, February
10, 2023, March
24, 2023, June
14, 2023, June
15, 2023, December
11, 2023 and December
29, 2023; and |
| |
|
|
| |
● |
Description
of Securities of the Registrant, incorporated herein by reference to Exhibit 4.5 to the Annual Report on Form 10-K of the Company
for the fiscal year ended December 31, 2019. |
Any
statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will
be deemed to be modified or superseded for purposes hereof to the extent that a statement contained in this prospectus or any other subsequently
filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement
so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You
may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they are specifically
incorporated by reference in the documents) by writing or telephoning us at the following address:
Imunon,
Inc.
997
Lenox Drive, Suite 100
Lawrenceville,
NJ 08648
(609)
896-9100
Exhibits
to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus.
The
documents incorporated by reference may be accessed at our website: http://www.imunon.com.
Up to 14,035,087 Shares
of Common Stock
Up to 14,035,087 Series
A Common Warrants to Purchase 14,035,087 Shares of Common Stock
Up to 14,035,087 Series
B Common Warrants to Purchase 14,035,087 Shares of Common Stock
Up to 14,035,087 Pre-Funded
Warrants to Purchase 14,035,087 Shares of Common Stock
Up to 14,035,087 Shares
of Common Stock Underlying Such Series A Common Warrants
Up to 14,035,087 Shares
of Common Stock Underlying Such Series B Common Warrants
Up to 14,035,087 Shares
of Common Stock Underlying Pre-Funded Warrants
Preliminary
Prospectus
Lead
Placement Agent
A.G.P.
Co-Placement Agent
Brookline
Capital Markets
a division of Arcadia Securities,
LLC
,
2024
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
The
following table sets forth the expenses to be incurred in connection with the offering described in this registration statement, all
of which will be paid by the registrant. All amounts are estimates except for the SEC registration fee:
| SEC registration fee | |
$ | 3,542 | |
| FINRA filing fee | |
| 3,500 | |
| Legal fees and expenses | |
| 250,000 | |
| Accounting fees and expenses | |
| 75,000 | |
| Printing and related expenses | |
| 10,000 | |
| Miscellaneous | |
| 50,000 | |
| Total
expenses | |
$ | 392,042 | |
Item
14. Indemnification of Directors and Officers.
The
Company is incorporated under the laws of the State of Delaware. Our Bylaws provide that we shall indemnify, to the maximum extent and
in the manner permitted by the DGCL, our current and former directors and officers, and may indemnify our current and former employees
and agents, against any and all expenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually
and reasonably incurred in connection with any proceeding arising from their services in those capacities.
The
DGCL provides that a Delaware corporation has the power generally to indemnify its current and former directors, officers, employees
and other agents (each, a corporation agent) against expenses and liabilities, including amounts paid in settlement, in connection with
any proceeding involving such person by reason of his being a corporation agent, other than a proceeding by or in the right of the corporation,
if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation
and, with respect to any criminal proceeding, such person had no reasonable cause to believe his conduct was unlawful.
In
the case of an action brought by or in the right of the corporation, indemnification of a corporation agent is permitted if such person
acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation.
However, no indemnification is permitted in respect of any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation, unless and only to the extent that the court in which such proceeding was brought shall determine upon
application that despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably
entitled to such indemnification.
To
the extent that a corporation agent has been successful on the merits or otherwise in the defense of such proceeding, whether or not
by or in the right of the corporation, or in the defense of any claim, issue or matter therein, the corporation is required to indemnify
such person for expenses in connection therewith. Under the DGCL, the corporation may advance expenses incurred by a corporation agent
in connection with a proceeding, provided that the corporation agent undertakes to repay such amount if it shall ultimately be determined
that such person is not entitled to indemnification. Our Certificate of Incorporation requires us to advance expenses to any person entitled
to indemnification, provided that such person undertakes to repay the advancement if it is determined in a final judicial decision from
which there is no appeal that such person is not entitled to indemnification.
The
power to indemnify and advance the expenses under the DGCL does not exclude other rights to which a corporation agent may be entitled
to under our certificate of incorporation, by laws, agreement, vote of stockholders or disinterested directors or otherwise.
Our
Certificate of Incorporation permits us to secure insurance on behalf of our directors, officers, employees and agents for any expense,
liability or loss incurred in such capacities, whether or not the Company would have the power to indemnify such person against such
liability under the provisions of the DGCL.
The
purpose of these provisions is to assist us in retaining qualified individuals to serve as our directors, officers, employees and agents
by limiting their exposure to personal liability for serving as such.
Item
15. Recent Sales of Unregistered Securities.
On December 7, 2023, we
granted (i) an option to purchase 80,000 shares of the Company’s common stock with an exercise price of $0.88 per share and (ii)
a restricted stock award of 20,000 restricted shares to Dr. Sébastien Hazard, our Executive Vice President and Chief Medical Officer,
as an “inducement” grant pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The grant of the option was exempt from registration
under the Securities Act, pursuant to Section 4(a)(2) thereof as a transaction by an issuer not involving a public offering.
Item
16. Exhibits and Financial Statement Schedules.
(a)
The exhibits set forth below have been or are being filed herewith and are numbered in accordance with Item 601 of Regulation S-K.
(b)
Financial statement schedules have been omitted, as the information required to be set forth therein is included in the consolidated
financial statements or notes thereto incorporated by reference into the prospectus forming part of this registration statement.
| EXHIBIT
NO. |
|
DESCRIPTION |
| |
|
|
| 1.1++ |
|
Form of Placement Agency Agreement |
| |
|
|
| 2.1* |
|
Asset Purchase Agreement, dated as of June 6, 2014, by and between Imunon, Inc. and EGEN, Inc., incorporated herein by reference to Exhibit 2.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2014 (SEC File No. 001-15911). |
| |
|
|
| 2.2 |
|
Amendment
to Asset Purchase Agreement, between Celsion Corporation and EGWU, Inc., dated March 28, 2019 incorporated herein by reference to
Exhibit 10.1 to the Current Report on Form 8-K of the Company filed on April 1, 2019 (SEC File No. 001-15911). |
| |
|
|
| 3.1 |
|
Amended
and Restated Certificate of Incorporation of Imunon, dated March 24, 2023, incorporated herein by reference to Exhibit 3.1 to the
Current Report on Form 8-K of the Company filed on March 24, 2023 (SEC File No. 001-15911). |
| |
|
|
| 3.2 |
|
Amended
and Restated Bylaws of the Company, effective on September 19, 2022, incorporated by reference to Exhibit 3.3 to the Current Report
on Form 8-K of the Company, filed on September 19, 2022 (SEC File No. 001-15911). |
| |
|
|
| 4.1 |
|
Form
of Representative’s Common Stock Purchase Warrant, incorporated herein by reference to Exhibit 4.2 to the Current Report on
Form 8-K of the Company, filed on October 31, 2017 (SEC File No. 001-15911). |
| |
|
|
| 4.2 |
|
Form
of Placement Agent Common Stock Purchase Warrant, incorporated herein by reference to Exhibit 4.4 to the Current Report on Form 8-K
of the Company, filed on July 11, 2017 (SEC File No. 001-15911). |
| |
|
|
| 4.3 |
|
Form
of Amended and Restated Warrant (issued under First Amendment of Venture Loan and Security Agreement, dated as of August 1, 2020,
by and among Imunon, Inc., Horizon Funding I, LLC, Horizon Funding Trust 2019-1, and Horizon Technology Finance Corporation, as Collateral
Agent), incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K of the Company, filed on September 4, 2020
(SEC File No. 001-15911). |
| 4.4 |
|
Form
of Exchange Warrant, incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K of the Company, filed on March
13, 2020 (SEC File No. 001-15911).1 |
| |
|
|
| 4.5 |
|
Warrant
to purchase Shares of Common Stock of Celsion Corporation, between Celsion Corporation and EGWU, Inc., dated March 28, 2019, incorporated
herein by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2019 (SEC
File No. 001-15911). |
| |
|
|
| 4.6 |
|
Description
of Securities of the Registrant, incorporated herein by reference to Exhibit 4.5 to the Annual Report on Form 10-K of the Company
for the fiscal year ended December 31, 2019. |
| |
|
|
| 4.7++ |
|
Form of Pre-Funded Warrant. |
| |
|
|
| 4.8+ |
|
Form of Series A Common Stock Purchase Warrant. |
| |
|
|
| 4.9+ |
|
Form of Series B Common Stock Purchase Warrant. |
| |
|
|
| 5.1+ |
|
Opinion of Covington & Burling LLP. |
| |
|
|
| 10.1*** |
|
Imunon,
Inc. 2007 Stock Incentive Plan, as amended, incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of
the Company, filed on May 16, 2017 (SEC File No. 001-15911). |
| |
|
|
| 10.2 |
|
Form
Inducement Offer to Exercise Common Stock Purchase Warrants, incorporated herein by reference to Exhibit 10.3 to the Quarterly Report
on Form 10-Q of the Company for the quarter ended September 30, 2017 (SEC File No. 001-15911). |
| |
|
|
| 10.3*** |
|
Imunon,
Inc. 2018 Stock Incentive Plan, as amended as of June 14, 2023, incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K of the Company filed June 15, 2023 (SEC File No. 001-15911). |
| |
|
|
| 10.4*** |
|
Employment
Offer Letter, entered into on June 15, 2010, between the Company and Jeffrey W. Church, incorporated herein by reference to Exhibit
10.1 to the Current Report on Form 8-K of the Company filed on June 18, 2010 (SEC File No. 001-15911). |
| |
|
|
| 10.5*** |
|
Employment
Offer Letter between the Company and Khursheed Anwer, effective as of June 2, 2014, incorporated herein by reference to Exhibit 10.27
to the Annual Report of the Company for the year ended December 31, 2014 (SEC File No. 001-15911). |
| |
|
|
| 10.6*** |
|
Employment
Agreement between the Company and Michael H. Tardugno, effective as of July 18, 2022, incorporated herein by reference to Exhibit
10.2 to the Current Report on Form 8-K of the Company filed with the Commission on July 19, 2022 (SEC File No. 001-15911). |
| |
|
|
| 10.7*** |
|
Employment
Agreement between the Company Corporation and Corinne Le Goff, effective as of July 18, 2022 incorporated herein by reference to
Exhibit 10.1 to the Current Report on Form 8-K of the Company filed with the Commission on July 19, 2022 (SEC File No. 001-15911). |
| |
|
|
| 10.8*** |
|
Amended
and Restated Change in Control Agreement, dated as of September 6, 2016, by and between the Company and Michael H. Tardugno, incorporated
herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2016
(SEC File No. 001-15911). |
| |
|
|
| 10.9*** |
|
Amended
and Restated Change in Control Agreement, dated as of September 6, 2016, by and between the Company and Jeffrey W. Church, incorporated
herein by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2016
(SEC File No. 001-15911). |
| 10.10* |
|
Patent License Agreement between the Company and Duke University, dated November 10, 1999, incorporated herein by reference to Exhibit 10.9 to the Annual Report of the Company for the year ended September 30, 1999 (SEC File No. 001-15911). |
| |
|
|
| 10.11* |
|
License Agreement dated July 18, 2003, between the Company and Duke University, incorporated herein by reference to Exhibit 10.1 to the Registration Statement on Form S-3 (File No. 333-108318) filed on August 28, 2003 (SEC File No. 001-15911). |
| |
|
|
| 10.12* |
|
Development,
Product Supply and Commercialization Agreement, effective December 5, 2008, by and between the Company and Yakult Honsha Co., Ltd.,
incorporated herein by reference to Exhibit 10.15 to the Annual Report of the Company for the year ended December 31, 2008 (SEC File
No. 001-15911). |
| |
|
|
| 10.13* |
|
The
2nd Amendment to The Development, Product Supply and Commercialization Agreement, effective January 7, 2011, by and between the Company
and Yakult Honsha Co., Ltd. incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed
on January 18, 2011 (SEC File No. 001-15911). |
| |
|
|
| 10.14* |
|
Technology
Development Agreement, effective as of May 7, 2012, by and between Imunon, Inc. and Zhejiang Hisun Pharmaceutical Co. Ltd., incorporated
herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2012 (SEC
File No. 001-15911). |
| |
|
|
| 10.15* |
|
Technology
Development Contract, dated as of January 18, 2013, by and between Imunon, Inc. and Zhejiang Hisun Pharmaceutical Co. Ltd., incorporated
herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 (SEC
File No. 001-15911). |
| |
|
|
| 10.16 |
|
Lease
Agreement, executed July 21, 2011, by and between Imunon, Inc. and Brandywine Operating Partnership, L.P., incorporated herein by
reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed on July 25, 2011 (SEC File No. 001-15911). |
| |
|
|
| 10.17 |
|
First Amendment to Lease Agreement, executed April 20, 2017, by and between Imunon, Inc. and Lenox Drive Office Park, LLC, incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2017 (SEC File No. 001-15911). |
| |
|
|
| 10.18 |
|
Second Amendment to Lease Agreement, dated January 9, 2019, by and between Celsion Corporation and Lenox Drive Office Park, LLC, successor in interest to Brandywine Operating Partnership, L.P., incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2019 (SEC File No. 001-15911). |
| |
|
|
| 10.19 |
|
Lease
Agreement, dated January 15, 2018, by and between Imunon, Inc. and HudsonAlpha Institute of Biotechnology for office and lab space
located in Huntsville, Alabama incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company
for the quarter ended March 31, 2018 (SEC File No. 001-15911). |
| |
|
|
| 10.20 |
|
Registration
Rights Agreement, dated as of June 20, 2014, by and between Celsion Corporation and Egen, Inc., incorporated herein by reference
to Exhibit 4.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2014 (SEC File No. 001-15911). |
| |
|
|
| 10.21 |
|
Loan Facility Agreement, dated as of June 18, 2021, by and between the Company and Silicon Valley Bank, incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2021 (SEC File No. 001-15911). |
| 10.22 |
|
Settlement
Agreement and Release, by and between the plaintiff to the shareholder action captioned O’Connor v. Braun, et al., N.J. Super.,
Dkt. No. MERC-00068-19, William J. O’Connor, derivatively on behalf of Imunon, Inc. and individually on behalf of himself and
all other similarly situated stockholders of Imunon, Inc. and defendants, incorporated herein by reference to Exhibit 10.2 to the
Current Report on Form 8-K of the Company, filed on June 16, 2020 (SEC File No. 001-15911). |
| |
|
|
| 10.23 |
|
Form
of Exchange Agreement, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company, filed on March
13, 2020 (SEC File No. 001-15911). |
| |
|
|
| 10.24 |
|
At
the Market Offering Agreement, dated May 25, 2022 by and between Celsion Corporation and H.C. Wainwright & Co. LLC, incorporated
by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company, filed on May 25, 2022 (SEC File No. 001-15911). |
| |
|
|
| 10.25+ |
|
Form of Securities Purchase Agreement. |
| |
|
|
| 21.1 |
|
Subsidiaries of Imunon, Inc., incorporated herein by reference to Exhibit 21.1 to the Annual Report of the Company for the year ended December 31, 2022 (SEC File No. 001-15911). |
| |
|
|
| 23.1+ |
|
Consent of WithumSmith+Brown, PC, independent registered public accounting firm for the Company. |
| |
|
|
| 23.2+ |
|
Consent of Covington & Burling LLP (included in Exhibit 5.1). |
| |
|
|
| 24.1++ |
|
Power of Attorney (reference is made to the signature page of the initial Registration Statement)). |
| |
|
|
| 101** |
|
The
following materials from the Company’s Annual Report for the fiscal year ended December 31, 2022, formatted in XBRL (Extensible
Business Reporting Language): (i) the audited Consolidated Balance Sheets, (ii) the audited Consolidated Statements of Operations,
(iii) the audited Consolidated Statements of Comprehensive Loss, (iv) the audited Consolidated Statements of Cash Flows, (v) the
audited Consolidated Statements of Changes in Stockholders’ Equity and (vi) Notes to Financial Statements. |
| |
|
|
| 107+ |
|
Filing fee table |
| |
|
|
| * |
|
Portions
of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act
of 1934, amended, and the omitted material has been separately filed with the Securities and Exchange Commission. |
| + |
|
Filed
herewith. |
| ++ |
|
Previously filed. |
| ** |
|
XBRL
information is filed herewith. |
| *** |
|
Management
contract or compensatory plan or arrangement. |
| **** |
|
To
be filed by amendment. |
Item
17. Undertakings.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The
undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided,
however, that: Paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement, or is contained
in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b)
as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used
after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) |
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424; |
| |
|
| (ii) |
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant; |
| |
|
| (iii) |
The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and |
| |
|
| (iv) |
Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(6)
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing
of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(7)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act, the Registrant has duly caused this Amendment No. 2 to the registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lawrenceville, State of New Jersey, on the 9th
day of February, 2024.
| |
IMUNON,
INC. |
| |
|
|
| |
By: |
/s/
Corinne Le Goff |
| |
|
Corinne
Le Goff |
| |
|
President
and Chief Executive Officer |
Pursuant
to the requirements of the Securities Act, this Amendment No. 2 to the registration statement has been signed by the following
persons in the capacities and on the dates indicated.
| Name |
|
Position |
|
Date |
| |
|
|
|
|
| /s/
Corinne Le Goff |
|
President,
Chief Executive Officer and |
|
February
9th, 2024 |
| Corinne
Le Goff, Pharm. D., MBA |
|
Director
(Principal Executive Officer) |
|
|
| |
|
|
|
|
| /s/ Jeffrey W. Church |
|
Executive
Vice President, Chief |
|
February
9th, 2024 |
| Jeffrey
W. Church |
|
Financial
Officer and Corporate Secretary (Principal Financial and Accounting Officer) |
|
|
| |
|
|
|
|
| * |
|
Executive
Chairman and Director |
|
February
9th, 2024 |
| Michael
H. Tardugno |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
February
9th, 2024 |
| Frederick
J. Fritz |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
February
9th, 2024 |
| James
E. Dentzer |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
February
9th, 2024 |
| Donald
Braun, Ph.D. |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
February
9th, 2024 |
| Stacy
Lindborg, Ph. D. |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
February
9th, 2024 |
| Christine
Pellizzari, J.D. |
|
|
|
|
Exhibit
4.8
SERIES
A WARRANT TO PURCHASE SHARES OF COMMON STOCK
IMUNON,
INC.
| Warrant
Shares: ________ |
Original
Issuance Date: [*] __, 2024 |
THIS
SERIES A WARRANT TO PURCHASE SHARES OF COMMON STOCK (this “Warrant”) certifies that, for value received, _____________
or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the Original Issuance Date (the “Initial Exercise Date”) and on or
prior to 5:00 pm (New York City time) on [*] __, 20291 (the “Termination Date”) but not thereafter, to
subscribe for and purchase from IMUNON, INC., a Delaware corporation (the “Company”), up to ______ shares of
Common Stock, par value $0.01 per share (the “Common Stock”), of the Company (as subject to adjustment hereunder,
the “Warrant Shares”). The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price,
as defined in Section 2(b).
1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated [*], 2024, among the Company and the purchasers signatory thereto.
2.
Exercise.
(a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form attached hereto as Exhibit A
(the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver
the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable
Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within
three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares purchasable hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The
Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company
shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee,
by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less
than the amount stated on the face hereof.
1
Five years following the original issuance date.
For
the avoidance of doubt, there is no circumstance that would require the Company to net cash settle the Warrants.
(b)
Exercise Price. The exercise price of this Warrant, shall be $[•] per share, subject to adjustment hereunder (the “Exercise
Price”).
(c)
Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is no effective
registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the
Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| |
(A) |
= |
as applicable: (i) the VWAP
on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed
and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section
2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS
promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (x) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (y) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable
Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered
within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading
Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice
of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close
of “regular trading hours” on such Trading Day; |
| |
(B) |
= |
the Exercise Price of this
Warrant, as adjusted hereunder; and |
| |
(X) |
= |
the number of Warrant Shares
that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of
a cash exercise rather than a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2(c).
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the VWAP of the Common Stock
for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for
trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
(d)
Mechanics of Exercise
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to, or resale
of the Warrant Shares by, the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery
of the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for the number of
Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise
by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company, and (iii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”);
provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company
by such date. Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant
Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the
earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery
of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise
by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each
$1,000 of Warrant Shares subject to such exercise (based on the VWAP of the common Stock on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after the Warrant Share Delivery Date) for each Trading
Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees
to maintain a registrar (which may be the Transfer Agent) that is a participant in the FAST program so long as this Warrant remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a
number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m.
(New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement,
the Company agrees to deliver, or cause to be delivered, the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time)
on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided
that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery
Date.
(ii)
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
(iii)
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv)
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x)
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise
of Warrants with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein
shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common
Stock upon exercise of the Warrant as required pursuant to the terms hereof.
(v)
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share of Common Stock.
(vi)
Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue
or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall
be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed
by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto, and this Warrant shall be surrendered to the Company and, if any portion of this Warrant remains unexercised, a new
Warrant in the form hereof shall be delivered by the Company to the assignee. The Company shall pay all Transfer Agent fees required
for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation
performing similar functions) required for same-day electronic delivery of the Warrant Shares.
(vii)
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
(viii)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates, (ii) any
other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial
ownership of shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section 13(d) (such Persons,
“Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).
For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and
Attribution Parties shall include the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock
Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the
Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.
To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant
is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to
any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes
of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange
Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the Company or (C) a more
recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written
or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be [4.99%/9.99%] of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Warrant
Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of shares of Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares upon exercise of this Warrant
held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation
will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make
changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership
Limitation, no alternate consideration is owing to the Holder.
3.
Certain Adjustments.
(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock
any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant remains unchanged.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or reclassification.
(b)
[RESERVED]
(c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time that the Warrant is
outstanding the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other
property pro rata to all of the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
(d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to all of the holders of stock of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
(e)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person and the Company is not the surviving
entity, (ii) the Company (or any Subsidiary), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of the Company’s assets in one or a series of related transactions, (iii) any,
direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to
which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been
accepted by the holders of greater than 50% of the outstanding Common Stock or greater than 50% of the voting power of the common equity
of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of shares of Common Stock or any compulsory share exchange pursuant to which the shares of Common Stock are effectively
converted into or exchanged for other securities, cash or property (other than a stock split), or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power
of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately
prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e)
on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if
it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a
result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and
the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the
event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable
at any time concurrently with, or within thirty (30) days after, the consummation of the Fundamental Transaction (or, if later, the date
of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder,
as described below, an amount of consideration equal to the Black Scholes Value (as defined below) of the remaining unexercised portion
of this Warrant on the date of consummation of such Fundamental Transaction, provided, however, that, if the Fundamental Transaction
is not within the Company’s control, including not approved by the Company’s Board of Directors, the Holder shall only be
entitled to receive from the Company or any Successor Entity as of the date of consummation of such Fundamental Transaction the same
type or form of consideration (and in the same proportion), valued at the Black Scholes Value of the unexercised portion of this Warrant,
that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether
that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice
to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided further, that
if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of
Common Stock will be deemed to have received shares of the Successor Entity (which Successor Entity may be the Company following such
Fundamental Transaction) in such Fundamental Transaction and a Holder shall receive shares of the Successor Entity in the amount of the
Black Scholes Value. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction
for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time
between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected
volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization
factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying
price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus
the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP
immediately prior to the public announcement of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation
of such Fundamental Transaction, (D) a remaining option time equal to the time between the date of the public announcement of the applicable
Fundamental Transaction and the Termination Date, and (E) a zero cost of borrow. In the event of a cash payment in connection with a
Fundamental Transaction, the payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five
Trading Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company shall cause
any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with
the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior
to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable
for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common
Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior
to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in
form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the
same effect as if such Successor Entity had been named as the Company herein.
(f)
[RESERVED]
(g)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share of Common
Stock, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(h)
Notice to Holder.
(i)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment; provided, however,
that the Company may satisfy this notice requirement in this Section 3(h) by filing such notice with the Commission pursuant to a Current
Report on Form 8-K or Quarterly or Annual Report.
(ii)
Notice to Allow Exercise by Holder. If (A) the Company declares a dividend (or any other distribution in whatever form other than
a stock split) on the shares of Common Stock, (B) the Company declares a special nonrecurring cash dividend on, or a redemption of, the
shares of Common Stock, (C) the Company authorizes the granting to all holders of the shares of Common Stock rights or warrants to subscribe
for or purchase any shares of capital stock of any class or of any rights (excluding any granting or issuance of rights to all of the
Company’s stockholders pursuant to a stockholder rights plan), (D) the approval of any stockholders of the Company is required
in connection with a Fundamental Transaction, or (E) the Company authorizes the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder
at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least four (4) calendar
days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to
become effective or close, and the date as of which it is expected that holders of the shares of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified in such notice and provided, further that no notice shall
be required if the information is disseminated in a press release or document filed with the Commission. To the extent that any notice
provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.
(i)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during
the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and
for any period of time deemed appropriate by the board of directors of the Company.
4.
Transfer of Warrant.
(a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
(b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of
this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
5.
Miscellaneous.
(a)
Currency. Unless otherwise indicated, all dollar amounts referred to in this Warrant are in United States Dollars (“U.S.
Dollars”). All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies
shall be converted in the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar
exchange rate as published in the Wall Street Journal (NY edition) on the relevant date of calculation.
(b)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
(c)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
(d)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.
(e)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares underlying this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued and delivered, as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.
The Company covenants that all Warrant Shares underlying this Warrant which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any shares of Common Stock above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii)
use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
(f)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined
in accordance with the provisions of the Purchase Agreement.
(g)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
if the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state, federal or foreign securities
laws.
(h)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. No provision of this Warrant
shall be construed as a waiver by the Holder of any rights which the Holder may have under the federal securities laws and the rules
and regulations of the Commission thereunder. Without limiting any other provision of this Warrant or the Purchase Agreement, if the
Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(i)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Purchase Agreement.
(j)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any shares of Common Stock or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
(k)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
(l)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
(m)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holders of a majority of the Warrant Shares.
(n)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(o)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
| |
IMUNON,
INC. |
|
|
|
| |
By: |
|
| |
Name: |
|
| |
Title: |
|
EXHIBIT
A
NOTICE
OF EXERCISE
TO:
IMUNON, INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
☐
in lawful money of the United States; or
☐
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The
Warrant Shares shall be delivered to the following DWAC Account Number:
[SIGNATURE
OF HOLDER]
Name
of Investing Entity:
Signature
of Authorized Signatory of Investing Entity:
Name
of Authorized Signatory:
Title
of Authorized Signatory:
Date:
EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name:
(Please
Print)
Address:
(Please
Print)
Phone
Number:
Email
Address:
Dated:
Holder’s
Signature:
Holder’s
Address:
Exhibit
4.9
SERIES
B WARRANT TO PURCHASE SHARES OF COMMON STOCK
IMUNON,
INC.
| Warrant
Shares: ________ |
Original
Issuance Date: [*] __, 2024 |
THIS
SERIES B WARRANT TO PURCHASE SHARES OF COMMON STOCK (this “Warrant”) certifies that, for value received, _____________
or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the Original Issuance Date (the “Initial Exercise Date”) and on or
prior to 5:00 pm (New York City time) on [*] __, 2025[1] (the “Termination Date”) but not thereafter, to
subscribe for and purchase from IMUNON, INC., a Delaware corporation (the “Company”), up to ______ shares of
Common Stock, par value $0.01 per share (the “Common Stock”), of the Company (as subject to adjustment hereunder,
the “Warrant Shares”). The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price,
as defined in Section 2(b).
1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated [*], 2024, among the Company and the purchasers signatory thereto.
2.
Exercise.
(a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form attached hereto as Exhibit A
(the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver
the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable
Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within
three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares purchasable hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The
Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company
shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee,
by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less
than the amount stated on the face hereof.
For
the avoidance of doubt, there is no circumstance that would require the Company to net cash settle the Warrants.
1
Eighteen months following the original issuance date.
(b)
Exercise Price. The exercise price of this Warrant, shall be $[•] per share, subject to adjustment hereunder (the “Exercise
Price”).
(c)
Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is no effective
registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the
Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
|
(A) |
= |
as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section
2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior
to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities
laws) on such Trading Day, (ii) at the option of the Holder, either (x) the VWAP on the Trading Day immediately preceding the date of
the applicable Notice of Exercise or (y) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P.
(“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of
Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including
until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)
the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of
Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such
Trading Day; |
|
(B) |
= |
the Exercise Price of this Warrant, as adjusted hereunder; and |
| |
(X) |
= |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with
the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2(c).
Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the VWAP of the Common Stock
for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for
trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
(d)
Mechanics of Exercise
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to, or resale
of the Warrant Shares by, the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery
of the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for the number of
Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise
by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company, and (iii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”);
provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company
by such date. Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant
Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the
earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery
of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise
by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each
$1,000 of Warrant Shares subject to such exercise (based on the VWAP of the common Stock on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after the Warrant Share Delivery Date) for each Trading
Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees
to maintain a registrar (which may be the Transfer Agent) that is a participant in the FAST program so long as this Warrant remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a
number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m.
(New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement,
the Company agrees to deliver, or cause to be delivered, the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time)
on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided
that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery
Date.
(ii)
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
(iii)
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv)
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x)
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise
of Warrants with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein
shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common
Stock upon exercise of the Warrant as required pursuant to the terms hereof.
(v)
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share of Common Stock.
(vi)
Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue
or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall
be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed
by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto, and this Warrant shall be surrendered to the Company and, if any portion of this Warrant remains unexercised, a new
Warrant in the form hereof shall be delivered by the Company to the assignee. The Company shall pay all Transfer Agent fees required
for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation
performing similar functions) required for same-day electronic delivery of the Warrant Shares.
(vii)
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
(viii)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates, (ii) any
other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial
ownership of shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section 13(d) (such Persons,
“Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).
For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and
Attribution Parties shall include the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock
Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the
Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.
To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant
is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to
any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes
of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange
Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the Company or (C) a more
recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written
or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be [4.99%/9.99%] of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Warrant
Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of shares of Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares upon exercise of this Warrant
held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation
will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make
changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership
Limitation, no alternate consideration is owing to the Holder.
3.
Certain Adjustments.
(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock
any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant remains unchanged.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or reclassification.
(b)
[RESERVED]
(c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time that the Warrant is
outstanding the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other
property pro rata to all of the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
(d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to all of the holders of stock of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
(e)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person and the Company is not the surviving
entity, (ii) the Company (or any Subsidiary), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of the Company’s assets in one or a series of related transactions, (iii) any,
direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to
which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been
accepted by the holders of greater than 50% of the outstanding Common Stock or greater than 50% of the voting power of the common equity
of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of shares of Common Stock or any compulsory share exchange pursuant to which the shares of Common Stock are effectively
converted into or exchanged for other securities, cash or property (other than a stock split), or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power
of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately
prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e)
on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if
it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a
result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and
the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the
event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable
at any time concurrently with, or within thirty (30) days after, the consummation of the Fundamental Transaction (or, if later, the date
of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder,
as described below, an amount of consideration equal to the Black Scholes Value (as defined below) of the remaining unexercised portion
of this Warrant on the date of consummation of such Fundamental Transaction, provided, however, that, if the Fundamental Transaction
is not within the Company’s control, including not approved by the Company’s Board of Directors, the Holder shall only be
entitled to receive from the Company or any Successor Entity as of the date of consummation of such Fundamental Transaction the same
type or form of consideration (and in the same proportion), valued at the Black Scholes Value of the unexercised portion of this Warrant,
that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether
that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice
to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided further, that
if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of
Common Stock will be deemed to have received shares of the Successor Entity (which Successor Entity may be the Company following such
Fundamental Transaction) in such Fundamental Transaction and a Holder shall receive shares of the Successor Entity in the amount of the
Black Scholes Value. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction
for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time
between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected
volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization
factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying
price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus
the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP
immediately prior to the public announcement of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation
of such Fundamental Transaction, (D) a remaining option time equal to the time between the date of the public announcement of the applicable
Fundamental Transaction and the Termination Date, and (E) a zero cost of borrow. In the event of a cash payment in connection with a
Fundamental Transaction, the payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five
Trading Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company shall cause
any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with
the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior
to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable
for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common
Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior
to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in
form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the
same effect as if such Successor Entity had been named as the Company herein.
(f)
[RESERVED]
(g)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share of Common
Stock, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(h)
Notice to Holder.
(i)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment; provided, however,
that the Company may satisfy this notice requirement in this Section 3(h) by filing such notice with the Commission pursuant to a Current
Report on Form 8-K or Quarterly or Annual Report.
(ii)
Notice to Allow Exercise by Holder. If (A) the Company declares a dividend (or any other distribution in whatever form other than
a stock split) on the shares of Common Stock, (B) the Company declares a special nonrecurring cash dividend on, or a redemption of, the
shares of Common Stock, (C) the Company authorizes the granting to all holders of the shares of Common Stock rights or warrants to subscribe
for or purchase any shares of capital stock of any class or of any rights (excluding any granting or issuance of rights to all of the
Company’s stockholders pursuant to a stockholder rights plan), (D) the approval of any stockholders of the Company is required
in connection with a Fundamental Transaction, or (E) the Company authorizes the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder
at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least four (4) calendar
days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to
become effective or close, and the date as of which it is expected that holders of the shares of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified in such notice and provided, further that no notice shall
be required if the information is disseminated in a press release or document filed with the Commission. To the extent that any notice
provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.
(i)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during
the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and
for any period of time deemed appropriate by the board of directors of the Company.
4.
Transfer of Warrant.
(a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
(b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of
this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
5.
Miscellaneous.
(a)
Currency. Unless otherwise indicated, all dollar amounts referred to in this Warrant are in United States Dollars (“U.S.
Dollars”). All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies
shall be converted in the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar
exchange rate as published in the Wall Street Journal (NY edition) on the relevant date of calculation.
(b)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
(c)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
(d)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.
(e)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares underlying this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued and delivered, as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.
The Company covenants that all Warrant Shares underlying this Warrant which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any shares of Common Stock above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii)
use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
(f)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined
in accordance with the provisions of the Purchase Agreement.
(g)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
if the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state, federal or foreign securities
laws.
(h)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. No provision of this Warrant
shall be construed as a waiver by the Holder of any rights which the Holder may have under the federal securities laws and the rules
and regulations of the Commission thereunder. Without limiting any other provision of this Warrant or the Purchase Agreement, if the
Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(i)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Purchase Agreement.
(j)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any shares of Common Stock or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
(k)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
(l)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
(m)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holders of a majority of the Warrant Shares.
(n)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(o)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
| |
IMUNON,
INC. |
| |
|
| |
By: |
|
| |
Name: |
|
| |
Title: |
|
EXHIBIT
A
NOTICE
OF EXERCISE
TO:
IMUNON, INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
☐
in lawful money of the United States; or
☐
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
| The
Warrant Shares shall be delivered to the following DWAC Account Number: |
| |
| [SIGNATURE
OF HOLDER] |
| |
| Name
of Investing Entity: |
| Signature
of Authorized Signatory of Investing Entity: |
| Name
of Authorized Signatory: |
| Title
of Authorized Signatory: |
| Date: |
EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
| (Please
Print) |
| Address: |
| (Please
Print) |
| Phone
Number: |
| Email
Address: |
| Dated: |
| Holder’s
Signature: |
| Holder’s
Address: |
Exhibit
5.1
February
9, 2024
Imunon,
Inc.
997
Lenox Drive, Suite 100
Lawrenceville,
NJ 08646
Ladies
& Gentlemen:
We
have acted as counsel to Imunon, Inc., a Delaware corporation (the “Company”), in connection with the registration
by the Company under the Securities Act of 1933, as amended (the “Act”), and the issuance and sale of (i) shares (the
“Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”),
(ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase shares of Common Stock, at an exercise price of $0.0001
per Pre-Funded Warrant, (iii) Series A warrants to purchase shares of Common Stock (the “Series A Common Warrants”),
(iv) Series B warrants to purchase shares of Common Stock (together with the Series A Common Warrants, the “Common Warrants”
and the Common Warrants together with the Pre-Funded Warrants, the “Warrants”), and (v) the shares of Common Stock
issuable upon exercise of the Warrants (the “Warrant Shares”), in each case pursuant to the registration statement
on Form S-1 (File No. 333-276174) filed with the Securities and Exchange Commission (the “Commission”) on December
20, 2023, (such registration statement, as amended to the date hereof, is herein referred to as the “Registration Statement”).
The proposed maximum aggregate offering price of the Shares of Common Stock, Pre-Funded Warrants and Warrant Shares is $24,000,000. The
forms of Pre-Funded Warrant, Series A Common Warrant and Series B Common Warrant are filed as Exhibits 4.7, 4.8 and 4.9, respectively,
to the Registration Statement. The Shares, the Pre-Funded Warrants and the Common Warrants are to be sold pursuant to the form of securities
purchase agreement filed as Exhibit 10.25 to the Registration Statement (the “Securities Purchase Agreement”).
We
have reviewed the (a) Registration Statement, (b) the form of Series A Common Warrant, (c) the form of Series B Common Warrant, (d) the
form of Pre-Funded Warrant, (e) the Securities Purchase Agreement, (f) the form of Placement Agency Agreement to be entered into by and
among the Company and Alliance Global Partners and Brookline Capital Markets, acting as placement agents, and (g) such other corporate
records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes
of this opinion. We have assumed that all signatures are genuine, that all documents submitted to us as originals are authentic and that
all copies of such documents submitted to us conform to the originals. We have assumed further that, with respect to any document executed
or to be executed by any party other than the Company, that such party has, or will have, duly authorized, executed and delivered the
documents to which it is a party and that each such document is, or will be, the valid and binding obligation of such party, enforceable
against it in accordance with its terms.
We
have relied as to certain matters on information obtained from public officials, officers of the Company, and other sources believed
by us to be responsible.
Based
upon the foregoing, and subject to the qualifications set forth herein, we are of the opinion that (i) the Shares have been duly authorized
and, when the Registration Statement has become effective under the Act and the terms of the issuance and sale of the Shares have been
duly approved by all necessary corporate action by the Company, the Shares, when duly issued and sold as contemplated in the Registration
Statement, will be validly issued, fully paid and non-assessable, (ii) the Warrant Shares initially issuable upon exercise of the Warrants
have been duly authorized and, when the Registration Statement has become effective under the Act and the Warrant Shares have been duly
reserved for issuance and the terms of the issuance and sale of the Warrant Shares have been duly approved by all necessary corporate
action by the Company, the Warrant Shares, when issued upon such exercise in accordance with the terms of the Warrants, will be validly
issued, fully paid and non-assessable, and (iii) when the Registration Statement has become effective under the Act and the form, terms,
execution and delivery of the Warrants have been duly authorized by all necessary corporate action by the Company and the Warrants have
been duly executed and delivered in accordance with their terms and have been duly issued and sold as contemplated in the Registration
Statement, the Warrants will constitute the valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
The
foregoing opinion is subject to the following qualifications:
We
express no opinion as to: (i) waivers of defenses, subrogation and related rights, rights to trial by jury, rights to object to venue,
or other rights or benefits bestowed by operation of law; (ii) releases or waivers of unmatured claims or rights; (iii) indemnification,
contribution, exculpation, or arbitration provisions, or provisions for the non-survival of representations, to the extent they purport
to indemnify any party against, or release or limit any party’s liability for, its own breach or failure to comply with statutory
obligations, or to the extent such provisions are contrary to public policy; or (iv) provisions for liquidated damages and penalties,
penalty interest and interest on interest.
We
are members of the bar of Massachusetts. We do not express any opinion herein on any laws other than the Delaware General Corporation
Law and applicable provisions of the Delaware Constitution and reported judicial decisions interpreting such laws.
We
hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. We also hereby consent to the reference to
our firm under the heading “Legal Matters” in the prospectus constituting part of the Registration Statement. In giving such
consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act.
| |
Very truly yours, |
| |
|
| |
/s/ Covington & Burling
LLP |
| |
|
| |
Covington & Burling LLP |
Exhibit
10.25
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of [•], 2024, between Imunon, Inc., a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns,
a “Purchaser” and collectively the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities
Act (as defined below), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires
to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
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:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“A.G.P.”
means A.G.P./Alliance Global Partners.
“Board
of Directors” means the board of directors of the Company.
“Brookline”
means Brookline Capital Markets, LLC.
“Business
Day” means any day other than Saturday, Sunday, or other day on which banking institutions in the State of New York are authorized
or required by law to remain closed.
“Closing”
means the closing of the purchase and sale of the Shares and Warrants pursuant to Section 2.1.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount at the Closing and (ii)
the Company’s obligations to deliver the Shares and Warrants, in each case, at the Closing have been satisfied or waived, but in
no event later than the second (2nd) Trading Day following the date hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means common stock of the Company, par value $0.01 per share.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Common
Warrants” means, collectively, the Series A Common Warrants and the Series B Common Warrants.
“Company
Counsel” means Covington & Burling LLP, with offices located at One International Place, Suite 1020, Boston, MA 02110-2600.
“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and
before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the
date hereof, unless otherwise instructed as to an earlier time by the Placement Agents, and (ii) if this Agreement is signed between
midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on
the date hereof, unless otherwise instructed as to an earlier time by the Placement Agents.
“DVP”
shall have the meaning ascribed to such term in Section 2.1.
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock, restricted stock units, options or other equity awards to employees,
consultants, officers, or directors of the Company pursuant to any share or option plan in existence as of the date hereof or subsequently
approved by a vote of the stockholders of the Company, (b) shares of Common Stock upon the exercise or exchange of or conversion of any
Securities issued hereunder and other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in
connection with stock splits or combinations) or to extend the term (but not, for purposes of clarity, the exercise period of stock options)
of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested
directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and
carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition
period in Section 4.10(a) herein, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person)
which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business
of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction
in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing
in securities (for avoidance of doubt, securities issued to a venture arm of a strategic investor shall be deemed an “Exempt Issuance”),
(d) issuances of shares of Common Stock to consultants or vendors of the Company, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights during the prohibition period in Section 4.10(a) herein;
and (e) issuances of shares of Common Stock to existing holders of the Company’s securities in compliance with the terms of agreements
entered into with, or instruments issued to, such holders as of or prior to the date hereof, provided that such agreements regarding
such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise
price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend
the term of such securities, and provided further that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights during the prohibition period in Section 4.10(a) herein.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP”
means generally accepted accounting principles in the United States.
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up
Agreement” means the Lock-Up Agreement, dated as of the date hereof, signed by the directors and officers of the Company, in
the form of Exhibit C attached hereto.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Per
Share Purchase Price” equals $[___], subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations
and other similar transactions of shares of Common Stock that occur between the date hereof and the Closing Date.
“Per
Pre-Funded Warrant Purchase Price” equals $[___], subject to adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions relating to shares of Common Stock that occur after the date of this Agreement.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement
Agents” means each of A.G.P. and Brookline.
“Placement
Agent Counsel” means Sullivan & Worcester LLP, with offices located at 1633 Broadway, New York, New York 10019.
“Pre-Funded
Warrants” means, collectively, the pre-funded warrants delivered to the Purchasers at Closing in accordance with Section 2.2(a)
hereof, which Pre-Funded Warrants shall be exercisable immediately upon issuance and shall expire in accordance with the terms thereof,
in the form of Exhibit B attached hereto.
“Preliminary
Prospectus” means any preliminary prospectus included in the Registration Statement, as originally filed or as part of any
amendment thereto, or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities
Act.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Prospectus”
means the final prospectus filed pursuant to Rule 424(b) under the Securities Act.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration
Statement” means the effective registration statement filed with the Commission on Form S-1 (File No. 333-276174), including
all information, documents and exhibits filed with or incorporated by reference into such registration statement, which registers the
sale of the Securities and includes any Rule 462(b) Registration Statement.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Rule
462(b) Registration Statement” means any registration statement prepared by the Company registering additional Securities,
which was filed with the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated
by the Commission pursuant to the Securities Act.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Shares, the Warrants, and the Warrant Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock issued and issuable to each Purchaser pursuant to this Agreement.
“Series
A Common Warrants” means, the Common Stock purchase warrants delivered to Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Series A Common Warrants shall be immediately exercisable and have terms of exercise equal to five (5) years, in
substantially the form of Exhibit A-1 attached hereto.
“Series
B Common Warrants” means, the Common Stock purchase warrants delivered to Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Series B Common Warrants shall be immediately exercisable and have terms of exercise equal to eighteen (18) months,
in substantially the form of Exhibit A-2 attached hereto.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be
deemed to include locating and/or borrowing shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants, purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a), and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the shares of Common Stock are listed or quoted for trading
on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or
the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Warrants, the Lock-Up Agreements and all exhibits and schedules thereto and hereto and
any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Equiniti Trust Company, LLC. Equiniti Trust Company, LLC is located at 6201
15th Avenue, Brooklyn, NY 11219.
“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.10(b).
“Warrants”
means, collectively, the Common Warrants and the Pre-Funded Warrants.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the 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, (i) the number of shares of Common Stock set forth under the heading “Subscription Amount” on the Purchaser’s
signature page hereto, at the Per Share Purchase Price, and (ii) Common Warrants exercisable for shares of Common Stock as calculated
pursuant to Section 2.2(a); provided, however, that, to the extent that a Purchaser determines, in its sole discretion, that such Purchaser
(together with such Purchaser’s Affiliates, and any Person acting as a group together with such Purchaser or any of such Purchaser’s
Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation, or as such Purchaser may otherwise choose, in lieu
of purchasing shares of Common Stock, such Purchaser may elect to purchase Pre-Funded Warrants in lieu of shares of Common Stock in such
manner to result in the full Subscription Amount being paid by such Purchaser to the Company. The “Beneficial Ownership Limitation”
shall be 4.99% (or, at the election of the Purchaser, 9.99%) of the number of shares of Common Stock, in each case, outstanding immediately
after giving effect to the issuance of the Securities on the Closing Date.
Each
Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available for
Delivery Versus Payment (“DVP”) settlement with the Company or its designees. The Company shall deliver to each Purchaser
its respective Shares and Warrants as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other
items set forth in Section 2.2 at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the
Closing shall occur at the offices of A.G.P. or such other location as the parties shall mutually agree. Unless otherwise directed by
the Placement Agents, settlement of the Shares shall occur via DVP (i.e., on the Closing Date, the Company shall issue the Shares registered
in the Purchasers’ names and addresses and released by the Transfer Agent directly to the account(s) at the Placement Agents identified
by each Purchaser; upon receipt of such Shares, the Placement Agents shall promptly electronically deliver such Shares to the applicable
Purchaser, and payment therefor shall be made by the Placement Agents (or one of their clearing firms) by wire transfer to the Company).
Notwithstanding anything herein to the contrary, if at any time on or after the time of execution of this Agreement by the Company and
an applicable Purchaser through the Closing (the “Pre-Settlement Period”), such Purchaser sells to any Person all,
or any portion, of any Shares to be issued hereunder to such Purchaser at the Closing (collectively, the “Pre-Settlement Shares”),
such Person shall, automatically hereunder (without any additional required actions by such Purchaser or the Company), be deemed to be
a Purchaser under this Agreement unconditionally bound to purchase, and the Company shall be deemed unconditionally bound to sell, such
Pre-Settlement Shares to such Person at the Closing; provided, that the Company shall not be required to deliver any Pre-Settlement Shares
to such Purchaser prior to the Company’s receipt of the Subscription Amount for such Pre-Settlement Shares hereunder; provided,
further, that the Company hereby acknowledges and agrees that the forgoing shall not constitute a representation or covenant by such
Purchaser as to whether or not such Purchaser will elect to sell any Pre-Settlement Shares during the Pre-Settlement Period. The decision
to sell any Shares will be made in the sole discretion of such Purchaser from time to time, including during the Pre-Settlement Period.
Notwithstanding the foregoing, with respect to any Notice(s) of Exercise (as defined in the Warrants) delivered on or prior to 12:00
p.m. (New York City time) on the Closing Date, which may be delivered at any time after the time of execution of this Agreement, the
Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Closing Date and the
Closing Date shall be the Warrant Share Delivery Date (as defined in the Warrants) for purposes hereunder.
2.2 Deliveries.
| (a) | On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser the following: |
| (i) | this
Agreement duly executed by the Company; |
| (ii) | a
legal opinion of Company Counsel, in form and substance reasonably satisfactory to the Placement
Agents; |
| (iii) | the
Company’s wire instructions, on Company letterhead and executed by the Company’s
Chief Executive Officer or Chief Financial Officer; |
| (iv) | subject
to the last sentence in Section 2.1, a copy of the irrevocable instructions to the Transfer
Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository
Trust Company Deposit or Withdrawal at Custodian system shares of Common Stock equal to the
portion of such Purchaser’s Subscription Amount divided by the Per Share Purchase Price,
registered in the name of such Purchaser; |
| (v) | for
each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, a Pre-Funded Warrant registered
in the name of such Purchaser to purchase up to a number of shares of Common Stock equal
to the portion of such Purchaser’s Subscription Amount applicable to Pre-Funded Warrants
divided by the sum of the Per Pre-Funded Warrant Purchase Price plus the exercise price per
Warrant Share underlying such Pre-Funded Warrants, subject to adjustment therein; |
| (vi) | the
Preliminary Prospectus and the Prospectus (which may be delivered in accordance with Rule
172 under the Securities Act); |
| (vii) | an
originally signed Series A Common Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to 100% of such Purchaser’s Shares or
Pre-Funded Warrants, as applicable, with an exercise price equal to $[___] per share, subject
to adjustment therein; |
| (viii) | an
originally signed Series B Common Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to 100% of such Purchaser’s Shares or
Pre-Funded Warrants, as applicable, with an exercise price equal to $[___] per share, subject
to adjustment therein; |
| (ix) | the
duly executed Lock-Up Agreements; |
| (x) | a
certificate executed by the Chief Executive Officer and Chief Financial Officer of the Company,
dated as of the date of the Closing Date, in form and substance reasonably acceptable to
the Purchasers and Placement Agents; and |
| (xi) | a
certificate executed by the Secretary of the Company, dated as of the Closing Date, in form
and substance reasonable acceptable to the Purchasers and Placement Agents. |
| (b) | At
the time this Agreement is executed, the Placement Agents shall have received from WithumSmith+Brown,
PC a cold comfort letter containing statements and information of the type customarily included
in accountants’ comfort letters with respect to the financial statements and certain
financial information contained in the Registration Statement, the Preliminary Prospectus
and any issuer free writing prospectus, as defined in Rule 433 under the Securities Act,
addressed to the Placement Agents and in form and substance satisfactory in all respects
to the Placement Agents, dated as of the date of this Agreement. |
| (c) | On
or prior to the Closing Date, the Placement Agents shall have received from WithumSmith+Brown,
PC a bringdown comfort letter containing statements and information of the type customarily
included in accountants’ comfort letters, (i) reaffirming the statements made in the
letter furnished by them pursuant to Section 2.2(b), except that the specified date
referred to therein for the carrying out of procedures shall be no more than three business
days prior to the Closing Date; and (ii) covering certain financial information contained
in the Prospectus, addressed to the Placement Agents and in form and substance satisfactory
in all respects to the Placement Agents, dated as of the Closing Date. |
| (d) | On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the
Company the following: |
| (i) | this
Agreement duly executed by such Purchaser; and |
| (ii) | such
Purchaser’s Subscription Amount with respect to the Securities purchased by such Purchaser,
which shall be made available for DVP settlement with the Company or its designees. |
2.3 Closing
Conditions.
| (a) | The
obligations of the Company hereunder in connection with the Closing are subject to the following
conditions being met: |
| (i) | the
accuracy in all material respects (or, to the extent representations or warranties are qualified
by materiality or Material Adverse Effect, in all respects) when made and on the Closing
Date of the representations and warranties of the Purchasers contained herein (unless such
representation or warranty is as of a specific date therein in which case they shall be accurate
as of such date); |
| (ii) | all
obligations, covenants and agreements of each Purchaser required to be performed at or prior
to the Closing Date shall have been performed; and |
| (iii) | the
delivery by each Purchaser of the items set forth in Section 2.2(d) of this Agreement. |
| (b) | The
respective obligations of the Purchasers hereunder in connection with the Closing are subject
to the following conditions being met: |
| (i) | the
accuracy in all material respects (or, to the extent representations or warranties are qualified
by materiality or Material Adverse Effect, in all respects) when made and on the Closing
Date of the representations and warranties of the Company contained herein (unless such representation
or warranty is as of a specific date therein in which case they shall be accurate as of such
date); |
| (ii) | all
obligations, covenants and agreements of the Company required to be performed at or prior
to the Closing Date shall have been performed; |
| (iii) | the
delivery by the Company of the items set forth in Section 2.2 of this Agreement and if the
Company files a Rule 462(b) Registration Statement, then the Rule 462(b) Registration Statement
having been filed with the Commission; |
| (iv) | there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;
and |
| (v) | from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended
by the Commission or the Company’s principal Trading Market, and, at any time prior
to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market, nor shall
a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred after the date of this Agreement any material outbreak or escalation
of hostilities or other national or international calamity of such magnitude in its effect
on, or any material adverse change in, any financial market which, in each case, in the reasonable
judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Shares
and the Warrants at the Closing. |
ARTICLE
III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a
part hereof and shall qualify any representation made herein to the extent of the disclosures contained in the corresponding section
of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:
| (a) | Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a).
The Company owns, directly or indirectly, all of the capital stock or other equity interests
of each Subsidiary, free and clear of any Liens, and all of the issued and outstanding shares
of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or purchase securities. There
are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire, any capital stock of any Subsidiary, or contracts, commitments, understandings
or arrangements by which any Subsidiary is or may become bound to issue capital stock. If
the Company has no subsidiaries, all other references to the Subsidiaries or any of them
in the Transaction Documents shall be disregarded. |
| (b) | Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated
or otherwise organized, validly existing, and, if applicable under the laws of the jurisdiction
in which it was formed, in good standing under the laws of the jurisdiction of its incorporation
or organization, with the requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary
is in violation nor default of any of the provisions of its respective articles of association,
certificate or articles of incorporation, bylaws, operating agreement, or other organizational
or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may
be, 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 the Subsidiaries, taken as a whole, or (iii) a material
adverse effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification. |
| (c) | Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into
and to consummate the transactions contemplated by this Agreement and each of the other Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company and no further action
is required by the Company, the Board of Directors, a committee of the Board of Directors,
or the Company’s stockholders in connection herewith or therewith other than in connection
with the Required Approvals. This Agreement and each other Transaction Document to which
the Company is a party has been (or upon delivery will have been) duly executed by the Company
and, when delivered in accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar
as indemnification and contribution provisions may be limited by applicable law. |
| (d) | No
Conflicts. Except as set forth in Schedule 3.1(d), the execution, delivery and
performance by the Company of this Agreement and the other Transaction Documents to which
it is a party, the issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not (i) conflict with or violate
any provision of the Company’s or any Subsidiary’s 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) subject to the Required Approvals, conflict with or result
in a violation of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each
of clauses (ii) and (iii), such as would not have or reasonably be expected to result in
a Material Adverse Effect. |
| (e) | Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing
with the Commission of the Prospectus, (iii) notices and/or application(s) to and approvals
by each applicable Trading Market for the listing of the applicable Securities for trading
thereon in the time and manner required thereby, and (iv) filings required by the Financial
Industry Regulatory Authority (“FINRA”) (collectively, the “Required
Approvals”). |
| (f) | Issuance
of the Securities; Registration. The Shares and Warrant Shares are duly authorized and,
when issued and paid for in accordance with the applicable Transaction Documents, will be
duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed
by the Company. The Warrants are duly authorized and, when issued in accordance with this
Agreement, will be duly and validly issued, fully paid and non-assessable, and free and clear
of all Liens imposed by the Company. The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and
the Warrants. The Company has prepared and filed the Registration Statement in conformity
with the requirements of the Securities Act, which Registration Statement became effective
on [•], 2024, including the Prospectus, and such amendments and supplements thereto
as may have been required to the date of this Agreement. The Registration Statement is effective
under the Securities Act and no stop order preventing or suspending the effectiveness of
the Registration Statement or suspending or preventing the use of the Preliminary Prospectus
or the Prospectus has been issued by the Commission and no proceedings for that purpose have
been instituted or, to the knowledge of the Company, are threatened by the Commission. The
Company, if required by the rules and regulations of the Commission, shall file the Prospectus
with the Commission pursuant to Rule 424(b) under the Securities Act. At the time the Registration
Statement and any amendments thereto became effective as determined under the Securities
Act, at the date of this Agreement and at the Closing Date, the Registration Statement and
any amendments thereto conformed and will conform in all material respects to the requirements
of the Securities Act and did not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make
the statements therein not misleading; and the Prospectus and any amendments or supplements
thereto, at the time the Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto was issued and at the Closing Date, conformed and will conform in all material respects
to the requirements of the Securities Act and did not and will not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. |
| (g) | Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g),
which Schedule 3.1(g) shall also include the number of shares of Common Stock owned
beneficially, and of record, by Affiliates of the Company as of the date hereof. Except as
set forth on Schedule 3.1(g), the Company has not issued any capital stock since its
most recently filed periodic report under the Exchange Act, other than pursuant to the exercise
of employee stock options under the Company’s stock option plans, the issuance of shares
of Common Stock to employees pursuant to the Company’s employee stock purchase plans
and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as
of the date of the most recently filed periodic report under the Exchange Act. No Person
has any right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction Documents. Except
as set forth on Schedule 3.1(g) and as a result of the purchase and sale of the Securities,
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements
by which the Company or any Subsidiary is or may become bound to issue additional shares
of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities will
not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities
to any Person (other than the Purchasers). Except as set forth on Schedule 3.1(g),
here are no outstanding securities or instruments of the Company or any Subsidiary with any
provision that adjusts the exercise, conversion, exchange or reset price under any of such
securities. There are no outstanding securities or instruments of the Company or any Subsidiary
that contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound
to redeem a security of the Company or such Subsidiary. The Company does not have any share
appreciation rights or “phantom share” plans or agreements or any similar plan
or agreement. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and non-assessable, have been issued in compliance with all federal
and state securities laws where applicable, and none of such outstanding shares was issued
in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
Except for the Required Approvals, no further approval or authorization of any shareholder,
the Board of Directors or others is required for the issuance and sale of the Securities.
There are no shareholder agreements, voting agreements or other similar agreements with respect
to the Company’s share capital to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s shareholders. |
| (h) | SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one year preceding
the date hereof (or such shorter period as the Company was required by law or regulation
to file such materials) (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, together with the Preliminary Prospectus and the Prospectus,
being collectively referred to herein as the “SEC Reports”) and 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. The Company has never been an issuer
subject to Rule 144(i) under the Securities Act. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with GAAP, except as may be otherwise
specified in such financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in all material
respects the financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. |
| (i) | Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest
audited financial statements included within the SEC Reports, except as set forth on Schedule
3.1(i), (i) there has been no event, occurrence or development that has had or that would
reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred
any material liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and strategic
acquisitions and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company
has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its shareholders or purchased, redeemed or made
any agreements to purchase or redeem any of its shares of capital stock other than the repurchase
of Common Stock pursuant to a stock buyback program and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to existing Company
share option plans. Except for the issuance of the Securities contemplated by this Agreement
or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect
to the Company or its Subsidiaries or their respective businesses, prospects, properties,
operations, assets or financial condition that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is made or deemed made that
has not been publicly disclosed at least one (1) Trading Day prior to the date that this
representation is made. |
| (j) | Litigation.
Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents, the Shares, the Warrants or the Warrant Shares (ii) could,
if there were an unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Except as set forth on Schedule 3.1(j), neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty, which could reasonably be expected to result in a Material
Adverse Effect. There has not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the Company or any current
or former director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act. |
| (k) | Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with
respect to any of the employees of the Company, which would reasonably be expected to result
in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the
Company or any Subsidiary, is, or is now expected to be, in violation of any material term
of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant
in favor of any third party, and the continued employment of each such executive officer
does not subject the Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters. The Company and its Subsidiaries are in compliance with all
applicable U.S. federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and hours, except
where the failure to be in compliance would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. |
| (l) | Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such default or violation
has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except in each case
of (i), (ii) and (iii) as would not have or reasonably be expected to result in a Material
Adverse Effect. |
| (m) | Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all applicable federal,
state, local and foreign laws relating to pollution or protection of human health or the
environment (including ambient air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases or threatened releases
of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively,
“Hazardous Materials”) into the environment, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands,
or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental
Laws”); (ii) have received all permits licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective businesses; and (iii)
are in compliance with all terms and conditions of any such permit, license or approval where
in each clause (i), (ii) and (iii), the failure to so comply would be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect. |
| (n) | Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such certificates, authorizations or permits would not reasonably
be expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of proceedings relating
to the revocation or modification of any Material Permit. |
| (o) | Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple
to all real property owned by them and good and marketable title in all personal property
owned by them that is material to the business of the Company and the Subsidiaries, in each
case free and clear of all Liens, except for (i) Liens as do not materially affect the value
of such property and do not materially interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal,
state or other taxes, for which appropriate reserves have been made therefor in accordance
with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by the Company and the Subsidiaries are held by
them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries
are in compliance in all material respects. |
| (p) | Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade names, trade
secrets, inventions, copyrights, licenses and other intellectual property rights and similar
rights necessary or required for use in connection with their respective businesses as described
in the SEC Reports and which the failure to so have would reasonably be expected to have
a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise)
that any of, the Intellectual Property Rights has expired, terminated or been abandoned,
or is expected to expire or terminate or be abandoned, within two (2) years from the date
of this Agreement except as would not reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Subsidiary has received, since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a claim or otherwise
has any knowledge that the Intellectual Property Rights violate or infringe upon the rights
of any Person, except as would not have or reasonably be expected to not have a Material
Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has no knowledge of any facts that
would preclude it from having valid license rights or clear title to the Intellectual Property
Rights. The Company has no knowledge that it lacks or will be unable to obtain any rights
or licenses to use all Intellectual Property Rights that are necessary to conduct its business. |
| (q) | Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary in the businesses
in which the Company and the Subsidiaries are engaged, including, but not limited to, directors
and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither
the Company nor any Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business without a significant
increase in cost. |
| (r) | Transactions
with Affiliates and Employees. Except as set forth on Schedule 3.1(r), none of the officers
or directors of the Company or any Subsidiary and, to the knowledge of the Company, none
of the employees of the Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property to or from, providing for the
borrowing of money from or lending of money to or otherwise requiring payments to or from
any officer, director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or is an officer,
director, trustee, shareholder, member or partner, in each case in excess of $120,000 other
than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement
for expenses incurred on behalf of the Company or a Subsidiary and (iii) other employee benefits,
including share option agreements under any share option plan of the Company. |
| (s) | Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance
with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective
as of the date hereof, and any and all applicable rules and regulations promulgated by the
Commission thereunder that are effective as of the date hereof and as of the Closing Date.
The Company and the Subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that: (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect
to any differences. The Company and the Subsidiaries have established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company
and the Subsidiaries and designed such disclosure controls and procedures to ensure that
information required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company
and the Subsidiaries as of the end of the period covered by the most recently filed Form
10-K under the Exchange Act (such date, the “Evaluation Date”). The Company
presented in its most recently filed Form 10-K 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) that have materially affected, or is reasonably likely to materially
affect, the internal control over financial reporting of the Company and its Subsidiaries
other than the weakness in internal controls disclosed in the Company’s quarterly report
on Form 10-Q for the quarter ended March 31, 2023. |
| (t) | Certain
Fees. Except as set forth in the Preliminary Prospectus and the Prospectus, no brokerage
or finder’s fees or commissions are or will be payable by the Company or any Subsidiary
to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the Transaction Documents
(for the avoidance of doubt, the foregoing shall not include any fees and/or commissions
owed to the Transfer Agent). Other than for Persons engaged by any Purchaser, if any, the
Purchasers shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this Section 3.1(t)
that may be due in connection with the transactions contemplated by the Transaction Documents. |
| (u) | Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt
of payment for the Securities, will not be or be an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct
its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended. |
| (v) | Registration
Rights. Except as set forth on Schedule 3.1(v), no Person has any right to cause
the Company to effect the registration under the Securities Act of any securities of the
Company or any Subsidiary. |
| (w) | Listing
and Maintenance Requirements. The shares of Common Stock are registered pursuant to Section
12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which
to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. Except as set forth in Schedule 3.1(w), the
Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company
is not in compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason to believe, that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance requirements. The Common
Stock is currently eligible for electronic transfer through The Depository Trust Company
or another established clearing corporation and the Company is current in payment of the
fees to The Depository Trust Company (or such other established clearing corporation) in
connection with such electronic transfer. |
| (x) | Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Purchasers
as a result of the Purchasers and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation as a result of
the Company’s issuance of the Securities and the Purchasers’ ownership of the
Securities. |
| (y) | Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, the Company confirms that neither it nor any other Person acting
on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information which is
not otherwise disclosed in the Preliminary Prospectus or the Prospectus. The Company understands
and confirms that the Purchasers will rely on the foregoing representation in effecting transactions
in securities of the Company. All of the disclosure furnished by or on behalf of the Company
to the Purchasers regarding the Company and its Subsidiaries, their respective businesses
and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement,
is true and correct in all material respects and does not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not misleading.
The press releases disseminated by the Company during the twelve (12) months preceding the
date of this Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they were made
and when made, not misleading. The Company acknowledges that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated hereby other
than those specifically set forth in Section 3.2 hereof. |
| (z) | No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor
any Person acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to be integrated with prior offerings by the
Company for purposes of any applicable shareholder approval provisions of any Trading Market
on which any of the securities of the Company are listed or designated. |
| (aa) | Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after
giving effect to the receipt by the Company of the proceeds from the sale of the Securities
hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that
will be required to be paid on or in respect of the Company’s existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii) the Company’s
assets do not constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected
capital requirements and capital availability thereof, and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its liabilities when such amounts are required to
be paid. The Company does not intend to incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash to be payable on or in
respect of its debt). The Company has no knowledge of any facts or circumstances, which lead
it to believe that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date. Schedule
3.1(aa) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.
For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed by the Company in excess of $50,000 (other than trade
accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements
and other contingent obligations in respect of indebtedness of others to third parties, whether
or not the same are or should be reflected in the Company’s consolidated balance sheet
(or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be capitalized
in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect
to any Indebtedness. |
| (bb) | Tax
Compliance. Except for matters that would not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries
each (i) has made or filed all federal, state and local income and all foreign income and
franchise tax returns, reports and declarations required by any jurisdiction to which it
is subject, (ii) has paid all taxes and other governmental assessments and charges, fines
or penalties that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its financial statements provision reasonably
adequate for the payment of all material tax liability of which has not been finally determined
and all material taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed to be due
by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim. |
| (cc) | Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the
Company or any Subsidiary, any agent or other person acting on behalf of the Company or any
Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic political activity,
(ii) made any unlawful payment to foreign or domestic government officials or employees or
to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed
to disclose fully any contribution made by the Company or any Subsidiary (or made by any
person acting on its behalf of which the Company is aware) which is in violation of law,
or (iv) violated in any material respect any provision of FCPA. |
| (dd) | Accountants.
The Company’s independent registered public accounting firm is WithumSmith+Brown, PC.
To the knowledge and belief of the Company, such accounting firm (i) is a registered public
accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect
to the financial statements to be included in the Company’s Annual Report for the fiscal
year ended December 31, 2023. |
| (ee) | Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees
that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser
with respect to the Transaction Documents and the transactions contemplated thereby. The
Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction Documents and
the transactions contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to the Purchasers’ purchase
of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions contemplated hereby by the Company
and its representatives. |
| (ff) | Acknowledgment
Regarding Purchasers’ Trading Activity. Anything in this Agreement or elsewhere
herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.12 hereof), it is
understood and acknowledged by the Company that: (i) none of the Purchasers has been asked
by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling,
long and/or short, securities of the Company, or “derivative” securities based
on securities issued by the Company or to hold the Securities for any specified term; (ii)
past or future open market or other transactions by any Purchaser, specifically including,
without limitation, Short Sales or “derivative” transactions, before or after
the closing of this or future private placement transactions, may negatively impact the market
price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties
in “derivative” transactions to which any such Purchaser is a party, directly
or indirectly, presently may have a “short” position in the shares of Common
Stock, and (iv) each Purchaser shall not be deemed to have any affiliation with or control
over any arm’s length counter-party in any “derivative” transaction. The
Company further understands and acknowledges that (y) one or more Purchasers may engage in
hedging activities (in material compliance with applicable laws) at various times during
the period that the shares of Common Stock are outstanding, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders’ equity interests in the
Company at and after the time that the hedging activities are being conducted. The Company
acknowledges that such aforementioned hedging activities do not constitute a breach of any
of the Transaction Documents. |
| (gg) | Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has,
(i) taken, directly or indirectly, any action designed to cause or to result in the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale
of any of the shares of Common Stock, (ii) except as previously disclosed in the SEC Reports
and pursuant to the Company’s stock buyback program, sold, bid for, purchased, or,
paid any compensation for soliciting purchases of, any of the shares of Common Stock, or
(iii) except as previously disclosed in the SEC Reports and pursuant to the Company’s
stock buyback program, paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company, other than, in the case of clauses
(ii) and (iii), compensation paid to the Placement Agents in connection with the placement
of the shares of Common Stock. |
| (hh) | Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. The Company’s
execution, delivery and performance of this Agreement and consummation of the transactions
contemplated hereby will not (A) result in a material violation of any existing applicable
law, rule, regulation, judgment, order or decree of any governmental entity as of the date
hereof (including, without limitation, those promulgated by the Food and Drug Administration
of the U.S. Department of Health and Human Services (the “FDA”) or by
any foreign, federal, state or local regulatory authority performing functions similar to
those performed by the FDA), (B) conflict with, result in any violation or breach of, or
constitute a default (or an event that with notice or lapse of time or both would become
a default) under, or give to others any right of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) (a “Default Acceleration
Event”) of, any agreement, lease, credit facility, debt, note, bond, mortgage,
indenture or other instrument (“Contract”) or obligation or other understanding
to which the Company is a party or by which any property or asset of the Company is bound
or affected, except to the extent that such conflict, default, or Default Acceleration Event
is not reasonably likely to result in a Material Adverse Effect, or (C) result in a breach
or violation of any of the terms and provisions of, or constitute a default under, the Company’s
articles of incorporation (as the same may be amended or restated from time to time) or bylaws
(as the same may be amended or restated from time to time). The Company is not in violation,
breach or default under its certificate of incorporation (as the same may be amended or restated
from time to time) or bylaws (as the same may be amended or restated from time to time).
Neither the Company nor, to its knowledge, any other party is in violation, breach or default
of any Contract that has resulted in or could reasonably be expected to result in a Material
Adverse Effect. Each approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory, administrative or other governmental body necessary in
connection with the execution and delivery by the Company of this Agreement and the performance
of the Company of the transactions herein contemplated has been obtained or made and is in
full force and effect, except filings with the Commission required under the Securities Act
or the Exchange Act, or filings with the Exchange pursuant to the rules and regulations of
the Exchange, in each case that are contemplated by this Agreement to be made after the date
of this Agreement. |
| (ii) | Stock
Option Plans. Each stock option granted by the Company under the Company’s stock
option plan was granted (i) in accordance with the terms of the Company’s stock option
plan and (ii) with an exercise price at least equal to the fair market value of the Common
Stock on the date such stock option would be considered granted under GAAP and applicable
law. No stock option granted under the Company’s stock option plan has been backdated.
The Company has not knowingly granted, and there is no and has been no Company policy or
practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the
grant of stock options with, the release or other public announcement of material information
regarding the Company or its Subsidiaries or their financial results or prospects. |
| (jj) | Cybersecurity.
(i)(x)To the knowledge of the Company, there has been no material security breach or other
compromise of or relating to any of the Company’s or any Subsidiary’s information
technology and computer systems, networks, hardware, software, data (including the data of
its respective customers, employees, suppliers, vendors and any third-party data maintained
by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”)
and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge
of any event or condition that would reasonably be expected to result in, any security breach
or other compromise to its IT Systems and Data that would require notification to any third
party under applicable law; (ii) the Company and the Subsidiaries are presently in compliance
with all applicable laws or statutes and all judgments, orders, rules and regulations of
any court or arbitrator or governmental or regulatory authority, internal policies and contractual
obligations relating to the privacy and security of IT Systems and Data and to the protection
of such IT Systems and Data from unauthorized use, access, misappropriation or modification,
except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii)
the Company and the Subsidiaries have implemented and maintained commercially reasonable
safeguards to maintain and protect its material confidential information and the integrity,
continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company
and the Subsidiaries have implemented backup and disaster recovery technology consistent
with commercially reasonable industry standards and practices. |
| (kk) | Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary
is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department. |
| (ll) | U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real
property holding corporation within the meaning of Section 897 of the Internal Revenue Code
of 1986, as amended, and the Company shall so certify upon the Purchasers’ request. |
| (mm) | Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is
subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”)
and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or
controls, directly or indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent (25%) or more of the total equity of
a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence
over the management or policies of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve. |
| (nn) | Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted
at all times in compliance with applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary
with respect to the Money Laundering Laws is pending or, to the knowledge of the Company
or any Subsidiary, threatened. |
| (oo) | Promotional
Stock Activities. Neither the Company nor any Subsidiary of the Company and none of their
respective officers, directors, managers, affiliates or agents have engaged in any stock
promotional activity that could give rise to a complaint, inquiry, or trading suspension
by the Commission alleging (i) a violation of the anti-fraud provisions of the federal securities
laws, (ii) violations of the anti-touting provisions, (iii) improper “gun-jumping”;
or (iv) promotion without proper disclosure of compensation. |
| (pp) | Regulatory
Matters; Compliance. All preclinical and other nonclinical studies and clinical trials
conducted by or on behalf of the Company that are material to the Company have been adequately
described in the Registration Statement, in all material respects. The clinical trials and
nonclinical studies conducted by or on behalf of the Company that are described in the Registration
Statement or the results of such trials and studies which are referred to in the Registration
Statement were and, if still ongoing, are being conducted in material compliance with all
laws and regulations applicable thereto in the jurisdictions in which they are being conducted.
The descriptions in the Registration Statement of the results of such trials and studies
are accurate and complete in all material respects and fairly present the data derived from
such trials and studies, and the Company has no knowledge of any clinical trials the aggregate
results of which are inconsistent with or otherwise call into question the results of any
clinical trial conducted by or on behalf of the Company that are described in the Registration
Statement or the results of which are referred to in the Registration Statement. Except as
disclosed in the Registration Statement, the Company has not received any written notices
or other communications from the FDA, the European Medicines Agency (“EMA”)
or any other governmental agency or authority imposing, requiring, requesting or suggesting
a clinical hold, termination, suspension or material modification of any clinical trial that
is described in the Registration Statement or the results of which are referred to in the
Registration Statement. Except as disclosed in the Registration Statement, the Company has
not received any written notices or other communications from the FDA, the EMA or any other
governmental agency, and otherwise has no knowledge of, or reason to believe that, (i) any
investigational new drug application for a potential product of the Company is or has been
rejected or determined to be non-approvable or conditionally approvable; and (ii) any license,
approval, permit or authorization to conduct any clinical trial of any potential product
of the Company has been, will be or may be suspended, revoked, modified or limited. |
| (qq) | Compliance
with Data Privacy Laws. (i) The Company and the Subsidiaries are, and at all times during
the last three (3) years were, in compliance with all applicable state, federal and foreign
data privacy and security laws and regulations, (collectively, “Privacy Laws”);
(ii) the Company and the Subsidiaries have in place, comply with, and take commercially reasonable
steps designed to comply with their policies and procedures relating to data privacy and
security and the collection, storage, use, disclosure, handling and analysis of Personal
Data (as defined below) (the “Policies”); “Personal Data”
means (i) a natural person’s name, street address, telephone number, email address,
photograph, social security number, bank information, or customer or account number; and
(ii) any other piece of information that allows the identification of such natural person,
or his or her family, or permits the collection or analysis of any identifiable data related
to an identified person’s health or sexual orientation. (i) None of such disclosures
made or contained in any of the Policies have been inaccurate, misleading, or deceptive in
violation of any Privacy Laws and (ii) the execution, delivery and performance of the Transaction
Documents will not result in a breach of any Privacy Laws or Policies. Neither the Company
nor the Subsidiaries (is a party to any order, decree, or agreement by or with any court
or arbitrator or governmental or regulatory authority that imposed any obligation or liability
under any Privacy Law. |
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of
the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall
be accurate as of such date):
| (a) | Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed,
validly existing and in good standing under the laws of the jurisdiction of its incorporation
or formation with full right, corporate, partnership limited liability company or similar
power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of the Transaction Documents and performance by such Purchaser
of the transactions contemplated by the Transaction Documents have been duly authorized by
all necessary corporate, partnership, limited liability company or similar action, as applicable,
on the part of such Purchaser. Each Transaction Document to which it is a party has been
duly executed by such Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law. |
| (b) | Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own
account and has no direct or indirect arrangement or understandings with any other persons
to distribute or regarding the distribution of such Securities (this representation and warranty
not limiting such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state securities laws). |
| (d) | Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear
the economic risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment. |
| (e) | Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review
the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports
and has been afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to
evaluate its investment; and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the investment. Such Purchaser
acknowledges and agrees that neither the Placement Agents nor any Affiliate of the Placement
Agents has provided such Purchaser with any information or advice with respect to the Securities
nor is such information or advice necessary or desired. Neither the Placement Agents nor
any Affiliate has made or makes any representation as to the Company or the quality of the
Securities and the Placement Agents and any Affiliate may have acquired non-public information
with respect to the Company which such Purchaser agrees need not be provided to it. In connection
with the issuance of the Securities to such Purchaser, neither the Placement Agents nor any
of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser. |
| (f) | Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated
hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser, directly or indirectly executed any purchases or sales,
including Short Sales, of the securities of the Company during the period commencing as of
the time that the Preliminary Prospectus was filed with the Commission from the Company or
any other Person representing the Company setting forth the material terms, which terms include
definitive pricing terms, of the transactions contemplated hereunder and ending immediately
prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers manage separate
portions of such Purchaser’s assets and the portfolio managers have no direct knowledge
of the investment decisions made by the portfolio managers managing other portions of such
Purchaser’s assets, the representation set forth above shall only apply with respect
to the portion of assets managed by the portfolio manager that made the investment decision
to purchase the Securities covered by this Agreement. Other than to other Persons party to
this Agreement or to such Purchaser’s representatives, including, without limitation,
its officers, directors, partners, legal and other advisors, employees, agents and Affiliates,
such Purchaser has maintained the confidentiality of all disclosures made to it in connection
with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future. |
| (g) | No
Voting Agreements. The Purchaser is not a party to any agreement or arrangement, whether
written or oral, between the Purchaser and any other Purchaser and any of the Company’s
shareholders as of the date hereof, regulating the management of the Company, the shareholders’
rights in the Company, the transfer of shares in the Company, including any voting agreements,
shareholder agreements or any other similar agreement even if its title is different or has
any other relations or agreements with any of the Company’s shareholders, directors
or officers. |
| (h) | Brokers.
Except as set forth in the Preliminary Prospectus or the Prospectus, no agent, broker, investment
banker, person or firm acting in a similar capacity on behalf of or under the authority of
the Purchaser is or will be entitled to any broker’s or finder’s fee or any other
commission or similar fee, directly or indirectly, for which the Company or any of its Affiliates
after the Closing could have any liabilities in connection with this Agreement, any of the
transactions contemplated by this Agreement, or on account of any action taken by the Purchaser
in connection with the transactions contemplated by this Agreement. |
| (i) | Independent
Advice. Each Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with the purchase
of the Securities constitutes legal, tax or investment advice. |
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, except as set forth in this Agreement, with respect to
locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
ARTICLE
IV.
OTHER AGREEMENTS OF THE PARTIES
4.1
Legends. The shares of Common Stock, the Warrants, and, if all or any portion of a Warrant is exercised at a time when there is
an effective registration statement to cover the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless
exercise, the Warrant Shares, shall be issued free of legends. If at any time following the date hereof the Registration Statement is
not effective or is not otherwise available for the sale of the shares of Common Stock, the Warrants or the Warrant Shares, the Company
shall immediately notify the holders of the Warrants in writing that such Registration Statement is not then effective and thereafter
shall promptly notify such holders when the Registration Statement is effective again and available for the sale of the Shares, the Warrants
or the Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any
Purchaser to sell, any of the Shares, the Warrants or the Warrant Shares in compliance with applicable federal and state securities laws).
The Company shall use commercially reasonable best efforts to keep a registration statement (including the Registration Statement) registering
the issuance of the Warrant Shares effective during the term of the Warrants.
4.2
Furnishing of Information; Public Information. Until the earliest of the time that (i) no Purchaser owns Securities, or (ii) the
Common Warrants have expired, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of
the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the Exchange Act except in the case of a sale of all of substantially
all of the assets of the Company, a merger or reorganization of the Company with one or more other entities in which the Company is not
the surviving entity or any transaction or series of related transactions as a result of which any Person (together with its Affiliates)
acquires then outstanding securities of the Company.
4.3
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4
Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material
terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company
represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers
by the Company or any of its Subsidiaries or Affiliates, or any of their respective officers, directors, employees or agents, including,
without limitation, the Placement Agents, in connection with the transactions contemplated by the Transaction Documents. In addition,
effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees or Affiliates, including, without limitation, the Placement Agents, on the one hand, and any of the Purchasers or any
of their Affiliates on the other hand, with respect to the transactions contemplated hereby shall terminate and be of no further force
or effect. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent
of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except
if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of
such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser,
or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior
written consent of such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction
Documents with the Commission, and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case
the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).
4.5
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person,
that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under
the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.6
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have entered into a written agreement with the Company regarding the
confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information
to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any
duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or
Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates
not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law.
To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.
4.7
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder as disclosed in the Preliminary
Prospectus and the Prospectus.
4.8
Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser
and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and reasonable expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer
or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser Party in any capacity,
or any of them or their respective Affiliates, by any shareholder of the Company who is not an Affiliate of such Purchaser Party, with
respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser
Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser
Party may have with any such shareholder or any violations by such Purchaser Party of state or federal securities laws or any conduct
by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action
shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party
shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser
Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable
opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser
Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.
The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement or compromise of, or consent to the
entry of judgement in, any action, claim or proceeding by a Purchaser Party effected without the Company’s prior written consent,
which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability
is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.8 shall be made
by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.
The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against
the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9
Listing of Common Stock. The Company hereby agrees to use commercially reasonable best efforts to maintain the listing or quotation
of the shares of Common Stock on each Trading Market on which it is currently listed, and concurrently with the Closing, the Company
shall apply to list or quote all of the Shares and Warrant Shares on such Trading Markets and promptly secure the listing of all of the
Shares and Warrant Shares on such Trading Markets except in the case of a sale of all of substantially all of the assets of the Company,
a merger or reorganization of the Company with one or more other entities in which the Company is not the surviving entity or any transaction
or series of related transactions as a result of which any Person (together with its Affiliates) acquires then outstanding securities
of the Company representing more than fifty percent (50%) of the voting control of the Company. The Company further agrees, if the Company
applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Shares and Warrant
Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such
other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and
trading of the Common Stock on a Trading Market and will comply in all material respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of the Trading Market. The Company agrees to use commercially reasonable efforts to maintain
the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation,
including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation
in connection with such electronic transfer.
4.10
Subsequent Equity Sales.
| |
(a) |
From
the date hereof until ninety (90) days after the Closing Date, neither the Company nor any Subsidiary shall (i) issue, enter into
any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or
(ii) file any registration statement or amendment or supplement thereto, other than the Prospectus, filing a registration statement
on Form S-8 in connection with any employee benefit plan or the filing of a registration statement or post-effective registration
statement registering the Securities issued pursuant to this Agreement. |
| |
(b) |
From
the date hereof until 180 days after the Closing Date, the Company shall be prohibited from effecting or entering into an agreement
to effect any issuance by the Company or any of its Subsidiaries of shares of Common Stock or Common Stock Equivalents (or a combination
of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which
the Company issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include
the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other
price that is based upon and/or varies with the trading prices of or quotations for the Common Stock at any time after the initial
issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for shares of Common Stock, provided, however, that a
Variable Rate Transaction shall not include any at-the-market offering of the Company’s Common Stock, including any transactions
pursuant to the At The Market Offering Agreement, dated as of May 25, 2022, by and between the Company and H.C. Wainwright &
Co., LLC (the “ATM Facility”), and that sales under the ATM Facility may commence starting on the ninety-first
(91st) day following the Closing Date. Any Purchaser shall be entitled to obtain injunctive relief against the Company
to preclude any such issuance, which remedy shall be in addition to any right to collect damages. |
| |
(c) |
Notwithstanding
the foregoing, this Section 4.10 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.
|
4.11
Equal Treatment of Purchasers. No consideration (including any modification of the Transaction Documents) shall be offered or
paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration
is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate
right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat
the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the
purchase, disposition or voting of the shares of Common Stock or otherwise.
4.12
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that
neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at
such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as
described in Section 4.4 hereof. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time
as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described
in Section 4.4 hereof, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information
included in the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the
contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that
it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this
Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4 hereof, (ii) no Purchaser shall
be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities
laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial
press release as described in Section 4.4 hereof and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in
the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section
4.4 hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities
covered by this Agreement.
4.13
Exercise Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required
of the Purchasers in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required
of the Purchasers to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to
exercise the Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms,
conditions and time periods set forth in the Transaction Documents.
4.14
Reservations of Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue
shares of Common Stock pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.15.
Lock-Up Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements except
to extend the term of the lock-up period specified therein and shall enforce the provisions of each Lock-Up Agreement in accordance with
its terms. If any party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use its best
efforts to seek specific performance of the terms of such Lock-Up Agreement.
ARTICLE
V.
MISCELLANEOUS
5.1
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without
any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the
Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however,
that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including,
without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Preliminary Prospectus and
the Prospectus, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all
prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.
5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached
hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon
actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes,
or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K.
5.5
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Purchasers who, in the aggregate, hold at least 50.1% in interest of the
sum of (i) the Shares and (ii) the Pre-Funded Warrant Shares initially issuable upon exercise of the Pre-Funded Warrants based on the
initial Subscription Amounts hereunder (or, if prior to Closing, the Company and each Purchaser), or, in the case of a waiver, by the
party against whom enforcement of any such waived provision is sought; provided, that if any amendment, modification or waiver disproportionately
and adversely impacts a Purchaser (or group of Purchasers) relative to the comparable rights and obligations of the other Purchasers,
the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any
party to exercise any right hereunder in any manner impair the exercise of any such right. Any amendment effected in accordance with
this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
5.6
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
5.7
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom
such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8
No Third-Party Beneficiaries. The Placement Agents shall be third-party beneficiaries of the representations and warranties of
the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of
any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such action, suit or proceeding
shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
5.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities for
the applicable statutes of limitations.
5.11
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.
5.12
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
5.13
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of an exercise
of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise
notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration
of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement
warrant certificate evidencing such restored right).
5.14
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also
pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers and the Company will be entitled to seek specific performance under the Transaction Documents. The parties agree
that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.
5.16
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
5.17
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation
of the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to
communicate with the Company through Placement Agent Counsel. Placement Agent Counsel does not represent any of the Purchasers and only
represents the Placement Agents. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for
the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood
and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser,
solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
5.18
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
5.19
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts
have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.
5.20
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise
the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions relating to shares of Common Stock that
occur after the date of this Agreement.
5.21
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
| IMUNON,
INC. |
|
Address
for Notice: |
| |
|
|
997
Lenox Drive, Suite 100,
Lawrenceville,
NJ 08648 |
| By: |
|
|
|
| Name: |
Corinne
Le Goff |
|
Email:
[___] |
| Title: |
President
and Chief Executive Officer |
|
|
| |
|
|
| With
a copy to (which shall not constitute notice): [___] |
|
|
| |
|
|
| |
|
Email:
[___] |
| Attention:
[___] |
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO IMNN SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
Name
of Purchaser: _____________________________________________________
Signature
of Authorized Signatory of Purchaser: ______________________________
Name
of Authorized Signatory: _____________________________________________
Title
of Authorized Signatory: ______________________________________________
Email
Address of Authorized Signatory: _______________________________________
Facsimile
Number of Authorized Signatory: ____________________________________
Address
for Notice to Purchaser:
Address
for Delivery of Warrant Shares to the Purchaser (if not same address for notice):
DWAC
for Common Stock:
Subscription
Amount: $___________________
Shares
of Common Stock: ___________________
Common
Warrants:___________________
Shares
of Common Stock underlying the Pre-Funded Warrants: ________
Beneficial
Ownership Blocker ☐ 4.99% or ☐ 9.99%
Series
A Common Warrant Shares: __________ Beneficial Ownership Blocker ☐ 4.99% or ☐ 9.99%
Series
B Common Warrant Shares: __________ Beneficial Ownership Blocker ☐ 4.99% or ☐ 9.99%
EIN
Number: ___________________
☐
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to
purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the
Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii)
the Closing shall occur on the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated
by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed of any
agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall instead be
an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or
the like or purchase price (as applicable) to such other party on the Closing Date.
[SIGNATURE
PAGES CONTINUE]
Exhibit
A-1
Form
of Series A Common Warrant
(See
Attached)
Exhibit
A-2
Form of Series B Common Warrant
(See
Attached)
Exhibit
B
Form of Pre-Funded Warrant
(See
Attached)
Exhibit
C
Form of Lock-Up Agreement
(See
Attached)
Exhibit
23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement on Form S-1, Amendment
No. 2 of our report dated March 30, 2023, relating to the consolidated financial statements of Imunon, Inc. as of and for the years ended
December 31, 2022 and 2021, which is incorporated by reference in that Prospectus. We also consent to the reference to our firm under
the caption “Experts” in the Prospectus.
/s/
WithumSmith+Brown, PC
East
Brunswick, New Jersey
February
9, 2024
Exhibit 107
Calculation
of Filing Fee Tables
Form
S-1
(Form
Type)
Imunon,
Inc.
(Exact
Name of Registrant as Specified in its Charter)
Table
1: Newly Registered and Carry-Forward Securities
| |
|
Security Type |
|
Security
Class
Title |
|
Fee Calculation
Rule |
|
|
Amount
Registered |
|
Proposed
Maximum
Offering
Price Per Unit |
|
Maximum
Aggregate
Offering Price (1)(2) |
|
|
Fee Rate |
|
|
Amount of
Registration
Fee (3) |
|
|
Carry Forward
Form Type |
|
Carry Forward
File Number |
|
Carry Forward
Initial Effective
Date |
|
Filing Fee
Previously Paid
In Connection
with Unsold
Securities to be
Carried
Forward |
| Newly Registered Securities |
|
|
| Fees to be Paid |
|
Equity |
|
Common stock, par value $0.01 per share (“Common Stock”) |
|
|
457 |
(o) |
|
|
|
|
|
$ |
8,000,000 |
(3) |
|
|
0.00014760 |
|
|
$ |
1,180.80 |
|
|
|
|
|
|
|
|
|
| |
|
Equity |
|
Series A Warrants to purchase Common Stock |
|
|
457 |
(g) |
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Equity |
|
Series B Warrants to purchase Common Stock |
|
|
457 |
(g) |
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Equity |
|
Pre-funded warrants to purchase Common Stock |
|
|
457 |
(g) |
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Equity |
|
Common Stock issuable upon exercise of Series A and Series B warrants |
|
|
457 |
(o) |
|
|
|
|
|
$ |
16,000,000 |
|
|
|
0.00014760 |
|
|
$ |
2,361.60 |
|
|
|
|
|
|
|
|
|
| |
|
Equity |
|
Common Stock issuable upon exercise of pre-funded warrants(3) |
|
|
457 |
(o) |
|
|
|
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fees Previously Paid |
|
N/A |
|
N/A |
|
|
N/A |
|
|
N/A |
|
N/A |
|
|
N/A |
|
|
|
|
|
|
$ |
2,952.00 |
|
|
|
|
|
|
|
|
|
| Carry Forward Securities |
|
|
| Carry Forward Securities |
|
N/A |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
N/A |
|
N/A |
|
N/A |
|
N/A |
| |
|
Total Offering Amount |
|
|
|
$ |
24,000,000 |
|
|
|
0.00014760 |
|
|
$ |
3,542.40 |
|
|
|
|
|
|
|
|
|
| |
|
Total Fees Previously Paid |
|
|
|
|
|
|
|
|
|
|
$ |
2,952.00 |
|
|
|
|
|
|
|
|
|
| |
|
Total Fee Offsets |
|
|
|
|
|
|
|
|
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
| |
|
Net Fee Due |
|
|
|
|
|
|
|
|
|
|
|
$ |
590.40 |
|
|
|
|
|
|
|
|
|
(1)
Pursuant to Rule 416(a) promulgated under the Securities Act of 1933, as amended, this Registration Statement shall also cover any additional
shares of common stock of Imunon, Inc. (the “Registrant”) that become issuable with respect of the securities identified
in the above table by reason of any stock dividend, stock split, recapitalization or other transaction effected without the Registrant’s
receipt of consideration that results in an increase in the number of outstanding shares of Registrant’s common stock.
(2)
Estimated solely for the purpose of calculating the amount of the registration fee in pursuant to Rule 457(o) under the Securities Act
of 1933, as amended (the “Securities Act”)
(3)
The proposed maximum aggregate offering price of the Common Stock proposed to be sold in the offering will be reduced on a dollar-for-dollar
basis based on the offering price of any pre-funded warrants sold in the offering, and, as such, the proposed maximum aggregate offering
price of the Common Stock and pre-funded warrants (including the Common Stock issuable upon exercise of the pre-funded warrants), if
any, is $8,000,000.
(4)
Pursuant to Rule 457(g) of the Securities Act, no separate registration fee is required for the warrants because the warrants are being
registered in the same registration statement as the Common Stock issuable upon exercise of the warrants.
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