SCND 8-K
Scientific Industries Inc (SCND)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
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(Exact name of registrant as specified in its charter) |
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(Address of principal executive offices)
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading | Symbol | Name of each exchange on which registered |
OTC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
ITEM 3.02. UNREGISTERED SALE OF EQUITY SECURITIES
On April 18, 2025, the Scientific Industries, Inc., a Delaware corporation (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors (each an “Investor” and collectively, the “Investors”) pursuant to which the Company sold in a private placement (the “Private Placement”), and the Investors purchased, an aggregate of 1,550,000 Units, comprising (i) 1,050,000 shares of the Company’s common stock, par value $.05 per share (“Common Stock”), (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 500,000 shares of Common Stock and (iii) warrants (“Warrants”) to purchase 1,550,000 shares of Common Stock, for a total consideration of $1,550,000. The Company intends to use the net proceeds from the sale of the securities for operations, working capital and other general corporate purposes, including without limitation, covering costs and expenses associated with the Offering.
Each Warrant is exercisable for the purchase of one share of the Company’s common stock at an exercise price of $1.00 per share. The Warrants are immediately exercisable and expire 6 months from their date of issuance. Certain of the Warrants are exercisable for Pre-funded Warrants to purchase shares of Common Stock in lieu of shares of Common Stock.
Certain of the Warrants (“Alternate Warrants”) and Pre-Funded Warrants to be issued in the Private Placement will provide that the holder of an Alternate Warrant or a Pre-Funded Warrant will not have the right to exercise any portion of its Pre-Funded Warrants if such holder, together with its affiliates, would beneficially own in excess of 4.99% (or, upon election by such holder, 9.99%) of the number of shares of the Company’s Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that a holder may increase or decrease his, her or its Beneficial Ownership Limitation up to, and no higher than, 9.99%, by giving 61 days’ notice to the Company.
The Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Investors to have the Shares and Warrant Shares included in a registration statement to be prepared and filed with the Securities and Exchange Commission within 6 months of the closing date, to permit the registered resale of the Shares and the Warrant Shares. Under the Registration Rights Agreement, the Company shall use its best efforts to have such Registration Statement declared and maintained effective for a period of one (1) year following the initial date of effectiveness.
The sale of the Shares and Warrants was made in a private placement transaction, pursuant to the exemption provided by Section 4(2) of the Securities Act and certain rules and regulations promulgated under that section and pursuant to exemptions under state securities laws.
This Current Report on Form 8-K is neither an offer to sell nor the solicitation of an offer to buy the Shares, Warrants, Warrant Shares or any other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
A copy of the Purchase Agreement, the Registration Rights Agreement and the form of Warrant are attached hereto as exhibits. This summary description does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, the Registration Rights Agreement and the form of Warrant which are incorporated herein by reference.
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ITEM 9.01 Financial Statements and Exhibits
(a), (b), (c) not applicable
(d) Exhibits
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: April 22, 2025 | By: | /s/ Helena R. Santos |
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| Helena R. Santos, |
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| President and Chief Executive Officer |
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EXHIBIT 4.1
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS.
| No. | Warrant to Purchase |
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| Dated: April 18 2025 |
SCIENTIFIC INDUSTRIES, INC.
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
This certifies that, for good and valuable consideration, SCIENTIFIC INDUSTRIES, INC., a Delaware corporation (the “Company”), grants to [_____] (the “Warrantholder”), the right to subscribe for and purchase from the Company [___] ( ) Shares (the “Warrant Shares”) at a per Share price equal to $1.00 per Share, subject to adjustment as provided herein (the “Exercise Price”). This Warrant shall be exercisable as set forth below and shall expire, without notice, at 5:00 p.m., New York City time, on the Expiration Date (as defined below). The Exercise Price and the number of Warrant Shares are subject to adjustment from time to time as provided in Section 5. This Warrant is issued in connection with that certain Securities Purchase Agreement, dated as of April 18, 2025 (the “Purchase Agreement”), by and among the Company and the purchasers named therein.
For purposes of this Warrant, the following defined terms shall have the following meanings:
“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 of 1933, as amended.
“Business Day” means any day on which the Trading Markets are open for business.
“Exercise Date” means the date on which the Exercise Notice and Warrant is delivered to the Company.
“Expiration Date" means October 17, 2025; provided that, if the Company consummates a Qualified Transaction on or prior to such date, the Expiration Date shall be the date that is fifteen (15) calendar days after the date such Qualified Transaction is consummated (or if such day that would otherwise be the Expiration Date is not a Business Day, the Expiration Date shall be the immediately succeeding Business Day).
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“Fundamental Transaction” means any of the following (i) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which all or substantially all of the holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property; (ii) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 5.1 hereof, or a Distribution covered by Section 5.2 hereof); (iii) any sale, lease, license, transfer, conveyance or other disposition of all or substantially all of the assets of the Company, in one or a series of related transactions; (iv) any reorganization, consolidation, merger, demerger or sale of shares of the Company where the holders of the Company’s outstanding shares as of immediately before the transaction (or series of related transactions) beneficially own less than a majority by voting power of the outstanding shares of the surviving or successor entity as of immediately after the transaction; or (v) any “person” (together with his, her or its Affiliates) or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) acquires, directly or indirectly, the beneficial ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of outstanding shares of capital stock and/or other equity securities of the Company, in a single transaction or series of related transactions (including, without limitation, one or more tender offers or exchange offers), representing at least 50% of the voting power of or economic interests in the then outstanding shares of capital stock of the Company.
“OTC Markets” means either OTC QX or OTC QB of the OTC Markets Group, Inc.
“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.
“Qualified Transaction” means any equity financing, sale of assets or other transaction in which the aggregate purchase price is at least $10,000,000.
“Shares” means shares of the Company’s Common Stock, $0.05 par value per share (the “Common Stock”).
“Trading Market” shall mean any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the New York Stock Exchange or the OTC Markets (or any successors to any of the foregoing).
SECTION 1. VESTING; EXERCISE OF WARRANT; LIMITATION ON EXERCISE; TAXES; TRANSFER; DIVISIBILITY.
1.1. VESTING. The Warrant Shares shall vest immediately upon issuance.
1.2. EXERCISE OF WARRANT. This Warrant may be exercised for vested Warrant Shares, in whole or in part, at any time after payment prior to the Expiration Date. This Warrant may be exercised by delivery by the Warrantholder to the Company of the following:
(a) this Warrant, accompanied by the Exercise Form annexed hereto (the “Exercise Form”) duly executed by the Warrantholder, at the Company’s offices at 80 Orville Drive, Suite 102, Bohemia, New York 11716 (or such other office or agency of the Company as it may designate by notice to the Warrantholder) during normal business hours on any Business Day;
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(b) payment of an amount equal to (x) the number of Warrant Shares then issuable multiplied by (y) the Exercise Price by wire transfer or immediately available funds or by certified or official bank check; and
(c) such documentation as to the identity and authority of the Warrantholder as the Company may reasonably request.
1.3. ISSUANCE OF WARRANT SHARES. The Warrant Shares shall be deemed by the Company to be issued to the Warrantholder as the record holder of the Warrant Shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for the Warrant Shares as aforesaid. Within two (2) Business Days following the exercise of this Warrant as provided above, the Company shall cause its transfer agent to issue the Warrant Shares through the facilities of its transfer agent for the account of the Warrantholder.
1.4. LIMITATION ON EXERCISE. If this Warrant is not exercised prior to the Expiration Date or is terminated pursuant to Section 6, this Warrant shall cease to be exercisable and shall become void, and all rights of the Warrantholder hereunder shall cease.
1.5. PAYMENT OF TAXES. The issuance of certificates for any Warrant Shares that are certificated shall be made without charge to the Warrantholder for any Share transfer or other issuance tax in respect thereto.
SECTION 2. RESERVATION OF SHARES.
All Warrant Shares issued upon the exercise of the rights represented by this Warrant shall, upon issuance and payment of the Exercise Price in cash, be validly issued, fully paid and non-assessable and free from all taxes, liens, security interests, charges and other encumbrances with respect to the issuance thereof other than taxes in respect of any transfer occurring contemporaneously with such issuance and restrictions under applicable state and federal securities Laws. During the period within which this Warrant may be exercised, the Company shall at all times have authorized and reserved, and keep available and free from preemptive or similar rights, a sufficient number of Shares to provide for the exercise of this Warrant.
SECTION 3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and, if requested by the Company, an agreement to indemnify the Company for any loss resulting from the replacement of this Warrant, the Company will execute and deliver a new Warrant of like tenor.
SECTION 4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person or entity in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary.
SECTION 5. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise Price and the number of Shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 5.
5.1. SUBDIVISION OR COMBINATION OF SHARES. In case the Company shall at any time subdivide its outstanding Shares into a greater number of Shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the outstanding Shares of the Company shall be combined into a smaller number of Shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased.
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5.2. NO VOTING RIGHTS. Nothing contained in this Warrant shall be construed as conferring upon the holder hereof the right to vote or to consent to receive notice as a shareholder of the Company on any other matters or any rights whatsoever as a shareholder of the Company.
5.3. NOTICE OF ADJUSTMENT. When the Exercise Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly (i) deliver a notice to the Warrantholder, and (ii) file with the transfer agent for the Warrants a certificate of an officer of the Company, in each case, 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 and a computation thereof. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company, the Company shall simultaneously file such notice with the Commission pursuant to a Report on Form 8-K. The Warrantholder 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.
5.4. CERTAIN EVENTS. If any change in the outstanding Shares of the Company or any other event occurs as to which the other provisions of this Section 5 are not strictly applicable or if strictly applicable would not fairly effect the adjustments to this Warrant in accordance with the essential intent and principles of such provisions, then the Company shall make in good faith an adjustment in the number and class of Shares issuable under this Warrant, the Exercise Price and/or the application of such provisions, in accordance with such essential intent and principles, so as to protect such purchase rights as aforesaid. The adjustment shall be such as will give the Warrantholder, upon exercise for the same aggregate Exercise Price, the total number, class and kind of Shares as the Warrantholder would have owned had this Warrant been exercised prior to the event and had the Warrantholder continued to hold such Shares until after the event requiring adjustment.
SECTION 6. NOTICE OF CORPORATE EVENTS. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or of any rights, (ii) enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction, or (iii) authorizes the dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered to the Warrantholder at least twenty (20) calendar days prior to the applicable record or effective date on which a Person would be required to hold Common Stock in order to participate in or vote with respect to such event or transaction a written notice stating the date on which a record is to be taken for the purpose of such event or transaction, or if a record is not to be taken, the date as of which the holders of the Common Stock to be entitled to participate or vote in event or transaction are to be determined. 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 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 5:00 P.M. Eastern Time on the Business Day immediately preceding the effective date of the event triggering such notice (the “Corporate Event Exercise Date”) in order to participate in or vote with respect to such event or transaction except as may otherwise be expressly set forth herein; provided, however, that upon the consummation or occurrence of an event described in either clause (ii) or (iii) above, this Warrant will terminate as of the Corporate Event Exercise Date.
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SECTION 7. COMPLIANCE WITH SECURITIES ACT; TRANSFERABILITY OF WARRANT; DISPOSITION OF WARRANT SHARES AND COMMON STOCK.
7.1. COMPLIANCE WITH SECURITIES ACT. The Warrantholder, by acceptance hereof, agrees that this Warrant and the Warrant Shares are being acquired for investment and that it shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares except under circumstances which will not result in a violation of the Act or any applicable state securities laws. This Warrant and the Warrant Shares (unless registered under the Act) shall be stamped or imprinted with a legend in substantially the following form:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT.
7.2 ACCREDITED INVESTOR; ACCESS TO INFORMATION; PRE-EXISTING RELATIONSHIP. The Warrantholder presently qualifies and will as of any exercise of this Warrant qualify as an “accredited investor” within the meaning of Regulation D of the rules and regulations promulgated under the Act. The Warrantholder has had the opportunity to ask questions of, and to receive answers from, appropriate executive officers of the Company with respect to the terms and conditions of the transactions contemplated hereby and with respect to the business, affairs, financial condition and results of operations of the Company. The Warrantholder has had access to such financial and other information as is necessary in order for the Warrantholder to make a fully informed decision as to investment in the Company, and has had the opportunity to obtain any additional information necessary to verify any of such information to which the Warrantholder has had access. The Warrantholder further represents and warrants that the Warrantholder has either (a) a pre-existing relationship with the Company or one or more of its officers or directors consisting of personal or business contacts of a nature and duration which enable the Warrantholder to be aware of the character, business acumen and general business and financial circumstances of the Company or the officer or director with whom such relationship exists or (b) such business or financial expertise as to be able to protect the Warrantholder’s own interests in connection with the purchase of the Warrant Shares.
7.3 WARRANT AND WARRANT SHARES NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH APPLICABLE SECURITES LAWS. The Warrant and the Warrant Shares, if and when issued, may be transferred or sold only in compliance with applicable United States federal and state securities laws or of any requirements of the Trading Market upon which the Common Stock may be quoted or listed. Any instrument purporting to make an assignment in contravention of this Section 7.3 shall be void.
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7.4 DISPOSITION OF WARRANT SHARES. With respect to any offer, sale, or other disposition of any Warrant Shares prior to registration of such shares, the Warrantholder and each subsequent Warrantholder agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such Warrantholder’s counsel, if reasonably requested by the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state law then in effect) of such Warrant Shares and indicating whether or not under the Act certificates for such Warrant Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability. Promptly upon receiving such written notice and, if applicable, opinion, the Company, as promptly as practicable, shall notify such Warrantholder that such Warrantholder may sell or otherwise dispose of such Warrant Shares all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 7.4 that the opinion of the counsel for the Warrantholder is not reasonably satisfactory to the Company, the Company shall, upon request, so notify the Warrantholder promptly after such determination has been made. Notwithstanding the foregoing, such Warrant Shares may be offered, sold or otherwise disposed of in accordance with Rule 144 under the Act, provided that the Company shall have been furnished with such information as the Company may request to provide reasonable assurance that the provisions of Rule 144 have been satisfied. Each certificate representing the Warrant Shares thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to insure compliance with the Act, unless in the aforesaid opinion of counsel for the Warrantholder, such legend is not required in order to insure compliance with the Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
7.5 MARKET STANDOFF. The Warrantholder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to a registered public offering of the Company and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Warrant Shares, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Warrant Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of securities, in cash or otherwise. The underwriters in connection with a registered public offering of the Company are intended third party beneficiaries of this Section and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. The Warrantholder further agrees to execute such agreements as may be reasonably requested by the underwriters or the Company in a registered public offering of the Company that are consistent with this Section 7.5 or that are necessary to give further effect thereto.
In order to enforce the foregoing covenant, the Company may impose stop‑transfer instructions with respect to shares of the Company’s capital stock acquired through the exercise of this Warrant until the end of such period. The Warrantholder agrees that a legend reading substantially as follows shall be placed on all certificates representing all shares of the Warrantholder (and the shares or securities of every other person subject to the restriction contained in this Section 7.5):
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE SHARES.”
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SECTION 8. MISCELLANEOUS.
8.1. ENTIRE AGREEMENT. This Agreement and the documents referred to herein constitute the entire agreement among the parties and supersede any prior agreements or understandings regarding the subject matter hereof.
8.2. SUCCESSORS AND ASSIGNS. The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the parties’ respective successors and assigns. Nothing in this Warrant, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Warrant, except as expressly provided in this Warrant.
8.3. AMENDMENTS AND WAIVERS. No failure on the part of either party to exercise and no delay in exercising any power or right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof or the exercise of any other power or right. The remedies herein and in any other instrument, document or agreement delivered or to be delivered by either party hereunder or in connection herewith are cumulative and not exclusive of any remedies provided by law. No notice to or demand on a party not required hereunder shall in any event entitle such party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of the other party to any other or further action in any circumstances without notice or demand. No amendment, modification or waiver of any provision of this Warrant or consent to any departure by either party therefrom shall be effective unless the same shall be in writing and signed by the Company and the Warrantholder.
8.4. SECTION AND OTHER HEADINGS. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.
8.5. NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the next Business Day, in each case subject to written evidence of receipt by the noticed party; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the address as set forth in the Warrantholder’s signature page to the Purchase Agreement or at such other address as such party may designate by ten (10) days’ advance written notice to the other parties hereto.
8.6. SEVERABILITY. If one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of this Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
8.7. FRACTIONAL SHARES. No fractional Shares or scrip representing fractional Shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a Share called for upon any exercise hereof, the Company shall round up to the nearest whole Share.
8.8 DELIVERY OF NEW WARRANT. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance herewith, deliver to the Warrantholder a new warrant evidencing the rights of the Warrantholder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new warrant shall in all other respects be identical to this Warrant.
8.9. GOVERNING LAW. This Warrant shall be governed by and construed under the substantive laws of New York without regard to the conflicts of law provisions thereof. The federal courts in New York, New York shall have exclusive jurisdiction of any and all actions or suits commenced by either party arising under or with respect to this Warrant.
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the first date written above.
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| SCIENTIFIC INDUSTRIES, INC. |
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| Name: Helena Santos |
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| Title: President and Chief Executive Officer |
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SIGNATURE PAGE TO WARRANT
IN WITNESS WHEREOF, the undersigned Warrantholder has caused this Warrant to be signed by its duly authorized officer as of the first date written above.
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SIGNATURE PAGE TO WARRANT
SCIENTIFIC INDUSTRIES, INC.
WARRANT EXERCISE FORM
(To be executed upon exercise of Warrant)
The undersigned, the record holder of the Warrant, hereby irrevocably elects to exercise the right, represented by this Warrant to purchase [_________(____)] shares of Common Stock of Scientific Industries, Inc., pursuant to the terms of the attached Warrant and herewith pays the Exercise Price in accordance with the terms of the Warrant by tendering cash payment for such Warrant Shares.
The undersigned hereby represents and warrants that (i) the undersigned is acquiring such shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof and (ii) the undersigned is an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended, and a “sophisticated investor” in accordance with the exemption from registration under such Act in accordance with Section 4(a)(2) thereof.
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EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into as of April __, 2025, by and among Scientific Industries, Inc., a Delaware corporation (the “Company”), and each of the investors listed on Schedule A hereto (collectively, the “Investors” and each, an “Investor”).
WHEREAS, the Company and the Investors are parties to a Securities Purchase Agreement, dated as of April __, 2025 (the “Purchase Agreement”), pursuant to which, among other things, the Investors have requested, and the Company has agreed to provide, registration rights with respect to (i) the shares of the Common Stock (as defined below) purchased by the Investors from the Company thereunder (the “Purchased Shares”) and (ii) the shares of Common Stock issuable upon the exercise of warrants delivered to the Investors thereunder (the “Warrant Shares” and, together with the Purchased Shares, the “Shares”); and
WHEREAS, in light of the foregoing, the Parties desire to set forth certain registration rights applicable to the Registrable Securities (as defined below).
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each Party hereto, the Parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms have the meanings indicated:
“Affiliate” of any specified Person means any other person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such specified Person. For purposes of this definition, “control” of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Agreement” has the meaning set forth in the preamble.
“Automatic Shelf Registration Statement” means an “automatic shelf registration statement” as defined under Rule 405.
“Blackout Period” has the meaning set forth in Section 3(n).
“Board” means the board of directors of the Company.
“Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in the State of New York are authorized or required to be closed.
“Commission” means the Securities and Exchange Commission or any other federal agency then administering the Securities Act or the Exchange Act.
“Common Stock” means the common stock, par value $0.05 per share, of the Company.
“Company” has the meaning set forth in the preamble.
“Company Securities” means any equity interest of any class or series in the Company.
“Demand Effectiveness Period” has the meaning set forth in Section 2(a)(ii).
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“Demand Notice” has the meaning set forth in Section 2(a)(i).
“Demand Registration Period” means the period commencing 180 days after the expiration of the Mandatory Shelf Effectiveness Period and ending on the fifth (5th) anniversary of the date hereof.
“Effective Date” means the time and date that a Registration Statement is first declared effective by the Commission or otherwise becomes effective.
“Effectiveness Period” shall mean the Demand Effectiveness Period or the Mandatory Shelf Effectiveness Period, as applicable.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“Holder” means any record holder of Registrable Securities that (i) is a Party hereto or (ii) to whom registration rights conferred by this Agreement have been transferred in compliance with Section 9(d) hereof; provided, however, that any Person referenced in clause (ii) shall be a Holder only if such Person agrees in writing to be bound by and subject to the terms set forth in this Agreement.
“Holder Demand Registration” has the meaning set forth in Section 2(a)(i).
“Initiating Holders” means the Holders delivering the Demand Notice or the Underwritten Offering Notice, as applicable.
“Investor” has the meaning set forth in the preamble.
“Losses” has the meaning set forth in Section 6(a).
“Mandatory Shelf Effectiveness Period” has the meaning set forth in Section 2(b)(i).
“Mandatory Shelf Filing Date” has the meaning set forth in Section 2(b)(i).
“Mandatory Shelf Registration Statement” has the meaning set forth in Section 2(b)(i).
“Mandatory Shelf Securities” means the Registrable Securities issued pursuant to the Purchase Agreement.
“Minimum Amount” means the sum of $2,500,000.
“Parties” means the Company, the Investors and any Person that may become a party to this Agreement pursuant to the terms hereof.
“Person” means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, estate, trust, government (or an agency or subdivision thereof) or other entity of any kind.
“Piggyback Notice” has the meaning set forth in Section 2(d)(i).
“Piggyback Registration” has the meaning set forth in Section 2(d)(i).
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“Proceeding” means any action, claim, suit, proceeding or investigation (including a preliminary investigation or partial proceeding, such as a deposition) pending or, to the knowledge of the Company, to be threatened.
“Prospectus” means the prospectus included in a Registration Statement (including a prospectus that includes any information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A, Rule 430B or Rule 430C promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
“Purchase Agreement” has the meaning set forth in the preamble.
“Records” has the meaning set forth in Section 3(l).
“Registrable Securities” means the Shares; provided, however, that Registrable Securities shall not include: (i) any Shares the offering and sale of which has been registered under the Securities Act, and that have been disposed of pursuant to an effective Registration Statement; (ii) any Shares transferred to a Person who is not entitled to the registration and other rights hereunder; (iii) any Shares that have been sold or transferred by the Holder thereof pursuant to Rule 144 (or any similar provision then in force under the Securities Act) and the transferee thereof does not receive “restricted securities” as defined in Rule 144; and (iv) any Shares that cease to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise). The Company shall not be required to register the offering and sale of the same Registrable Securities under more than one Registration Statement at any one time.
“Registration Expenses” means: (i) all registration and filing fees (including fees and expenses (A) with respect to filings required to be made with the Trading Market or FINRA and (B) in compliance with applicable state securities or “Blue Sky” laws); (ii) reasonable printing expenses (including expenses of printing certificates for Company Securities and of printing Prospectuses if the printing of Prospectuses is reasonably requested by a Selling Stockholder included in the Registration Statement); (iii) reasonable messenger, telephone and delivery expenses; (iv) reasonable transfer agent fees; (v) reasonable fees and disbursements of counsel, auditors and accountants for the Company; (vi) Securities Act liability insurance, if the Company so desires such insurance; and (vii) reasonable fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement.
“Registration Statement” means a registration statement of the Company in the form required to register the resale of the Registrable Securities under the Securities Act, and including any Prospectus, amendments and supplements to each such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.
“Requested Underwritten Offering” has the meaning set forth in Section 2(c)(i).
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act.
“Rule 405” means Rule 405 promulgated by the Commission pursuant to the Securities Act.
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act.
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“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act.
“Securities Act” means the Securities Act of 1933, as amended.
“Selling Expenses” means (i) all discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar industry professionals and stock transfer taxes applicable to the sale of Registrable Securities, (ii) and fees and disbursements of counsel for any Holder or Selling Stockholder and (iii) all expenses relating to marketing the sale of the Registrable Securities, including expenses related to conducting a “road show.”
“Selling Stockholder” means a Party (other than the Company) included as a selling stockholder selling Registrable Securities pursuant to a Registration Statement.
“Selling Stockholder Indemnified Persons” has the meaning set forth in Section 6(a).
“Shares” has the meaning set forth in the preamble.
“Shelf Registration Statement” means a Registration Statement of the Company filed with the Commission on Form S-3 (or any equivalent or successor form under the Securities Act) for an offering to be made on a continuous or delayed basis pursuant to Rule 415 (or any similar rule that may be adopted by the Commission) covering Registrable Securities, as applicable.
“Suspension Period” has the meaning set forth in Section 3(o).
“Trading Market” means the principal national securities exchange on which Registrable Securities are listed.
“Underwritten Offering” means an underwritten offering of Common Stock in which shares of Common Stock are sold to one or more underwriters for reoffering to the public (whether a Requested Underwritten Offering or in connection with a public offering of Common Stock by the Company, a public offering of Common Stock by stockholders, or both, but excluding an offering relating solely to an employee benefit plan, an offering relating to a transaction on Form S-4 or S-8 (or any similar forms adopted after the date hereof as replacements therefor) or an offering on any registration statement form that does not permit secondary sales).
“Underwritten Offering Notice” has the meaning set forth in Section 2(c)(i).
“WKSI” means a “well known seasoned issuer” as defined under Rule 405.
Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms; (b) references to Sections refer to Sections of this Agreement; (c) the terms “include,” “includes,” “including” and words of like import shall be deemed to be followed by the words “without limitation”; (d) the terms “hereof,” “herein” or “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement; (e) unless the context otherwise requires, the term “or” is not exclusive and shall have the inclusive meaning of “and/or”; (f) defined terms herein will apply equally to both the singular and plural forms and derivative forms of defined terms will have correlative meanings; (g) references to any law or statute shall include all rules and regulations promulgated thereunder, and references to any law, statute or rule shall be construed as including any legal and statutory provisions consolidating, amending, succeeding or replacing the applicable law, statute or rule; (h) references to any Person include such Person’s successors and permitted assigns; and (i) references to “days” are to calendar days unless otherwise indicated.
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2. Registration.
(a) Demand Registration.
(i) During the Demand Registration Period, the Holders of at least 200,000 Registrable Securities (adjusted for any stock split, stock dividend, reverse stock split or similar change in the Common Stock after the date of this Agreement) shall have the option and right, exercisable by delivering a written notice to the Company (a “Holder Demand Notice”), to require the Company to, pursuant to the terms of and subject to the limitations contained in this Agreement, prepare and file with the Commission a Registration Statement on Form S-1 (or any equivalent or successor form under the Securities Act) (or to the extent the Company is eligible to use Form S-3 or any equivalent or successor form or forms, on Form S-3 or any comparable or successor form) registering the offering and sale of at least 200,000 Registrable Securities (adjusted for any stock split, stock dividend, reverse stock split or similar change in the Common Stock after the date of this Agreement) on the terms and conditions specified in the Holder Demand Notice, which may include sales on a delayed or continuous basis pursuant to Rule 415 pursuant to a Shelf Registration Statement (a “Holder Demand Registration”). The Holder Demand Notice must set forth the number and type of Registrable Securities that the Initiating Holders anticipate will be included in such Holder Demand Registration and the intended methods of disposition thereof.
(ii) Within five (5) Business Days of the receipt of the Demand Notice, the Company shall give written notice of such Demand Notice to all Holders (other than the Initiating Holders) and, within thirty (30) days thereof, shall, subject to the limitations of this Section 2(a), file a Registration Statement in accordance with the terms and conditions of the Demand Notice, which Registration Statement shall cover, in addition to the Registrable Securities set forth in the Demand Notice, all of the Registrable Securities that such Holders shall in writing request to be included in the Demand Registration (provided such request is given to the Company within ten (10) days of receipt of notice of the Demand Notice given by the Company pursuant to this Section 2(a)(ii) and includes such information regarding the requesting Holder as is required to be disclosed in connection with such Demand Registration pursuant to Regulation S-K promulgated under the Securities Act). The Company shall use commercially reasonable efforts to cause such Registration Statement to become and remain effective under the Securities Act until the earlier of (A) one hundred eighty (180) days (or one (1) year if a Shelf Registration Statement is requested) after the Effective Date or (B) the date on which all Registrable Securities covered by such Registration Statement have been sold or cease to be Registrable Securities (the “Demand Effectiveness Period”); provided, however, that such period shall be extended for a period of time equal to the period the Selling Stockholders refrain from selling any securities included in such Registration Statement at the request of an underwriter of the Company or the Company pursuant to this Agreement.
(iii) Subject to the other limitations contained in this Agreement, the Company is not obligated hereunder to effect: (A) more than two (2) Demand Registrations during the Demand Registration Period, (B) more than one (1) Demand Registration in a calendar year, (C) a Demand Registration within one hundred eighty (180)) days of the closing of any Underwritten Offering, (D) a Demand Registration for the registration of Registrable Securities below the Minimum Amount and (E) a subsequent Demand Registration pursuant to a Demand Notice if a Registration Statement covering all of the Registrable Securities covered by such Demand Notice shall already have become effective under the Securities Act and remains effective under the Securities Act and is sufficient to permit offers and sales of such Registrable Securities on the terms and conditions specified in such Demand Notice in accordance with the intended timing and method or methods of distribution thereof specified in such Demand Notice.
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(iv) Subject to Section 2(a)(i), a Selling Stockholder may withdraw all or any portion of its Registrable Securities included in a Demand Registration from such Demand Registration at any time prior to the effectiveness of the applicable Registration Statement. Upon delivery of a notice by a Selling Stockholder to the effect that the Selling Stockholder is withdrawing Registrable Securities such that the remaining Registrable Securities are below the Minimum Amount, the Company shall cease all efforts to secure effectiveness of the applicable Registration Statement.
(v) Subject to the limitations contained in this Agreement, the Company shall effect any Demand Registration on such appropriate registration form of the Commission (x) as shall be selected by the Company and (y) as shall permit the disposition of the Registrable Securities in accordance with the intended method or methods of disposition specified in the Initiating Holders’ request for such registration; provided, however, that if the Company becomes, and is at the time of its receipt of a Demand Notice, a WKSI, the Demand Registration for any offering and selling of Registrable Securities shall be effected pursuant to an Automatic Shelf Registration Statement, which shall be on Form S-3 or any equivalent or successor form under the Securities Act if available to the Company. If at any time a Registration Statement is effective and a Selling Stockholder provides written notice to the Company that it intends to effect an offering of all or part of the Registrable Securities included on such Registration Statement, the Company will amend or supplement such Registration Statement as may be necessary in order to enable such offering to take place.
(vi) Without limiting Section 3, in connection with any Demand Registration pursuant to and in accordance with this Section 2(a), the Company shall (A) promptly prepare and file or cause to be prepared and filed (1) such additional forms, amendments, supplements, prospectuses, certificates, letters, opinions and other documents, as may be necessary or advisable to register or qualify the securities subject to such Demand Registration, including under the securities laws of such states as the Selling Stockholders shall reasonably request; provided, however, that no such registration or qualification shall be required in any jurisdiction where, as a result thereof, the Company would become subject to general service of process or to taxation or would be required to qualify to do business or register as a broker or dealer, and (2) such forms, amendments, supplements, prospectuses, certificates, letters, opinions and other documents as may be necessary to apply for listing or to list the Registrable Securities subject to such Demand Registration on the Trading Market and (B) do any and all other acts and things that may be reasonably necessary or appropriate or reasonably requested by the Selling Stockholders to enable the Selling Stockholders to consummate a public sale of such Registrable Securities in accordance with the intended timing and method or methods of distribution thereof.
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(b) Mandatory Shelf Registration.
(i) The Company shall use its reasonable efforts to prepare and file with the Commission, as soon as practicable following the date hereof, and no later than one hundred eighty (180) days after the date hereof (such filing date, the “Mandatory Shelf Filing Date”), a Registration Statement providing for registration and resale, on a continuous or delayed basis pursuant to Rule 415, of all of the Mandatory Shelf Securities (the “Mandatory Shelf Registration Statement”). The Mandatory Shelf Registration Statement shall be on Form S-1 (or any equivalent or successor form) under the Securities Act (or to the extent the Company is eligible to use Form S-3 or any equivalent or successor form or forms, on Form S-3 or any comparable or successor form). The Company shall use its reasonable efforts to cause the Mandatory Shelf Registration Statement to be declared effective under the Securities Act by the Commission on or before the date that is ninety (90) days the Mandatory Shelf Filing Date of the filing (or, in the event of a “full review” by the Commission, the date that is one hundred twenty (120) days after the date of the filing). The Company shall use its reasonable efforts to keep the Mandatory Shelf Registration Statement (or any successor Shelf Registration Statement) continuously effective under the Securities Act until the earlier of (A) the date when all of the Mandatory Shelf Securities covered by such Mandatory Shelf Registration Statement have been sold or cease to be Registrable Securities and (B) one (1) year after the Effective Date (such period, the “Mandatory Shelf Effectiveness Period”).
(ii) Without limiting Section 3, the Company shall, as promptly as practicable during the Mandatory Shelf Effectiveness Period:
(1) if required by applicable law, file with the Commission a post-effective amendment to the Mandatory Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document necessary to permit the Holders of Mandatory Shelf Securities to deliver such Prospectus to purchasers of Mandatory Shelf Securities in accordance with applicable law and, if the Company shall file a post-effective amendment to the Mandatory Shelf Registration Statement, use its reasonable efforts to cause such post-effective amendment to be declared effective under the Securities Act as promptly as is practicable;
(2) provide the Holders of Mandatory Shelf Securities copies of any documents to filed pursuant to Section 2(b)(ii)(1) a reasonable period of time prior to such filing, and use commercially reasonable efforts to address in each such document when so filed with the Commission such comments as such Holder of Mandatory Shelf Securities reasonably shall propose prior to the filing thereof; and
(3) notify the Holders of Mandatory Shelf Securities as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(b)(ii)(1).
(c) Requested Underwritten Offering.
(i) Any Holder then able to effectuate a Demand Registration pursuant to the terms of Section 2(a) shall have the option and right, exercisable by delivering written notice to the Company (an “Underwritten Offering Notice”), to require the Company, pursuant to the terms of and subject to the limitations of this Agreement, to effectuate a distribution of Registrable Securities by means of an Underwritten Offering pursuant to an effective Registration Statement (or pursuant to an effective Automatic Shelf Registration Statement) (a “Requested Underwritten Offering”); provided, however, that the Registrable Securities requested to be included in such Requested Underwritten Offering have an aggregate value at least equal to the Minimum Amount.
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(ii) The managing underwriter or managing underwriters of a Requested Underwritten Offering shall be designated by the Initiating Holders (provided, however, that such designated managing underwriter or managing underwriters shall be a nationally recognized investment banking firm reasonably acceptable to the Company). Notwithstanding the foregoing, the Company is not obligated to effect a Requested Underwritten Offering within 90 days of the closing of an Underwritten Offering.
(iii) If the managing underwriter or underwriters of a proposed Requested Underwritten Offering of the Registrable Securities included in a Demand Registration advise the Company that, in its or their opinion, the number of securities requested to be included in such Requested Underwritten Offering exceeds the number which can be sold in such Requested Underwritten Offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the securities to be included in such Requested Underwritten Offering shall be allocated, (A) first, pro rata among the Parties (other than the Company) that (prior to any cutback) would participate in such Underwritten Offering based on the relative number of Registrable Securities that would be held by each such Party following any related resale distribution, if any; provided, however, that any securities thereby allocated to a Party that exceed such Party’s request shall be reallocated among the remaining Parties in like manner; (B) second, and only if all the securities referred to in clause (A) have been included in such registration, to the Company up to the number of securities that the Company proposes to include in such registration that, in the opinion of the managing underwriter or underwriters can be sold without having such adverse effect and (C) third, and only if all of the securities referred to in clause (B) have been included in such registration, up to the number of securities that in the opinion of the managing underwriter or underwriters can be sold without having such adverse effect.
(d) Piggyback Registration.
(i) If the Company shall at any time propose to conduct a registered offering of Common Stock (whether a registered offering of Common Stock by the Company or a registered offering of Common Stock by the Company’s stockholders (including a Requested Underwritten Offering), or both, but excluding an offering pursuant to Section 2(b), an offering relating solely to an employee benefit plan, an offering relating to a transaction on Form S-4 or S-8 (or any similar forms adopted after the date hereof as replacements therefor) or an offering on any registration statement form that does not permit secondary sales), the Company shall promptly notify all Holders of such proposal reasonably in advance of (and in any event at least five (5) Business Days before) the commencement of such offering, which notice will set forth the principal terms and conditions of the issuance, including the proposed offering price (or range of offering prices), the anticipated filing date of the registration statement (if not yet filed) and the number of shares of Common Stock that are proposed to be registered (the “Piggyback Notice”); provided, however, notwithstanding any other provision of this Agreement, if the managing underwriter or managing underwriters of an Underwritten Offering (other than a Requested Underwritten Offering) advise the Company that in their reasonable opinion that the inclusion of a Holder’s Registrable Securities requested for inclusion in the subject Underwritten Offering (and any related registration, if applicable) would likely have an adverse effect on the price, timing, marketing or distribution of Common Stock proposed to be included in such Underwritten Offering, the Company shall have no obligation to provide a Piggyback Notice to such Holder and such Holder shall have no right to include any Registrable Securities in such Underwritten Offering (and any related registration, if applicable). The Piggyback Notice shall offer the Holders the opportunity to include in such offering (and any related registration, if applicable) the number of Registrable Securities as they may request (a “Piggyback Registration”); provided, however, that in the event that the Company proposes to effectuate the subject offering pursuant to an effective Shelf Registration Statement of the Company other than an Automatic Shelf Registration Statement, only Registrable Securities of Holders which are subject to such effective Shelf Registration Statement may be included in such Piggyback Registration. The Company shall use commercially reasonable efforts to include in each such Piggyback Registration such Registrable Securities for which the Company has received written requests for inclusion within three (3) Business Days (or within one (1) Business Day in the case of an “overnight” offering or “bought deal”) after sending the Piggyback Notice, provided that such written request sets forth such information regarding the Selling Stockholder as is required to be disclosed in connection with the offering (and any related registration, if applicable) pursuant to Regulation S-K promulgated under the Securities Act.
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(ii) If a Holder decides not to include for registration in an offering contemplated by this Section 2(c) (and any related registration, if applicable) such Holder’s Registrable Securities following the receipt of a Piggyback Notice, such Holder shall nevertheless continue to have the right to include any of such Holder’s Registrable Securities in any subsequent offering contemplated by this Section 2(c) (and any related registration, if applicable) in accordance with this Section 2(c).
(iii) If the managing underwriter or managing underwriters of an Underwritten Offering advise the Company and the Holders that in their reasonable opinion that the inclusion of all of the Registrable Securities requested for inclusion in an Underwritten Offering (other than a Requested Underwritten Offering) would likely have an adverse effect on the price, timing, marketing or distribution of Common Stock proposed to be included in such offering, the Company shall include in such Underwritten Offering only that number of shares of Common Stock proposed to be included in such Underwritten Offering that, in the reasonable opinion of the managing underwriter or managing underwriters, will not have such effect, with such number to be allocated as follows: (A) first, to the Company, (B) second, if there remains availability for additional shares of Common Stock to be included in such Underwritten Offering following the allocation to the Company under (A), pro rata among the Parties (other than the Company) that (prior to any cutback) would participate in such Underwritten Offering based on the relative number of Registrable Securities that would be held by each such Party following any related resale distribution, if any, and (C) if there remains availability for additional shares of Common Stock to be included in such registration following the allocation to the Parties under (B), third pro rata among all other Persons holding Common Stock who may be seeking to register such Common Stock pursuant to incidental or piggyback registration rights based on the number of Common Stock such Person is entitled to include in such registration.
(iv) Any Holder or Limited Partner shall have the right to withdraw all or part of its request for inclusion of its Registrable Securities in a Piggyback Registration by giving written notice to the Company of its request to withdraw; provided, however, that (i) such request must be made in writing prior to the effectiveness of such Registration Statement and (ii) such withdrawal shall be irrevocable and, after making such withdrawal, a Holder or Limited Partner shall no longer have any right to include Registrable Securities in the Piggyback Registration as to which such withdrawal was made.
(v) The Company shall have the right to terminate or suspend any registered offering as to which Holders have a right to a Piggyback Registration pursuant to this Section 2(c) (other than any registered offering initiated by a Holder pursuant to Section 2(a) or 2(b)) at any time in its sole discretion, and without any obligation to any Party (whether or not such Party has elected to exercise its right to a Piggyback Registration pursuant to this Section 2(c)).
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3. Registration and Underwritten Offering Procedures.
The procedures to be followed by the Company and each Selling Stockholder electing to sell Registrable Securities in a Registration Statement pursuant to this Agreement, and the respective rights and obligations of the Company and such Selling Stockholders with respect to the preparation, filing and effectiveness of such Registration Statement and the effectuation of any Underwritten Offering, are as follows:
(a) in connection with a Demand Registration, the Company will, at least three (3) Business Days prior to the anticipated filing of the Registration Statement and any related Prospectus or any amendment or supplement thereto (other than, after effectiveness of the Registration Statement, any filing made under the Exchange Act that is incorporated by reference into the Registration Statement), (i) furnish to such Selling Stockholders copies of all such documents prior to filing and (ii) use commercially reasonable efforts to address in each such document when so filed with the Commission such comments as such Selling Stockholders reasonably shall propose prior to the filing thereof.
(b) in connection with a Piggyback Registration or a Requested Underwritten Offering, the Company will, at least three (3) Business Days prior to the anticipated filing of any initial Registration Statement that identifies the Selling Stockholders and any related Prospectus or any amendment or supplement thereto (other than amendments and supplements that do not materially alter the previous disclosure or do nothing more than name the Selling Stockholders and provide information with respect thereto), as applicable, (i) furnish to such Selling Stockholders copies of any such Registration Statement or related Prospectus or amendment or supplement thereto that identify the Selling Stockholder and any related Prospectus or any amendment or supplement thereto (other than amendments and supplements that do not materially alter the previous disclosure or do nothing more than name Selling Stockholders and provide information with respect thereto) prior to filing and (ii) use commercially reasonable efforts to address in each such document when so filed with the Commission such comments as such Selling Stockholders reasonably shall propose prior to the filing thereof.
(c) The Company will use commercially reasonable efforts to as promptly as reasonably practicable (i) prepare and file with the Commission such amendments, including post-effective amendments, and supplements to each Registration Statement and the Prospectus used in connection therewith as may be necessary under applicable law to keep such Registration Statement continuously effective with respect to the disposition of all Registrable Securities covered thereby during the Effectiveness Period; (ii) cause the related Prospectus to be amended or supplemented by any required prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; and (iii) respond to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably practicable provide such Selling Stockholders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains to such Selling Stockholders as selling stockholders but not any comments that would result in the disclosure to such Selling Stockholders of material and non-public information concerning the Company.
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(d) The Company will comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of all Registrable Securities covered by each Registration Statement.
(e) The Company will notify such Selling Stockholders who are included in a Registration Statement as promptly as reasonably practicable: (i)(A) when a Prospectus or any prospectus supplement or post-effective amendment to a Registration Statement in which such Selling Stockholder is included has been filed; (B) when the Commission notifies the Company whether there will be a “review” of the applicable Registration Statement and whenever the Commission comments in writing on such Registration Statement (in which case the Company shall provide true and complete copies thereof and all written responses thereto to each of such Selling Stockholders that pertain to such Selling Stockholders as selling stockholders); and (C) with respect to each applicable Registration Statement or any post-effective amendment thereto, when the same has been declared effective; (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to such Registration Statement or Prospectus or for additional information that pertains to such Selling Stockholders as sellers of Registrable Securities; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it 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, in the light of the circumstances under which they were made, not misleading (provided, however, that no notice by the Company shall be required pursuant to this clause (v) in the event that the Company either promptly files a prospectus supplement to update the Prospectus or a Form 8-K or other appropriate Exchange Act report that is incorporated by reference into the Registration Statement, which in either case, contains the requisite information that results in such Registration Statement no longer containing any untrue statement of material fact or omitting to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading).
(f) The Company will use commercially reasonable efforts to avoid the issuance of or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as promptly as reasonably practicable, or if any such order or suspension is made effective during any Blackout Period or Suspension Period, as promptly as reasonably practicable after such Blackout Period or Suspension Period is over.
(g) During the Effectiveness Period, the Company will furnish to each Selling Stockholder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Selling Stockholder (including those incorporated by reference) promptly after the filing of such documents with the Commission; provided, however, that the Company will not have any obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system.
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(h) The Company will promptly deliver to each Selling Stockholder, without charge, as many copies of each Prospectus or Prospectuses (including each form of prospectus) authorized by the Company for use and each amendment or supplement thereto as such Selling Stockholder may reasonably request during the Effectiveness Period. Subject to the terms of this Agreement, including Section 3(o), the Company consents to the use of such Prospectus and each amendment or supplement thereto by each of the Selling Stockholders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.
(i) The Company will cooperate with such Selling Stockholders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free of all restrictive legends indicating that the Registrable Securities are unregistered or unqualified for resale under the Securities Act, Exchange Act or other applicable securities laws, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Selling Stockholder may request in writing. In connection therewith, if required by the Company’s transfer agent, the Company will promptly, after the Effective Date of the Registration Statement, cause an opinion of counsel as to the effectiveness of the Registration Statement to be delivered to and maintained with its transfer agent, together with any other authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to issue such Registrable Securities without any such legend upon sale by the Selling Stockholder of such Registrable Securities under the Registration Statement.
(j) Upon the occurrence of any event contemplated by Section 3(e)(v), as promptly as reasonably practicable, the Company will prepare a supplement or amendment, including a post-effective amendment, if required by applicable law, to the affected Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(k) In connection with any Requested Underwritten Offering, the Company will use commercially reasonable efforts to cause appropriate officers and employees to be available, on a customary basis and upon reasonable notice, to meet with prospective investors in presentations, meetings and “road shows.”
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(l) With respect to Underwritten Offerings, (i) the right of any Selling Stockholder to include such Selling Stockholder’s Registrable Securities in an Underwritten Offering shall be conditioned upon such Selling Stockholder’s participation in such underwriting and the inclusion of such Selling Stockholder’s Registrable Securities in the underwriting to the extent provided herein, (ii) each Selling Stockholder participating in such Underwritten Offering agrees to enter into an underwriting agreement in customary form and sell such Selling Stockholder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled to select the managing underwriter or managing underwriters hereunder and (iii) each Selling Stockholder participating in such Underwritten Offering agrees to complete and execute all questionnaires, powers of attorney, indemnities, custody agreements, lock-ups, “hold back” agreements, and other documents reasonably required under the terms of such underwriting arrangements. The Company hereby agrees with each Selling Stockholder that, in connection with any Underwritten Offering in accordance with the terms hereof, it will negotiate in good faith and execute all customary indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, including using all commercially reasonable efforts to procure customary legal opinions and auditor “comfort” letters. In the event such Selling Stockholders seek to complete an Underwritten Offering, for a reasonable period prior to the filing of any Registration Statement and throughout the Effectiveness Period, the Company will make available upon reasonable notice at the Company’s principal place of business or such other reasonable place for inspection during normal business hours by the managing underwriter or managing underwriters selected in accordance with this Section 3(l) such financial and other information and books and records of the Company (collectively, the “Records”), and cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary (and in the case of counsel, not violate an attorney-client privilege in such counsel’s reasonable belief) to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that, unless the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the Registration Statement or the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, the Company shall not be required to provide any Records under this Section 3(l) if (i) the Company believes, after consultation with counsel for the Company, that to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such Records, or (ii) if either (A) the Company has requested and been granted from the Commission confidential treatment of such Records contained in any filing with the Commission or documents provided supplementally or otherwise or (B) the Company reasonably determines in good faith that such Records are confidential and so notifies the Person so inspecting in writing, unless prior to furnishing any such Records with respect to clause (ii) such Person requesting such Records agrees to enter into a confidentiality agreement in customary form and subject to customary exceptions; and provided, further, that each Party agrees that it shall, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake appropriate action and to prevent disclosure of the Records deemed confidential.
(m) Each Selling Stockholder agrees to furnish to the Company any other information regarding the Selling Stockholder and the distribution of such securities as the Company reasonably determines is required to be included in any Registration Statement or any prospectus or prospectus supplement relating to an Underwritten Offering.
(n) Notwithstanding any other provision of this Agreement, the Company shall not be required to file a Registration Statement (or any amendment thereto) or effect a Requested Underwritten Offering (or, if the Company has filed a Shelf Registration Statement and has included Registrable Securities therein, the Company shall be entitled to suspend the offer and sale of Registrable Securities pursuant to such Registration Statement) for a period of up to 120 days, if (A) the Board determines that a postponement is in the best interest of the Company and its stockholders generally due to a pending transaction involving the Company (including a pending securities offering by the Company, or any proposed financing, acquisition, merger, tender offer, business combination, corporate reorganization, consolidation or other significant transaction involving the Company), (B) the Board determines such registration would render the Company unable to comply with applicable securities laws, (C) the Board determines such registration would require disclosure of material information that the Company has a bona fide business purpose for preserving as confidential, or (D) audited financial statements as of a date other than the fiscal year end of the Company would be required to be prepared (any such period, a “Blackout Period”); provided, however, that in no event shall any Blackout Period together with any Suspension Period collectively exceed an aggregate of 120 days in any 12 month period. In addition, if the Company receives a Demand Notice and the Company is then in the process of preparing to engage in a public offering, the Company shall inform the Initiating Holders of the Company’s intent to engage in a public offering and may require the Initiating Holders to withdraw the Demand Notice for a period of up to one hundred twenty (120) days so that the Company may complete its public offering. In the event that the Company ceases to pursue such public offering, it shall promptly inform the Initiating Holders, and the Initiating Holders shall be permitted to submit a new Demand Notice.
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(o) Discontinued Disposition. Each Selling Stockholder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in clauses (ii) through (v) of Section 3(e), such Selling Stockholder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Selling Stockholder’s receipt of the copies of the supplemental Prospectus or amended Registration Statement as contemplated by Section 3(j) or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement (a “Suspension Period”). During any Suspension Period, if so directed by the Company, such Selling Stockholder must deliver to the Company all copies in its possession, other than permanent file copies then in the Selling Stockholder’s possession, of the Prospectus covering such Registrable Shares current at the time of receipt of such notice, and shall keep the information contained in such, as well as any knowledge related to the reason for the Suspension Period, confidential. The Company may provide appropriate stop orders to enforce the provisions of this Section 3(o).
(p) Except as otherwise specifically provided in this Agreement, in all offerings of the Company’s securities the Company shall have sole discretion to select the underwriters.
4. No Inconsistent Agreements. The Company shall not hereafter enter into, and is not currently a party to, any agreement with respect to its securities that is inconsistent in any material respect with the rights granted to the Parties by this Agreement.
5. Registration Expenses. All Registration Expenses incident to the Company’s performance of or compliance with its obligations under this Agreement shall be borne by the Company, whether or not any Registrable Securities are sold pursuant to a Registration Statement. In addition, the Company shall be responsible for all of its expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including expenses payable to third parties and including all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on the Trading Market. The Company shall not be required to pay any Selling Expenses, fees of any counsel retained by any underwriter with respect to any Requested Underwritten Offering, or any other expenses of the Parties (other than the Company) not specifically required to be paid pursuant to this Section 5.
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6. Indemnification.
(a) The Company shall indemnify and hold harmless each Selling Stockholder whose Registrable Securities are covered by a Registration Statement, each Person who controls such Selling Stockholder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), and each of their respective officers and directors and any agent thereof (collectively, “Selling Stockholder Indemnified Persons”), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, joint or several, costs (including reasonable costs of preparation and reasonable attorneys’ fees) and expenses, judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Selling Stockholder Indemnified Person may be involved, or is threatened to be involved, as a party or otherwise, under the Securities Act or otherwise (collectively, “Losses”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which any Registrable Securities of such Selling Stockholder were registered, in any related preliminary prospectus (if the Company authorized the use of such preliminary prospectus prior to the Effective Date), or in any related summary or final prospectus or free writing prospectus (if such free writing prospectus was authorized for use by the Company) or in any amendment or supplement thereto (if used during the period the Company is required to keep the Registration Statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances in which they were made, not misleading; provided, however, that the Company shall not be liable to any Selling Stockholder Indemnified Person to the extent that any such claim arises out of, is based upon or results from: (i) an untrue or alleged untrue statement or omission or alleged omission made in such Registration Statement, such preliminary, summary or final prospectus or free writing prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Selling Stockholder Indemnified Person or any underwriter specifically for use in the preparation thereof; or (ii) any sales by a Selling Stockholder after the delivery by the Company to such Selling Stockholder of written notice of a Suspension Period and before the written confirmation by the Company that sales may be resumed. The Company shall notify the Selling Stockholders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. This indemnity shall be in addition to any liability the Company may otherwise have.
(b) In connection with any Registration Statement in which a Selling Stockholder participates, all such participating Selling Stockholders shall, severally and not jointly, indemnify and hold harmless the Company, each Person who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), and each of their respective officers, directors and any agent thereof to the fullest extent permitted by applicable law, from and against any and all Losses as incurred, arising out of or relating to (i) any untrue or alleged untrue statement of a material fact contained in any such Registration Statement, in any preliminary prospectus (if used prior to the Effective Date of such Registration Statement), or in any summary or final prospectus or free writing prospectus or in any amendment or supplement thereto (if used during the period the Company is required to keep the Registration Statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances in which they were made, not misleading, but only to the extent that the same are made in reliance and in conformity with information relating to the Selling Stockholder furnished in writing to the Company by or on behalf of such Selling Stockholder for use therein and (ii) any sales by such Selling Stockholders after the delivery by the Company to such Selling Stockholders of written notice of a Suspension Period and before the written confirmation by the Company that sales may be resumed. This indemnity shall be in addition to any liability such Selling Stockholder may otherwise have. In no event shall the liability of any Selling Stockholder hereunder be greater in amount than the dollar amount of the proceeds received by such Selling Stockholder under the sale of the Registrable Securities giving rise to such indemnification obligation, except in the case of fraud or willful misconduct by such Selling Stockholder.
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(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim or there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to any local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party that are in addition to or may conflict with those available to another indemnified party with respect to such claim. The delay or failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder except to the extent that the indemnifying party has been prejudiced by such delay or failure. An indemnifying party shall not be liable for any settlement effected by the indemnified party without the written consent of such indemnifying party.
(d) If the indemnification provided for in this Section 6 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any Losses referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, in connection with the untrue or alleged untrue statement of a material fact or the omission to state a material fact that resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that in no event shall any contribution by a Selling Stockholder hereunder exceed the net proceeds from the offering received by such Selling Stockholder.
7. Facilitation of Sales Pursuant to Rule 144. For so long as the Company is subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act, the Company shall (i) timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144), and (ii) take such further action as any Holder may reasonably request, all to the extent required from time to time to enable the Holders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144. Upon the request of any Holder in connection with that Holder’s sale pursuant to Rule 144, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements.
8. Duration of Agreement. This Agreement shall terminate and be of no further force or effect when there shall no longer be any Registrable Securities outstanding; provided, however, that the Company’s and any Selling Stockholder’s obligations under Section 6 shall survive such termination.
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9. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of any of its obligations under this Agreement, each Holder, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.
(b) Amendments and Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and Investors holding a majority in interest of the Registrable Securities then outstanding 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 an Investor (or group of Investors), the consent of such disproportionately impacted Investor (or group of Investors) shall also be required. The Company shall provide prior notice to all Parties of any proposed waiver or amendment. 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. Notwithstanding the foregoing, a waiver or consent to depart from the provisions of this Agreement with respect to a matter that relates exclusively to the rights of Selling Stockholders whose Registrable Securities are being sold pursuant to a Registration Statement and that does not materially adversely affect the rights of other Parties may be given by Selling Stockholders selling of a majority of the Registrable Securities being sold pursuant to such Registration Statement. Any amendment effected in accordance with accordance with this Section 9(b) shall be binding upon each Investor and holder of Registrable Securities and the Company.
(c) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via electronic mail as specified in this Section 9(c) prior to 5:00 p.m. Eastern Time on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via electronic mail as specified in this Agreement later than 5:00 p.m. Eastern Time on any date and earlier than 11:59 p.m. Eastern Time on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service, (iv) the date of delivery, if delivered personally, or (v) upon actual receipt by the Party to whom such notice is required to be given. The contact information for such notices and communications shall be as set forth on the signature pages hereto (or as any such party may designate by written notice to the other parties in accordance with this Section 9(c)).
(d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, successors, legal representatives and permitted assigns. Except as provided in this Section 9(d), this Agreement, and any rights or obligations hereunder, may not be assigned without the prior written consent of the Company. Notwithstanding anything in the foregoing to the contrary, the registration rights of any of the Investors pursuant to this Agreement with respect to all or any portion of its Registrable Securities may be assigned without such consent (but only with all related obligations) with respect to such Registrable Securities by such Party to a transferee of not less than 200,000 of such Registrable Securities (adjusted for any stock split, stock dividend, reverse stock split or similar change in the Common Stock after the date of this Agreement); provided (i) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the Registrable Securities with respect to which such registration rights are being assigned and (ii) such transferee or assignee agrees in writing to be bound by and subject to the terms set forth in this Agreement. The Company may not assign its rights or obligations hereunder without the prior written consent of the Holders.
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(e) No Third Party Beneficiaries. Nothing in this Agreement, whether express or implied, shall be construed to give any Person, other than the parties hereto or their respective successors and permitted assigns, any legal or equitable right, remedy, claim or benefit under or in respect of this Agreement.
(f) Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by electronic mail transmission, such signature shall create a valid binding obligation of the Party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such signature delivered by electronic mail transmission were the original thereof.
(g) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to its choice of law or conflict of law provisions or rules. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York over any suit, action, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each Party anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the Parties irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Each of the Parties agrees that a judgment in any such suit, action or proceeding may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
(h) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.
(i) Headings. The section and paragraph headings contained in this Agreement are for reference purposes only and should not affect in any way the meaning or interpretation of this Agreement.
(j) 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 shall use their 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.
(k) Entire Agreement. This Agreement constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous contracts, agreements and understandings with respect to the subject matter hereof and the matters addressed or governed hereby, whether oral or written.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement as of the date first written above.
| SCIENTIFIC INDUSTRIES, INC |
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| Name: Helena Santos Title: President and Chief Executive Officer
Information for Notice: Scientific Industries, Inc. 80 Orville Drive, Suite 102 Bohemia, NY 11716 Attention: Helena Santos Electronic mail: [email protected]
With a copy to:
Reitler Kailas & Rosenblatt LLP 885 3rd Ave, 20th Floor New York, NY 10022 Attention: John F.F. Watkins, Esq. Electronic mail: [email protected] |
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IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement as of the date first written above.
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| If you are signing on behalf of an entity, please print the name of the entity and sign below, indicating your title with the entity: |
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______________________________________________ Print Name of Entity
By: ___________________________________________ (Signature)
______________________________________________ Print Name of Signatory
______________________________________________ Title of Signatory |
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EXHIBIT 10.1
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE SECURITIES PURCHASED HEREUNDER MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS PURSUANT TO REGISTRATION OR EXEMPTION FROM REGISTRATION REQUIREMENTS THEREUNDER.
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (the “Agreement”) is entered into as of April __, 2025 by and among Scientific Industries, Inc., a Delaware corporation (the “Company”), and each of the purchasers, severally and not jointly, listed on Annex A hereto (collectively, the “Purchasers” and each, a “Purchaser”).
BACKGROUND
The Company desires to sell, and each Purchaser desires to purchase, shares of the Company’s common stock, par value $0.05 per share (the “Common Stock”), and warrants to purchase shares of Common Stock, on the terms and subject to the conditions contained herein.
The issuance of the shares of Common Stock and warrants to purchase shares of Common Stock hereunder is being made in a private placement, without registration under the Securities Act of 1933, as amended (the “Securities Act”), or any other applicable securities Laws (as defined below), in reliance on one or more exemptions from registration and other requirements thereunder.
Capitalized terms used in this Agreement shall have the meanings set forth in Section 7.14.
Therefore, in consideration of the foregoing, and the representations, warranties, covenants and conditions set forth below, the parties hereto, intending to be legally bound, hereby agree as follows:
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1. Purchase and Sale of Common Stock.
1.1 Sale and Issuance of Common Stock. Subject to the terms and conditions of this Agreement, each Purchaser agrees, severally and not jointly, to purchase at the Closing (as defined below), and the Company agrees to sell and issue to the such Purchasers at the Closing, that number of units, each comprising (a) one share of Common Stock, and (ii) a warrant to purchase one share of Common Stock (the “Warrants” and, together with the Common Stock, the “Units”) at a purchase price of $1.00 per Unit. The shares of Common Stock purchased by each Purchaser and number of shares of Common Stock underlying the Warrants purchased by each Purchaser, in each case, at the applicable Closing for such Purchaser, shall be set forth by the Company opposite such Purchaser’s name on Annex A hereto. The shares of Common Stock to be issued and sold by the Company to the Purchasers pursuant to this Agreement are collectively referred to herein as the “Shares”, the shares of Common Stock issuable upon exercise of the Warrants are collectively referred to herein as the “Warrant Shares” and the Shares, Warrants and Warrant Shares are collectively referred to herein as the “Securities”. To the extent a Purchaser’s subscription amount accepted by the Company with regard to the purchase of Units pursuant to this Agreement does not divide into a whole number of Shares, then the Purchaser hereby agrees that the Company may, in its sole discretion, receive and keep the excess subscription amount closed upon pursuant to this Agreement up to $0.99. Prior to the Closing (as defined below), each Purchaser hereby agrees to pay the entire purchase price of the Shares for which such Purchaser has subscribed, as is set forth on the Purchaser’s signature page, by wire transfer of immediately available funds in an amount equal to such purchase price to FirstBank or such other bank as may be selected by the Company (the “Escrow Agent”) in accordance with the wiring instructions provided by the Company or on the Company’s behalf by the Company’s placement agent Brookline Capital Markets, a division of Arcadia Securities, LLC (the “Placement Agent”). The Escrow Agent shall hold the escrow funds for the benefit of the Company until the applicable Closing pursuant to the terms of an escrow deposit agreement between the Company, the Escrow Agent and the Placement Agent, whereupon the Escrow Agent shall release the funds as designated in writing by the Company and the Placement Agent. In the event a prospective Purchaser’s subscription is rejected by the Company, which each prospective Purchaser hereby acknowledges the Company may do at any time, in whole or in part and for any reason or no reason, in the Company’s sole discretion, then such prospective Purchaser’s funds in escrow that are rejected, if any, shall be promptly returned to such prospective Purchaser without interest or deduction. In the event the Initial Closing (as defined below) has not occurred by May 31, 2025, any funds of a prospective Purchaser that are in escrow will be promptly returned to such prospective Purchaser, without interest or deduction, upon such prospective Purchaser’s written request to the Company for the same. Any unaccepted subscription amount(s) shall be promptly returned to the same account from which such amount(s) were received (or, if the Company and the Placement Agent so determine, to such other account or in such other manner as the Company and the Placement Agreement may mutually agree upon with the Person to whom an amount is being returned) without interest or penalty. Additionally, the Company and the Placement Agent will promptly return funds in escrow for unaccepted subscriptions if (i) such funds remain in escrow for more than 90 days after the Company or the Placement Agent, as applicable, have received completed subscription documents from the prospective Purchaser, (ii) the prospective Purchaser then requests in writing the return of such funds to the extent such funds are not closed upon within 30 days of receipt of such writing by the Company and the Placement Agent, and (iii) such funds then are not closed upon within 30 days after the receipt of such writing from the prospective Purchaser.
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1.2 Closing. The initial purchase and sale of the Units and other transactions contemplated hereby (the “Initial Closing”) shall take place remotely via the exchange of documents and signatures by electronic mail, facsimile and/or other similar electronic manner on the date hereof or at such other time, place and manner as the Company and the Purchasers shall mutually agree (the date that the Closing occurs, the “Initial Closing Date”). In the event there is more than one closing, the term “Closing” shall apply to each such closing unless otherwise specified. At each Closing, unless waived by the Company and the Placement Agent, (a) each Purchaser shall execute and deliver to the Placement Agent an investor acknowledgment letter, an escrow acknowledgement letter, a client suitability review form and an anti-money laundering form, in each case, in the forms provided along with this Agreement and (b) the Company shall (i) issue to each Purchaser (and deliver a book-entry confirmation by the Company’s transfer agent) that number of Shares set forth opposite such Purchaser’s name on Annex A hereto in book-entry form and (ii) deliver to each Purchaser a Warrant in the form attached hereto as Exhibit A-1 or, at the election of a Purchaser, in the form attached hereto as Exhibit A-2, to purchase that number of shares of Common Stock set forth opposite such Purchaser’s name on Annex A hereto; provided that, notwithstanding anything to the contrary in this Agreement, such delivery of the Warrant to Purchaser may, in the Company’s sole discretion, be made up to three business days after the applicable Closing. At each Closing, each Purchaser and the Company shall execute and deliver the Registration Rights Agreement among the Company and each Purchaser, the form of which is attached hereto as Exhibit B (the “Registration Rights Agreement”). The parties acknowledge and agree that the Company presently is offering an aggregate amount of up to $2,500,000 of Units (i.e., 2,500,000 Units at $1.00 per Unit) pursuant to this Agreement.
1.3 Use of Proceeds. The proceeds from the sale of the Units will be used for operations, working capital and other general corporate purposes, including covering costs and expenses associated with the offering of the Units.
2. Representations and Warranties of the Company. The Company represents and warrants to each Purchaser as of the date hereof and as of the date of each Closing that:
2.1 Organization, Good Standing and Qualification. Each of the Company and its Subsidiaries is duly incorporated or organized (as applicable), validly existing, and in good standing under the Laws of the state of its incorporation or organization (as applicable); has all corporate, partnership or limited liability company (as applicable) power and authority to own its properties and conduct its business as presently conducted; and is duly qualified to do business and in good standing in each state in the United States of America where its business requires such qualification, except where failure to qualify would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
2.2 Authorization; Enforceability. The Company has all necessary power and authority to execute, deliver, and perform its obligations under this Agreement, the Warrants and the Registration Rights Agreement. All corporate action by and on behalf of the Company necessary for the authorization, execution, and delivery of this Agreement, the Warrants and the Registration Rights Agreement, the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance, sale, and delivery of the Securities to each Purchaser hereunder has been taken. This Agreement, the Warrants and the Registration Rights Agreement, when executed and delivered by the Company, assuming due authorization, execution, and delivery by each Purchaser, constitutes and will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject to: (a) Laws limiting the availability of specific performance, injunctive relief, and other equitable remedies; (b) bankruptcy, insolvency, reorganization, moratorium, or other similar Laws now or hereafter in effect generally relating to or affecting creditors’ rights generally; and (c) limitations on the enforceability of indemnification provisions contained in the Registration Rights Agreement (collectively, the “Enforceability Exceptions”).
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2.3 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Securities and Exchange Commission (the “SEC”) with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
2.4 Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, 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, consultants, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the Knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (a) payment of salary or consulting fees for services rendered, (b) reimbursement for expenses incurred on behalf of the Company and (c) other employee benefits, including stock option agreements under any stock option plan of the Company.
2.5 Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected the internal control over financial reporting of the Company and its Subsidiaries.
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2.6 Indebtedness. Neither the Company nor any of its Subsidiaries is in default in the payment of any Indebtedness or in default under any agreement relating to its Indebtedness or under any mortgage, deed of trust, security agreement, or lease to which it is a party, other than defaults that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
2.7 Litigation. There is no action, suit, proceeding, or investigation pending or, to the Knowledge of the Company, overtly threatened against, nor any outstanding judgment, order, or decree against, the Company or any of its Subsidiaries before or by any Governmental Authority or arbitral body which in the aggregate have, or if adversely determined, would reasonably be expected to have, a Company Material Adverse Effect.
2.8 Title. Each of the Company and its Subsidiaries has good and marketable title to its properties that are real property and good and valid title to all of its other properties (other than negligible assets that are immaterial to the operations of the Company or any of its Subsidiaries), free and clear of all Liens, except (a) for Permitted Liens and (b) as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
2.9 Taxes. Each of the Company and its Subsidiaries has filed all material tax returns required to have been filed and paid all material taxes shown thereon to be due, except for those for which extensions have been obtained and which are being contested in good faith by appropriate proceedings and in respect of which adequate reserves are maintained by the Company and its Subsidiaries in accordance with GAAP.
2.10 Governmental Consents. No consent, approval, order, or authorization of, or registration, qualification, declaration, or filing with, any Governmental Authority on the part of the Company is required in connection with the offer, sale, or issuance of the Securities to each Purchaser hereunder or the consummation of the transactions contemplated hereby, except for the following: (a) the compliance with other applicable state securities Laws, which compliance will have occurred within the appropriate time periods therefor; and (b) the filing with the SEC of such reports under the Exchange Act and/or the Securities Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement.
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2.11 Permits and Licenses. The Company and each of its Subsidiaries possess all permits, certificates, licenses and other authorizations of Governmental Authorities that are required to conduct its business, except for such permits, certificates, licenses or other authorizations the absence of which would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
2.12 Valid Issuance of Common Stock. The Shares being purchased by each Purchaser hereunder, when issued, sold, and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions under applicable state and federal securities Laws. The Warrant Shares, when issued in accordance with the terms of the Warrants for the consideration expressed therein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions under applicable state and federal securities Laws. The Company has reserved (and shall maintain in reserve) from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants.
2.13 Capitalization. The authorized capital stock of the Company consists of 30,000,000 shares of Common Stock, of which 10,503,599 were issued and outstanding as of March 31, 2025 (excluding the Shares to be issued pursuant to this Agreement). As of March 31, 2025, (a) there were 1,835,447 outstanding options under the Company’s 2022 Stock Option Plan and earlier option plans that have expired and (b) the Company has reserved an aggregate of 1,750,000 shares of Common Stock for issuance pursuant to the Company’s 2022 Stock Option Plan, under which 463,848 shares remain available for future grant. All issued and outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and nonassessable. There are also outstanding warrants to purchase 8,232,510 shares of Common Stock. Other than as provided in this Agreement, there are no other outstanding rights, options, warrants, preemptive rights, rights of first offer, or similar rights for the purchase or acquisition from the Company of any securities of the Company, nor are there any commitments from the Company to issue or execute any such rights, options, warrants, preemptive rights, or rights of first offer. There are no outstanding rights or obligations of the Company to repurchase or redeem any of its securities.
2.14 Private Placement. Assuming that the representations of each Purchaser set forth in Section 3 hereof are true and correct, the offer, sale, and issuance of the Units in conformity with the terms of this Agreement are exempt from the registration requirements of Section 5 of the Securities Act, and all applicable state securities Laws. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Units by any form of general solicitation or general advertising. The Company has offered the Units for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering of the Units, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder. Investment Company Act. Neither the Company nor any of its Subsidiaries is an investment company within the meaning of the Investment Company Act of 1940, as amended, or, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company, within the meaning of such act.
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2.15 No Default of Violation. The Company is not in violation or default of any provision of its Certificate of Incorporation, as amended (the “Charter”), or its Bylaws, as amended and restated (the “Bylaws”). The execution, delivery, and performance of this Agreement, the Warrants and the Registration Rights Agreement by the Company and the issuance and sale of the Units will not: (a) result in any default or violation of the Charter or Bylaws; (b) result in any default or violation of any agreement relating to the Indebtedness of the Company or its Subsidiaries or under any mortgage, deed of trust, security agreement, or lease to which the Company or its Subsidiaries is a party or in any default or violation of any judgment, order, or decree of any Governmental Authority; or (c) be in conflict with or constitute, with or without the passage of time or giving of notice, a default under any such provision, require any consent or waiver under any such provision, or result in the creation of any Lien upon any of the properties or assets of the Company or its Subsidiaries pursuant to any such provision; except in the case of (b) and (c) above, as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
2.16 Compliance with Laws. Neither the Company nor any of its Subsidiaries is in violation of any applicable Laws, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. To the Knowledge of the Company, neither the Company nor any of its Subsidiaries is being investigated with respect to, or been overtly threatened to be charged with or given notice of any violation of, any applicable Law, except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
2.17 No Company Material Adverse Effect. Since March 31, 2025, no event or circumstance has occurred that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect.
2.18 No Restricted Payments. No Subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary’s property or assets to the Company or any other Subsidiary of the Company.
2.19 No Price Stabilization or Manipulation. The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.
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2.20 FCPA. Neither the Company nor any of its Subsidiaries nor any director, officer or controlled Affiliate of the Company or any of its Subsidiaries nor, to the Knowledge of the Company, any agent or employee of the Company or any of its Subsidiaries nor, to the Knowledge of the Company, any Affiliate of the Company or any of its Subsidiaries that is not controlled by or under common control with the Company or any of its Subsidiaries, is aware of, has taken or will take any action, directly or indirectly, that would result in a violation by such Persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and the Company, its Subsidiaries and its controlled Affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith and with the representation and warranty contained herein.
2.21 Compliance with Money Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (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 of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.
2.22 OFAC. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee or Affiliate of the Company or any of its Subsidiaries (a) is currently subject to any sanctions administered imposed by the United States (including any administered or enforced by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”) or (b) will, directly or indirectly, use the proceeds from the issuance of the Units, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person in any manner that will result in a violation of any economic sanctions imposed by the United States (including any administered or enforced by OFAC, the U.S. Department of State, or the Bureau of Industry and Security of the U.S. Department of Commerce), the United Nations Security Council, the European Union, or the United Kingdom (including sanctions administered or controlled by Her Majesty’s Treasury) by, or could result in the imposition of Sanctions against, any Person (including any Person participating in the transactions contemplated by this Agreement, whether as placement agent, advisor, investor or otherwise).
2.23 No Brokers’ Fees; Relationship with Certain Representatives of Placement Agent. No broker, investment banker, financial advisor or other Person, other than the Placement Agent, the fees of which will be paid by the Company, is entitled to any broker’s, finder’s, financial advisor’s, or other similar fee or commission in connection with the transactions contemplated by this Agreement.
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3. Representations and Warranties of Each Purchaser. Each Purchaser represents and warrants, severally and not jointly, to the Company as of the date of the Closing applicable to such Purchaser that:
3.1 Private Placement.
(a) The Units to be acquired by such Purchaser hereunder will be acquired for such Purchaser’s own account and not with a view to the resale or distribution of any part thereof. Such Purchaser is aware that (i) the offer and sale of the Units to it have not been, and, except as contemplated by the Registration Rights Agreement, will not be, registered under the Securities Act or any state securities Laws and are being offered and sold in reliance upon exemptions from the registration requirements of the Securities Act and (ii) the Units purchased hereunder may not be transferred or resold except as permitted under the Securities Act and applicable state securities Laws pursuant to registration or exemption from registration requirements thereunder; provided, however, that by making such representations herein, such Purchaser does not agree to hold any of the Units for any minimum or other specific term and reserves the right to dispose of the Units at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.
(b) Such Purchaser is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act.
(c) Such Purchaser understands that, unless sold pursuant to a registration statement that has been declared effective under the Securities Act or in compliance with Rule 144 thereunder, the certificates evidencing the Securities will bear a legend or other restriction substantially to the following effect (it being agreed that if the Shares or Warrant Shares are not certificated, other appropriate restrictions shall be implemented or notated to give effect to the following):
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND WERE OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE SECURITIES MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS PURSUANT TO REGISTRATION OR EXEMPTION FROM REGISTRATION REQUIREMENTS THEREUNDER.”
(d) Such Purchaser: (i) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its prospective investment in the Units; and (ii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment.
(e) Such Purchaser: (i) has conducted its own investigation of the Company and the Units; (ii) has had access to the Company’s public filings with the SEC, including the SEC Reports, and to such financial and other information as it deems necessary in connection with its decision to purchase the Units; and (iii) has been offered the opportunity to conduct such review and analysis of the business, assets, condition, operations, and prospects of the Company and its Subsidiaries and to ask questions of the Company and received answers thereto, each as it deems necessary in connection with its decision to purchase the Units. Each Purchaser further acknowledges that it has had the opportunity to consult with its own counsel, financial, tax, and other professional advisers as it believes is sufficient for purposes of its purchase of the Units. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2 hereof or the right of each Purchaser to rely thereon.
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(f) Such Purchaser understands that the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements, and agreements.
(g) Except for the representations and warranties contained in Section 2 hereof, each Purchaser acknowledges that neither the Company nor any Person on behalf of the Company makes, and such Purchaser has not relied upon, any other express or implied representation or warranty with respect to the Company or any of its Subsidiaries or with respect to any other information provided to such Purchaser in connection with the transactions contemplated by this Agreement.
3.2 Organization and Good Standing. Such Purchaser is duly incorporated or organized (as applicable), validly existing, and in good standing under the Laws of the state of its incorporation or organization (as applicable).
3.3 Authorization; Enforceability. Such Purchaser has all necessary power and authority to execute, deliver, and perform its obligations under this Agreement, the Warrants and the Registration Rights Agreement. All action by and on behalf of such Purchaser necessary for the authorization, execution, and delivery of this Agreement, the Warrants and the Registration Rights Agreement and the performance of all obligations of such Purchaser hereunder and thereunder has been taken. This Agreement, the Warrants and the Registration Rights Agreement, when executed and delivered by such Purchaser, assuming due authorization, execution and delivery by the Company, constitutes and will constitute a valid and legally binding obligation of such Purchaser, enforceable against such Purchaser in accordance with their respective terms, subject to the Enforceability Exceptions.
3.4 “Bad Actor” Status. The Purchaser hereby represents that neither it nor, to its knowledge, any of its Rule 506(d) Related Parties is a “bad actor” within the meaning of 506(d) promulgated under the Securities Act. For purposes of this Agreement, “Rule 506(d) Related Party” shall mean a Person covered by the “Bad Actor disqualification” provision of Rule 506(d) of the Securities Act.
3.5 Oral Statements. IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE UNITS, SUCH PURCHASER IS NOT RELYING ON ORAL STATEMENTS MADE BY REPRESENTATIVES OF ANY OF THE COMPANY OR THE PLACEMENT AGENT, ANY OF THEIR RESPECTIVE AFFILIATES, OR ANY OTHER PERSON. PURCHASER’S INVESTMENT DECISION IS BASED SOLELY ON WRITTEN INFORMATION PROVIDED BY THE COMPANY.
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3.6 USA Patriot Act and Related Matters. Such Purchaser is in compliance with all applicable provisions of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (as amended from time to time and together with the regulations promulgated thereunder, the “USA Patriot Act”), the United States Bank Secrecy Act (as amended from time to time and together with the regulations promulgated thereunder, the “BSA”) and all other anti-money laundering laws and applicable regulations adopted to implement the provisions of such laws, including policies and procedures that can be reasonably expected to detect and cause the reporting of transactions under Section 5318 of the BSA. The Purchaser is not, and shall not be, a person: (a) acting, directly or indirectly, on behalf of terrorists or terrorist organizations, including those persons or entities that are included on any of the United States Office of Foreign Assets Control (“OFAC”) lists; (b) listed on, residing in, or having a place of business in a country or territory named on any of such lists, or which is designated as a Non-Cooperative Jurisdiction by the Financial Action Task Force on Money Laundering (“FATF”), or whose funds are from or through such a jurisdiction; (c) that is a “Foreign Shell Bank” within the meaning of the USA Patriot Act; or (d) residing in, or organized under the laws of, a jurisdiction designated by the United States Secretary of the Treasury under Sections 311 or 312 of the USA Patriot Act as warranting special measures due to money-laundering concerns.
3.7 Non-U.S. Investor Matters.
(a) Notwithstanding anything to the contrary contained in this Agreement, each Non-U.S. Investor (as defined below) and the Company agree that, as of and following the date of this Agreement, no such Non-U.S. Investor shall be afforded any of the following within the meaning of the Defense Production Act of 1950, as amended, including any implementing regulations thereof (the “DPA”): (i) “control” of the Company; (ii) access to any “material nonpublic technical information” in the possession of the Company; (iii) membership or observer rights on, or the right to nominate an individual to a position on, the board of directors or equivalent governing body of the Company; or (iv) any “involvement,” other than through the voting of shares, in “substantive decision making” by the Company regarding: (A) the use, development, acquisition, safekeeping, or release of “sensitive personal data” of U.S. citizens maintained or collected by the Company; (B) the use, development, acquisition, or release of any “critical technology”; or (C) the management, operation, manufacture, or supply of “covered investment critical infrastructure.” To the extent that any term in this Agreement would afford any of the foregoing to such Non-U.S. Investor contrary to the intent of each Non-U.S. Investor and the Company as expressed herein, such term shall have no effect as to the Non-U.S. Investor. Additionally, for the avoidance of doubt, in the event that any Non-U.S. Investor is afforded any information and/or inspection rights pursuant to written agreements with the Company, such rights shall not include access to material nonpublic technical information in the Company’s possession nor any involvement in substantive decision making with respect to the matters listed in clause 3.7(a)(iv) hereinabove. For purposes of this Agreement, a “Non-U.S. Investor” means a Purchaser that is a “foreign person” within the meaning of the DPA.
(b) The Company shall have and shall exercise the right to (i) exclude any Non-U.S. Investor from access to any information, facilities, or properties of the Company or any its subsidiaries, and (ii) prohibit any Non-U.S. Investor from engaging in discussions and communications with any Company personnel and any personnel of any Company subsidiary if the Company determines in its sole discretion that such exclusion is necessary or appropriate to enforce the limitations in Section 3.7(a).
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3.8 Purchases by Affiliates of the Company and the Placement Agent. The Purchaser acknowledges and understands that the Company reserves the right (but is not obligated) to have its officers, directors, employees and affiliates and other persons who will receive fees or other compensation or gain dependent upon the success of this offering, including the Placement Agent and its employees, associated persons, and affiliates, purchase Units in this offering and that such purchases may be made at any time. The Purchaser does not expect that the sale(s) of Units in this offering indicates that such sale(s) have been made to investors who have no financial or other interest in this offering or who otherwise are exercising independent investment discretion. The Purchaser acknowledges and understands that there may be substantial purchases by officers, directors, employees and affiliates of the Company or by other persons who will receive fees or other compensation or gain dependent upon the success of this offering and that such purchases will be counted in determining whether the required Minimum Initial Closing Amount has been met for the Initial Closing and, as such, the Purchaser represents and warrants that the Purchaser is not placing any reliance on the sale of Units to other investors in this offering or the sale of the Minimum Initial Closing Amount at the Initial Closing as an indication of the merits of this offering. The sale of the Minimum Initial Closing Amount at the Initial Closing, while desirable for purposes of the business operations of the Company, is not designed as a protection to Purchasers or to indicate that their investment decision is shared by other unaffiliated investors. Each Purchaser acknowledges and agrees that such Purchaser has made its own investment decision as to the merits of this offering.
3.9 Confidentiality and Non-Disclosure Agreement. Such Purchaser agrees and acknowledges that it has entered into that certain Confidentiality and Non-Disclosure Agreement (the “NDA”) and that the NDA remains in full force and effect. Such Purchaser agrees to continue to comply in all respects with the terms and conditions of the NDA.
3.10 Financial Capability. Such Purchaser currently has, or at Closing will have, available funds necessary to purchase the Units at Closing on the terms and conditions contemplated by this Agreement.
4. Conditions to Each Purchaser’s Obligations at Closing. The several obligations of each Purchaser to purchase the Units from the Company and to consummate the transactions contemplated by this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions; provided, that each Purchaser shall only be entitled to waive conditions with respect to such Purchaser’s obligations:
4.1 Representations and Warranties. The representations and warranties of the Company contained in Section 2 hereof shall be true and correct on and as of the date of each Closing as if such representations and warranties were made as of such date, except for such representations and warranties made as of a specific date, which shall be true and correct only as of such date, and in each case, except where the failure of such representations and warranties to be so true and correct (without giving effect to any qualification and limitation as to “materiality” or “material adverse effect” set forth therein) would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
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4.2 Performance. The Company shall have performed and complied in all material respects with all agreements, obligations, and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.
4.3 Compliance Certificate. The Chief Executive Officer or Chief Financial Officer of the Company shall deliver to such Purchaser at the Closing a certificate stating that the conditions specified in Section 4.1 and Section 4.2 hereof have been fulfilled.
4.4 Registration Rights Agreement. The Company and such Purchaser shall have entered into the Registration Rights Agreement.
4.5 No Legal Restraint. No Law, judgment, injunction, order, ruling, or decree shall have been enacted, promulgated, entered, or enforced by Governmental Authority which would prohibit the consummation of the transactions contemplated by this Agreement, and there shall be no legal proceeding or action pending or threatened by any Governmental Authority that seeks to enact, issue, promulgate, enforce, or enter into any such Law, judgment, injunction, order, ruling, or decree or that seeks to enjoin or prohibit the consummation of the transactions contemplated hereby.
4.6 Minimum Initial Closing Amount. A minimum of $1,000,000 (the “Minimum Initial Closing Amount”) of Units must be sold at the Initial Closing.
5. Conditions of the Company’s Obligations at Closing. The obligations of the Company to sell the Units to the several Purchasers and to consummate the transactions contemplated by this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions:
5.1 Representations and Warranties. The representations and warranties of each Purchaser contained in Section 3 hereof shall be true and correct on and as of the date of the Closing applicable to such Purchaser as if such representations and warranties were made as of such date, except for such representations and warranties made as of a specific date, which shall be true and correct only as of such date, and in each case, except where the failure of such representations and warranties to be so true and correct (without giving effect to any qualification and limitation as to “materiality” or “material adverse effect” set forth therein) would not, individually or in the aggregate, reasonably be expected to prevent or materially impair or materially delay the ability of such Purchaser to consummate the transactions contemplated by this Agreement.
5.2 Performance. Such Purchaser shall have performed and complied in all material respects with all agreements, obligations, and conditions contained in this Agreement that are required to be performed or complied with by them on or before the Closing.
5.3 Compliance Certificate. An authorized officer of such Purchaser shall deliver to the Company at the Closing a certificate stating that the conditions specified in Section 5.1 and Section 5.2 hereof have been fulfilled.
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5.4 Registration Rights Agreement. The Company and each Purchaser shall have entered into the Registration Rights Agreement.
5.5 No Legal Restraint. No Law, judgment, injunction, order, ruling, or decree shall have been enacted, promulgated, entered, or enforced by any Governmental Authority which would prohibit the consummation of the transactions contemplated by this Agreement, and there shall be no legal proceeding or action pending or threatened by any Governmental Authority that seeks to enact, issue, promulgate, enforce, or enter into any such Law, judgment, injunction, order, ruling, or decree or that seeks to enjoin or prohibit the consummation of the transactions contemplated hereby.
5.6 Minimum Initial Closing Amount. This Minimum Initial Closing Amount of Units must be sold at the Initial Closing.
6. Indemnification.
(a) Indemnification by the Company. The Company agrees to indemnify the Purchasers and their Representatives (collectively, “Purchaser Related Parties”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including the reasonable fees and disbursements of counsel and all other reasonable expenses (collectively, “Losses”) incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Company contained herein, provided that such claim for indemnification relating to a breach of the representations or warranties is made prior to the expiration of such representations or warranties.
(b) Indemnification by the Purchasers. Each Purchaser severally agrees to indemnify the Company and its Representatives (collectively, “Company Related Parties”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all Losses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of such Purchaser contained herein, provided that such claim for indemnification relating to a breach of the representations and warranties is made prior to the expiration of such representations and warranties. Notwithstanding anything herein to the contrary, (i) no Purchaser shall be liable for the acts, omission or breaches of any other Purchaser under or with respect to this Agreement or the transactions contemplated hereby, and (ii) each Purchaser’s aggregate liability for Losses under this Section 6(b) shall not exceed the aggregate purchase price payable by such Purchaser to the Company for Units under this Agreement, except in the case of fraud or willful misconduct by such Purchaser.
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(c) Indemnification Procedure. Promptly after any Company Related Party or Purchaser Related Party (hereinafter, the “Indemnified Party”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third Person, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of such claim or the commencement of such action, suit or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known. The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (i) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense or employ counsel reasonably acceptable to the Indemnified Party or (B) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, and includes a complete release from liability of, and does not include any admission of wrongdoing or malfeasance by, the Indemnified Party.
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7. Anti-Dilution. In the event that within the twelve (12) month period following the initial Closing hereunder (i) the Company has not completed a Qualified Transaction and (ii) the Company, in a capital raise transaction, offers to sell shares of Common Stock for a purchase price of less than $1.00 per share and/or any security convertible into, or exercisable for, shares of Common Stock (each, a “Common Stock Equivalent”) having a conversion or exercise price, as the case may be, of less than $1.00 (a “Subsequent Financing”), then the Company shall issue, for no additional consideration, to each Purchaser such number and type of securities offered in such Subsequent Financing so that each Purchaser will have the number of shares of Common Stock and/or Common Stock Equivalents (taking into account the shares of Common Stock purchased by such Purchaser under this Agreement) that such Purchaser would have received if such Purchaser had invested such Purchaser’s respective purchase price hereunder in such Subsequent Financing. For the avoidance of doubt, there shall be no adjustment or cancellation of the Warrants issued under this Agreement in connection with any issuance of securities to the Purchasers pursuant to this Section 7 in connection with a Subsequent Financing.
8. Miscellaneous.
8.1 Survival. The representations, warranties, covenants, and agreements contained in this Agreement shall survive the Closing for a period of one year after the date hereof and thereafter shall have no further force and effect.
8.2 Finder’s Fees. The Company represents that it will be obligated for compensation and other rights to the Placement Agent in connection with this offering as may be set forth in that certain placement agency agreement by and between the Company and the Placement Agent dated effective as of April 8, 2025, as the same may be amended and restated from time to time, including receiving a placement fee and reimbursement for certain expenses. Each Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this offering (and the costs and expenses of defending against such liability or asserted liability) for which each Purchaser or any of its officers, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this offering (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.
8.3 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties hereto. The Company will not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers. None of the Purchasers will assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company, except to a Permitted Transferee as provided in the next sentence. Notwithstanding anything to the contrary contained herein, each of the Purchasers may assign its commitment to purchase the Units hereunder in whole or in part to any direct or indirect subsidiary of such Purchaser or any of its Affiliates and its Affiliates’ limited partners and/or funds, entities and accounts managed or advised by its Affiliates (any such transferee, a “Permitted Transferee”) subject to such Permitted Transferee making the representations and warranties set forth in Section 3, and each such Permitted Transferee shall be entitled to the full benefit and be subject to the obligations of this Agreement as if such Person were a “Purchaser” hereunder.
8.4 Notices. Any notice or request required or permitted to be delivered under this Agreement shall be given in writing and shall be deemed effectively given (a) if given by personal delivery, upon actual delivery; (b) if given by facsimile or electronic mail, upon receipt of confirmation of a completed transmittal or receipt, as applicable; (c) if given by mail, upon the earlier of (i) actual receipt of such notice by the intended recipient or (ii) three business days after such notice is deposited in first class mail, postage prepaid; and (d) if by an internationally recognized overnight courier, one business day after delivery to such courier for overnight delivery. All notices to the Company shall be addressed to the address below and all notices to any Purchaser shall be addressed to the address listed on such Purchaser’s signature page hereto, or at such other address as the parties hereto may designate by ten days’ advance written notice to the other parties:
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If the Company:
Scientific Industries, Inc.
80 Orville Drive, Suite 102
Bohemia, NY 11716
Attention: Helena Santos
Email: [email protected]
With a copy to (which shall not constitute notice to the Company):
Reitler Kailas & Rosenblatt LLP
885 3rd Ave, 20th Floor
New York, NY 10022
Attention: John F.F. Watkins, Esq.
Email: [email protected]
Facsimile: (212) 371-5500
If to a Purchaser:
[See signature pages hereto]
8.5 Governing Law. This Agreement shall be governed in all respects by the Laws of the State of New York without regard to choice of Law or principles that could require the application of the Laws of any other jurisdiction.
8.6 Submission to Jurisdiction; Venue; Waiver of Trial by Jury. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York over any suit, action, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of venue of any such suit, action, or proceeding brought in such a court pursuant to the foregoing sentence and any claim that any such suit, action, or proceeding brought in such a court has been brought in an inconvenient forum. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE, EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (A) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION 7.6.
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8.7 Equitable Relief. The parties hereto agree that irreparable damage would occur in the event that any provision of this Agreement was not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction, this being in addition to any other remedy to which they are entitled at Law or in equity. Additionally, each party hereto irrevocably waives any defense based on adequacy of any other remedy, whether at Law or in equity, that might be asserted as a bar to the remedy of specific performance of any of the terms or provisions hereof or injunctive relief in any action brought therefor.
8.8 Severability. If any provision of this Agreement or the application of any such provision to any Person or circumstance shall be declared by any court of competent jurisdiction to be invalid, illegal, void, or unenforceable in any respect, all other provisions of this Agreement, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid, illegal, void, or unenforceable, shall nevertheless remain in full force and effect and will in no way be affected, impaired, or invalidated thereby. Upon such determination that any provision, or the application of any such provision, is invalid, illegal, void, or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible to the fullest extent permitted by Law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the greatest extent possible.
8.9 Entire Agreement. This Agreement, including the Annexes and Exhibits hereto, the NDA, the Warrants and the Registration Rights Agreement constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all prior written, and prior and contemporaneous oral, agreements and understandings between the parties with respect to the subject matter hereof.
8.10 No Third Party Beneficiaries. Nothing in this Agreement (implied or otherwise) is intended to confer upon any Person other than the parties hereto, or their respective successors and permitted assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement.
8.11 Headings; Interpretation. All headings and subheadings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. The words “include,” “includes,” and “including” will be deemed to be followed by the phrase “without limitation.” The meanings given to terms defined herein will be equally applicable to both the singular and plural forms of such terms. Unless expressly provided to the contrary, the word “or” is not exclusive and “hereunder,” “hereof,” “herein” and words of similar import are references to this Agreement as a whole and not any particular section or other provision of this Agreement. Whenever the context may require, any pronoun includes the corresponding masculine, feminine, and neuter forms. All references to “dollars” or “$” will be deemed references to the lawful money of the United States of America. Further, the parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement. All annexes and exhibits attached hereto are hereby incorporated herein by reference and made a part hereof.
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8.12 Expenses. 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 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 the Units to the Purchasers.
8.13 Amendments and Waivers. No term of this Agreement may be amended or modified without the prior written consent of each party hereto and this Agreement may not be amended in a manner that provides more favorable terms to any Purchaser unless the other Purchasers are first offered the opportunity to accept such favorable terms. No provision of this Agreement may be waived except in a writing executed and delivered by the party against whom such waiver is sought to be enforced.
8.14 Certain Definitions. The following terms shall have the respective meanings for all purposes of the Agreement:
(a) “Affiliate” of any Person shall mean any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. For purposes of this definition, “control” when used with respect to any Person has the meaning specified in Rule 12b-2 promulgated under the Exchange Act; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
(b) “Company Material Adverse Effect” shall mean any change, development, occurrence, or event that would reasonably be expected to be materially adverse to (i) the business, prospects, properties, assets, liabilities, consolidated results of operations, or financial condition of the Company and its Subsidiaries, taken as a whole; or (ii) the ability of the Company to consummate the transactions contemplated hereby; provided that any such change, development, occurrence, or event resulting or arising from or relating to any of the following matters shall not be considered when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur: (1) any change, development, occurrence, or event affecting the businesses or industries in which the Company and its Subsidiaries operate; (2) any conditions affecting the United States of America’s general economy or the general economy in any geographic area in which the Company or its Subsidiaries operate or developments or changes therein or the financial and securities markets and credit markets in the United States of America or elsewhere in the world; (3) political conditions, including acts of war (whether or not declared), armed hostilities, and terrorism, or developments or changes therein; (4) any conditions resulting from natural disasters; (5) changes in any Laws or GAAP; (6) any action taken or omitted to be taken by or at the written request or with the written consent of any Purchaser; (7) any announcement or pendency of this Agreement or the transactions contemplated hereby; (8) changes in the market price or trading volume of Common Stock or any other equity, equity-related, or debt securities of the Company or its Affiliates (it being understood that the underlying circumstances, events, or reasons giving rise to any such change can be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur); (9) any failure by the Company or its Subsidiaries to meet any internal or public projections, forecasts, estimates, or guidance for any period (it being understood that the underlying circumstances, events, or reasons giving rise to any such failure can be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur); or (10) any legal claims or other proceedings made by any of the Company’s stockholders (on their own behalf or on behalf of the Company) arising out of or related to this Agreement; provided, however, that the changes, developments, occurrences, or events set forth in clauses (1), (2), (3), (4), and (5) above may be taken into account in determining whether there has been or is a Company Material Adverse Effect if and only to the extent such changes, developments, occurrences, or events have a disproportionate impact on the Company and its Subsidiaries, taken as a whole, relative to other laboratory equipment and bioprocessing companies in the United States of America.
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(c) “Governmental Authority” shall mean any foreign governmental authority, the United States of America, any state of the United States of America, and any political subdivision of any of the foregoing, and any agency, instrumentality, department, commission, board, bureau, central bank, authority, court, or other tribunal, having jurisdiction over any Purchaser, the Company, any of the Company’s Subsidiaries, or their respective properties.
(d) “Indebtedness” shall mean, as to any Person, without duplication: (i) all indebtedness (including principal, interest, fees, and charges) of such Person for borrowed money or for the deferred purchase price of property or services; (ii) any other indebtedness which is evidenced by a promissory note, bond, debenture, or similar instrument; and (iii) any obligation under or in respect of outstanding letters of credit, acceptances, and similar obligations created for the account of such Person.
(e) “Knowledge” of the Company shall mean the actual knowledge of any of the following individuals: John Moore, Chairman of the Board, Helena Santos, President & CEO, or Robert Nichols, President.
(f) “Laws” shall mean any federal, state, local, foreign, or other law, statute, regulation, rule, ordinance, code, convention, directive, order, judgment, or other legal requirement.
(g) “Lien” shall mean any mortgage, pledge, charge, encumbrance, security interest, collateral assignment, or other lien or restriction.
(h) “Permitted Liens” shall mean: (i) Liens for taxes, assessments, or levies not yet due (subject to applicable grace periods) or which are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Company in accordance with GAAP; (ii) carriers’, warehousemen’s, mechanics,’ landlords,’ vendors,’ materialmen’s, repairmen’s, sureties,’ or other like Liens arising in the ordinary course of business and securing amounts not yet due or which are being contested in good faith by appropriate proceedings if, in the case of such contested Liens, adequate reserves with respect thereto are maintained on the books of the Company in accordance with GAAP; (iii) easements, rights-of-way, covenants, reservations, exceptions, encroachments, zoning, and similar restrictions and encumbrances or title defects incurred in the ordinary course of business which, in the aggregate, are not substantial in amount, and which would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect; (iv) contractual Liens which arise in the ordinary course of business under operating agreements, joint venture agreements, and other agreements which are usual and customary in the Company’s industries and are for claims which are not delinquent by more than 90 days or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (v) bankers’ Liens, rights of set-off or similar rights and remedies arising by operation of Law; and (vi) rights of lessees and sublessees in assets leased by the Company or any Subsidiary not prohibited elsewhere herein.
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(i) “Person” shall mean any individual, corporation, trust, unincorporated organization, Governmental Authority, or any other form of entity.
(j) “Qualified Transaction” means any equity financing, sale of assets or other transaction in which the aggregate purchase price is at least $10,000,000.
(k) “Representative” of any Person means the Affiliates, officers, directors, managers, employees, agents, counsel, accountants, investment bankers and other representatives of such Person.
(l) “Subsidiary” of any Person shall mean any corporation, partnership, joint venture, limited liability company, trust, or estate of which (or in which) more than fifty percent of: (i) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (regardless of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency); (ii) the interest in the capital or profits of such partnership, joint venture, or limited liability company; or (iii) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries, or by one or more of such Person’s other Subsidiaries.
8.15 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under this Agreement, the NDA and the Registration Rights Agreement (together, the “Transaction Documents”) are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Units pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or arising from any such information, materials, statement or opinions. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant 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 acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Units or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including the rights arising out of the 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.
8.16 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. ESIGN Act of 2000, e.g. www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound by the terms hereof, have caused this Agreement to be executed as of the date first written above by their officers or other representatives thereunto duly authorized.
| COMPANY: | SCIENTIFIC INDUSTRIES, INC. |
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| By: |
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| Name: | Helena Santos |
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| Title: | President and Chief Executive Officer |
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound by the terms hereof, have caused this Agreement to be executed as of the date first written above by their officers or other representatives thereunto duly authorized.
PURCHASERS:
Name of Purchaser:
Signature of Authorized Signatory of Purchaser:
Name of Authorized Signatory (if Purchaser is an entity):
Title of Authorized Signatory (if Purchaser is an entity):
Email Address of Purchaser:
Facsimile Number of Purchaser:
Address for Notice to Purchaser:
Tax Identification or EIN Number of Purchaser:
Address for Delivery of Units to Purchaser (if not same as address for notice):
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Subscription Amount for Units ($1.00 per Unit): $
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Annex A
Purchasers and Number of Shares
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| Number of Shares Purchased at Closing |
| Number of Shares of Common Stock Underlying Warrants Purchased at Closing |
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[Annex A to Securities Purchase Agreement]
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EXHIBIT A-1
Form of Warrant
[See attached]
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EXHIBIT A-2
Alternate Form of Warrant
[See attached]
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EXHIBIT B
Registration Rights Agreement
[See attached]
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EXHIBIT 10.2
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS.
| No. | Warrant to Purchase |
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| Shares of Common Stock |
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| Dated: April 18, 2025 |
SCIENTIFIC INDUSTRIES, INC.
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
This certifies that, for good and valuable consideration, SCIENTIFIC INDUSTRIES, INC., a Delaware corporation (the “Company”), grants to [_______] (the “Warrantholder”), the right to subscribe for and purchase from the Company [_____ (____)] Shares (the “Warrant Shares”) at a per Share price equal to $1.00 per Share, subject to adjustment as provided herein (the “Exercise Price”). This Warrant shall be exercisable as set forth below and shall expire, without notice, at 5:00 p.m., New York City time, on the Expiration Date (as defined below). The Exercise Price and the number of Warrant Shares are subject to adjustment from time to time as provided in Section 5. At the option of the Warrantholder, this Warrant shall be exercisable for, in lieu of the issuance of the Warrant Shares as provided above, a Pre-Funded Warrant in the form attached hereto as Exhibit A exercisable for the same number of Warrant Shares as provided above. This Warrant is issued in connection with that certain Securities Purchase Agreement dated as of April 18 2025 (the “Purchase Agreement”), by and among the Company and the purchasers named therein.
For purposes of this Warrant, the following defined terms shall have the following meanings:
“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 of 1933, as amended.
“Business Day” means any day on which the Trading Markets are open for business.
“Common Stock” means the common stock of the Company, par value $0.05 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exercise Date” means the date on which the Exercise Notice and Warrant is delivered to the Company.
“Expiration Date" means October 17, 2025; provided that, if the Company consummates a Qualified Transaction on or prior to such date, the Expiration Date shall be the date that is fifteen (15) calendar days after the date such Qualified Transaction is consummated (or if such day that would otherwise be the Expiration Date is not a Business Day, the Expiration Date shall be the immediately succeeding Business Day).
“Fundamental Transaction” means any of the following (i) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which all or substantially all of the holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property; (ii) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 5.1 hereof, or a Distribution covered by Section 5.2 hereof); (iii) any sale, lease, license, transfer, conveyance or other disposition of all or substantially all of the assets of the Company, in one or a series of related transactions; (iv) any reorganization, consolidation, merger, demerger or sale of shares of the Company where the holders of the Company’s outstanding shares as of immediately before the transaction (or series of related transactions) beneficially own less than a majority by voting power of the outstanding shares of the surviving or successor entity as of immediately after the transaction; or (v) any “person” (together with his, her or its Affiliates) or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) acquires, directly or indirectly, the beneficial ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of outstanding shares of capital stock and/or other equity securities of the Company, in a single transaction or series of related transactions (including, without limitation, one or more tender offers or exchange offers), representing at least 50% of the voting power of or economic interests in the then outstanding shares of capital stock of the Company.
“OTC Markets” means either OTC QX or OTC QB of the OTC Markets Group, Inc.
“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.
“Qualified Transaction” means any equity financing, sale of assets or other transaction in which the aggregate purchase price is at least $10,000,000.
“Shares” means shares of the Company’s Common Stock, $0.05 par value per share (the “Common Stock”).
“Trading Market” shall mean any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the New York Stock Exchange or the OTC Markets (or any successors to any of the foregoing).
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SECTION 1. VESTING; EXERCISE OF WARRANT; LIMITATION ON EXERCISE; TAXES; TRANSFER; DIVISIBILITY.
1.1. VESTING. The Warrant Shares shall vest immediately upon issuance.
1.2. EXERCISE OF WARRANT. This Warrant may be exercised for vested Warrant Shares, in whole or in part, at any time after payment prior to the Expiration Date. This Warrant may be exercised by delivery by the Warrantholder to the Company of the following:
(a) this Warrant, accompanied by the Exercise Form annexed hereto (the “Exercise Form”) duly executed by the Warrantholder, at the Company’s offices at 80 Orville Drive, Suite 102, Bohemia, New York 11716 (or such other office or agency of the Company as it may designate by notice to the Warrantholder) during normal business hours on any Business Day;
(b) payment of an amount equal to (x) the number of Warrant Shares then issuable multiplied by (y) the Exercise Price by wire transfer or immediately available funds or by certified or official bank check; and
(c) such documentation as to the identity and authority of the Warrantholder as the Company may reasonably request.
1.3. HOLDER’S EXERCISE LIMITATIONS. The Company shall not effect any exercise of this Warrant, and a Warrantholder shall not have the right to exercise any portion of this Warrant, pursuant to this Section 1 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Warrantholder (together with the Warrantholder’s Affiliates, and any other Persons acting as a group together with the Warrantholder or any of the Warrantholder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Warrantholder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Warrantholder 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 Warrantholder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 1.3, 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 Warrantholder that the Company is not representing to the Warrantholder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Warrantholder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 1.3 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Warrantholder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Warrantholder, and the submission of a Notice of Exercise shall be deemed to be the Warrantholder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Warrantholder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 1.3, in determining the number of outstanding shares of Common Stock, a Warrantholder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Warrantholder, the Company shall within one Trading Day confirm orally and in writing to the Warrantholder 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 Warrantholder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Warrantholder prior to the issuance of any Warrants, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Warrantholder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1.3, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Warrantholder and the provisions of this Section 1.3 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 1.3 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.
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1.4 ISSUANCE OF WARRANT SHARES. The Warrant Shares shall be deemed by the Company to be issued to the Warrantholder as the record holder of the Warrant Shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for the Warrant Shares as aforesaid. Within two (2) Business Days following the exercise of this Warrant as provided above, the Company shall cause its transfer agent to issue the Warrant Shares through the facilities of its transfer agent for the account of the Warrantholder.
1.5. LIMITATION ON EXERCISE. If this Warrant is not exercised prior to the Expiration Date or is terminated pursuant to Section 6, this Warrant shall cease to be exercisable and shall become void, and all rights of the Warrantholder hereunder shall cease.
1.6. PAYMENT OF TAXES. The issuance of certificates for any Warrant Shares that are certificated shall be made without charge to the Warrantholder for any Share transfer or other issuance tax in respect thereto.
SECTION 2. RESERVATION OF SHARES.
All Warrant Shares issued upon the exercise of the rights represented by this Warrant shall, upon issuance and payment of the Exercise Price in cash, be validly issued, fully paid and non-assessable and free from all taxes, liens, security interests, charges and other encumbrances with respect to the issuance thereof other than taxes in respect of any transfer occurring contemporaneously with such issuance and restrictions under applicable state and federal securities Laws. During the period within which this Warrant may be exercised, the Company shall at all times have authorized and reserved, and keep available and free from preemptive or similar rights, a sufficient number of Shares to provide for the exercise of this Warrant.
SECTION 3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and, if requested by the Company, an agreement to indemnify the Company for any loss resulting from the replacement of this Warrant, the Company will execute and deliver a new Warrant of like tenor.
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SECTION 4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person or entity in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary.
SECTION 5. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise Price and the number of Shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 5.
5.1. SUBDIVISION OR COMBINATION OF SHARES. In case the Company shall at any time subdivide its outstanding Shares into a greater number of Shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the outstanding Shares of the Company shall be combined into a smaller number of Shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased.
5.2. NO VOTING RIGHTS. Nothing contained in this Warrant shall be construed as conferring upon the holder hereof the right to vote or to consent to receive notice as a shareholder of the Company on any other matters or any rights whatsoever as a shareholder of the Company.
5.3. NOTICE OF ADJUSTMENT. When the Exercise Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly (i) deliver a notice to the Warrantholder, and (ii) file with the transfer agent for the Warrants a certificate of an officer of the Company, in each case, 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 and a computation thereof. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company, the Company shall simultaneously file such notice with the Commission pursuant to a Report on Form 8-K. The Warrantholder 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.
5.4. CERTAIN EVENTS. If any change in the outstanding Shares of the Company or any other event occurs as to which the other provisions of this Section 5 are not strictly applicable or if strictly applicable would not fairly effect the adjustments to this Warrant in accordance with the essential intent and principles of such provisions, then the Company shall make in good faith an adjustment in the number and class of Shares issuable under this Warrant, the Exercise Price and/or the application of such provisions, in accordance with such essential intent and principles, so as to protect such purchase rights as aforesaid. The adjustment shall be such as will give the Warrantholder, upon exercise for the same aggregate Exercise Price, the total number, class and kind of Shares as the Warrantholder would have owned had this Warrant been exercised prior to the event and had the Warrantholder continued to hold such Shares until after the event requiring adjustment.
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SECTION 6. NOTICE OF CORPORATE EVENTS. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or of any rights, (ii) enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction, or (iii) authorizes the dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered to the Warrantholder at least twenty (20) calendar days prior to the applicable record or effective date on which a Person would be required to hold Common Stock in order to participate in or vote with respect to such event or transaction a written notice stating the date on which a record is to be taken for the purpose of such event or transaction, or if a record is not to be taken, the date as of which the holders of the Common Stock to be entitled to participate or vote in event or transaction are to be determined. 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 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 5:00 P.M. Eastern Time on the Business Day immediately preceding the effective date of the event triggering such notice (the “Corporate Event Exercise Date”) in order to participate in or vote with respect to such event or transaction except as may otherwise be expressly set forth herein; provided, however, that upon the consummation or occurrence of an event described in either clause (ii) or (iii) above, this Warrant will terminate as of the Corporate Event Exercise Date.
SECTION 7. COMPLIANCE WITH SECURITIES ACT; TRANSFERABILITY OF WARRANT; DISPOSITION OF WARRANT SHARES AND COMMON STOCK.
7.1. COMPLIANCE WITH SECURITIES ACT. The Warrantholder, by acceptance hereof, agrees that this Warrant and the Warrant Shares are being acquired for investment and that it shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares except under circumstances which will not result in a violation of the Act or any applicable state securities laws. This Warrant and the Warrant Shares (unless registered under the Act) shall be stamped or imprinted with a legend in substantially the following form:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT.
7.2 ACCREDITED INVESTOR; ACCESS TO INFORMATION; PRE-EXISTING RELATIONSHIP. The Warrantholder presently qualifies and will as of any exercise of this Warrant qualify as an “accredited investor” within the meaning of Regulation D of the rules and regulations promulgated under the Act. The Warrantholder has had the opportunity to ask questions of, and to receive answers from, appropriate executive officers of the Company with respect to the terms and conditions of the transactions contemplated hereby and with respect to the business, affairs, financial condition and results of operations of the Company. The Warrantholder has had access to such financial and other information as is necessary in order for the Warrantholder to make a fully informed decision as to investment in the Company, and has had the opportunity to obtain any additional information necessary to verify any of such information to which the Warrantholder has had access. The Warrantholder further represents and warrants that the Warrantholder has either (a) a pre-existing relationship with the Company or one or more of its officers or directors consisting of personal or business contacts of a nature and duration which enable the Warrantholder to be aware of the character, business acumen and general business and financial circumstances of the Company or the officer or director with whom such relationship exists or (b) such business or financial expertise as to be able to protect the Warrantholder’s own interests in connection with the purchase of the Warrant Shares.
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7.3 WARRANT AND WARRANT SHARES NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH APPLICABLE SECURITES LAWS. The Warrant and the Warrant Shares, if and when issued, may be transferred or sold only in compliance with applicable United States federal and state securities laws or of any requirements of the Trading Market upon which the Common Stock may be quoted or listed. Any instrument purporting to make an assignment in contravention of this Section 7.3 shall be void.
7.4 DISPOSITION OF WARRANT SHARES. With respect to any offer, sale, or other disposition of any Warrant Shares prior to registration of such shares, the Warrantholder and each subsequent Warrantholder agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such Warrantholder’s counsel, if reasonably requested by the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state law then in effect) of such Warrant Shares and indicating whether or not under the Act certificates for such Warrant Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability. Promptly upon receiving such written notice and, if applicable, opinion, the Company, as promptly as practicable, shall notify such Warrantholder that such Warrantholder may sell or otherwise dispose of such Warrant Shares all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 7.4 that the opinion of the counsel for the Warrantholder is not reasonably satisfactory to the Company, the Company shall, upon request, so notify the Warrantholder promptly after such determination has been made. Notwithstanding the foregoing, such Warrant Shares may be offered, sold or otherwise disposed of in accordance with Rule 144 under the Act, provided that the Company shall have been furnished with such information as the Company may request to provide reasonable assurance that the provisions of Rule 144 have been satisfied. Each certificate representing the Warrant Shares thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to insure compliance with the Act, unless in the aforesaid opinion of counsel for the Warrantholder, such legend is not required in order to insure compliance with the Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
7.5 MARKET STANDOFF. The Warrantholder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to a registered public offering of the Company and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Warrant Shares, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Warrant Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of securities, in cash or otherwise. The underwriters in connection with a registered public offering of the Company are intended third party beneficiaries of this Section and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. The Warrantholder further agrees to execute such agreements as may be reasonably requested by the underwriters or the Company in a registered public offering of the Company that are consistent with this Section 7.5 or that are necessary to give further effect thereto.
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In order to enforce the foregoing covenant, the Company may impose stop‑transfer instructions with respect to shares of the Company’s capital stock acquired through the exercise of this Warrant until the end of such period. The Warrantholder agrees that a legend reading substantially as follows shall be placed on all certificates representing all shares of the Warrantholder (and the shares or securities of every other person subject to the restriction contained in this Section 7.5):
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE SHARES.”
SECTION 8. MISCELLANEOUS.
8.1. ENTIRE AGREEMENT. This Agreement and the documents referred to herein constitute the entire agreement among the parties and supersede any prior agreements or understandings regarding the subject matter hereof.
8.2. SUCCESSORS AND ASSIGNS. The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the parties’ respective successors and assigns. Nothing in this Warrant, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Warrant, except as expressly provided in this Warrant.
8.3. AMENDMENTS AND WAIVERS. No failure on the part of either party to exercise and no delay in exercising any power or right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof or the exercise of any other power or right. The remedies herein and in any other instrument, document or agreement delivered or to be delivered by either party hereunder or in connection herewith are cumulative and not exclusive of any remedies provided by law. No notice to or demand on a party not required hereunder shall in any event entitle such party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of the other party to any other or further action in any circumstances without notice or demand. No amendment, modification or waiver of any provision of this Warrant or consent to any departure by either party therefrom shall be effective unless the same shall be in writing and signed by the Company and the Warrantholder.
8.4. SECTION AND OTHER HEADINGS. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.
8.5. NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the next Business Day, in each case subject to written evidence of receipt by the noticed party; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the address as set forth in the Warrantholder’s signature page to the Purchase Agreement or at such other address as such party may designate by ten (10) days’ advance written notice to the other parties hereto.
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8.6. SEVERABILITY. If one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of this Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
8.7. FRACTIONAL SHARES. No fractional Shares or scrip representing fractional Shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a Share called for upon any exercise hereof, the Company shall round up to the nearest whole Share.
8.8 DELIVERY OF NEW WARRANT. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance herewith, deliver to the Warrantholder a new warrant evidencing the rights of the Warrantholder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new warrant shall in all other respects be identical to this Warrant.
8.9. GOVERNING LAW. This Warrant shall be governed by and construed under the substantive laws of New York without regard to the conflicts of law provisions thereof. The federal courts in New York, New York shall have exclusive jurisdiction of any and all actions or suits commenced by either party arising under or with respect to this Warrant.
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the first date written above.
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SIGNATURE PAGE TO WARRANT
IN WITNESS WHEREOF, the undersigned Warrantholder has caused this Warrant to be signed by its duly authorized officer as of the first date written above.
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SIGNATURE PAGE TO WARRANT
SCIENTIFIC INDUSTRIES, INC.
WARRANT EXERCISE FORM
(To be executed upon exercise of Warrant)
The undersigned, the record holder of the Warrant, hereby irrevocably elects to exercise the right, represented by this Warrant, [check applicable subsection]:
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| To purchase __________ shares of Common Stock of Scientific Industries, Inc., pursuant to the terms of the attached Warrant and herewith pays the Exercise Price in accordance with the terms of the Warrant by tendering cash payment for such Warrant Shares; |
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The undersigned hereby represents and warrants that (i) the undersigned is acquiring such shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof and (ii) the undersigned is an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended, and a “sophisticated investor” in accordance with the exemption from registration under such Act in accordance with Section 4(a)(2) thereof.
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Date: ___________________________
Name in which shares should be registered:
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[_______________________]
Exhibit A
Form of Pre-Funded Warrant
(see attached)
EXHIBIT 10.3
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS.
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SCIENTIFIC INDUSTRIES, INC.
PRE-FUNDED WARRANT
TO PURCHASE SHARES OF COMMON STOCK
This certifies that, for good and valuable consideration, SCIENTIFIC INDUSTRIES, INC., a Delaware corporation (the “Company”), grants to _______ (the “Warrantholder”), the right to subscribe for and purchase from the Company _____ Shares (the “Warrant Shares”). This Warrant shall be exercisable at an exercise price per share equal to $0.0001 (the “Exercise Price”). The Exercise Price and the number of Warrant Shares are subject to adjustment from time to time as provided in Section 5. This Warrant is issued in connection with that certain Securities Purchase Agreement, dated as of April 18, 2025 (the “Purchase Agreement”), by and among the Company and the purchasers named therein.
For purposes of this Warrant, the following defined terms shall have the following meanings:
“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 of 1933, as amended.
“Business Day” means any day on which the Trading Markets are open for business.
“Common Stock” means the common stock of the Company, par value $0.05 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exercise Date” means the date on which the Exercise Notice and Warrant is delivered to the Company.
“Fundamental Transaction” means any of the following (i) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which all or substantially all of the holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property; (ii) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 5.1 hereof, or a Distribution covered by Section 5.2 hereof); (iii) any sale, lease, license, transfer, conveyance or other disposition of all or substantially all of the assets of the Company, in one or a series of related transactions; (iv) any reorganization, consolidation, merger, demerger or sale of shares of the Company where the holders of the Company’s outstanding shares as of immediately before the transaction (or series of related transactions) beneficially own less than a majority by voting power of the outstanding shares of the surviving or successor entity as of immediately after the transaction; or (v) any “person” (together with his, her or its Affiliates) or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) acquires, directly or indirectly, the beneficial ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of outstanding shares of capital stock and/or other equity securities of the Company, in a single transaction or series of related transactions (including, without limitation, one or more tender offers or exchange offers), representing at least 50% of the voting power of or economic interests in the then outstanding shares of capital stock of the Company.
“OTC Markets” means either OTC QX or OTC QB of the OTC Markets Group, Inc.
“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.
“Shares” means shares of the Company’s Common Stock, $0.05 par value per share (the “Common Stock”).
“Trading Market” shall mean any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the New York Stock Exchange or the OTC Markets (or any successors to any of the foregoing).
SECTION 1. VESTING; EXERCISE OF WARRANT; LIMITATION ON EXERCISE; TAXES; TRANSFER; DIVISIBILITY.
1.1. VESTING. The Warrant Shares shall vest immediately upon issuance.
1.2. EXERCISE OF WARRANT. All or any part of this Warrant shall be exercisable by the registered Warrantholder in any manner permitted by this Warrant at any time and from time to time on or after the date hereof, and such rights shall not expire. This Warrant may be exercised by delivery by the Warrantholder to the Company of the following:
(a) this Warrant, accompanied by the Exercise Form annexed hereto (the “Exercise Form”) duly executed by the Warrantholder, at the Company’s offices at 80 Orville Drive, Suite 102, Bohemia, New York 11716 (or such other office or agency of the Company as it may designate by notice to the Warrantholder) during normal business hours on any Business Day;
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(b) payment of an amount equal to (x) the number of Warrant Shares then issuable multiplied by (y) the Exercise Price by wire transfer or immediately available funds or by certified or official bank check; and
(c) such documentation as to the identity and authority of the Warrantholder as the Company may reasonably request.
1.3. HOLDER’S EXERCISE LIMITATIONS. The Company shall not effect any exercise of this Warrant, and a Warrantholder shall not have the right to exercise any portion of this Warrant, pursuant to this Section 1 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Warrantholder (together with the Warrantholder’s Affiliates, and any other Persons acting as a group together with the Warrantholder or any of the Warrantholder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Warrantholder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Warrantholder 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 Warrantholder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 1.3, 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 Warrantholder that the Company is not representing to the Warrantholder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Warrantholder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 1.3 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Warrantholder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Warrantholder, and the submission of a Notice of Exercise shall be deemed to be the Warrantholder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Warrantholder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 1.3, in determining the number of outstanding shares of Common Stock, a Warrantholder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Warrantholder, the Company shall within one Trading Day confirm orally and in writing to the Warrantholder 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 Warrantholder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Warrantholder prior to the issuance of any Warrants, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Warrantholder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1.3, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Warrantholder and the provisions of this Section 1.3 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 1.3 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.
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1.4 ISSUANCE OF WARRANT SHARES. The Warrant Shares shall be deemed by the Company to be issued to the Warrantholder as the record holder of the Warrant Shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for the Warrant Shares as aforesaid. Within two (2) Business Days following the exercise of this Warrant as provided above, the Company shall cause its transfer agent to issue the Warrant Shares through the facilities of its transfer agent for the account of the Warrantholder.
1.5. LIMITATION ON EXERCISE. If this Warrant is not exercised prior to the Expiration Date or is terminated pursuant to Section 6, this Warrant shall cease to be exercisable and shall become void, and all rights of the Warrantholder hereunder shall cease.
1.6. PAYMENT OF TAXES. The issuance of certificates for any Warrant Shares that are certificated shall be made without charge to the Warrantholder for any Share transfer or other issuance tax in respect thereto.
SECTION 2. RESERVATION OF SHARES.
All Warrant Shares issued upon the exercise of the rights represented by this Warrant shall, upon issuance and payment of the Exercise Price in cash, be validly issued, fully paid and non-assessable and free from all taxes, liens, security interests, charges and other encumbrances with respect to the issuance thereof other than taxes in respect of any transfer occurring contemporaneously with such issuance and restrictions under applicable state and federal securities Laws. During the period within which this Warrant may be exercised, the Company shall at all times have authorized and reserved, and keep available and free from preemptive or similar rights, a sufficient number of Shares to provide for the exercise of this Warrant.
SECTION 3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and, if requested by the Company, an agreement to indemnify the Company for any loss resulting from the replacement of this Warrant, the Company will execute and deliver a new Warrant of like tenor.
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SECTION 4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person or entity in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary.
SECTION 5. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise Price and the number of Shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 5.
5.1. SUBDIVISION OR COMBINATION OF SHARES. In case the Company shall at any time subdivide its outstanding Shares into a greater number of Shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the outstanding Shares of the Company shall be combined into a smaller number of Shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased.
5.2. NO VOTING RIGHTS. Nothing contained in this Warrant shall be construed as conferring upon the holder hereof the right to vote or to consent to receive notice as a shareholder of the Company on any other matters or any rights whatsoever as a shareholder of the Company.
2.3. NOTICE OF ADJUSTMENT. When the Exercise Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly (i) deliver a notice to the Warrantholder, and (ii) file with the transfer agent for the Warrants a certificate of an officer of the Company, in each case, 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 and a computation thereof. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company, the Company shall simultaneously file such notice with the Commission pursuant to a Report on Form 8-K. The Warrantholder 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.
5.4. CERTAIN EVENTS. If any change in the outstanding Shares of the Company or any other event occurs as to which the other provisions of this Section 5 are not strictly applicable or if strictly applicable would not fairly effect the adjustments to this Warrant in accordance with the essential intent and principles of such provisions, then the Company shall make in good faith an adjustment in the number and class of Shares issuable under this Warrant, the Exercise Price and/or the application of such provisions, in accordance with such essential intent and principles, so as to protect such purchase rights as aforesaid. The adjustment shall be such as will give the Warrantholder, upon exercise for the same aggregate Exercise Price, the total number, class and kind of Shares as the Warrantholder would have owned had this Warrant been exercised prior to the event and had the Warrantholder continued to hold such Shares until after the event requiring adjustment.
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SECTION 6. COMPLIANCE WITH SECURITIES ACT; TRANSFERABILITY OF WARRANT; DISPOSITION OF WARRANT SHARES AND COMMON STOCK.
6.1. COMPLIANCE WITH SECURITIES ACT. The Warrantholder, by acceptance hereof, agrees that this Warrant, the Warrant Shares and the shares of Common Stock issuable upon conversion of the Warrant Shares are being acquired for investment and that it shall not offer, sell or otherwise dispose of this Warrant, any Warrant Shares or any shares of Common Stock issuable upon conversion of the Warrant Shares except under circumstances which will not result in a violation of the Act or any applicable state securities laws. This Warrant, the Warrant Shares and the shares of Common Stock issuable upon conversion of the Warrant Shares (unless registered under the Act) shall be stamped or imprinted with a legend in substantially the following form:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT.
6.2 ACCREDITED INVESTOR; ACCESS TO INFORMATION; PRE-EXISTING RELATIONSHIP. Warrantholder presently qualifies and will as of any exercise of this Warrant qualify as an “accredited investor” within the meaning of Regulation D of the rules and regulations promulgated under the Act. Warrantholder has had the opportunity to ask questions of, and to receive answers from, appropriate executive officers of the Company with respect to the terms and conditions of the transactions contemplated hereby and with respect to the business, affairs, financial condition and results of operations of the Company. Warrantholder has had access to such financial and other information as is necessary in order for Warrantholder to make a fully informed decision as to investment in the Company, and has had the opportunity to obtain any additional information necessary to verify any of such information to which Warrantholder has had access. Warrantholder further represents and warrants that the Warrantholder has either (a) a pre-existing relationship with the Company or one or more of its officers or directors consisting of personal or business contacts of a nature and duration which enable the Warrantholder to be aware of the character, business acumen and general business and financial circumstances of the Company or the officer or director with whom such relationship exists or (b) such business or financial expertise as to be able to protect the Warrantholder’s own interests in connection with the purchase of the Warrant Shares.
6.3 WARRANT NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH APPLICABLE SECURITES LAWS. The Warrant Shares, if and when issued, may be transferred or sold only in compliance with applicable United States federal and state securities laws or of any requirements of the Trading Market upon which the Common Stock may be quoted or listed. Any instrument purporting to make an assignment in contravention of this Section 8.3 shall be void.
6.4 DISPOSITION OF WARRANT SHARES. With respect to any offer, sale, or other disposition of any Warrant Shares prior to registration of such shares, the Warrantholder and each subsequent Warrantholder agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such Warrantholder’s counsel, if reasonably requested by the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state law then in effect) of such Warrant Shares and indicating whether or not under the Act certificates for such Warrant Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability. Promptly upon receiving such written notice and, if applicable, opinion, the Company, as promptly as practicable, shall notify such Warrantholder that such Warrantholder may sell or otherwise dispose of such Warrant Shares all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 8.4 that the opinion of the counsel for the Warrantholder is not reasonably satisfactory to the Company, the Company shall, upon request, so notify the Warrantholder promptly after such determination has been made. Notwithstanding the foregoing, such Warrant Shares may be offered, sold or otherwise disposed of in accordance with Rule 144 under the Act, provided that the Company shall have been furnished with such information as the Company may request to provide reasonable assurance that the provisions of Rule 144 have been satisfied. Each certificate representing the Warrant Shares thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to insure compliance with the Act, unless in the aforesaid opinion of counsel for the Warrantholder, such legend is not required in order to insure compliance with the Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
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6.5 MARKET STANDOFF. The Warrantholder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to a registered public offering of the Company and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Warrant Shares, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Warrant Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of securities, in cash or otherwise. The underwriters in connection with a registered public offering of the Company are intended third party beneficiaries of this Section and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Warrantholder further agrees to execute such agreements as may be reasonably requested by the underwriters or the Company in a registered public offering of the Company that are consistent with this Section 8.5 or that are necessary to give further effect thereto.
In order to enforce the foregoing covenant, the Company may impose stop‑transfer instructions with respect to shares of the Company’s capital stock acquired through the exercise of this Warrant until the end of such period. The Warrantholder agrees that a legend reading substantially as follows shall be placed on all certificates representing all shares of the Warrantholder (and the shares or securities of every other person subject to the restriction contained in this Section 8.5):
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE SHARES.”
SECTION 7. NOTICE OF CORPORATE EVENTS. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or of any rights, (ii) enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction, or (iii) authorizes the dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered to the Warrantholder at least twenty (20) calendar days prior to the applicable record or effective date on which a Person would be required to hold Common Stock in order to participate in or vote with respect to such event or transaction a written notice stating the date on which a record is to be taken for the purpose of such event or transaction, or if a record is not to be taken, the date as of which the holders of the Common Stock to be entitled to participate or vote in event or transaction are to be determined. 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 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 5:00 P.M. Eastern Time on the Business Day immediately preceding the effective date of the event triggering such notice (the “Corporate Event Exercise Date”) in order to participate in or vote with respect to such event or transaction except as may otherwise be expressly set forth herein; provided, however, that upon the consummation or occurrence of an event described in either clause (ii) or (iii) above, this Warrant will terminate as of the Corporate Event Exercise Date.
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SECTION 8 MISCELLANEOUS.
8.1. ENTIRE AGREEMENT. This Agreement and the documents referred to herein constitute the entire agreement among the parties and supersede any prior agreements or understandings regarding the subject matter hereof.
8.2. SUCCESSORS AND ASSIGNS. The terms and conditions of this Warrant shall inure to the benefit of and be binding upon the parties’ respective successors and assigns. Nothing in this Warrant, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Warrant, except as expressly provided in this Warrant.
8.3. AMENDMENTS AND WAIVERS. No failure on the part of either party to exercise and no delay in exercising any power or right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof or the exercise of any other power or right. The remedies herein and in any other instrument, document or agreement delivered or to be delivered by either party hereunder or in connection herewith are cumulative and not exclusive of any remedies provided by law. No notice to or demand on a party not required hereunder shall in any event entitle such party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of the other party to any other or further action in any circumstances without notice or demand. No amendment, modification or waiver of any provision of this Warrant or consent to any departure by either party therefrom shall be effective unless the same shall be in writing and signed by the Company and the Warrantholder.
8.4. SECTION AND OTHER HEADINGS. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.
8.5. NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the next Business Day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the address as set forth in the Warrantholder’s signature page to the Purchase Agreement or at such other address as such party may designate by ten (10) days’ advance written notice to the other parties hereto.
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8.6. SEVERABILITY. If one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of this Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
8.7. FRACTIONAL SHARES. No fractional Shares or scrip representing fractional Shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a Share called for upon any exercise hereof, the Company shall round up to the nearest whole Share.
8.8 DELIVERY OF NEW WARRANT. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance herewith, deliver to the Warrantholder a new warrant evidencing the rights of the Warrantholder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new warrant shall in all other respects be identical to this Warrant.
8.9. GOVERNING LAW. This Warrant shall be governed by and construed under the substantive laws of New York without regard to the conflicts of law provisions thereof. The federal courts in New York, New York shall have exclusive jurisdiction of any and all actions or suits commenced by either party arising under or with respect to this Warrant.
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the first date written above.
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| SCIENTIFIC INDUSTRIES, INC. |
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SIGNATURE PAGE TO WARRANT
IN WITNESS WHEREOF, the undersigned Warrantholder has caused this Warrant to be signed by its duly authorized officer as of the first date written above.
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SIGNATURE PAGE TO WARRANT
SCIENTIFIC INDUSTRIES, INC.
WARRANT EXERCISE FORM
(To be executed upon exercise of Warrant)
The undersigned, the record holder of the Warrant, hereby irrevocably elects to exercise the right, represented by this Warrant, to purchase __________ shares of Common Stock of Scientific Industries, Inc., pursuant to the terms of the attached Warrant and herewith pays the Exercise Price in accordance with the terms of the Warrant by tendering cash payment for such Warrant Shares.
The undersigned hereby represents and warrants that (i) the undersigned is acquiring such shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof and (ii) the undersigned is an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended, and a “sophisticated investor” in accordance with the exemption from registration under such Act in accordance with Section 4(a)(2) thereof.
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Date: ___________________________
Name in which shares should be registered:
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