As filed with the Securities and Exchange
Commission on May 24, 2024
Registration No. 333-278890
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 4
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Applied DNA Sciences, Inc.
(Exact name of registrant as specified in its charter)
Delaware |
7380 |
59-2262718 |
(State or other jurisdiction of
incorporation or organization) |
(primary standard industrial classification
code number) |
(I.R.S. Employer
Identification Number) |
50 Health Sciences Drive
Stony Brook, New York 11790
631-240-8800
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
James A. Hayward, Ph.D., Sc.D.
Chairman, Chief Executive Officer and President
Applied DNA Sciences, Inc.
50 Health Sciences Drive
Stony Brook, New York 11790
631-240-8801
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
Merrill M. Kraines
Todd Kornfeld
McDermott Will & Emery LLP
One Vanderbilt Avenue
New York, NY 10017-3852
212-547-5616 |
Robert Charron
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, NY 10105
212-370-1300 |
Approximate date of commencement of proposed
sale to the public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following
box. x
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
x |
Smaller reporting company |
x |
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Emerging growth company |
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If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act and Section 13(a) of the Exchange Act. ¨
The Registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
The information in this preliminary
prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and the Company is not soliciting
an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS |
SUBJECT TO COMPLETION,
DATED MAY 24, 2024 |
![](https://www.sec.gov/Archives/edgar/data/744452/000110465924065129/tm2412319d1_s1img01.jpg)
Applied DNA Sciences, Inc.
Up to 5,911,330 Units, Each Unit Consisting
of One Share of Common Stock or One
Pre-Funded Warrant to Purchase One Share of
Common Stock, One Series A Warrant to Purchase One Share of Common Stock and One Series B Warrant to Purchase One Share of Common Stock
Placement Agent Warrants to Purchase Up to 295,567
Shares of Common Stock
Up to 18,029,557 Shares of Common Stock Underlying
the Pre-Funded Warrants, Series A Warrants, Series B Warrants and Placement Agent Warrants
We are offering 5,911,330
units (the “Units”), each Unit consisting of one share of our common stock, $0.001 par value per share, one Series A warrant
(“Series A Warrant”) to purchase one share of common stock and one Series B warrant (“Series B Warrant”, and,
with the Series A Warrants, the “Series Warrants”) to purchase one share of common stock, at the assumed public offering price
of $2.03 per Unit, which was the last reported sales price of our common stock on The Nasdaq Capital Market on May 23, 2024.
The Units have no stand-alone
rights and will not be certificated or issued as stand-alone securities. The exercisability of the Series Warrants will be available
only upon receipt of such stockholder approval as may be required by the applicable rules and regulations of the Nasdaq Capital Market
(the “Warrant Stockholder Approval”).
Each Series A Warrant
offered hereby will become exercisable beginning on the date of the Warrant Stockholder Approval at an exercise price of $
per share of common stock, and will expire five years from the date of the Warrant Stockholder Approval. Each Series B Warrant offered
hereby will become exercisable beginning on the date of the Warrant Stockholder Approval at an exercise price of $ per
share of common stock, and will expire one year from the date of the Warrant Stockholder Approval.
Under the alternate cashless
exercise option of the Series B Warrants, the holder of the Series B Warrant, has the right to receive an aggregate number of shares
equal to the product of (x) the aggregate number of shares of common stock that would be issuable upon a cash exercise of the Series
B Warrant and (y) 3.0. In addition, the Series A Warrants and Series B Warrants will include a provision that resets their respective
exercise price in the event of a reverse split of our common stock, to a price equal to the lesser of (i) the then exercise price and
(ii) lowest volume weighted average price (VWAP) during the period commencing five trading days immediately preceding and the five trading
days commencing on the date we effect a reverse stock split in the future with a proportionate adjustment to the number of shares underlying
the Series A Warrants and Series B Warrants. Further, subject to certain exceptions, the Series A Warrants will provide for an adjustment
to the exercise price and number of shares underlying the Series A Warrants upon any issuance by us of our common stock or common stock
equivalents at a price per share that is less than the exercise price of the Series A Warrants.
In the event that we are
unable to obtain the Warrant Stockholder Approval, the Series Warrants will not be exercisable and therefore may have no
value. See the Risk Factor on page 16 relating to the Series A Warrants and Series B Warrants and Warrant Stockholder Approval, and see
the section entitled “Warrant Stockholder Approval” on page 20 for additional details regarding the Warrant Stockholder
Approval.
We are also offering to each
purchaser of Units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the
purchaser, 9.99%) of our outstanding common stock immediately following the consummation of this offering, the opportunity to purchase
Units consisting of one pre-funded warrant (in lieu of one share of common stock, each a “Pre-Funded Warrant”), one Series
A Warrant and one Series B Warrant. Subject to limited exceptions, a holder of Pre-Funded Warrants will not have the right to exercise
any portion of its Pre-Funded Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at
the election of the holder, such limit may be increased to up to 9.99%) of the number of shares of common stock outstanding immediately
after giving effect to such exercise. Each Pre-Funded Warrant will be exercisable for one share of common stock. The purchase price of
each Unit including a Pre-Funded Warrant will be equal to the price per Unit including one share of common stock, minus $0.0001, and the
remaining exercise price of each Pre-Funded Warrant will equal $0.0001 per share. The Pre-Funded Warrants will be immediately exercisable
(subject to the beneficial ownership cap) and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.
For each Unit including a Pre-Funded Warrant we sell (without regard to any limitation on exercise set forth therein), the number of Units
including a share of common stock we are offering will be decreased on a one-for-one basis. The Pre-Funded Warrant may be exercised on
a cashless basis.
This prospectus also includes
the shares of common stock issuable upon exercise of the Series A Warrants, Series B Warrants, and the Pre-Funded Warrants.
The common stock and Pre-Funded
Warrants can each be purchased in this offering only with the accompanying Series A Warrants and Series B Warrants that are part of a
Unit, but the components of the Units will be immediately separable and will be issued separately in this offering. See “Description
of Securities” in this prospectus for more information.
Our common stock is listed
on The Nasdaq Capital Market under the symbol “APDN.” On May 23, 2024, the last reported sale price of our common stock on
The Nasdaq Capital Market was $2.03 per share.
We have engaged Craig-Hallum
Capital Group LLC (“Craig-Hallum”) and Laidlaw & Company (UK) Ltd. (“Laidlaw”, and each of Craig-Hallum and
Laidlaw, a “Placement Agent” and collectively, the “Co-Placement Agents”), to act as our exclusive placement
agents in connection with this offering. The Co-Placement Agents have agreed to use their best efforts to arrange for the sale of the
securities offered by this prospectus. The Co-Placement Agents are not purchasing or selling any of the securities we are offering and
the Co-Placement Agents are not required to arrange the purchase or sale of any specific number of securities or dollar amount. We have
agreed to pay to the Co-Placement Agents the placement agent fees set forth in the table below, which assumes that we sell all of the
securities offered by this prospectus. There is no minimum number of securities or minimum aggregate amount of proceeds that is a condition
of the closing of this offering. We will bear all costs associated with the offering. See “Plan of Distribution” on page
23 of this prospectus for more information regarding these arrangements.
The actual public offering
price per Unit will be determined between us, the Co-Placement Agents and the investors in this offering at the time of pricing, and
may be at a discount to the current market price. Therefore, the recent market price of $2.03 per share of common stock used throughout
this prospectus may not be indicative of the actual public offering price for our Units. There is no established public trading market
for the Series Warrants or the Pre-Funded Warrants, and we do not expect a market to develop. In addition, we do not intend to apply
for the listing of the Series Warrants or the Pre-Funded Warrants on any national securities exchange. Without an active trading market,
the liquidity of the Series Warrants and the Pre-Funded Warrants will be limited.
This
offering will terminate on June 30, 2024, unless we decide to terminate the offering (which we may do at any time in our discretion)
prior to that date. We will have one closing for all the securities purchased in this offering. The public offering price per Unit will
be fixed for the duration of this offering.
We may sell fewer than all
securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will
not receive a refund if we do not sell all of the securities offered hereby. We have not established an escrow account in conjunction
with this offering. Because there is no escrow account and no minimum number of securities or amount of proceeds, investors could be
in a position where they have invested in us, but we have not raised sufficient proceeds in this offering to adequately fund the intended
uses of the proceeds as described in this prospectus.
Except as otherwise indicated,
all share and per share information in this prospectus gives effect to the reverse stock split of the Company’s outstanding common
stock at a ratio of one-for-twenty shares, which was approved by our Board of Directors on April 21, 2024 and was effected as of 12:01
a.m. Eastern Time on Thursday, April 25, 2024.
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Per
Share and
Series Warrants | | |
Per
Pre-Funded Warrant and
Series Warrants | | |
Total | |
Public offering price | |
$ | | | |
$ | | | |
$ | | |
Placement Agent fees(1) | |
| | | |
| | | |
| | |
Proceeds, before expenses, to
us(2) | |
$ | | | |
$ | | | |
$ | | |
| (1) | We have agreed to pay the Co-Placement
Agents a total cash fee equal to 7.0% of the aggregate gross proceeds raised in this offering
and to reimburse the Co-Placement Agents for their legal fees and expenses and other out-of-pocket
expenses in an amount up to $110,000. In addition, we have agreed to issue to the Co-Placement
Agents warrants to purchase up to a number of shares of our common stock equal to 5.0% of
the number of Units being offered in this offering at an exercise price equal to that of
the Series Warrants and with an expiration date of five years from the commencement of sales.
See “Plan of Distribution” for a description of the compensation to be
received by the Co-Placement Agents. |
| (2) | Because there
is no minimum number of securities or amount of proceeds required as a condition to closing
in this offering, the actual public offering amount, Placement Agent fees, and proceeds to
us, if any, are not presently determinable and may be substantially less than the total maximum
offering amounts set forth above. In addition, this does not include proceeds from the cash
exercise of the Pre-Funded Warrants, if any, or Series Warrants. For more information, see
“Plan of Distribution.” |
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 12 of this prospectus and elsewhere
in this prospectus for a discussion of information that should be considered in connection with an investment in our securities.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy
or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The securities are not being offered in any
jurisdiction where the offer is not permitted.
Delivery of the securities
offered hereby is expected to be made on or about , 2024, subject
to satisfaction of certain customary closing conditions.
Craig-Hallum
|
Laidlaw
& Company (UK) Ltd. |
The date of this Prospectus is
, 2024.
Table
of Contents
ABOUT
THIS PROSPECTUS
The
information contained in this prospectus is not complete and may be changed. You should rely only on the information provided in or incorporated
by reference in this prospectus, or in a related free writing prospectus, or documents to which we otherwise refer you. We have not authorized
anyone else to provide you with different information.
We have not authorized any
dealer, agent or other person to give any information or to make any representation other than those contained or incorporated by reference
in this prospectus or any related free writing prospectus. You must not rely upon any information or representation not contained or
incorporated by reference in this prospectus or any related free writing prospectus. This prospectus and any related free writing prospectus,
if any, do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities
to which they relate, nor do this prospectus and any related free writing prospectus, if any, constitute an offer to sell or the solicitation
of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.
You should not assume that the information contained in this prospectus and any related free writing prospectus, if any, is accurate
on any date subsequent to the date set forth on the front of such document or that any information we have incorporated by reference
is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus and any related
free writing prospectus is delivered or securities are sold on a later date.
We have not done anything
that would permit this offering or possession or distribution of this prospectus or any free writing prospectus in any jurisdiction where
action for that purpose is required, other than in the United States. You are required to inform yourself about and to observe any restrictions
relating as to this offering and the distribution of this prospectus and any such free writing prospectus outside the United States.
We further note that the
representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated
by reference in this prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the
purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant
to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations,
warranties and covenants should not be relied on as accurately representing the current state of our affairs.
Forward-Looking
Statements
This prospectus and
the documents that we incorporate herein by reference contain forward-looking statements concerning our business, operations and
financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance
and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such as “can”, “may”, “could”,
“should”, “assume”, “forecasts”, “believe”, “designed to”, “will”,
“expect”, “plan”, “anticipate”, “estimate”, “potential”, “position”,
“predicts”, “strategy”, “guidance”, “intend”, “budget”, “seek”,
“project” or “continue”, or the negative thereof or other comparable terminology regarding beliefs, plans, expectations
or intentions regarding the future. You should read statements that contain these words carefully because they:
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discuss our future expectations; |
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contain projections of our future results of operations or of our financial
condition; and |
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state other “forward-looking” information. |
We believe it is important
to communicate our expectations. However, forward-looking statements are based on our current expectations, assumptions, estimates and
projections about our business and our industry and are subject to known and unknown risks, uncertainties and other factors. Accordingly,
our actual results and the timing of certain events may differ materially from those expressed or implied in such forward-looking statements
due to a variety of factors and risks, including, but not limited to, those set forth under “Risk Factors” in this prospectus
and in the documents we incorporate by reference herein, and the following factors and risks:
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our expectations of future revenues, margins, expenditures, capital
or other funding requirements; |
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the adequacy of our cash and working capital to fund present and planned
operations and growth; |
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the substantial doubt relating to our ability to continue as a going
concern; |
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our need for additional financing which may in turn require the issuance
of additional shares of common stock, preferred stock, warrants or other debt or equity securities (including convertible securities)
which would dilute the ownership held by stockholders; |
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our business strategy and the timing of our expansion plans, including
the development of new production facilities for our Therapeutic DNA Production Services; |
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demand for Therapeutic DNA Production Services; |
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demand for DNA Tagging Services; |
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demand for MDx Testing Services; |
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our expectations concerning existing or potential development and license
agreements for third-party collaborations or joint ventures; |
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regulatory approval and compliance for our Therapeutic DNA Production
Services, upon which our business strategy is substantially dependent; |
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whether we are able to achieve the benefits expected from the acquisition
of Spindle; |
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the effect of governmental regulations generally; |
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our expectations of when regulatory submissions may be filed or when
regulatory approvals may be received; |
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our expectations concerning product candidates for our technologies; |
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our expectations of when or if we will become profitable; |
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our ability to meet
the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”) to maintain the listing of our common stock on Nasdaq
particularly in light of the notification by Nasdaq of our failure to comply with minimum stockholder equity requirements; |
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the effect of the reverse
stock split on the liquidity of our common stock and our ability to satisfy the investing requirements of new investors, including
institutional investors; |
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the potential dilution
of our existing stockholders due to the effective increase in the number of shares of our common stock available for issuance as
a result of our reverse stock split; and |
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the risk that our laboratory
developed tests (“LDTs”) may become subject to additional regulatory requirements due to FDA rulemaking activity, and
that compliance with such requirements may be expensive and time-consuming, resulting in significant or unanticipated delays. |
Any or all of our forward-looking
statements may turn out to be wrong. They may be affected by inaccurate assumptions that we might make or by known or unknown risks and
uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in our forward-looking statements.
Among the factors that could affect future results are:
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the inherent uncertainties of product development based on our new
and as yet not fully proven technologies; |
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the risks and uncertainties regarding the actual effect on humans of
seemingly safe and efficacious formulations and treatments when tested clinically; |
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formulations and treatments that utilize our Therapeutic DNA Production
Services; |
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the inherent uncertainties associated with clinical trials of product
candidates, including product candidates that utilize our Therapeutic DNA Production Services; |
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the inherent uncertainties associated with the process of obtaining
regulatory clearance or approval to market product candidates, including product candidates that utilize our Therapeutic DNA Production
Services; |
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the inherent uncertainties associated with the process of obtaining
regulatory clearance for our MDx Testing Services; |
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the inherent uncertainties associated with commercialization of products
that have received regulatory clearance or approval, including products that utilize our Therapeutic DNA Production Services; |
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economic and industry conditions generally and in our specific markets; |
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the volatility of, and decline in, our stock price; and |
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our ability to obtain the necessary financing to fund our operations
and effect our strategic development plan. |
All forward-looking statements
and risk factors included in this prospectus are made as of the date hereof, and all forward-looking statements and risk factors included
in documents incorporated herein by reference are made as of their original date, in each case based on information available to us as
of the date hereof, or in the case of documents incorporated by reference, the original date of any such document, and we assume no obligations
to update any forward-looking statement or risk factor, unless we are required to do so by law. If we do update one or more forward-looking
statements, no inference should be drawn that we will make updates with respect to other forward-looking statements or that we will make
any further updates to those forward-looking statements at any future time.
Forward-looking statements
may include our plans and objectives for future operations, including plans and objectives relating to our products and our future economic
performance, projections, business strategy and timing and likelihood of success. Assumptions relating to the foregoing involve judgments
with respect to, among other things, future economic, competitive and market conditions, future business decisions, demand for our products
and services, and the time and money required to successfully complete development and commercialization of our technologies, all of
which are difficult or impossible to predict accurately and many of which are beyond our control.
Any of the assumptions underlying
the forward-looking statements contained in this prospectus could prove inaccurate and, therefore, we cannot assure you that any of the
results or events contemplated in any of such forward-looking statements will be realized. Based on the significant uncertainties inherent
in these forward-looking statements, the inclusion of any such statement should not be regarded as a representation or as a guarantee
by us that our objectives or plans will be achieved, and we caution you against relying on any of the forward looking-statements contained
herein.
PROSPECTUS SUMMARY
This summary highlights certain
information about us, this offering and information appearing elsewhere in this prospectus and in the documents we incorporate by reference
in this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing
in our securities. After you carefully read this summary, to fully understand our Company and this offering and its consequences to you,
you should read this entire prospectus and any related free writing prospectus authorized by us, including the information referred to
under the heading “Risk Factors” in this prospectus beginning on page 12, and any related free writing prospectus, as
well as the other documents that we incorporate by reference into this prospectus, including our financial statements and the notes to
those financial statements, which are incorporated herein by reference from our Annual Report on Form 10-K for the year ended
September 30, 2023, filed December 7, 2023, as amended on January 26, 2024, and our Quarterly Reports on Form 10-Q
for the three month periods ended December 31, 2023 and March 31, 2024, filed on February 8, 2024 and May 10, 2024, respectively.
Please read “Where You Can Find More Information” on page 26 of this prospectus. Except
as otherwise indicated, all share and per share information in this prospectus gives effect to the reverse stock split of the Company’s
outstanding common stock at a ratio of one-for-twenty shares, which was approved by our Board of Directors on April 21, 2024 and was
effected as of 12:01 a.m. Eastern Time on Thursday, April 25, 2024.
In this prospectus, unless
context requires otherwise, references to “we,” “us,” “our,” or “the Company” refer to
Applied DNA Sciences, Inc., a Delaware corporation and its consolidated subsidiaries. Our trademarks currently used in the United
States include Applied DNA Sciences®, SigNature® molecular tags, SigNature® T molecular tags, fiberTyping®, SigNify®,
Beacon®, CertainT®, Linea™ DNA, Linea™ RNAP, Linea™ and TR8TM pharmacogenetic testing. We do
not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship
of us by, any other companies. All trademarks, service marks and trade names included in this prospectus are the property of the respective
owners.
Overview
Applied DNA Sciences, Inc.
Company Overview
We are a biotechnology company
developing and commercializing technologies to produce and detect deoxyribonucleic acid (“DNA”) and ribonucleic acid (“RNA”).
Using the polymerase chain reaction (“PCR”) to enable the production and detection of DNA and RNA, we currently operate in
three primary business markets: (i) the enzymatic manufacture of synthetic DNA for use in the production of nucleic acid-based therapeutics
(including biologics and drugs) and, through our recent acquisition of Spindle Biotech, Inc. (“Spindle”), the development
and sale of a proprietary RNA polymerase (“RNAP”) for use in the production of messenger RNA (“mRNA”) therapeutics
(“Therapeutic DNA Production Services”); (ii) the detection of DNA and RNA in molecular diagnostics and genetic testing
services (“MDx Testing Services”); and (iii) the manufacture and detection of DNA for industrial supply chain security
services (“DNA Tagging and Security Products and Services”).
Our current growth strategy
is to primarily focus our resources on the further development, commercialization, and customer adoption of our Therapeutic DNA Production
Services, including the expansion of our contract development and manufacturing operation (“CDMO”) for the manufacture of
synthetic DNA for use in the production of nucleic acid-based therapies, and to further expand and commercialize our MDx Testing Services
through genetic testing.
We will continue to update
our business strategy and monitor the use of our resources regarding our various business markets. In addition, we expect that based
on available opportunities and our beliefs regarding future opportunities, we will continue to modify and refine our business strategy.
Therapeutic DNA Production Services
The
Company is developing and commercializing our Linea DNA and Linea IVT platforms for the manufacture of synthetic DNA for use in the production
of nucleic acid-based therapeutics.
Linea DNA Platform
Our
Linea DNA platform is our core enabling technology, and enables the rapid, efficient, and large-scale cell-free manufacture of high-fidelity
DNA sequences for use in the manufacturing of a broad range of nucleic acid-based therapeutics. The Linea DNA platform enzymatically
produces a linear form of DNA we call “Linea DNA” that is an alternative to plasmid-based DNA manufacturing technologies
that have supplied the DNA used in biotherapeutics for the past 40 years.
As
of the first quarter of calendar year 2024, there were 4,002 gene, cell and RNA therapies in development from preclinical through pre-registration
stages, almost all of which use DNA in their manufacturing process. (Source: ASGCT Gene, Cell & RNA Therapy Landscape: Q1 2024
Quarterly Report). Due to what we believe are the Linea DNA platform’s numerous advantages over legacy nucleic acid-based therapeutic
manufacturing platforms, we believe this large number of therapies under development represents a substantial market opportunity for
the Linea DNA platform to supplant legacy manufacturing methods in the manufacture of nucleic acid-based therapies.
We
believe our Linea DNA platform holds several important advantages over existing cell-based plasmid DNA manufacturing platforms. Plasmid-based
DNA manufacturing is based on the complex, costly and time-consuming biological process of amplifying DNA in living bacterial cells.
Once amplified, the DNA must be separated from the living cells and other process contaminants via multiple rounds of purification, adding
further complexity and costs. Unlike plasmid-based DNA manufacturing, the Linea DNA platform does not require living cells and instead
amplifies DNA via the enzymatic process of PCR. The Linea DNA platform is simple and can rapidly produce very large quantities of DNA
without the need for complex purification steps.
We
believe the key advantages of the Linea DNA platform include:
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Speed – Production of Linea DNA can be measured in terms of hours,
not days and weeks as is the case with plasmid-based DNA manufacturing platforms. |
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Scalability – Linea DNA production takes place on efficient bench-top
instruments, allowing for rapid scalability in a minimal footprint. |
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Purity – DNA produced via PCR is pure, resulting in only large
quantities of only the target DNA sequence. Unwanted DNA sequences such as the plasmid backbone and antibiotic resistance genes,
inherent to plasmid DNA, are not present in Linea DNA. |
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Simplicity – The production of Linea DNA is streamlined relative
to plasmid-based DNA production. Linea DNA requires only four primary ingredients, does not require living cells or complex fermentation
systems and does not require multiple rounds of purification. |
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Flexibility – DNA produced via the Linea DNA platform can be
easily chemically modified to suit specific customer applications. In addition, the Linea DNA platform can produce a wide range of
complex DNA sequences that are difficult to produce via plasmid-based DNA production platforms. These complex sequences include inverted
terminal repeats (“ITRs”) and long homopolymers such as polyadenylation sequences (poly (A) tail) important for
gene therapy and mRNA therapies, respectively. |
Preclinical
studies conducted by the Company have shown that Linea DNA is substitutable for plasmid DNA in numerous nucleic acid-based therapies,
including:
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DNA templates to produce RNA, including mRNA therapeutics; and |
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adoptive cell therapy (CAR-T) manufacturing. |
Further,
we believe that Linea DNA is also substitutable for plasmid DNA in the following nucleic acid-based therapies:
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viral vector manufacturing for in vivo and ex
vivo gene editing; |
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clustered regularly interspaced short palindromic repeats (“CRISPR”)-mediated
gene therapy; and |
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non-viral gene therapy. |
Linea IVT Platform
The
number of mRNA therapies under development is growing at a rapid rate, thanks in part to the success of the mRNA COVID-19 vaccines. mRNA
therapeutics are produced via a process called in vitro transcription (“IVT”) that requires DNA as a starting
material. As of the 1st quarter of calendar 2024, there were approximately 450 mRNA therapies under development, with the large
majority of these therapies (67%) in the preclinical stage (Source: ASGCT Gene, Cell & RNA Therapy Landscape: Q1 2024 Quarterly
Report). The Company believes that the mRNA market is in a nascent stage that represents a large growth opportunity for the Company via
the production and supply of DNA critical starting materials and RNAP to produce mRNA therapies.
In
August 2022, the Company launched DNA IVT templates manufactured via its Linea DNA platform and has since secured proof of concept
contracts with numerous mRNA manufacturing customers. In response to this demand, the continued growth of the mRNA therapeutic market,
and the unique abilities of the Linea DNA platform, the Company acquired Spindle in July 2023 to potentially increase its mRNA-related
total addressable market (“TAM”).
Through
our acquisition of Spindle, we launched our Linea IVT platform in July 2023, which combines Spindle’s proprietary high-performance
RNAP, now marketed by the Company as Linea RNAP, with our enzymatically produced Linea DNA IVT templates. We believe the Linea IVT platform
enables our customers to make better mRNA, faster. Based on data generated by the Company, we believe the integrated Linea IVT platform
offers the following advantages over conventional mRNA production to therapy developers and manufacturers:
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The prevention or reduction of double stranded RNA (“dsRNA”)
contamination resulting in higher target mRNA yields with the potential to reduce downstream processing steps. dsRNA is a problematic
immunogenic byproduct produced during conventional mRNA manufacture; |
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delivery of IVT templates in as little as 14 days for milligram scale
and 30 days for gram scale; |
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reduced mRNA manufacturing complexities; and |
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potentially enabling mRNA manufactures to produce mRNA
drug substance in less than 45 days. |
According
to the Company’s internal modeling, the ability to sell both Linea DNA IVT templates and Linea RNAP under the Linea IVT platform
potentially increases the Company’s mRNA-related TAM by approximately 3-5x as compared to selling Linea DNA IVT templates alone,
while also providing a more competitive offering to the mRNA manufacturing market. Currently, Linea RNAP is produced for the Company
under an ISO 13485 quality system by a third-party CDMO located in the United States. The Company is currently undertaking manufacturing
process development work with its Linea RNAP manufacturer to increase production scale of the enzyme.
Manufacturing Scale-up
The
Company plans to offer several quality grades of Linea DNA, each of which will have different permitted uses.
Quality
Grade |
Permitted
Use |
Company
Status |
GLP |
Research
and pre-clinical discovery |
Currently
available |
GMP
for Starting Materials |
DNA
critical starting materials for the production of mRNA therapies |
Planned
availability in Q3 of CY2024 |
GMP |
DNA
biologic, drug substance and/or drug product |
Planned
availability second half of CY 2025 (1) |
(1) Dependent
on the availability of future financing.
The
Company currently manufactures Linea DNA pursuant to Good Laboratory Practices (“GLP”) and, is creating a fit for purpose
manufacturing facility within our current Stony Brook, NY laboratory space capable of producing Linea DNA IVT templates under Good Manufacturing
Practices (“GMP”) suitable for use as a critical starting material for clinical and commercial mRNA therapeutics, with a
planned completion date in the third quarter of calendar year 2024 (“GMP Site 1”). The Company also plans to offer additional
capacity for Linea DNA IVT templates as well as capacity for Linea DNA materials manufactured under GMP suitable for use as, or incorporation
into, a biologic, drug substance and/or drug product, with availability expected during the second half of calendar year 2025, dependent
upon the availability of future funding (“GMP Site 2”). GMP is a quality standard used globally and by the U.S. Food and
Drug Administration (“FDA”) to ensure pharmaceutical quality. Drug substances are the pharmaceutically active components
of drug products. According to the Company’s internal modeling using currently projected unit pricing based on current pricing
and market analysis, the Company believes that GMP Site 1 affords the Company a potential annual revenue opportunity of up to $20M at
full capacity utilization, and GMP Site 2 affords the Company a potential annual revenue opportunity of up to $63M at full capacity utilization.
This potential revenue opportunity may not be realized and is not indicative of profit.
Segment Business
Strategy
Our
business strategy for our Therapeutic DNA Production Services is to capitalize upon the rapid growth of mRNA therapies in the near term
via our planned near term future availability of Linea DNA IVT templates manufactured under GMP at our GMP Site 1, while at the same
time laying the basis for additional clinical and commercial applications of Linea DNA with our future planned availability of Linea
DNA manufactured under GMP suitable for use as, or incorporation into, a biologic, drug substance and/or drug product at planned GMP
Site 2. Planned GMP Site 2 may also be used for additional Linea DNA IVT template manufacturing if customer demand exceeds the capacity
of GMP Site 1. Our current plan is: (i) through our Linea IVT platform and planned near term future GMP manufacturing capabilities
for IVT templates at GMP Site 1 to secure commercial-scale supply contracts with clinical and commercial mRNA and/or self-amplifying
mRNA (“sa-RNA”) manufacturers for Linea DNA IVT templates and/or Linea RNAP as critical starting materials; (ii) to
utilize our current GLP production capacity for non-IVT template applications to secure supply and/or development contracts with pre-clinical
therapy developers that use DNA in their therapy manufacturing, and (iii) upon our development of our planned future Linea DNA production
under GMP suitable for use as, or incorporation into, a biologic, drug substance and/or drug product at planned GMP Site 2, to convert
existing and new Linea DNA customers into large-scale supply contracts to supply Linea DNA for clinical and commercial use as,
or incorporation into, a biologic, drug substance and/or drug product in a wide range of nucleic acid therapies. Until we complete our
GMP Site 1 to produce DNA critical starting materials (DNA IVT templates) for mRNA manufacturing, we will not be able to realize significant
revenues from this business. We estimate the cost of creating GMP Site 1 will be approximately $1.5 million. If we were to expand our
facilities to enable GMP production of Linea DNA for use as, or incorporation, into a biologic, drug substance and/or drug product as
planned for GMP Site 2, the cost may be up to approximately $10 million which would require additional funding. We are currently building
GMP Site 1 within our existing laboratory space. We anticipate that GMP Site 2 would require us to acquire additional space.
In
addition, we plan to leverage our Therapeutic DNA Production Services and deep knowledge of PCR to develop and monetize, ourselves or
with strategic partners, one or more Linea DNA-based therapeutic or prophylactic vaccines for high-value veterinary health indications
(collectively “Linea DNA Vaccines”). We currently seek to commercialize our Linea DNA Vaccines in conjunction with lipid
nanoparticle (“LNP”) encapsulation to facilitate intramuscular (“IM”) administration. We have recently demonstrated in
vitro and in vivo (mice studies) expression of generic reporter proteins via Linea DNA encapsulated by LNPs.
For the in vivo study, successful expression of the LNP-encapsulated Linea DNA was administered and achieved via IM
injection. We believe that our Linea DNA Vaccines under development provide a substantial advantage over plasmid DNA-based vaccines for
the veterinary health market.
MDx Testing Services
Through
ADCL, we leverage our expertise in DNA and RNA detection via PCR to provide and develop clinical molecular diagnostics and genetic (collectively
“MDx”) testing services. ADCL is a NYSDOH clinical laboratory improvement amendments-certified laboratory which is currently
permitted for virology. Permitting for genetics (molecular) is currently pending with the NYSDOH. In providing MDx Testing Services,
ADCL employs its own or third-party molecular diagnostic tests.
We
have successfully validated internally our pharmacogenomics testing services (the “PGx Testing Services”). Our PGx Testing
Services will utilize a 120-target PGx panel test to evaluate the unique genotype of a specific patient to help guide the patient’s
healthcare provider in making individual drug therapy decisions. Our PGx Testing Services are designed to interrogate DNA targets on
over 33 genes and provide genotyping information relevant to certain cardiac, mental health, oncology, and pain management drug therapies.
Our PGx Testing Services cannot commence until we receive approval from the NYSDOH.
On
March 22, 2023, we submitted our validation package to the NYSDOH for our PGx Testing Services. On September 21, 2023, we received
a first set of comments from NYSDOH requesting additional data and clarifications. A response was submitted to NYSDOH on November 17,
2023. On December 26, 2023, we received a second set of comments from NYSDOH requesting additional data and clarifications
to which a response was submitted on February 23, 2024. A third set of comments was received from NYSDOH on March 29, 2024. A response
must be filed by May 28, 2024. Currently, the timing of any approval by NYSDOH for our PGx Testing Services is unclear. Recently
published studies show that population-scale PGx enabled medication management can significantly reduce overall population healthcare
costs, reduce adverse drug events, and increase overall population wellbeing. These benefits can result in significant cost savings to
large entities and self-insured employers, the latter accounting for approximately 65% of all U.S. employers in 2022. If and when approved
by the NYSDOH, we plan to leverage our PGx Testing Services to provide PGx testing services to large entities, self-insured employers
and healthcare providers.
Historically,
the majority of our revenue attributable to our MDx Testing Services has been derived from our safeCircle® COVID-19 testing solutions,
for which testing demand has significantly declined commencing in our fiscal third quarter of 2023, resulting in substantially reduced
revenues. We expect future demand for COVID-19 testing to continue to be reduced and we may terminate COVID-19 testing services in the
future.
DNA Tagging and Security Products and
Services
By
leveraging our expertise in both the manufacture and detection of DNA via PCR, our DNA Tagging and Security Products and Services allow
our customers to use non-biologic DNA tags manufactured on our Linea DNA platform to mark objects in a unique manner and then identify
these objects by detecting the absence or presence of the DNA tag. The Company’s core DNA Tagging and Security Products and Services,
which are marketed collectively as a platform under the trademark CertainT®, include:
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SigNature® Molecular Tags, which are short non-biologic DNA taggants
produced by the Company’s Linea DNA platform, provide a methodology to authenticate goods within large and complex supply chains
with a focus on cotton, nutraceuticals and other products. |
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SigNify® portable DNA readers and SigNify consumable reagent test
kits provide definitive real-time authentication of the Company’s DNA tags in the field. |
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fiberTyping® and other product genotyping services use PCR-based
DNA detection to determine a cotton species or cultivar, via a product’s naturally occurring DNA sequence for the purposes
of product provenance authentication. |
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Isotopic analysis testing services, provided in partnership with third-party
labs, use cotton’s carbon, hydrogen and oxygen elements to indicate origin of its fiber through finished goods. |
To
date, our largest commercial application for our DNA Tagging and Security Products and Services is in the tracking and provenance authentication
of cotton.
Our
business plan is to leverage consumer and governmental awareness for product traceability to expand our existing partnerships and seek
new partnerships for our DNA Tagging and Security Products and Services with a focus on cotton.
FDA Publishes Final Rule on Laboratory
Developed Tests
As
an LDT, our MDx Testing Services are currently subject to enforcement discretion by the FDA. On April 29, 2024, however, the FDA
published a final rule on LDTs, in which FDA outlines its plans to end enforcement discretion for many LDTs in five stages over a four-year
period. In Phase 1 (effective May 6, 2025), clinical laboratories running LDTs will be required to comply with medical device (adverse
event) reporting and correction/removal reporting requirements, as well as requirements for maintenance of complaint files under the
FDA’s quality systems regulation (QSR). In Phase 2 (effective May 6, 2026), clinical laboratories will be required to comply
with all other device requirements (e.g., registration/listing, labeling, investigational use), except for the remaining QSR requirements
and premarket review. In Phase 3 (effective May 6, 2027), clinical laboratories will be required to comply with all remaining QSR
requirements. In Phase 4 (effective ~November 6, 2027), clinical laboratories will be required to comply with premarket review
requirements for high-risk tests (i.e., tests subject to the premarket approval (PMA) requirement). Finally, in Phase 5
(effective May 6, 2028), clinical laboratories will be required to comply with premarket review requirements for moderate- and low-risk
tests (i.e., tests subject to the de novo or 510(k) requirement).
Under
the final rule, several types of tests will be eligible for some degree of continued enforcement discretion, including LDTs approved
by NYSDOH. FDA notes, however, that it retains discretion to pursue enforcement action for violations of the FDCA at any time and intends
to do so when appropriate. FDA further explains that it may update any of the enforcement discretion policies set forth in the final
rule as circumstances warrant or if the circumstances that inform those policies change, consistent with FDA’s good guidance practices.
Based on our current analysis of the FDA final rule, and assuming the final rule goes into effect without modification, we believe that
ADCL’s current and future NYSDOH approved LDTs, which includes our under development PGx Testing Services, will be exempt from
FDA premarket review requirements but will remain subject to the requirements of Phases 1 through 3.
Recent Developments
Special Meeting of Stockholders
On April 15, 2024, we held
a special meeting of stockholders (the “Special Meeting”) pursuant to which our stockholders approved the following: (i) in
accordance with Nasdaq Listing Rule 5635(d), the issuance to certain holders of common stock purchase warrants in connection with
a private placement; (ii) in accordance with Nasdaq Listing Rule 5635(d), the repricing of certain of our common stock purchase
warrants; (iii) a grant of discretionary authority to the Board of Directors giving them the authority to amend the Company’s
certificate of incorporation, as amended, to effect a reverse stock split of common stock, at a ratio in the range from one-for-five
to one-for-fifty, with such specific ratio to be determined by the Company’s Board of Directors following the Special Meeting (the
“Reverse Split Proposal”) in order to regain compliance with the requirement to maintain a minimum bid price of $1.00 per
share for continued listing on Nasdaq, as set forth in the Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”);
and (iv) an amendment to the Company’s 2020 Equity Incentive Plan to increase the number of authorized shares of common stock
reserved for issuance by 200,000 shares.
Reverse Stock Split
As discussed above, on April
15, 2024, we held the Special Meeting where our stockholders approved the Reverse Split Proposal.
The reverse stock split was
effected at 12:01 a.m. Eastern Time on Thursday, April 25, 2024 and combined each twenty shares of our outstanding common stock into
one share of common stock, without any change in the par value per share. Moreover, the reverse stock split correspondingly adjusted,
(i) the per share exercise price and the number of shares issuable upon the exercise of all outstanding options, and (ii) the number
of shares underlying any of our outstanding warrants by adjusting the conversion ratio for each instrument and increasing the applicable
exercise price or conversion price in accordance with the terms of each instrument and based on the reverse stock split ratio. No fractional
shares were issued in connection with the reverse stock split. Any fractional shares resulting from the reverse stock split were rounded
up to the nearest whole share. The reverse stock split resulted in a reduction of our outstanding shares of common stock from 17,261,343
to 863,068 shares.
Nasdaq Notification
On May 9, 2024, the Company
received a written notification from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”)
notifying the Company that the closing bid price of its common stock had exceeded $1.00 per share for 10 consecutive trading days, and
as a result, the Company had regained compliance with the Minimum Bid Price Requirement.
On May 16, 2024, the Company
received a deficiency letter (the “Letter”) from the Nasdaq Staff notifying the Company that it is not in compliance with
the minimum stockholders’ equity requirement of at least $2,500,000 for continued inclusion on The Nasdaq Capital Market pursuant
to Nasdaq Listing Rule 5550(b)(1) (the “Stockholders’ Equity Requirement”). In the Company’s Quarterly Report
on Form 10-Q for the quarter ended March 31, 2024, the Company reported stockholders’ equity of ($175,385), which was below the
Stockholders’ Equity Requirement.
In accordance with Nasdaq
rules, the Company has 45 calendar days, or until July 1, 2024, to submit a plan to the Staff to regain compliance (the “Compliance
Plan”) with the Stockholders’ Equity Requirement. If the Compliance Plan is accepted, Nasdaq can grant an extension of up
to 180 calendar days from the date of the Letter for the Company to evidence compliance.
The Company must submit a
Compliance Plan to the Staff on or before July 1, 2024 and is considering available options to regain compliance with the Stockholders’
Equity Requirement. However, there is no assurance that the Company will be successful in developing the Compliance Plan, that the Compliance
Plan will be accepted by Nasdaq, or even if it is accepted, that the Company will ultimately be able to regain compliance with the Stockholders’
Equity Requirement within the allotted extension period, which may be less than 180 calendar days.
Receipt of the Letter described
above from Nasdaq has no immediate effect on the listing of the Company’s common stock.
Company Information
We are a Delaware corporation,
which was initially formed in 1983 under the laws of the State of Florida as Datalink Systems, Inc. In 1998, we reincorporated in
the State of Nevada, and in 2002, we changed our name to our current name, Applied DNA Sciences, Inc. On December 17, 2008,
we reincorporated from the State of Nevada to the State of Delaware.
Our corporate headquarters
are located at the Long Island High Technology Incubator at Stony Brook University in Stony Brook, New York, where we have established
laboratories for the manufacture and detection of nucleic acids (DNA and RNA) to support our various business units. In addition, this
location also houses our NYSDOH CLEP-permitted, Clinical Laboratory Improvement Amendments (“CLIA”)-certified clinical laboratory
where we perform MDx Testing Services. The mailing address of our corporate headquarters is 50 Health Sciences Drive, Stony Brook, New
York 11790, and our telephone number is (631) 240-8800.
Implications of Being a Smaller Reporting Company
We are a “smaller reporting
company” as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act, and have elected to take advantage
of certain of the scaled disclosures available to smaller reporting companies. We will continue to be a “smaller reporting company”
until we have $250 million or more in public float (based on our common stock) measured as of the last business day of our most
recently completed second fiscal quarter or, in the event we have no public float (based on our common stock) or a public float
(based on our common stock) that is less than $700 million, annual revenues of $100 million or more during the most recently
completed fiscal year.
We may choose to take advantage
of some, but not all, of these exemptions. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly,
the information contained herein may be different from the information you receive from other public companies in which you hold stock.
Risk Factor Summary
This summary does not address all of the risks
that we face. Additional discussions of the risks summarized in this risk factor summary, and other risks that we face, can be found
below and should be carefully considered, together with other information in this prospectus and the documents incorporated by reference
herein before making investment decisions.
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We have produced limited revenue. This makes it difficult to evaluate
our future prospects and increase the risk that we will not be successful. |
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There is substantial doubt relating to our ability to continue as a
going concern. |
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Our opportunities to work with customers to develop pharmaceuticals
and biologics will require substantial additional funding. Our customers may not be successful in their efforts to create a pipeline
of product candidates, to develop commercially successful products, or to develop commercially successful biologic production. |
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We may not successfully implement our business strategies, including
achieving our growth objectives. |
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We may require additional financing which may in turn require the issuance
of additional shares of common stock, preferred stock or other debt or equity securities (including convertible securities) and which
would dilute the ownership held by or stockholders. |
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Our operating results have been and could be adversely affected by
a reduction in business with our significant customers. |
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We may encounter difficulties in managing our growth and these difficulties
could impair our profitability. |
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Our current emphasis on Therapeutic DNA Production Services may reduce
our ability to maintain and expand our existing MDX Testing Services and DNA Tagging and Security Products and Services businesses. |
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If in the future our MDX Testing Services and DNA Tagging and Security
Products and Services businesses do not generate significant cash flows, we may not have sufficient capital to develop, commercialize
and have our customers adopt our Therapeutic DNA Production Services. |
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If we are unable to expand our DNA manufacturing capacity, we could
lose revenue and our business could suffer. |
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Rapidly changing technology and extensive competition in synthetic
biology could make the services or products we are developing obsolete or non-competitive unless we continue to develop new and improved
services or products and pursue new market opportunities. |
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Pharmaceutical, diagnostic and biologic products and/or services are
highly complex, and if we or our collaborators and customers are unable to provide quality and timely offerings to our respective
customers, our business could suffer. |
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We will need to develop and maintain manufacturing facilities that
meet GMP. |
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Pharmaceutical and biologic-related revenue will be dependent on our
collaborators’ and customers’ demand for our manufacturing services. |
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We may be unable to consistently manufacture or source our products
to the necessary specifications or in quantities necessary to meet demand on a timely basis and at acceptable performance and cost
levels. |
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The markets for drug and biologic candidates and synthetic DNA are
very competitive, and we may be unable to continue to compete effectively in these industries in the future. |
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The markets for our supply chain security and product authentication
solutions are very competitive, and we may be unable to continue to compete effectively in these industries in the future. |
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We compete with life science, pharmaceutical and biotechnology companies,
some of whom are our customers, who are substantially larger than we are and potentially capable of developing new approaches that
could make our products and technology obsolete or develop their own internal capabilities that compete with our products. |
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Our intellectual property rights are valuable, and any inability to
protect them could reduce the value of our products, services and brand. |
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Pharmaceutical and biologic-related revenue is generally dependent on regulatory
approval, oversight and compliance. |
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If the FDA were to begin to enforce regulation of laboratory-developed
tests (“LDTs”), we could incur substantial costs and delays associated with trying to obtain pre-market clearance or approval
and costs associated with complying with post-market requirements in respect of MDx Testing Services. |
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If we fail to comply with laboratory licensing requirements, we could lose
the ability to offer our MDx Testing Services or experience disruptions to our business. |
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If we fail to comply with healthcare laws, we could face substantial penalties
and our business, operations and financial conditions could be adversely affected. |
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If we are unable to continue to retain the services of Dr. Hayward,
we may not be able to continue our operations. |
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We may have conflicts of interest with our affiliates and related parties,
and in the past we have engaged in transactions and entered into agreements with affiliates that were not negotiated at arms’ length. |
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There are a large number of shares of common stock underlying our outstanding
options and warrants and the sale of these shares may depress the market price of our common stock and cause immediate and substantial
dilution to our existing stockholders. |
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We have received a deficiency letter from the Nasdaq Staff notifying us that we are not in compliance
with the minimum stockholders’ equity requirement of at least $2,500,000 for continued inclusion on The Nasdaq Capital Market and
no assurance can be given that we will be able to maintain our Nasdaq listing. |
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The reverse stock split to regain compliance with Nasdaq’s Minimum
Bid Price Requirement, which was effected on Thursday, April 25, 2024, may adversely impact the market price of our common stock. |
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The reverse stock split may decrease the liquidity of our common stock
and as a result our common stock may not satisfy the investing requirements of new investors, including institutional investors. |
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The effective increase in the number of shares of our common stock available
for issuance as a result of our reverse stock split could result in further dilution to our existing stockholders and have anti-takeover
implications. |
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In addition to the above key factors, as well as other variables affecting
our operating results and financial condition, past financial performance may not be a reliable indicator of future performance, and
historical trends should not be used to anticipate results or trends in future periods. |
Summary
of the Offering
Units being offered |
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5,911,330 Units at the assumed
public offering price of $2.03 per Unit (the last reported sale price of our common stock on The Nasdaq Capital Market on May 23,
2024) on a “best-efforts” basis. Each Unit will consist of one share of common stock (or Pre-Funded Warrant to purchase
one share of our common stock in lieu thereof), one Series A Warrant to purchase one share of common stock and one Series B Warrant
to purchase one share of common stock. The Units have no stand-alone rights and will not be certificated or issued as stand-alone
securities. The shares of common stock and Pre-Funded Warrants, if any, can each be purchased in this offering only with the accompanying
Series A Warrants and Series B Warrants as part of Units, but the components of the Units will be immediately separable and will
be issued separately in this offering. |
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Units, including Pre-Funded Warrants, offered by us in this offering |
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We are also offering to each purchaser whose
purchase of Units consisting of shares of common stock in this offering would otherwise result in the purchaser, together with its
affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our
outstanding common stock immediately following the consummation of this offering, the opportunity to purchase, if the purchaser so
chooses, Units, including Pre-Funded Warrants, in lieu of shares of common stock that would otherwise result in the purchaser’s
beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock. Subject to limited
exceptions, a holder of Pre-Funded Warrants will not have the right to exercise any portion of its Pre-Funded Warrants if the holder,
together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, 9.99%) of the number
of shares of common stock outstanding immediately after giving effect to such exercise. Each Pre-Funded Warrant will be exercisable
for one share of our common stock. The purchase price of each Unit including a Pre-Funded Warrant will equal the price per Unit in
which the shares of common stock and accompanying Series Warrants are being sold to the public in this offering, minus $0.0001, and
the exercise price of each Pre-Funded Warrant will be $0.0001 per share. The Pre-Funded Warrants are immediately exercisable and
may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. This offering also relates to the shares
of common stock issuable upon exercise of any Pre-Funded Warrants sold in this offering. For each Pre-Funded Warrant we sell, the
number of shares of common stock we are offering will be decreased on a one-for-one basis. |
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Description of Series Warrants |
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Each Unit includes one share of common stock, or one Pre-Funded Warrant in lieu of one share of
common stock, one Series A Warrant and one Series B Warrant. Each Series A Warrant will become exercisable beginning on the date
of the Warrant Stockholder Approval at a price of $ per share and will expire five years from the date of Warrant Stockholder Approval,
and each Series B Warrant will become exercisable beginning on the date of the Warrant Stockholder Approval at a price of $ per share,
or pursuant to an alternate cashless exercise option, and will expire one year from the date of Warrant Stockholder Approval. The Series B Warrants contain an alternative cashless exercise option,
the Series A Warrants contain certain anti-dilution provisions and both the Series A and Series B Warrants contain a reverse stock split
provision which requires the Company to effect a reverse stock split under certain circumstances. See
“Description of Securities — Series Warrants.” This prospectus also relates to the offering of the shares of common
stock issuable upon exercise of the Series Warrants. |
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Description of Placement Agent Warrants |
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Pursuant to this prospectus, we will issue to the Co-Placement Agents
(or their respective designees) warrants to purchase shares equal to 5.0% of the number of Units being offered in this offering at
an exercise price equal to that of the Series Warrants and with an expiration date of five years from the commencement of sales as
part of the compensation payable to the Co-Placement Agents in connection with this offering (the “Placement Agent Warrants”).
See “Plan of Distribution” on page 23 of this prospectus. This prospectus also relates to the offering of the shares
of common stock issuable upon exercise of the Placement Agent Warrants. |
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Common stock outstanding prior to this offering |
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984,728 shares. |
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Common stock to be outstanding after this offering |
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6,896,058 shares (assuming no sale of any Pre-Funded Warrants and
assuming none of the Series Warrants or Placement Agent Warrants issued in this offering are exercised). |
Use of proceeds |
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We estimate that the net proceeds
to us from this offering will be approximately $10.8 million, after deducting the Placement Agent fees and estimated offering expenses
payable by us and assuming no exercise of the Series Warrants. We intend to use the net proceeds from the sale of the securities
for the further development of our Therapeutic DNA Production and MDx Testing Services, as well as general corporate purposes, which
may include research and development expenses, capital expenditures, working capital and general and administrative expenses, and
potential acquisitions of or investments in businesses, products and technologies that complement our business, although we have
no present commitments or agreements to make any such acquisitions or investments as of the date of this prospectus. Pending these
uses, we intend to invest the funds in short-term, investment grade, interest-bearing securities. It is possible that, pending their
use, we may invest the net proceeds in a way that does not yield a favorable, or any, return for us. See “Use of Proceeds”
on page 16 of this prospectus. |
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Risk factors |
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You should carefully read and consider the
information set forth under “Risk Factors” on page 12 of this prospectus and the documents incorporated by reference
herein before deciding to invest in our securities. |
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Lock-up agreements |
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All of our executive officers and directors
will enter into lock-up agreements in connection with the offering. Under these agreements, each of these persons may not, without
the prior written approval of Craig-Hallum, offer, sell, contract to sell or otherwise dispose of or hedge common stock or securities
convertible into or exchangeable for common stock, subject to certain exceptions. The restrictions contained in these agreements
will be in effect for a period of 90 days after the date of the closing of this offering. |
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In addition,
we have agreed to be subject to a lock-up period of one year following the date of closing
of the offering pursuant to this prospectus. This means that, during the applicable lock-up
period, we may not offer, sell, contract to sell or otherwise dispose of or hedge common
stock or securities convertible into or exchangeable for common stock, subject to customary
exceptions. However, this lock-up period shall terminate upon the earlier of 90 days after
(i) the closing of this offering if the Warrant Stockholder Approval is obtained prior to
90 days after the closing of this offering and (ii) the date that Warrant Stockholder Approval
is obtained. For more information, see “Plan of Distribution” on page 23 of
this prospectus. |
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Market for common stock |
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Our common stock is listed on The Nasdaq Capital Market under the symbol
“APDN.” |
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Listing of Pre-Funded Warrants and Series Warrants |
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We do not intend to list the Pre-Funded Warrants or the Series Warrants on any securities exchange
or nationally recognized trading system. Without a trading market, the liquidity of the Pre-Funded Warrants and Series Warrants will
be extremely limited. |
The number of shares of our
common stock to be outstanding after this offering is based on 984,728 shares of our common stock outstanding as of May 23, 2024,
and excludes the following:
● |
109,363 shares of common stock issuable upon exercise
of options outstanding as of May 23, 2024, with a weighted average exercise price of $185.00 per share; |
● |
825,067 shares of common stock issuable upon exercise of
warrants outstanding as of May 23, 2024, with a weighted average
exercise price of $20.81 per share; and |
● |
267,355 shares of common stock reserved for future grant
or issuance as of May 23, 2024, under our equity incentive plan. |
Risk
Factors
Investment in our securities,
including our common stock, Series Warrants, and Pre-Funded Warrants, involves a high degree of risk. In addition to the risks and investment
considerations discussed elsewhere in this prospectus, any document incorporated by reference herein or any “free writing prospectus”
we have authorized in connection with this offering, the following factors should be carefully considered by anyone purchasing the securities
offered by this prospectus. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial also may impair our business operations. We also update risk factors from
time to time in our periodic reports on Forms
10-K, 10-Q
and 8-K
which will be incorporated by reference in this prospectus. If any of the following risks actually occur, our business could be harmed.
In such case, the trading price of our common stock could decline and investors could lose all or a part of their investment. All of
these risks could adversely affect our business, business prospects, results of operations, financial condition and cash flows.
See also the statements
contained under the heading “Forward-Looking Statements.”
Risks Related to Our Business:
There is substantial
doubt relating to our ability to continue as a going concern.
We
have recurring net losses, which have resulted in an accumulated deficit of $308,255,808 as of March 31, 2024. We have incurred a net
loss of $5,624,064 for the six months ended March 31, 2024. At March 31, 2024, we had cash and cash equivalents of $3,149,640. We have
concluded that these factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance
of the financial statements. We will continue to seek to raise additional working capital through public equity, private equity or debt
financings. If we fail to raise additional working capital, or do so on commercially unfavorable terms, it would materially and adversely
affect our business, prospects, financial condition and results of operations, and we may be unable to continue as a going concern. If
we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue
as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable
terms, if at all.
We
have received a deficiency letter from the Nasdaq Staff notifying us that we are not in compliance with the minimum stockholders’
equity requirement of at least $2,500,000 for continued inclusion on The Nasdaq Capital Market and no assurance can be given that we
will be able to maintain our Nasdaq listing.
On
May 16, 2024, we received a deficiency letter from the Nasdaq Staff notifying us that we are not in compliance with the minimum stockholders’
equity requirement of at least $2,500,000 for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(1)
(the “Stockholders’ Equity Requirement”). In our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024,
we reported stockholders’ equity of ($175,385), which was below the Stockholders’ Equity Requirement.
In
accordance with Nasdaq rules, we have 45 calendar days, or until July 1, 2024, to submit a plan to the Staff to regain compliance (the
“Compliance Plan”) with the Stockholders’ Equity Requirement. If the Compliance Plan is accepted, Nasdaq can grant
an extension of up to 180 calendar days from the date of the deficiency letter for the Company to evidence compliance.
The
Company must submit a Compliance Plan to the Staff on or before July 1, 2024 and is considering available options to regain compliance
with the Stockholders’ Equity Requirement. However, there is no assurance that the Company will be successful in developing the
Compliance Plan, that the Compliance Plan will be accepted by Nasdaq, or even if it is accepted, that the Company will ultimately be
able to regain compliance with the Stockholders’ Equity Requirement within the allotted extension period, which may be less than
180 calendar days.
Receipt
of the Letter described above from Nasdaq has no immediate effect on the listing of the Company’s common stock.
Further,
there can be no assurance that we will continue to meet Nasdaq’s other continued listing requirements. Our failure to meet such
applicable listing criteria could result in the termination of the listing of our common stock on Nasdaq. In the event we are unable
to have our shares traded on Nasdaq, our common stock could potentially trade on the OTCQX or the OTCQB, each of which is generally considered
less liquid and more volatile than Nasdaq. Failure to maintain our listing on Nasdaq or on another national securities exchange could
make it more difficult to trade our shares, could prevent our common stock from trading on a frequent and liquid basis, and could result
in the market price of our common stock being less than it would be if we maintained our listing on Nasdaq or on another national securities
exchange.
Risks Related to Our Reverse Stock Split:
We approved a reverse stock split to regain
compliance with Nasdaq’s Minimum Bid Price Requirement, which was effected on Thursday, April 25, 2024 and which may adversely
impact the market price of our common stock.
On December 1, 2023, we received
a written notice (the “Notification Letter”) from Nasdaq’s Listing Qualifications Department notifying us that, based
upon the closing bid price of our common stock for the last 30 consecutive business days, we were not in compliance with the requirement
to maintain a minimum bid price of $1.00 per share for continued listing on Nasdaq, as set forth in the Nasdaq Listing Rule 5550(a)(2)
(the “Minimum Bid Price Requirement”), and that, if at any time before May 29, 2024, the closing bid price of our common
stock remained at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq would provide written notification that
we had regained compliance with the Minimum Bid Requirement.
On April 15, 2024, our stockholders
approved the proposal in the Company’s Definitive Proxy Statement dated March 14, 2024 to grant discretionary authority to the
Board of Directors to amend the Company’s Certificate of Incorporation to effect a reverse stock split within a range of one-for-five
to one-for-fifty, if needed to meet the Minimum Bid Price Requirement. Subsequently,
on April 21, 2024, our Board of Directors approved a reverse stock split at a ratio of one-for-twenty shares, which was effected at 12:01
a.m. Eastern Time on Thursday, April 25, 2024. On May 9, 2024, the Company received a written notification from Nasdaq’s Listing
Qualifications Department notifying the Company that the closing bid price of its common stock had exceeded $1.00 per share for 10 consecutive
trading days, and as a result, the Company had regained compliance with the Minimum Bid Price Requirement. There can be no assurance
that our common stock will maintain market prices consistent with such reverse stock split and that we will remain in compliance with
the Minimum Bid Price Requirement or any other Nasdaq continued listing requirement, and it is possible that the market price of our
common stock will decline more than would have occurred in the absence of a reverse stock split.
The reverse stock split may decrease the
liquidity of the shares of our common stock and the resulting market price of our common stock may not attract or satisfy the investing
requirements of new investors, including institutional investors.
The liquidity of the shares
of our common stock may be affected adversely by the reverse stock split given the reduced number of shares outstanding following the
reverse stock split. Additionally, the reverse stock split may increase the number of shareholders who own odd lots (less than 100 shares)
of our common stock, creating the potential for such shareholders to experience an increase in the cost of selling their shares and greater
difficulty affecting such sales. Moreover, there can be no assurance that the reverse stock split will result in a share price that will
attract new investors, including institutional investors, and there can be no assurance that the market price of our common stock will
satisfy the investing requirements of these investors. Consequently, the trading liquidity of our common stock may not necessarily improve
as a result of the reverse stock split.
The effective increase in the number of
shares of our common stock available for issuance as a result of the reverse stock split may result in further dilution to our existing
stockholders and have anti-takeover implications.
The reverse stock split alone
had no effect on our authorized capital stock, and the total number of authorized shares remains the same as before the reverse stock
split. The reverse stock split of our issued and outstanding shares increased the number of shares of our common stock (or securities
convertible or exchangeable for our common stock) available for issuance. The additional available shares are available for issuance
from time to time at the discretion of the Company’s Board of Directors when opportunities arise, without further stockholder action
or the related delays and expenses, except as may be required for a particular transaction by law, the rules of any exchange on which
our securities may then be listed, or other agreements or restrictions. Any issuance of additional shares of our common stock would increase
the number of outstanding shares of our common stock and (unless such issuance was pro-rata among existing stockholders) the percentage
ownership of existing stockholders would be diluted accordingly. In addition, any such issuance of additional shares of our common stock
could have the effect of diluting the earnings per share and book value per share of outstanding shares of our common stock.
Additionally, the effective
increase in the number of authorized shares could, under certain circumstances, have anti-takeover implications. For example, the additional
shares of common stock that have become available for issuance could be used by us to oppose a hostile takeover attempt or to delay or
prevent changes in control or our management. Although our reverse stock split is prompted by other considerations and not by the threat
of any hostile takeover attempt, stockholders should be aware that our reverse stock split could facilitate future efforts by us to deter
or prevent changes in control, including transactions in which our stockholders might otherwise receive a premium for their shares over
then-current market prices.
In addition, we may need
to effect an additional reverse stock split as a result of this offering. If at any time the Series A Warrants or Series B Warrants are
outstanding and the Company receives notice from the Nasdaq Listing Qualifications Department that the Company is failing to satisfy
the $1.00 minimum bid requirement (the “Trigger Date”), then the Company has covenanted to take all necessary steps
to obtain the necessary consents and approvals to undertake a reverse stock split after such Trigger Date and shall, prior to the effectiveness
of any delisting notice issued by Nasdaq, effect such reverse stock split. Any such issuance of additional shares of our common stock
could have the effect of diluting the earnings per share and book value per share of outstanding shares of our common stock.
Risks Related to this Offering:
This is a best-efforts
offering, no minimum amount of securities is required to be sold, and we may not raise the amount of capital we believe is required for
our business plans, including our near-term business plans.
The Co-Placement
Agents have agreed to use their best efforts to solicit offers to purchase the securities in this offering. The Co-Placement Agents have
no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of
the securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering. Because
there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, placement agent
fees and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth herein. We may
sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors
in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to support our continued
operations, including our near-term continued operations. Thus, we may not raise the amount of capital we believe is required for our
operations in the short-term and may need to raise additional funds to complete such short-term operations. Such additional fundraises
may not be available or available on terms acceptable to us.
Management will have broad discretion as
to the use of proceeds from this offering and we may use the net proceeds in ways with which you may disagree.
We intend to use the net
proceeds of this offering for the further development of our Therapeutic DNA Production and MDx Testing Services, as well as general
corporate purposes, which may include research and development expenses, capital expenditures, working capital and general and administrative
expenses, and potential acquisitions of or investments in businesses, products and technologies that complement our business, although
we have no present commitments or agreements to make any such acquisitions or investments as of the date of this prospectus. Our management
will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not
improve our results of operations or enhance the value of our common stock. Accordingly, you will be relying on the judgment of our management
on the use of net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds
are being used appropriately. Our failure to apply these funds effectively could have a material adverse effect on our business and cause
the price of our common stock to decline.
Pending these uses, we intend
to invest the funds in short-term, investment grade, interest-bearing securities. It is possible that, pending their use, we may invest
the net proceeds in a way that does not yield a favorable, or any, return for us.
The public offering price will be set by
our Board of Directors and does not necessarily indicate the actual or market value of our common stock.
Our Board of Directors will
approve the public offering price and other terms of this offering after considering, among other things: the number of shares authorized
in our Certificate of Incorporation; the current market price of our common stock; trading prices of our common stock over time; the
volatility of our common stock; our current financial condition and the prospects for our future cash flows; the availability of and
likely cost of capital of other potential sources of capital; the characteristics of interested investors and market and economic conditions
at the time of the offering. The public offering price is not intended to bear any relationship to the book value of our assets or our
past operations, cash flows, losses, financial condition, net worth or any other established criteria used to value securities. The public
offering price may not be indicative of the fair value of the common stock.
If you purchase the common stock or Pre-Funded
Warrants sold in this offering, you will experience immediate dilution as a result of this offering and future equity issuances.
Because the price per share
of our Units being offered is higher than the book value per share of our common stock, you will suffer immediate substantial dilution
in the net tangible book value of the common stock you purchase in this offering. See the section entitled “Dilution” of
this prospectus for a more detailed discussion of the dilution you will incur if you purchase common stock and Pre-Funded Warrants in
this offering. The issuance of additional shares of our common stock in future offerings could be dilutive to stockholders if they do
not invest in future offerings. Moreover, to the extent that we issue options or warrants to purchase, or securities convertible into
or exchangeable for, shares of our common stock in the future and those options, warrants or other securities are exercised, converted
or exchanged, stockholders may experience further dilution.
There is no public market for the Pre-Funded
Warrants or Series Warrants being offered in this offering.
There is no established public
trading market for the Pre-Funded Warrants or Series Warrants being offered in this offering, and we do not expect a market to develop.
In addition, we do not intend to apply to list the Pre-Funded Warrants or Series Warrants on any securities exchange or nationally recognized
trading system, including The Nasdaq Stock Market. Without an active market, the liquidity of the Pre-Funded Warrants or Series Warrants
will be limited.
Holders of Pre-Funded Warrants or Series
Warrants purchased in this offering will have no rights as common stockholders until such holders exercise their Pre-Funded Warrants
or Series Warrants and acquire our common stock.
Until holders of Pre-Funded
Warrants or Series Warrants acquire shares of our common stock upon exercise of the Pre-Funded Warrants or Series Warrants, as applicable,
holders of Pre-Funded Warrants or Series Warrants will have no rights with respect to the shares of our common stock underlying such
Pre-Funded Warrants or Series Warrants. Upon exercise of the Pre-Funded Warrants or Series Warrants, the holders will be entitled to
exercise the rights of a common stockholder only as to matters for which the record date occurs after the exercise date.
Provisions of the Series Warrants and Pre-Funded
Warrants offered by this prospectus could discourage an acquisition of us by a third party.
In addition to the discussion
of the provisions of our Certificate of Incorporation, certain provisions of the Series Warrants and Pre-Funded Warrants offered by this
prospectus could make it more difficult or expensive for a third party to acquire us. Such Series Warrants and Pre-Funded Warrants prohibit
us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving
entity assumes our obligations under the Series Warrants and Pre-Funded Warrants. Further, the Series Warrants and Pre-Funded Warrants
provide that, in the event of certain transactions constituting “fundamental transactions,” with some exception, holders
of such the Series Warrants and Pre-Funded Warrants will have the right, at their option, to require us to repurchase such the Series
Warrants and Pre-Funded Warrants at a price described in the Series Warrants and Pre-Funded Warrants. These and other provisions of the
Series Warrants and Pre-Funded Warrants offered by this prospectus could prevent or deter a third party from acquiring us even where
the acquisition could be beneficial to you.
We may be required to repurchase certain
of our warrants.
Certain
of our warrants sold privately that have registration rights, in the event of a “Fundamental Transaction” (as defined in
the related warrant agreement, which generally includes any merger with another entity, the sale, transfer or other disposition of all
or substantially all of our assets to another entity, or the acquisition by a person of more than 50% of our common stock), each warrant
holder will have the right at any time prior to the consummation of the Fundamental Transaction to require us to repurchase the warrant
for a purchase price in cash equal to the Black Scholes value (as calculated under the warrant agreement) of the then remaining unexercised
portion of such warrant on the date of such Fundamental Transaction, which may materially adversely affect our financial condition and/or
results of operations and may prevent or deter a third party from acquiring us.
The Series Warrants may not have any value.
Each Series
Warrant will have an exercise price of $ per share of common
stock. The Series A Warrants will expire five years from the date of Warrant Stockholder Approval and the Series B Warrants will expire
one year from the date of Warrant Stockholder Approval. In the event our common stock price does not exceed the exercise price of the
Series Warrants during the period when the Series Warrants are exercisable, the Series Warrants may not have any value.
Stockholders may suffer substantial
dilution if certain provisions in the Series Warrants are utilized.
If
the Series B Warrants are exercised by way of an alternative cashless exercise, assuming receipt of Warrant Stockholder Approval, such
exercising holder will receive three shares of Common Stock for each Series B Warrant they exercise, without any cash payment to us.
In
addition, and subject to certain exemptions, if we sell, enter into an agreement to sell, or grant any option to purchase, or sell, enter
into an agreement to sell, or grant any right to reprice (excluding Exempt Issuances, as defined in the Placement Agency Agreement),
or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any shares of common
stock, at an effective price per share less than the exercise price of the Series A Warrants then in effect, the exercise price of the
Series A Warrants will be reduced to the lower of such price or the lowest volume weighted average price (VWAP) during the five consecutive
trading days immediately following such dilutive issuance or announcement thereof, and the number of shares issuable upon exercise will
be proportionately adjusted such that the aggregate exercise price will remain unchanged.
Further, if at any time
the Series A Warrants or Series B Warrants are outstanding and the Company receives notice from the Nasdaq Listing Qualifications Department
that the Company is failing to satisfy the $1.00 minimum bid requirement, then the Company has covenanted to take all necessary steps
to obtain the necessary consents and approvals to undertake a reverse stock split after such Trigger Date and shall, prior to the effectiveness
of any delisting notice issued by Nasdaq, effect such reverse stock split.
If
any of the above provisions in the Series Warrants are utilized, our stockholders may suffer substantial dilution.
We will likely not receive any additional
funds upon the exercise of the Series B Warrants.
The Series
B Warrants may be exercised by way of an alternative cashless exercise, in which case the holder would not pay a cash purchase price
upon exercise, but instead would receive upon such exercise the number of shares equal to the number of Series B Warrants being exercised
multiplied by three. Accordingly, we will likely not receive any additional funds upon the exercise of the Series B Warrants.
The exercisability of the Series Warrants
is contingent upon us obtaining the Warrant Stockholder Approval. If we do not obtain such Warrant Stockholder Approval, the Series Warrants
may never become exercisable.
The Series Warrants are
not immediately exercisable, as their exercisability is contingent upon us obtaining Warrant Stockholder Approval. The Series Warrants
will become exercisable upon Warrant Stockholder Approval and will expire on the five-year anniversary of such date with respect to the
Series A Warrants, and on the one-year anniversary of such date with respect to the Series B Warrants. While we intend to promptly seek
Warrant Stockholder Approval for these mechanisms, there is no guarantee that it will ever be obtained. In the event that we cannot obtain
Warrant Stockholder Approval, the Series Warrants may never become exercisable. If we are unable to obtain the Warrant Stockholder
Approval, the Series Warrants will have no value.
We have agreed to hold
a special meeting of shareholders (which may also be at the annual meeting of shareholders) at the earliest practicable date after the
date hereof, but in no event later than ninety days after the closing of the offering, in order to obtain Warrant Stockholder Approval.
There is no guarantee we will be able to hold a special meeting within this timeframe, or at all.
Risks
Relating to Manufacturing, Development, and Industries:
If the FDA implements
its plans to regulate LDTs, we could incur substantial costs and delays associated with trying to obtain pre-market clearance or approval
and costs associated with complying with post-market requirements.
As an LDT, our MDx Testing
Services are currently subject to enforcement discretion by the FDA. On April 29, 2024, however, the FDA published a final rule
on LDTs, in which FDA outlines its plans to end enforcement discretion for many LDTs in five stages over a four-year period. In
Phase 1 (effective May 6, 2025), clinical laboratories running LDTs will be required to comply with medical device (adverse event) reporting
and correction/removal reporting requirements, as well as requirements for maintenance of complaint files under the FDA’s quality
systems regulation (QSR). In Phase 2 (effective May 6, 2026), clinical laboratories will be required to comply with all other device
requirements (e.g., registration/listing, labeling, investigational use), except for the remaining QSR requirements and premarket review.
In Phase 3 (effective May 6, 2027), clinical laboratories will be required to comply with all remaining QSR requirements. In
Phase 4 (effective ~November 6, 2027), clinical laboratories will be required to comply with premarket review requirements for high-risk
tests (i.e., tests subject to the premarket approval (PMA) requirement). Finally, in Phase 5 (effective May 6, 2028), clinical
laboratories will be required to comply with premarket review requirements for moderate- and low-risk tests (i.e., tests subject
to the de novo or 510(k) requirement).
Under
the final rule, several types of tests will be eligible for some degree of continued enforcement discretion, including LDTs approved
by NYSDOH. FDA notes, however, that it retains discretion to pursue enforcement action for violations of the FDCA at any time and intends
to do so when appropriate. FDA further explains that it may update any of the enforcement discretion policies set forth in the final
rule as circumstances warrant or if the circumstances that inform those policies change, consistent with FDA’s good guidance practices.
Based on our current analysis of the FDA final rule, and assuming the final rule goes into effect without modification, we believe that
ADCL’s current and future NYSDOH approved LDTs, which includes our under development PGx Testing Services, will be exempt from
FDA premarket review requirements but will remain subject to the requirements of Phases 1 through 3.
Congress
is also working on legislative language that would clarify FDA’s authority with respect to LDTs – and if enacted, would potentially
supersede the final rule. In this regard, the “Verifying Accurate Leading-edge IVCT Development Act,” or VALID Act,
was most recently introduced in March 2023. The bill proposes a risk-based approach that would subject many LDTs to FDA regulation
by creating a new in vitro clinical test, or IVCT, category of regulated products. As proposed, the bill would grandfather
many existing LDTs from the proposed premarket approval, quality systems, and labeling requirements, respectively, but would require
such tests to comply with other regulatory requirements (e.g., registration/listing, adverse event reporting). To market a high-risk
IVCT, reasonable assurance of analytical and clinical validity for the intended use would be needed to be established. Under VALID, a
precertification process would be established that would allow a laboratory to establish that the facilities, methods, and controls used
in the development of its IVCTs meet quality system requirements. If pre-certified, low-risk IVCTs developed by the laboratory and falling
within the scope of FDA’s precertification order would not be subject to test-specific pre-market review. The new regulatory framework
would include quality control and post-market reporting requirements. The FDA would have the authority to withdraw approvals for IVCTs
for various reasons, including (for example) if there were a reasonable likelihood that the test would cause death or serious adverse
health consequences. However, we cannot predict if this (or any other bill) will be enacted in its current (or any other) form and cannot
quantify the effect of such proposals on our business.
To
the extent that FDA ultimately regulates certain LDTs, whether via final rule, final guidance, or as instructed by Congress, our LDTs
may be subject to certain additional regulatory requirements. Complying with the FDA’s requirements may be expensive, time-consuming,
and subject us to significant or unanticipated delays. Insofar as we may be required to obtain premarket clearance or approval to perform
or continue performing an LDT, we cannot assure you that we will be able to obtain such authorization. Even if we obtain regulatory clearance
or approval where required, such authorization may not be for the intended uses that we believe are commercially attractive or are critical
to the commercial success of our tests. As a result, the application of the FDA’s requirements to our tests could materially and
adversely affect our business, financial condition, and results of operations.
Failure
to comply with applicable FDA regulatory requirements may trigger a range of enforcement actions by the FDA including warning letters,
civil monetary penalties, injunctions, criminal prosecution, recall or seizure, operating restrictions, partial suspension or total shutdown
of operations, and denial of or challenges to applications for clearance or approval, as well as significant adverse publicity.
Use
of Proceeds
We estimate that the net
proceeds from this offering will be approximately $10.8 million, assuming a public offering price of $2.03 per Unit and the sale of all
the securities offered under this prospectus, after deducting the Placement Agent fees and estimated offering expenses payable by us
and assuming no exercise of the Series Warrants. However, this is a best efforts offering with no minimum number of securities or amount
of proceeds as a condition to closing, and we may not sell all or any of these securities offered pursuant to this prospectus; as a result,
we may receive significantly less in net proceeds. We will only receive additional proceeds from the exercise of the Series A Warrants
issuable in connection with this offering if Warrant Stockholder Approval is obtained and such Series A Warrants are exercised at their
exercise price of $ and the holders of such Series A Warrants pay the exercise
price in cash upon such exercise. We will only receive additional proceeds from the exercise of the Series B Warrants issuable in connection
with this offering if Warrant Stockholder Approval is obtained and such Series B Warrants are exercised at their exercise price of $
and the holders of such Series B Warrants pay the exercise price in cash upon such exercise. Such proceeds with respect to the Series
A Warrants and Series B Warrants could not exceed, in the aggregate, $ million.
The foregoing discussion
assumes no sale of Pre-Funded Warrants.
We intend to use the net
proceeds from this offering for the further development of our Therapeutic DNA Production Services and MDx Testing Services, as well
as general corporate purposes, which may include research and development expenses, capital expenditures, working capital and general
and administrative expenses, and potential acquisitions of or investments in businesses, products and technologies that complement our
business, although we have no present commitments or agreements to make any such acquisitions or investments as of the date of this prospectus.
Pending these uses, we intend to invest the funds in short-term, investment grade, interest-bearing securities. It is possible that,
pending their use, we may invest the net proceeds in a way that does not yield a favorable, or any, return for us.
Our expected use of net proceeds
from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus,
we cannot currently allocate specific percentages of the net proceeds that we may use for the purposes specified above, and we cannot
predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering, or the amounts
that we will actually spend on the uses set forth above. The amounts and timing of our actual use of the net proceeds will vary depending
on numerous factors, including our ability to obtain additional financing. We may find it necessary or advisable to use the net proceeds
for other purposes, and our management will have broad discretion in the application of the net proceeds, and investors will be relying
on our judgment regarding the application of the net proceeds from this offering. See “Risk Factors” for a discussion of
certain risks that may affect our intended use of the net proceeds from this offering.
Market
Price of our Common Stock and Related Stockholder Matters
Market Information
Our common stock is listed
on The Nasdaq Stock Market under the symbol “APDN.” A description of the common stock that we are issuing in this offering
is set forth under the heading “Description of Securities” beginning on page 19 of this prospectus. We do not intend
to apply for the listing of the Pre-Funded Warrants or Series Warrants that are part of this offering on any national securities exchange.
The last reported sale
price for our common stock on May 23, 2024 was $2.03 per share.
Holders
As of May 23, 2024, we had
269 record holders of our common stock, and no preferred stock issued and outstanding. The number of record holders was determined from
the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various
security brokers, dealers, and registered clearing agencies. The transfer agent of our common stock and publicly traded warrants is Equiniti
Trust Company, LLC, located at 90 Park Avenue, New York, NY 10016.
Dividend Policy
We have never declared or
paid any cash dividends on our common stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future.
In addition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent
upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant.
Capitalization
The following table sets
forth our capitalization as of March 31, 2024:
|
● |
on an actual basis; and |
|
● |
on a pro forma, as adjusted basis, after giving effect to the application
of the net proceeds of this offering and after deducting the Placement Agent fees and estimated offering expenses payable by us. |
The information set forth
in the following table should be read in conjunction with and is qualified in its entirety by “Use of Proceeds” above, as
well as our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial
statements and the notes to those financial statements incorporated by reference in this prospectus. See “The Offering” in
this prospectus for information relating to the expected number of shares of our common stock to be outstanding after this offering.
Our capitalization following the closing of this offering will be adjusted based on the actual public offering price and other terms
of this offering determined at pricing.
|
|
As of March 31, 2024 |
|
|
|
Actual |
|
|
Pro
Forma, As
Adjusted for
this Offering* |
|
Cash and cash equivalents |
|
$ |
3,149,640 |
|
|
$ |
13,982,063 |
|
Stockholders’ (Deficit) Equity: |
|
|
|
|
|
|
|
|
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0- shares issued
and outstanding as of March 31, 2024 |
|
|
- |
|
|
|
- |
|
Series A Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0-
shares outstanding as of March 31, 2024 |
|
|
- |
|
|
|
- |
|
Series B Preferred stock, par value $0.001 per share; 10,000,000 shares authorized; -0-
shares outstanding as of March 31, 2024 |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value per share; 200,000,000 shares authorized; 863,068 shares issued
and outstanding as of March 31, 2024 |
|
|
864 |
|
|
|
6,775 |
|
Additional paid-in capital |
|
|
308,206,796 |
|
|
|
319,033,308 |
|
Accumulated deficit |
|
|
(308,255,808 |
) |
|
|
(308,255,808 |
) |
Total Stockholders’ (Deficit) Equity |
|
$ |
(48,148 |
) |
|
$ |
10,784,275 |
|
*Assumes
a $12,000,000 capital raise with net cash proceeds of approximately $10,832,400; number of
shares derived by dividing closing stock price on May 23, 2024 of $2.03. Each $1.00 increase
(decrease) in the assumed public offering price per share would increase (decrease) the amount
of cash and cash equivalents, working capital, total assets, and total stockholders’
equity by $5,911,330, assuming the number of securities offered by us, as set forth on the
cover page of this prospectus, remains the same, and after deducting the Placement Agent
fee and estimated offering expenses payable by us. We may also increase or decrease the number
of securities to be issued in this offering. Each increase (decrease) of 1.0 million Units
offered by us would increase (decrease) the as adjusted amount of cash and cash equivalents,
working capital, total assets and total stockholders’ equity by approximately $2,030,000,
assuming the assumed public offering price remains the same, and after deducting the Placement
Agent fee and estimated offering expenses payable by us.
The discussion and table
above are based on the 863,068 shares of our common stock outstanding as of March 31, 2024, and excludes the following:
● |
109,363
shares of common stock issuable upon exercise of options outstanding as of March 31, 2024, with a weighted average exercise price
of $184.60 per share; |
● |
945,867
shares of common stock issuable upon exercise of warrants outstanding as of March 31, 2024, with a weighted average exercise price
of $18.20 per share; |
● |
267,355
shares of common stock reserved for future grant or issuance as of March 31, 2024, under our equity incentive plan; and |
Dilution
If you invest in our common
stock and/or Pre-Funded Warrants in this offering, your ownership interest will be diluted immediately to the extent of the difference
between the assumed public offering price per share of our common stock underlying the Units and the as adjusted net tangible book value
per share of our common stock after this offering. Our net tangible book value as of March 31, 2024 was approximately $2.5 million, or
$2.86 per share of our common stock. Net tangible book value per share is equal to our total tangible assets less our total liabilities,
divided by the number of shares of our outstanding common stock.
After
giving effect to the sale of Units in this offering at the assumed public offering price
of $2.03 per share (the last reported sale price of our common stock on The Nasdaq Capital
Market on May 23, 2024), and after deducting the Placement Agent fee and estimated offering
expenses payable by us, and excluding the proceeds, if any, from the cash exercise of the
Series Warrants issued in this offering and assuming no Pre-Funded Warrants are issued in
this offering, our as adjusted net tangible book value as of March 31, 2024 would have been
$13,304,063, or $1.96 per share of common stock. This represents an immediate decrease in
as adjusted net tangible book value of $0.90 per share to our existing stockholders, and
an immediate dilution of $0.07 per share to new investors purchasing securities in this offering
at the assumed public offering price. The final public offering price will be determined
between us, the Co-Placement Agents and investors in the offering and may be at a discount
to the current market price. Therefore, the assumed public offering price used throughout
this prospectus may not be indicative of the final public offering price.
The following table illustrates this dilution
on a per share basis:
Assumed public offering price per share and accompanying Series Warrants |
|
|
|
|
|
$ |
2.03 |
|
Historical net tangible book value per share as of March 31, 2024 |
|
$ |
2.86 |
|
|
|
|
|
Pro forma decrease in net tangible book value per share attributable to investors in this offering |
|
$ |
(0.90 |
) |
|
|
|
|
As adjusted net tangible book value per share after giving effect to this offering |
|
|
|
|
|
$ |
1.96 |
|
Dilution per share to investors participating in this offering |
|
|
|
|
|
$ |
0.07 |
|
A $1.00 increase in the
assumed public offering price of $2.03 per share, which is the last reported sale price of our common stock on The Nasdaq Capital Market
on May 23, 2024, would result in a decrease in our as adjusted net tangible book value per share after this offering by approximately
$0.10 and the dilution per share to new investors purchasing shares in this offering by $0.27 assuming the number of securities offered
by us as set forth on the cover page of this prospectus remains the same, and after deducting the Placement Agent fee and estimated
offering expenses payable by us. A $1.00 decrease in the assumed public offering price of $2.03 per share, which is the last reported
sale price of our common stock on The Nasdaq Capital Market on May 23, 2024, would result in a decrease in our as adjusted net tangible
book value per share after this offering by approximately $1.80 and the dilution per share to new investors purchasing shares in this
offering by $0.03 assuming the number of securities offered by us as set forth on the cover page of this prospectus remains the
same, and after the Placement Agent fee and estimated offering expenses payable by us. We may also increase or decrease the number of
securities to be issued in this offering. Each increase (decrease) of 1.0 million Units offered by us would increase (decrease) our as
adjusted net tangible book value per share and the dilution per share to new investors purchasing securities in this offering by $0.08
assuming that the assumed public offering price remains the same, and after deducting the Placement Agent fee and estimated offering
expenses payable by us. The information discussed above is illustrative only and will be adjusted based on the actual public offering
price and other terms of this offering as determined between us and the Co-Placement Agents at pricing.
The foregoing discussion
and table do not take into account further dilution to investors in this offering that could occur upon the exercise of outstanding options
and warrants, including the Pre-Funded Warrants and Series Warrants offered in this offering, having a per share exercise price less
than the public offering price per share in this offering. The foregoing discussion and table also does not take into account any “alternative
cashless exercises” of the Series B Warrants, pursuant to which the aggregate number of shares issuable in such alternative cashless
exercise would be equal to the number of Series B Warrants being exercised multiplied by three.
The discussion and table above are based on the
863,068 shares of our common stock outstanding as of March 31, 2024, and excludes the following:
● |
109,363
shares of common stock issuable upon exercise of options outstanding as of March 31, 2024, with a weighted average exercise price
of $184.60 per share; |
● |
945,867
shares of common stock issuable upon exercise of warrants outstanding as of March 31, 2024, with a weighted average exercise price
of $18.20 per share; |
● |
267,355
shares of common stock reserved for future grant or issuance as of March 31, 2024, under our equity incentive plan; and |
The discussion and table
above assume no sale of Pre-Funded Warrants, which, if sold, would reduce the number of shares of common stock that we are offering on
a one-for-one basis.
To the extent that our outstanding
options or warrants are exercised, new options are issued under our equity incentive plan, or additional shares of our common stock are
issued in the future, there may be further dilution to investors participating in this offering. In addition, we may choose to raise
additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our
current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance
of these securities could result in further dilution to our stockholders.
Description
of Securities
The following description
of our common stock, Pre-Funded Warrants and accompanying Series Warrants underlying the Units summarizes the material terms and provisions
of the securities that we may issue in connection with this offering. It may not contain all the information that is important to you.
For the complete terms of our common stock, please refer to our Certificate of Incorporation and our by-laws (“By-Laws”),
which are filed as exhibits to the registration statement which includes this prospectus. See “Where You Can Find More Information”
and “Incorporation by Reference.” The Delaware General Corporation Law (“DGCL”) may also affect the terms of
these securities. The summary below is qualified in its entirety by reference to our Certificate of Incorporation and By-Laws, each as
in effect at the time of any offering of securities under this prospectus.
As of May 23, 2024,
our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.001 per share, of which 984,728 shares were
issued and outstanding, and 10,000,000 shares of preferred stock, par value $0.001 per share, of which no shares were issued and outstanding.
In addition, as of May 23, 2024, there were 109,363 shares of common stock issuable upon exercise of options outstanding, 825,067 shares
of common stock issuable upon exercise of warrants outstanding, and 267,355 shares of common stock reserved for future grant or issuance
The authorized and unissued shares of common stock and preferred stock are available for issuance without further action by our stockholders.
Common Stock
Each stockholder of our common
stock is entitled to one vote for each share issued and outstanding held on all matters to be voted upon by the stockholders. Our shares
of common stock have no preemptive, conversion, or redemption rights. The rights, preferences, and privileges of the holders of common
stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock. Upon the
sale of substantially all of our stock or assets or dissolution, liquidation or winding up, and after all liquidation preferences payable
to any series of preferred stock entitled thereto have been satisfied, our remaining assets shall be distributed to all holders of common
stock and any similarly situated stockholders who are not entitled to any liquidation preference or, if there be an insufficient amount
to pay all such stockholders, then ratably among such holders. All of our issued and outstanding shares of common stock are fully paid
and non-assessable. The holders of shares of our common stock will be entitled to such cash dividends as may be declared from time to
time by our Board of Directors from funds available therefor.
The shares of common stock
offered by this prospectus, when issued and paid for, will also be fully paid and non-assessable.
Our common stock is listed
on The Nasdaq Capital Market under the symbol “APDN.” Equiniti Trust Company, LLC, located at 90 Park Avenue, New York, NY
10016, is the transfer agent and registrar for our common stock.
Preferred Stock
Our Certificate of Incorporation
provides that our Board of Directors may, by resolution, designate classes of preferred stock in the future. The designated series of
preferred stock shall have such powers, designations, preferences and relative, participation or optional or other special rights and
qualifications, limitations or restrictions as shall be expressed in the resolution adopted by the Board of Directors. Once designated
by our Board of Directors, each series of preferred stock will have specific financial and other terms described in the documents that
govern the preferred stock, which include our Certificate of Incorporation and any certificates of designation that our Board of Directors
may adopt. Prior to the issuance of shares of each series of preferred stock, the Board of Directors is required by the DGCL and our
Certificate of Incorporation to adopt resolutions and file a certificate of designations with the Secretary of State of the State of
Delaware. The certificate of designations fixes for each class or series the designations, powers, preferences, rights, qualifications,
limitations and restrictions, including, but not limited to, some or all of the following:
|
● |
the number of shares constituting that series and the distinctive designation
of that series, which number may be increased or decreased (but not below the number of shares then outstanding) from time to time
by action of the Board of Directors; |
|
● |
the dividend rate and the manner and frequency of payment of dividends
on the shares of that series, whether dividends will be cumulative, and, if so, from which date; |
|
● |
whether that series will have voting rights, in addition to any voting
rights provided by law, and, if so, the terms of such voting rights; |
|
● |
whether that series will have conversion privileges, and, if so, the
terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of
Directors may determine; |
|
● |
whether or not the shares of that series will be redeemable, and, if
so, the terms and conditions of such redemption; |
|
● |
whether that series will have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of such sinking fund; |
|
● |
whether or not the shares of the series will have priority over or
be on a parity with or be junior to the shares of any other series or class in any respect; |
|
● |
the rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the corporation, and the relative rights or priority, if any, of payment of
shares of that series; and |
|
● |
any other relative rights, preferences and limitations of that series. |
Although our Board of Directors
has no intention at the present time of doing so, it could authorize the issuance of a series of preferred stock that could, depending
on the terms of such series, impede the completion of a merger, tender offer or other takeover attempt.
Warrant Stockholder Approval
Under Nasdaq listing rules,
the exercisability of the Series Warrants will not be effective until, and unless, we obtain the approval of our stockholders. While
we intend to promptly seek stockholder approval, and in no event later than 90 days following the closing of this offering, there is
no guarantee that the Warrant Stockholder Approval will ever be obtained. If we are unable to obtain the Warrant Stockholder Approval,
the Series Warrants will not be able to be exercised and will therefore have no value. In addition, we will incur substantial costs,
and management will devote substantial time and attention, in attempting to obtain the Warrant Stockholder Approval.
Series Warrants
The following summary of certain terms and
provisions of the Series Warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by,
the provisions of the Series Warrants, the forms of which are filed as exhibits to the registration statement of which this prospectus
forms a part. Prospective investors should carefully review the terms and provisions of the forms of the Series Warrants for complete
descriptions of the terms and conditions of the Series Warrants.
The Series A Warrants
and Series B Warrants will become exercisable beginning on the date of the Warrant Stockholder Approval and at any time up to the date
that is five years from the Warrant Stockholder Approval date (with respect to the Series A Warrants) or one year from the Warrant Stockholder
Approval date (with respect to the Series B Warrants). If Warrant Stockholder Approval is obtained, the Series A Warrants and Series
B Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice
and by payment in full in immediately available funds for the number of shares of common stock purchased upon such exercise. If a registration
statement registering the issuance of the shares of common stock underlying the Series A Warrants or Series B Warrants under the Securities
Act is not effective, the holder may elect to exercise the Series A Warrants or Series B Warrants through a cashless exercise, in which
case the holder would receive upon such exercise the net number of shares of common stock determined according to the formula set forth
in the warrant. No fractional shares of common stock will be issued in connection with the exercise of Series A Warrants
or Series B Warrants. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied
by the exercise price.
A holder may also effect
an “alternative cashless exercise” at any time while the Series B Warrants are exercisable and outstanding. In such event,
the aggregate number of shares issuable in such alternative cashless exercise will be equal to the number of Series B Warrants being
exercised multiplied by three.
A holder will not have the
right to exercise any portion of the Series A Warrants or Series B Warrants if the holder (together with its affiliates) would beneficially
own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such
percentage ownership is determined in accordance with the terms of the Series A Warrants and Series B Warrants. However, any holder may
increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall
not be effective until 61 days following notice from the holder to us.
The exercise price per
whole share of common stock purchasable upon exercise of the Series A Warrants is $ , and the exercise price per whole share of common
stock purchasable upon exercise of the Series B Warrants is $ . The exercise price of the Series A Warrants and Series B Warrants
is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications
or similar events affecting our common stock and also upon any distributions of assets, including cash, stock or other property to our
stockholders.
In addition, and subject
to certain exemptions, if we sell, enter into an agreement to sell, or grant any option to purchase, or sell, enter into an agreement
to sell, or grant any right to reprice (excluding Exempt Issuances, as defined in the Placement Agency Agreement), or otherwise dispose
of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any shares of common stock, at an effective
price per share less than the exercise price of the Series A Warrants then in effect, the exercise price of the Series A Warrants will
be reduced to the lower of such price or the lowest volume weighted average price (VWAP) during the five consecutive trading days immediately
following such dilutive issuance or announcement thereof, and the number of shares issuable upon exercise will be proportionately adjusted
such that the aggregate exercise price will remain unchanged.
If at any time on or after
the date of issuance there occurs any share split, share dividend, share combination recapitalization or other similar transaction involving
our common stock and the lowest daily volume weighted average price during the period commencing five consecutive trading days immediately
preceding and the five consecutive trading days commencing on the date of such event is less than the exercise price of the Series A
Warrants or Series B Warrants then in effect, then the exercise price of the Series A Warrants and Series B Warrants will be reduced
to the lowest daily volume weighted average price during such period and the number of shares issuable upon exercise will be proportionately
adjusted such that the aggregate price will remain unchanged.
Subject to applicable laws,
the Series A Warrants and Series B Warrants may be offered for sale, sold, transferred or assigned without our consent.
In
the case of certain fundamental transactions affecting the Company, a holder of Series Warrants, upon exercise of such Series
Warrants after such fundamental transaction, will have the right to receive, in lieu of shares of the Company’s common stock, the
same amount and kind of securities, cash or property that such holder would have been entitled to receive upon the occurrence of the
fundamental transaction, had the Series Warrants been exercised immediately prior to such fundamental transaction. In lieu of such consideration,
a holder of Series Warrants may instead elect to receive a cash payment based upon the Black-Scholes value of their Series Warrants.
Except as otherwise provided
in the Series A Warrants or Series B Warrants or by virtue of such holder’s ownership of shares of our common stock, the holder
of Series A Warrants or Series B Warrants does not have the rights or privileges of a holder of our common stock, including any voting
rights, until the holder exercises the Series A Warrant or Series B Warrants.
If at any time the Series
A Warrants or Series B Warrants are outstanding and the Company receives notice from the Nasdaq Listing Qualifications Department that
the Company is failing to satisfy the $1.00 minimum bid requirement, then the Company has covenanted to take all necessary steps to obtain
the necessary consents and approvals to undertake a reverse stock split after such Trigger Date and shall, prior to the effectiveness
of any delisting notice issued by Nasdaq, effect such reverse stock split.
The Series A Warrants and
the Series B Warrants are governed by New York law.
We do not intend to list
the Series Warrants on any securities exchange or nationally recognized trading system. Except as otherwise provided in the Series Warrants
or by virtue of such holder’s ownership of shares of our common stock, the holders of the Series Warrants do not have the rights
or privileges of holders of our common stock, including any voting rights, until they exercise their Series Warrants.
In addition, we have agreed
to hold a special meeting of shareholders (which may also be at the annual meeting of shareholders) at the earliest practicable date
after the date hereof, but in no event later than ninety days after the closing of the offering, in order to obtain Warrant Stockholder
Approval.
Pre-Funded Warrants
The following summary
of certain terms and provisions of Pre-Funded Warrants that are being offered hereby is not complete and is subject to, and qualified
in its entirety by, the provisions of the Pre-Funded Warrant, the form of which is filed as an exhibit to the registration statement
of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the form of Pre-Funded
Warrant for a complete description of the terms and conditions of the Pre-Funded Warrants.
Each Pre-Funded Warrant offered
hereby will have an initial exercise price per share equal to $0.0001. The Pre-Funded Warrants will be immediately exercisable and may
be exercised at any time until the Pre-Funded Warrants are exercised in full. The exercise price and number of shares of common stock
issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar
events affecting our common stock and the exercise price. The Pre-Funded Warrants will be issued separately from the accompanying Series
Warrants and may be transferred separately immediately thereafter.
The Pre-Funded Warrants will
be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by
payment in full for the number of shares of our common stock purchased upon such exercise (except in the case of a cashless exercise
as discussed below). A holder (together with its affiliates) may not exercise any portion of the Pre-Funded Warrant to the extent that
the holder would own more than 4.99% (or, at the election of the holder, 9.99%) of the outstanding common stock immediately after exercise,
except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership of outstanding
stock after exercising the holder’s Pre-Funded Warrants up to 9.99 % of the number of shares of our common stock outstanding immediately
after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants.
Purchasers of Pre-Funded Warrants in this offering may also elect prior to the issuance of the Pre-Funded Warrants to have the initial
exercise limitation set at 9.99% of our outstanding common stock. No fractional shares of common stock will be issued in connection with
the exercise of a Pre-Funded Warrant. In lieu of fractional shares, we will round up to the next whole share.
At any time, in lieu of making
the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may
elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according
to a formula set forth in the Pre-Funded Warrants.
Subject to applicable laws,
a Pre-Funded Warrant may be transferred at the option of the holder upon surrender of the Pre-Funded Warrant to us together with the
appropriate instruments of transfer.
We do not intend to list
the Pre-Funded Warrants on any securities exchange or nationally recognized trading system. Except as otherwise provided in the Pre-Funded
Warrants or by virtue of such holder’s ownership of shares of our common stock, the holders of the Pre-Funded Warrants do not have
the rights or privileges of holders of our common stock, including any voting rights, until they exercise their Pre-Funded Warrants.
Possible Anti-Takeover Effects of Delaware Law and our Certificate
of Incorporation and By-Laws
Our Certificate of Incorporation
contains provisions that could make it more difficult to acquire control of our company by means of a tender offer, open market purchases,
a proxy contest or otherwise. A description of these provisions is set forth below.
Anti-Takeover Effects of Delaware Law
Companies incorporated in
Delaware are subject to the provisions of Section 203 of the DGCL, or Section 203, unless the corporation has “opted
out” of these provisions with an express provision in its original certificate of incorporation or an express provision in its
certificate of incorporation or by-laws resulting from a stockholders’ amendment approved by at least a majority of the outstanding
voting shares. We have opted out of Section 203 with an express provision in our Certificate of Incorporation. Therefore, the anti-takeover
effects of Section 203 do not apply to us.
In general, Section 203
prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested stockholder”
for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is
approved in a prescribed manner. A “business combination” includes, among other things, a merger, asset or stock sale or
other transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person
who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder
status, 15% or more of the corporation’s voting stock.
Under Section 203, a
business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:
before the stockholder became interested, the Board of Directors approved either the business combination or the transaction which resulted
in the stockholder becoming an interested stockholder; upon consummation of the transaction which resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors
and also officers, and employee stock plans, in some instances; or at or after the time the stockholder became interested, the business
combination was approved by the Board of Directors of the corporation and authorized at an annual or special meeting of the stockholders
by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
Election and Removal of Directors
Directors will be elected
by a plurality of the voting power of the shares present in person or represented by proxy at the stockholders meeting and entitled to
vote on the election of directors. Our Certificate of Incorporation does not provide for a classified Board of Directors or for cumulative
voting in the election of directors. Under Article VIII of the Certificate of Incorporation and Section 3.13 of the By-Laws,
directors may be removed by the stockholders of the Company only for cause, and in such case only by the affirmative vote of the holders
of at least a majority of the voting power of the issued and outstanding shares of capital stock of the Company then entitled to vote
in the election of directors. On December 21, 2015, the Court of Chancery of the State of Delaware invalidated as a matter of law
certain provisions of the certificate of incorporation and bylaws of VAALCO Energy, Inc. (“VAALCO”), a Delaware corporation,
that permitted the removal of VAALCO’s directors by its stockholders only for cause. In In re VAALCO Energy, Inc.
Stockholder Litigation, Consol. C.A. No. 11775-VCL (Del. Ch. Dec. 21, 2015), the Court ruled from the bench to hold
that, in the absence of a classified Board of Directors or cumulative voting, VAALCO’s “only for-cause” director removal
provisions conflict with Section 141(k) of the DGCL and are therefore invalid. Because the Company’s Certificate of Incorporation
and By-Laws contain similar “only for-cause” director removal provisions and the Company does not have a classified Board
of Directors or cumulative voting, the Company will not attempt to enforce the foregoing “only for-cause” director removal
provision in light of the recent VAALCO decision.
Size of Board and Vacancies
The authorized number of
directors may be determined by the Board of Directors, provided the board shall consist of at least one (1) member. No decrease
in the number of directors constituting the board shall shorten the term of any incumbent director.
Vacancies occurring on our
Board of Directors for any reason and newly created directorships resulting from an increase in the authorized number of directors may
be filled only by a vote of a majority of the remaining members of the Board of Directors, although less than a quorum, or by a sole
remaining director, at any meeting of the Board of Directors.
Amendment
The Certificate of Incorporation
may be amended in the manner prescribed by the DGCL. The Board of Directors is authorized to adopt, amend, alter or repeal the By-Laws
by the affirmative vote of at least a majority of the Board of Directors then in office. No amendment to the Certificate of Incorporation
or the By-Laws may adversely affect any indemnification right or protection of any director, officer, employee or other agent existing
at the time of such amendment, repeal or adoption of an inconsistent provision for or in respect of any act, omission or other matter
occurring, or any action or proceeding accruing or arising prior to such amendment, repeal or adoption of an inconsistent provision.
Authorized but Unissued Shares of Common Stock
and of Preferred Stock
We believe that the availability
of the “Blank Check” preferred stock under our Certificate of Incorporation provides us with flexibility in addressing corporate
issues that may arise. The Board of Directors has the power, subject to applicable law, to issue series of preferred stock that could,
depending on the terms of the series, impede the completion of a merger, tender offer or other takeover attempt that some, or a majority,
of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over
the then prevailing market price of the stock. Our Board of Directors may issue preferred stock with voting rights or conversion rights
that, if exercised, could adversely affect the voting power of the holders of common stock.
The authorized shares of
preferred stock, as well as shares of common stock, will be available for issuance without further action by our stockholders, unless
action is required by applicable law or the rules of any stock exchange on which our securities may be listed. Having these authorized
shares available for issuance allows us to issue shares without the expense and delay of a special stockholders’ meeting. We may
use additional shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions
and as employee compensation. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult
or discourage an attempt to obtain control of our company by means of a proxy contest, tender offer, merger or otherwise. The above provisions
may deter a hostile takeover or delay a change in control or management of our company.
Advance Notice Procedure
Our By-Laws provide an advance
notice procedure for stockholders to nominate director candidates for election or to bring business before an annual meeting of stockholders.
Only persons nominated by, or at the direction of, our Board of Directors or by a stockholder of record who has given proper and timely
notice to our secretary prior to the meeting at which such stockholder is entitled to vote and appears, will be eligible for election
as a director. In addition, any proposed business other than the nomination of persons for election to our Board of Directors must constitute
a proper matter for stockholder action pursuant to a proper notice of meeting delivered to us. For notice to be timely, it must generally
be delivered to our secretary not less than 90 nor more than 120 calendar days prior to the first anniversary of the previous year’s
annual meeting (or if the date of the annual meeting is more than 30 calendar days before or more than 60 calendar days after the anniversary
date of the previous year’s annual meeting, not earlier than the 120th calendar day prior to such meeting and not later than either
the 90th calendar day prior to such meeting or the 10th calendar day after public disclosure of the date of such meeting is first made
by us). These advance notice provisions may have the effect of precluding the conduct of certain business at a meeting if the proper
procedures are not followed or may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own
slate of directors or otherwise attempt to obtain control of us.
Special Meetings of Stockholders
Our By-Laws provide that special meetings of
stockholders may be called only by the Chairman of the Board, the Chief Executive Officer, or the Board of Directors pursuant to a resolution
adopted by a majority of the board.
PLAN
OF DISTRIBUTION
Pursuant to a placement agency
agreement, dated as of [●], 2024, we have engaged Craig-Hallum and Laidlaw, or the Co-Placement Agents, to act as our exclusive
placement agents to solicit offers to purchase the Units offered by this prospectus on a best efforts basis. The placement agency agreement
does not give rise to any commitment by the Co-Placement Agents to purchase any of our securities, and the Co-Placement Agents will have
no authority to bind us by virtue of the placement agency agreement. The Co-Placement Agents are not purchasing or selling any such securities,
nor is it required to arrange for the purchase and sale of any specific number or dollar amount of such securities, other than to use
their “ best efforts” to arrange for the sale of such securities by us. Therefore, we may not sell all, or any, of the Units
being offered. The terms of this offering were subject to market conditions and negotiations between us, the Co-Placement Agents and
prospective investors. This is a best efforts offering and there is no minimum number of securities or minimum aggregate amount of proceeds
that is a condition to the closing of this offering. The Co-Placement Agents may retain sub-agents and selected dealers in connection
with this offering. This offering will terminate on June 30, 2024, unless we decide to terminate
the offering (which we may do at any time in our discretion) prior to that date. We will have one closing for all the securities purchased
in this offering. The public offering price per Unit will be fixed for the duration of this offering.
Delivery of the securities
offered hereby is expected to occur on or about
, 2024, subject to satisfaction of certain customary closing conditions.
We have agreed to pay
the Co-Placement Agents an aggregate fee equal to 7.0% of the gross proceeds received in the offering and
will issue to the Co-Placement Agents, or their respective designees, Placement Agent Warrants to purchase up to 295,567 shares of common
stock (which equals 5.0% of the number of Units being offered) on substantially the same terms as the Series Warrants,
except that the Placement Agent Warrants will have an expiration date of five years from the commencement of sales in this offering.
The Placement Agent Warrants and the underlying shares of common stock are being registered on this prospectus. In addition, we have
agreed to reimburse the Co-Placement Agents for their legal fees, costs and expenses in connection with this offering in an amount up
to $110,000.
We estimate the total
expenses of this offering paid or payable by us, exclusive of the Co-Placement Agents’ cash fees and expenses, will be approximately
$217,577. After deducting the fees due to the Co-Placement Agents and our estimated expenses in connection with this offering, we expect
the net proceeds from this offering will be approximately $10,832,400 based on an assumed public offering price of $2.03, which was
the last reported sales price of our common stock on The Nasdaq Capital Market on May 23, 2024.
The following table shows
the per share and total cash fees we will pay to the Co-Placement Agents in connection with the sale of the securities pursuant to this
prospectus.
| |
Per
Share and Series Warrants | | |
Per
Pre-Funded Warrant and Series Warrants | | |
Total | |
Public offering price | |
$ | | | |
$ | | | |
$ | | |
Placement Agent fees | |
| | | |
| | | |
| | |
Proceeds, before expenses, to us | |
$ | | | |
$ | | | |
$ | | |
Indemnification
We have agreed to indemnify
the Co-Placement Agents against certain liabilities, including liabilities under the Securities Act and liabilities arising from breaches
of representations, warranties and covenants contained in our placement agency agreement with the Co-Placement Agents.
Determination of Public Offering Price and Warrant Exercise Price
Our common stock is currently
traded on The Nasdaq Capital Market under the symbol “APDN.” On May 23, 2024, the closing price of our common stock was $2.03
per share.
The final public offering
price of the Units and the exercise price of the Series Warrants that we are offering, will be negotiated between us, the Co-Placement
Agents and the investors in this offering. We believe that the market price of our common stock at the date of this prospectus is not
the appropriate public offering price for the shares of our common stock because the market price is affected by a number of factors.
The principal factors considered by us and the Co-Placement Agents in determining the final public offering price of the Units we are
offering, as well as the exercise price of the Series Warrants that we are offering, included:
| ● | the
recent trading history of our common stock on The Nasdaq Capital Market, including market
prices and trading volume of our common stock; |
| ● | the
current market price of our common stock on The Nasdaq Capital Market; |
| ● | the
recent market prices of, and demand for, publicly traded common stock of generally comparable
companies; |
| ● | the
information set forth or incorporated by reference in this prospectus and otherwise available
to the Co-Placement Agents; |
| ● | our
past and present financial performance and an assessment of our management; |
| ● | our
prospects for future earnings and the present state of our products; |
| ● | the
current status of competitive products and product developments by our competitors; |
| ● | our
history and prospects, and the history and prospects of the industry in which we compete; |
| ● | the
general condition of the securities markets at the time of this offering; and |
| ● | other
factors deemed relevant by the Co-Placement Agents and us, including a to be negotiated discount
to the trading price. |
Tail Fees
We
have also agreed to pay Craig-Hallum a cash fee equal to 7.0% of the total gross proceeds received by us from any investor who was contacted
by Craig-Hallum, if such investor provides us with capital in any offering or other financing or capital raising transaction during the
term of the engagement with Craig-Hallum or within six months following the expiration or termination of the engagement with Craig-Hallum.
Lock-up Agreements
Each of our officers and
directors have agreed to be subject to a lock-up period of 90 days following the date of closing of the offering pursuant to this prospectus.
This means that, during the applicable lock-up period, such persons may not offer for sale, contract to sell, sell, distribute, grant
any option, right or warrant to purchase, pledge, hypothecate or otherwise dispose of, directly or indirectly, any of our shares of common
stock or any securities convertible into, or exercisable or exchangeable for, shares of common stock, subject to customary exceptions.
We have agreed to be subject
to a lock-up period of one year following the date of closing of the offering pursuant to this prospectus. This means that, during the
applicable lock-up period, we may not offer for sale, contract to sell, sell, distribute, grant any option, right or warrant to purchase,
pledge, hypothecate or otherwise dispose of, directly or indirectly, any of our shares of common stock or any securities convertible
into, or exercisable or exchangeable for, shares of common stock, subject to customary exceptions. However, this lock-up period shall
terminate upon the earlier of 90 days after (i) the closing of this offering if the Warrant Stockholder Approval is obtained prior to
90 days after the closing of this offering and (ii) the date that Warrant Stockholder Approval is obtained.
We have also agreed, subject to certain exceptions,
to a restriction on the issuance of any variable priced securities for 180 days after the closing of this offering, although we will
be permitted to issue stock options or stock awards to directors, officers and employees under our existing plans. Craig-Hallum may waive
the terms of these lock-up agreements in its sole discretion and without notice.
Right of First Refusal
We
have granted Craig-Hallum a right of first refusal, for a period commencing after the closing of this offering and ending on the date
on which the Series B Warrants are no longer outstanding, to act as sole bookrunner, exclusive placement agent or exclusive sales agent
in connection with any financing in which we decide to raise funds by means of a solicitation of any of the Series B Warrants.
Other Relationships
From time to time, the Co-Placement
Agents may provide in the future various advisory, investment and commercial banking and other services to us in the ordinary course
of business, for which they may receive customary fees and commissions. However, except as disclosed in this prospectus, we have no present
arrangements with the Co-Placement Agents for any further services.
Regulation M Compliance
The Co-Placement Agents may
be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it
and any profit realized on the sale of our securities offered hereby by it while acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. The Co-Placement Agents will be required to comply with the requirements of the Securities
Act and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations
may limit the timing of purchases and sales of our securities by the Co-Placement Agents. Under these rules and regulations, the Co-Placement
Agents may not (i) engage in any stabilization activity in connection with our securities; and (ii) bid for or purchase any
of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act,
until they have completed their participation in the distribution.
Electronic Distribution
This prospectus in electronic
format may be made available on websites or through other online services maintained by the Co-Placement Agents, or by their affiliates.
Other than this prospectus in electronic format, the information on the Co-Placement Agents’ websites and any information contained
in any other website maintained by the Co-Placement Agents is not part of this prospectus or the registration statement of which this
prospectus forms a part, has not been approved and/or endorsed by us or the Co-Placement Agents in their capacity as placement agent,
and should not be relied upon by investors.
Experts
Marcum LLP, independent registered
public accounting firm, has audited our consolidated financial statements included in our Annual Report on Form 10-K for the years
ended September 30, 2023 and 2022, as set forth in their report, which is incorporated by reference in this prospectus and elsewhere
in this registration statement. Marcum LLP’s report includes an explanatory paragraph relating to our ability to continue as a
going concern. Our consolidated financial statements are incorporated by reference in reliance on Marcum LLP’s report, given on
their authority as experts in accounting and auditing.
Legal
Matters
Certain legal matters relating
to the issuance of the securities offered by this prospectus will be passed upon for us by McDermott Will & Emery LLP, New York,
New York. Certain legal matters in connection with this offering will be passed upon for the Co-Placement Agents by Ellenoff Grossman &
Schole LLP, New York, New York.
Where
you can find more information
We have filed with the SEC
a registration statement on Form S-1 under the Securities Act with respect to the securities offered by this prospectus. This prospectus,
which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement,
as permitted by the rules and regulations of the SEC. For further information with respect to us and our securities, we refer you
to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus
concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed
as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this
prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The SEC also maintains
an Internet website that contains the registration statement of which this prospectus forms a part, as well as the exhibits thereto.
These documents, along with future reports, proxy statements and other information about us, are available at the SEC’s website,
www.sec.gov.
We are subject to the information
and reporting requirements of the Exchange Act, and, in accordance with this law, file periodic reports and other information with the
SEC. These periodic reports and other information are available at the SEC’s website, www.sec.gov. We also maintain a website
at http://www.adnas.com. You may access these materials free of charge as soon as reasonably practicable after they are electronically
filed with, or furnished to, the SEC. Information contained on our website is not a part of this prospectus, and the inclusion of our
website address in this prospectus is an inactive textual reference only.
MATERIAL
CHANGES
None.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE.
The
SEC allows us to “incorporate by reference” into this prospectus the information in documents we file with it, which means
that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information.
Any statement contained in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained in or omitted from this prospectus or any accompanying
prospectus supplement, or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
We
incorporate by reference the documents listed below and any future documents that we file with the SEC (excluding any portion of such
documents that are furnished and not filed with the SEC) under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (1) on
and after the date of the initial filing of the registration statement of which this prospectus is a part prior to the effectiveness
of the registration statement, (2) prior to the effectiveness of the registration statement of which this prospectus is a part,
and (3) after the date of effectiveness of this prospectus until the offering of the underlying securities is terminated; provided,
however, we are not incorporating by reference any information furnished (but not filed) under Item 2.02 or Item 7.01 of any Current
Report on Form 8-K:
|
· |
Our Annual Report on Form 10-K for the
fiscal year September 30, 2023 filed with the SEC on December 7,
2023, as amended on January 26,
2024. |
|
|
|
|
· |
Our Quarterly Reports on Form 10-Q for the
three month periods ended December 31, 2023 and March 31, 2024 filed with the SEC on February 8,
2024 and May 10, 2024,
respectively. |
|
|
|
|
· |
Our Current Reports on Form 8-K filed
with the SEC on November 7,
2023, December 6,
2023, January 5,
2024, January 31,
2024, February 1,
2024, April
16, 2024, April
19, 2024, April 22, 2024
(excluding Item 7.01), as amended on April
23, 2024 (excluding Item 7.01) and May
16, 2024. |
|
|
|
|
· |
Our Definitive Proxy Statement on Schedule 14A,
filed with the SEC on March
14, 2024. |
|
|
|
|
· |
The description of our capital stock contained
in our registration statement on Form 8-A
(File No. 001-36745) filed with the Commission on November 13, 2014, pursuant to Section 12(b) of the Exchange
Act, including any amendment or report filed for the purpose of updating such description. |
Upon
written or oral request, we will provide without charge to each person, including any beneficial owner, to whom a copy of the prospectus
is delivered a copy of the documents incorporated by reference in this prospectus (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference in this prospectus). You may request a copy of these filings, at no cost, by writing
or telephoning us at the following address: Applied DNA Sciences, Inc., 50 Health Sciences Drive, Stony Brook, New York 11790, c/o
Investor Relations, telephone: 631-240-8800. You may also access these documents on our website at www.adnas.com.
Information on our website,
including subsections, pages, or other subdivisions of our website, or any website linked to by content on our website, is not part of
this prospectus and you should not rely on that information unless that information is also in this prospectus or incorporated by reference
in this prospectus.
Up to 5,911,330 Units, Each Unit Consisting
of One Share of Common Stock or One
Pre-Funded Warrant to Purchase One Share
of Common Stock, One Series A Warrant to Purchase One Share of Common Stock and One Series B Warrant to Purchase One Share of Common
Stock
Placement Agent Warrants to Purchase Up
to 295,567 Shares of Common Stock
Up to 18,029,557 Shares of Common Stock
Underlying the Pre-Funded Warrants, Series A Warrants, Series B Warrants and Placement Agent Warrants
PROSPECTUS
Craig-Hallum
|
Laidlaw
& Company (UK) Ltd. |
, 2024
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 13. |
Other Expenses of Issuance and Distribution |
The following table sets
forth the fees and expenses, other than placement agent fees and expenses, payable in connection with the registration of the securities
hereunder. All amounts are estimates except the SEC registration fee and the FINRA filing fee.
Item |
|
Amount
to be paid |
|
SEC registration fee |
|
$ |
7,363 |
|
FINRA filing fee |
|
$ |
7,990 |
|
Printing expenses |
|
$ |
4,989 |
|
Legal fees and expenses |
|
$ |
150,000 |
|
Accounting fees and expenses |
|
$ |
42,735 |
|
Transfer Agent fees and expenses |
|
$ |
4,500 |
|
Total |
|
$ |
217,577 |
|
Item 14. |
Indemnification of Directors and Officers |
Section 145 of the Delaware
General Corporation Law provides that a corporation may indemnify directors and officers as well as other employees and individuals against
expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection
with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person
being or having been a director, officer, employee or agent to the corporation. The Delaware General Corporation Law provides that Section 145
is not exclusive of other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of stockholders
or disinterested directors or otherwise.
Section 102(b)(7) of
the Delaware General Corporation Law provides that a corporation may adopt a provision in its certificate of incorporation eliminating
or limiting the personal liability of a director of the corporation to the corporation or its stockholders for monetary damages for breaches
of fiduciary duty as a director, except for liability for any: (i) breach of the director’s duty of loyalty to the corporation
or its stockholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) unlawful payment of dividends or unlawful stock purchases or redemptions; or (iv) transaction from which the director
derives an improper personal benefit.
Our Certificate of Incorporation
provides to the fullest extent permitted by Delaware law that our directors or officers shall not be personally liable to us or our stockholders
for damages for breach of such director’s or officer’s fiduciary duty. The effect of this provision of our Certificate of
Incorporation is to eliminate our rights and the rights of our stockholders (through stockholders’ derivative suits on behalf of
our Company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including
breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that
the indemnification provisions in our Certificate of Incorporation are necessary to attract and retain qualified persons as directors
and officers.
Our Certificate of Incorporation
also provides that we shall have the power to indemnify, to the extent permitted by the DGCL, as it presently exists or may hereafter
be amended from time to time, any employee or agent of ours who was or is a party or is threatened to be made a party to any proceeding
by reason of the fact that he or she is or was a director, officer, employee or agent of ours or is or was serving at our request as
a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with any such proceeding.
Section 9.3 of our By-Laws
provides for the indemnification of our directors, officers and employees to the fullest extent permitted by the DGCL.
We have entered into an indemnification
agreement (each, an “Indemnification Agreement”) with each of our directors and executive officers. In general, the Indemnification
Agreement obligates us to indemnify a director or executive officer, to the fullest extent permitted by applicable law, for certain expenses,
including attorneys’ fees, judgments, penalties, fines and settlement amounts actually and reasonably incurred by them in any action
or proceeding arising out of their services as one of our directors or executive officers, or any of our subsidiaries or any other company
or enterprise to which the person provides services at our request. In addition, the Indemnification Agreement provides for the advancement
of expenses incurred by the indemnitee in connection with any covered proceeding to the fullest extent permitted by applicable law. The
rights provided by the Indemnification Agreement are in addition to any other rights to indemnification or advancement of expenses to
which the indemnitee may be entitled under applicable law, our Certificate of Incorporation or By-Laws, or otherwise.
Insofar as indemnification
for liabilities arising under the Securities Act, may be permitted to directors, officers and controlling persons of ours pursuant to
the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by us of expenses incurred or paid by a director, officer or controlling person of ours in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
We maintain a director and
officer insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions
in their capacities as directors or officers.
Item 15. |
Recent Sales of Unregistered Securities |
On
January 31, 2024, the Company entered into the Placement Agreement with Maxim Group pursuant to which Maxim Group agreed to
serve as the sole placement agent, on a “reasonable best efforts” basis, in connection with the Offering of 161,403
shares of the Company’s common stock and pre-funded warrants to purchase up to 120,801 shares of common stock, and in a concurrent
private placement, unregistered common warrants to purchase up to 564,407 shares of common stock. Also on January 31, 2024, in connection
with the Offering, the Company entered into Purchase Agreements with the Purchasers.
The
Offering closed on February 2, 2024. The Company received gross proceeds from the Offering, before deducting placement agent fees
and other estimated offering expenses payable by the Company, of approximately $3.4 million.
Pursuant
to the Placement Agreement, the Company paid Maxim Group a cash placement fee equal to 6.5% of the aggregate gross proceeds raised
in the Offering from sales arranged for by Maxim Group. Subject to certain conditions, the Company has also agreed to reimburse certain
expenses of Maxim Group in connection with the Offering, including but not limited to legal fees, up to a maximum of $50,000.
Securities Act Exemptions
The
common warrants and the shares of common stock issuable upon the exercise of the common warrants are not registered under the Securities
Act. The common warrants and the shares of common stock issuable upon exercise thereof were issued in reliance on the exemptions from
registration provided by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder, for transactions
not involving a public offering.
Item 16. |
Exhibit and Financial Statement Schedules |
(a) Exhibits.
The exhibit index attached hereto is incorporated
herein by reference.
(b) Financial Statement Schedules.
Schedules have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which
offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the U.S. Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement; and
(iii) To include any material information
with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information
in the registration statement; provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities
and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining
any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means
of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining
liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance
on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or
made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such date of first use.
(5) That for the purpose of determining
liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of securities, the undersigned
registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus
of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating
to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing
prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or
on behalf of the undersigned registrant; and
(iv) Any other communication that is an
offer in the offering made by the undersigned registrant to the purchaser.
(6) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to
any charter provision, by law or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(7) The undersigned registrant hereby undertakes
that:
(i) For purposes of determining any liability
under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective;
and
(ii) For the purpose of determining any
liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
EXHIBIT INDEX
Exhibit |
|
|
|
Incorporated
by Reference |
|
Filed
or Furnished |
Number |
|
Description |
|
Form |
|
Exhibit |
|
File
No. |
|
Date
Filed |
|
Herewith |
2.1*† |
|
Share
Purchase Agreement, dated July 12, 2023, by and among Spindle Acquisition Corp., Spindle Biotech Inc., the persons listed on Schedule
1.1 therein, Lai Him Chung and Applied DNA Sciences, Inc. |
|
8-K |
|
2.1 |
|
001-36745 |
|
7/13/2023 |
|
|
3.1 |
|
Conformed
version of Certificate of Incorporation of Applied DNA Sciences, Inc., as most recently amended by the Sixth Certificate of Amendment,
effective Thursday, April 25, 2024 |
|
|
|
|
|
|
|
|
|
Previously
Filed |
3.2 |
|
By-Laws |
|
8-K |
|
3.2 |
|
002-90539 |
|
1/16/2009 |
|
|
4.1 |
|
Description
of Securities |
|
10-K |
|
4.1 |
|
001-36745 |
|
12/9/2021 |
|
|
4.2 |
|
Form of
Purchase Warrant |
|
8-K |
|
4.1 |
|
001-36745 |
|
12/20/2017 |
|
|
4.3 |
|
Common
Stock Purchase Warrant |
|
8-K |
|
4.1 |
|
001-36745 |
|
12/21/2018 |
|
|
4.4 |
|
Form of
common warrant certificate (included in the Warrant Agreement, dated November 15, 2019) |
|
8-K |
|
4.2 |
|
001-36745 |
|
11/18/2019 |
|
|
4.5 |
|
Form of
Indenture |
|
S-3 |
|
4.1 |
|
333-238557 |
|
05/21/2020 |
|
|
4.6 |
|
Form of
Common Stock Purchase Warrant |
|
8-K |
|
10.3 |
|
001-36745 |
|
10/14/2020 |
|
|
4.7 |
|
Form of
Pre-Funded Common Stock Purchase Warrant |
|
8-K |
|
4.1 |
|
001-36745 |
|
2/23/2022 |
|
|
4.8 |
|
Form of
Common Stock Purchase Warrant |
|
8-K |
|
4.2 |
|
001-36745 |
|
2/23/2022 |
|
|
4.9 |
|
Form of
Series A Warrant |
|
8-K |
|
4.1 |
|
001-36745 |
|
8/9/2022 |
|
|
4.10 |
|
Form of
Series B Warrant |
|
8-K |
|
4.2 |
|
001-36745 |
|
8/9/2022 |
|
|
4.11 |
|
Form of
Prefunded Warrant |
|
8-K |
|
4.3 |
|
001-36745 |
|
8/9/2022 |
|
|
4.12 |
|
Form of
Pre-Funded Warrant. |
|
8-K |
|
4.1 |
|
001-36745 |
|
02/01/2024 |
|
|
4.13 |
|
Form of
Private Common Warrant. |
|
8-K |
|
4.2 |
|
001-36745 |
|
02/01/2024 |
|
|
4.14 |
|
Form
of Pre-Funded Warrant |
|
|
|
|
|
|
|
|
|
Previously
Filed |
4.15 |
|
Form of Series A Warrant |
|
|
|
|
|
|
|
|
|
|
4.16 |
|
Form of Series B Warrant |
|
|
|
|
|
|
|
|
|
|
4.17 |
|
Form
of Placement Agent Warrant |
|
|
|
|
|
|
|
|
|
Previously
Filed |
5.1 |
|
Opinion
of McDermott Will & Emery LLP |
|
|
|
|
|
|
|
|
|
|
10.1† |
|
Form of
employee stock option agreement under the Applied DNA Sciences, Inc. 2005 Incentive Stock Plan |
|
10-Q |
|
4.1 |
|
002-90539 |
|
05/15/2012 |
|
|
10.2† |
|
Applied
DNA Sciences, Inc. 2005 Incentive Stock Plan, as amended and restated |
|
DEF
14A |
|
Appendix
A |
|
001-36745 |
|
04/04/2019 |
|
|
10.3† |
|
Form of
employee stock option agreement under the Applied DNA Sciences, Inc. 2005 Incentive Stock Plan, as amended |
|
10-K |
|
10.1 |
|
001-36745 |
|
12/14/2015 |
|
|
10.4† |
|
Conformed
version of Applied DNA Sciences, Inc. 2020 Equity Incentive Plan, as most recently amended by the Amendment to the Applied DNA Sciences,
Inc. 2020 Equity Incentive Plan, effective April 15, 2024 |
|
DEF
14A |
|
Appendix
C |
|
001-36745 |
|
03/14/2024 |
|
|
10.5† |
|
Applied
DNA Sciences, Inc. 2020 Equity Incentive Plan Stock Option Grant Notice and Award Agreement |
|
S-8 |
|
10.3 |
|
333-249365 |
|
10/07/2020 |
|
|
10.6† |
|
Employment
Agreement, dated July 1, 2016, between James A. Hayward and Applied DNA Sciences, Inc. |
|
8-K |
|
10.1 |
|
001-36745 |
|
8/2/2016 |
|
|
10.7† |
|
Form of
Indemnification Agreement dated as of September 7, 2012, by and between Applied DNA Sciences, Inc. and each of its directors
and executive officers |
|
8-K |
|
10.1 |
|
002-90539 |
|
9/13/2012 |
|
|
10.8 |
|
Warrant
Agreement, dated November 20, 2014, between Applied DNA Sciences, Inc. and American Stock Transfer & Trust Company,
LLC as warrant agent |
|
8-K |
|
4.1 |
|
001-36745 |
|
11/20/2014 |
|
|
10.9 |
|
First
Amendment to Warrant Agreement dated April 1, 2015 between Applied DNA Sciences, Inc. and American Stock Transfer &
Trust Company, LLC as warrant agent |
|
8-K |
|
4.1 |
|
001-36745 |
|
4/1/2015 |
|
|
10.10 |
|
Second
Amendment to Warrant Agreement dated November 2, 2016 |
|
8-K |
|
10.4 |
|
001-36745 |
|
11/2/2016 |
|
|
10.11 |
|
Registration
Rights Agreement dated November 2, 2016 |
|
8-K |
|
10.3 |
|
001-36745 |
|
11/2/2016 |
|
|
10.12* |
|
License
Agreement with Himatsingka America, Inc. dated June 23, 2017 |
|
10-Q |
|
10.1 |
|
001-36745 |
|
8/10/2017 |
|
|
10.13 |
|
Placement
Agency Agreement by and between Applied DNA Sciences, Inc. and Maxim Group LLC, dated December 20, 2017. |
|
8-K |
|
10.1 |
|
001-36745 |
|
12/20/2017 |
|
|
10.14 |
|
Registration
Rights Agreement, dated November 29, 2018 |
|
8-K |
|
10.2 |
|
001-36745 |
|
12/6/2018 |
|
|
10.15 |
|
Securities
Purchase Agreement, dated November 29, 2018 |
|
8-K |
|
10.3 |
|
001-36745 |
|
12/6/2018 |
|
|
10.16 |
|
Registration
Rights Agreement, dated August 31, 2018 |
|
8-K/A |
|
10.2 |
|
001-36745 |
|
12/10/2018 |
|
|
10.17 |
|
Securities
Purchase Agreement, dated August 31, 2018 |
|
10-K |
|
10.45 |
|
001-36745 |
|
12/18/2018 |
|
|
10.18+ |
|
Patent
and Know-How License and Cooperation Agreement, dated March 28, 2019, between the Company, APDN (B.V.I.), Inc., and ETCH
BioTrace S.A. |
|
10-Q |
|
10.10 |
|
001-36745 |
|
5/9/2019 |
|
|
10.19 |
|
Registration
Rights Agreement, dated July 16, 2019 by and among Applied DNA Sciences, Inc. and the investor named on the signature page thereof. |
|
8-K |
|
10.2 |
|
001-36745 |
|
07/17/2019 |
|
|
10.20 |
|
Securities
Purchase Agreement, dated July 16, 2019 by and among Applied DNA Sciences, Inc. and the investor named on the signature
page thereof. |
|
8-K |
|
10.3 |
|
001-36745 |
|
07/17/2019 |
|
|
10.21 |
|
Asset
Purchase Agreement, dated July 29, 2019 by and between LineaRX, Inc. and Vitatex Inc. |
|
8-K |
|
10.1 |
|
001-36745 |
|
8/12/2019 |
|
|
10.22 |
|
Form of
Subscription Agreement between investors and Applied DNA Sciences, Inc., dated August 22, 2019. |
|
8-K |
|
10.1 |
|
001-36745 |
|
8/26/2019 |
|
|
10.23 |
|
Underwriting
Agreement entered into by and between Applied DNA Sciences, Inc. and Maxim Group LLC, as Representative of the Underwriters
listed in Schedule I hereto, dated November 13, 2019. |
|
8-K |
|
1.1 |
|
001-36745 |
|
11/14/2019 |
|
|
10.24 |
|
Warrant
Agreement, dated November 15, 2019, between Applied DNA Sciences, Inc. and American Stock Transfer & Trust Company,
LLC |
|
8-K |
|
4.1 |
|
001-36745 |
|
11/18/2019 |
|
|
10.25† |
|
Consulting
Agreement, dated as of December 12, 2019, by and between Applied DNA Sciences, Inc. and Meadow Hill Place, LLC |
|
10-Q |
|
10.1 |
|
001-36745 |
|
08/06/2020 |
|
|
10.26 |
|
Agreement
of Lease dated June 14, 2013, between Applied DNA Sciences, Inc. and Long Island High Technology Incubator, Inc. |
|
10-Q |
|
10.2 |
|
002-90539 |
|
8/13/2013 |
|
|
10.27 |
|
Agreement
of Lease, dated November 1, 2015, by and between Applied DNA Sciences, Inc. and Long Island High Technology Incubator, Inc. |
|
10-Q |
|
10.2 |
|
001-36745 |
|
08/06/2020 |
|
|
10.28 |
|
Option
Exercise Notice, dated December 3, 2015, Pursuant to Lease dated June 14, 2013, between Applied DNA Sciences, Inc.
and Long Island High Technology Incubator, Inc. |
|
10-Q |
|
10.2 |
|
001-36745 |
|
05/12/2016 |
|
|
10.29 |
|
Temporary
Lease Extension Agreement, dated August 9, 2019, by and between Applied DNA Sciences, Inc. and Long Island High Technology
Incubator, Inc. |
|
10-Q |
|
10.3 |
|
001-36745 |
|
08/06/2020 |
|
|
10.30 |
|
Amendment
to Leases, dated November 4, 2019, by and between Long Island High Technology Incubator, Inc. and Applied DNA Sciences, Inc. |
|
10-Q |
|
10.4 |
|
001-36745 |
|
08/06/2020 |
|
|
10.31 |
|
Amendment
to Leases, dated January 17, 2020, by and between Long Island High Technology Incubator, Inc. and Applied DNA Sciences, Inc. |
|
10-Q |
|
10.5 |
|
001-36745 |
|
08/06/2020 |
|
|
10.32 |
|
Registration
Rights Agreement, dated October 7, 2020, by and between Applied DNA Sciences, Inc. and Dillon Hill Capital, LLC. |
|
8-K |
|
10.4 |
|
001-36745 |
|
10/14/2020 |
|
|
10.33 |
|
Registration
Rights Agreement, dated October 7, 2020, by and between Applied DNA Sciences, Inc. and Dillon Hill Investment Company LLC. |
|
8-K |
|
10.5 |
|
001-36745 |
|
10/14/2020 |
|
|
10.34+ |
|
Joint
Development Agreement, dated September 11, 2018, between LineaRx, Inc., Takis S.R.L. and Evvivax S.R.L., as amended by
that First Amendment, dated February 3, 2020 |
|
10-K |
|
10.46 |
|
001-36745 |
|
12/17/2020 |
|
|
10.35 |
|
Animal
Clinical Trial Agreement, dated September 14, 2020, between Applied DNA Sciences, Inc., Evvivax S.R.L. and Veterinary Oncology
Services, PLLC |
|
10-K |
|
10.47 |
|
001-36745 |
|
12/17/2020 |
|
|
10.36 |
|
Letter
Agreement dated March 2, 2021, by and between the Company and Dr. James Hayward |
|
8-K |
|
10.1 |
|
001-36745 |
|
3/4/2021 |
|
|
10.37 |
|
Office
Lease Renewal Letter Agreement, dated February 1, 2022, by and between Long Island High Technology Incubator, Inc. and
Applied DNA Sciences, Inc. |
|
10-K |
|
10.43 |
|
001
36745 |
|
12/14/2022 |
|
|
10.38 |
|
Laboratory
Lease Renewal Letter Agreement, dated February 1, 2022, by and between Long Island High Technology Incubator, Inc. and
Applied DNA Sciences, Inc. |
|
10-K |
|
10.44 |
|
001
36745 |
|
12/14/2022 |
|
|
10.39+ |
|
Contract
Number T212206, dated August 3, 2021, by and between The City University of New York and Applied DNA Clinical Labs, LLC. |
|
10-K |
|
10.45 |
|
001
36745 |
|
12/14/2022 |
|
|
10.40+ |
|
First
Amendment to Contract No. T212206, dated December 16, 2021, by and between The City University of New York and Applied
DNA Clinical Labs, LLC. |
|
10-K |
|
10.46 |
|
001
36745 |
|
12/14/2022 |
|
|
10.41+ |
|
Second
Amendment to Contract No. T212206, dated July 19, 2022, by and between The City University of New York and Applied DNA
Clinical Labs, LLC. |
|
10-K |
|
10.47 |
|
001
36745 |
|
12/14/2022 |
|
|
10.42 |
|
Equity
Distribution Agreement, dated November 7, 2023, by and between Applied DNA Sciences, Inc. and Maxim Group LLC |
|
8-K |
|
10.1 |
|
001-36745 |
|
11/7/2023 |
|
|
10.43† |
|
Letter
Agreement, dated January 4, 2024, by and between Applied DNA Sciences, Inc. and James A. Hayward. |
|
8-K |
|
10.1 |
|
001-36745 |
|
1/5/2024 |
|
|
10.44† |
|
Letter
Agreement, dated January 4, 2024, by and between Applied DNA Sciences, Inc. and Judith Murrah. |
|
8-K |
|
10.2 |
|
001-36745 |
|
1/5/2024 |
|
|
10.45 |
|
Amended
and Restated Lease Agreement, dated February 24, 2023, by and between Long Island High Technology Incubator, Inc. and Applied
DNA Sciences, Inc. (Office Lease). |
|
8-K |
|
10.1 |
|
001-36745 |
|
02/28/2023 |
|
|
10.46 |
|
Amended
and Restated Lease Agreement, dated February 24, 2023, by and between Long Island High Technology Incubator, Inc. and Applied
DNA Sciences, Inc. (Laboratory Lease). |
|
8-K |
|
10.2 |
|
001-36745 |
|
02/28/2023 |
|
|
10.47 |
|
Lease
Renewal Agreement dated January 10, 2024 (Laboratory Lease). |
|
10-Q |
|
10.3 |
|
001-36745 |
|
02/08/2024 |
|
|
10.48 |
|
Placement
Agency Agreement by and between Applied DNA Sciences, Inc. and Maxim Group LLC, dated January 31, 2024. |
|
8-K |
|
10.1 |
|
001-36745 |
|
01/05/2024 |
|
|
10.49 |
|
Form of
Securities Purchase Agreement, dated January 31, 2024, by and between Applied DNA Sciences, Inc. and the parties thereto. |
|
8-K |
|
10.2 |
|
001-36745 |
|
01/05/2024 |
|
|
10.50 |
|
Form
of Placement Agency Agreement |
|
|
|
|
|
|
|
|
|
Previously Filed |
10.51 |
|
Form
of Lock-up Agreement |
|
|
|
|
|
|
|
|
|
Previously
Filed |
| † | Indicates
a management contract or any compensatory plan, contract or arrangement. |
| * | A
request for confidentiality has been granted for certain portions of the indicated document.
Confidential portions have been omitted and filed separately with the SEC as required by
Rule 24b-2 promulgated under the Exchange Act. |
| + | Portions
of this exhibit have been omitted because the information is both not material and is the
type that the Company treats as private or confidential. The omissions have been indicated
by bracketed asterisks (“[***]”). |
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Stony Brook, State of New York, on the 24th day of May, 2024.
APPLIED DNA SCIENCES, INC. |
|
|
|
|
By: |
/s/ James
A. Hayward |
|
|
James
A. Hayward |
|
|
President
and Chief Executive Officer |
|
Pursuant to the requirements of the Securities
Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/
James A. Hayward |
|
Chief Executive Officer, President and Chairman
of the Board of Directors |
|
May 24, 2024 |
James A. Hayward |
|
(Principal Executive Officer) |
|
|
|
|
|
/s/
Beth Jantzen |
|
Chief Financial Officer |
|
May 24, 2024 |
Beth Jantzen |
|
(Principal Financial Officer and Principal Accounting
Officer) |
|
|
|
|
|
* |
|
Director |
|
May
24, 2024 |
Robert
B. Catell |
|
|
|
|
|
|
|
* |
|
Director |
|
May
24, 2024 |
Joseph
D. Ceccoli |
|
|
|
|
|
|
|
* |
|
Director |
|
May
24, 2024 |
Sanford
R. Simon |
|
|
|
|
|
|
|
* |
|
Director |
|
May
24, 2024 |
Yacov
A. Shamash |
|
|
|
|
|
|
|
|
|
* |
|
Director |
|
May
24, 2024 |
Elizabeth
M. Schmalz Shaheen |
|
|
|
|
*By: |
/s/
Beth Jantzen |
|
|
Name:
|
Beth
Jantzen |
|
|
Title:
|
Attorney-in-Fact |
|
Exhibit 5.1
May 24, 2024
Applied DNA Sciences, Inc.
50 Health Sciences Drive
Stony Brook, NY 11790
Re: |
Registration of Units, Shares, Warrants and Warrant Shares |
Ladies and Gentlemen:
Reference is made to the filing by Applied DNA
Sciences, Inc., a Delaware corporation (the “Company”), with the United States Securities and Exchange
Commission (the “SEC”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”),
of the Company’s registration statement on Form S-1, filed on April 24, 2024, as amended on May 14, 2024, May 21,
2024, May 22, 2024 and May 24, 2024 (the “Registration Statement”), which includes a prospectus (the “Prospectus”).
We are rendering
this opinion in connection with the filing by the Company with the SEC of the Registration Statement relating to the offering by the Company
(the “Offering”) with respect to the proposed issuance and sale by the Company of (i) 5,911,330
units (the “Units”), with each Unit consisting of either (A) one share of the Company’s common stock,
$0.001 par value (“Common Stock”) (collectively, the “Shares”) and one Series A
warrant (“Series A Warrant”) to purchase one share of Common Stock and one Series B warrant to purchase
one share of Common Stock (“Series B Warrant” and, together with the Series A Warrant, the “Series Warrants”),
or (B) one pre-funded warrant (each, a “Pre-Funded Warrant”) to purchase one share of Common Stock and
one Series A Warrant and one Series B Warrant, (ii) placement agent warrants (“Placement
Agent Warrants” and, together with the Pre-Funded Warrants, the Series A Warrants and the Series B
Warrants, the “Warrants”) to purchase up to 295,567 shares of Common Stock and (iii) the
shares of Common Stock issuable from time to time upon exercise of the Warrants (the “Warrant Shares”). The
Units, the Shares, the Warrants and Warrant Shares are collectively referred to herein as the “Securities.”
The Securities are being sold pursuant to the terms of a Placement Agency Agreement (the “Placement Agency Agreement”),
to be entered into by the Company, Craig-Hallum Capital Group LLC and Laidlaw & Company (UK) Ltd. and are being offered to the
public as set forth in the Prospectus.
We understand that the Securities are to be offered
and sold in the manner set forth in the Prospectus. This opinion letter is furnished to you at your request to enable you to fulfill the
requirements of Item 601(b)(5) of Regulation S-K in connection with the Registration Statement.
We have acted as your counsel in connection with
the preparation of the Registration Statement. We are familiar with the proceedings taken by the board of directors of the Company (the
“Board”) in connection with the authorization, issuance and sale of the Securities. We have examined all such
documents as we considered necessary to enable us to render this opinion, including, but not limited to: (i) the Registration Statement,
(ii) the form of Series A Warrants, (iii) the form of Series B Warrants, (iv) the form of Pre-Funded Warrants,
(v) the form of Placement Agent Warrants, (vi) the form of Placement Agency Agreement, (vii) the Company’s certificate
of incorporation, as amended to date, (viii) the Company’s amended and restated bylaws, as amended to date, (ix) certain
resolutions of the Board and (x) such other corporate records and instruments, and such laws and regulations as we have deemed necessary
for purposes of rendering the opinions set forth herein.
In our examination, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified, conformed, photostatic or facsimile copies, the authenticity
of all documents submitted to us as certified, conformed, photostatic or facsimile copies and the authenticity of the originals of such
certified, conformed, photostatic or facsimile copies. In addition, we have assumed that the Securities will be offered in the manner
and on the terms identified or referred to in the Prospectus. As to any facts material to the opinions expressed herein, which were not
independently established or verified, we have relied upon statements and representations of officers and other representatives of the
Company and others.
We express no opinion herein as to the law of
any state or jurisdiction other than the laws of the State of New York and the General Corporation Law of the State of Delaware.
Based upon the foregoing, and subject to the assumptions,
limitations and qualifications stated herein, we are of the opinion that:
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(i) |
The Units have been duly authorized and, when issued and delivered by the Company in accordance with the Registration Statement and the Prospectus and upon receipt by the Company of the consideration therefor provided therein, will be validly issued, fully paid and non-assessable; |
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(ii) |
The Shares have been duly authorized and, when issued and delivered by the Company in accordance with the Registration Statement and the Prospectus and upon receipt by the Company of the consideration therefor provided therein, will be validly issued, fully paid and non-assessable; |
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(iii) |
The Pre-Funded Warrants have been duly authorized and, when duly executed and delivered by the Company in accordance with and in the manner described in the Registration Statement and the Prospectus and upon receipt by the Company of the consideration therefor provided therein, will constitute valid and binding agreements of the Company enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and similar laws affecting creditors’ rights generally and equitable principles of general applicability; |
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(iv) |
The Pre-Funded Warrant Shares have been duly authorized and, when issued upon exercise of the Pre-Funded Warrants against payment therefor in accordance with the terms of the Pre-Funded Warrants, will be validly issued, fully paid and nonassessable; |
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(v) |
The Series A Warrants have been duly authorized and, when duly executed and delivered by the Company in accordance with and in the manner described in the Registration Statement and the Prospectus and upon receipt by the Company of the consideration therefor provided therein, will constitute valid and binding agreements of the Company enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and similar laws affecting creditors’ rights generally and equitable principles of general applicability; |
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(vi) |
The Series A Warrant Shares have been duly authorized and, when issued upon exercise of the Series A Warrants against payment therefor in accordance with the terms of the Series A Warrants, will be validly issued, fully paid and nonassessable; |
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(vii) |
The Series B Warrants have been duly authorized and, when duly executed and delivered by the Company in accordance with and in the manner described in the Registration Statement and the Prospectus and upon receipt by the Company of the consideration therefor provided therein, will constitute valid and binding agreements of the Company enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and similar laws affecting creditors’ rights generally and equitable principles of general applicability; |
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(viii) |
The Series B Warrant Shares have been duly authorized and, when issued upon exercise of the Series B Warrants against payment therefor in accordance with the terms of the Series B Warrants, will be validly issued, fully paid and nonassessable; |
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(ix) |
The Placement Agent Warrants have been duly authorized and, when duly executed and delivered by the Company in accordance with and in the manner described in the Registration Statement and the Prospectus and upon receipt by the Company of the consideration therefor provided therein, will constitute valid and binding agreements of the Company enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and similar laws affecting creditors’ rights generally and equitable principles of general applicability; and |
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(x) |
The Placement Agent Warrant Shares have been duly authorized and, when issued upon exercise of the Placement Agent Warrants against payment therefor in accordance with the terms of the Placement Agent Warrants, will be validly issued, fully paid and nonassessable. |
We assume no obligation to supplement this opinion
if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after
the date hereof. We hereby consent to the filing of this opinion as a part of the Registration Statement and to the reference of our firm
under the caption “Legal Matters” in the Prospectus. In giving such consent, we do not hereby admit that we are in the category
of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the SEC.
Very truly yours,
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/s/ McDermott Will and Emery LLP |
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McDermott Will and Emery LLP |
![](https://www.sec.gov/Archives/edgar/data/744452/000110465924065129/tm2412319d6_ex5-1img002.jpg) |
One Vanderbilt Avenue New York NY 10017-3852
Tel +1 212 547 5400 Fax +1 212 547 5444
US practice conducted through McDermott Will &
Emery LLP. |
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Exhibit 4.15
SERIES A COMMON STOCK PURCHASE WARRANT
APPLIED
DNA SCIENCES, INC.
Warrant Shares: [______] |
Issuance Date: [_______], 2024 |
THIS SERIES A COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, [___________] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the Stockholder Approval Date (as defined below) (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York
City time) on the five year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to
subscribe for and purchase from Applied DNA Sciences, Inc., a Delaware corporation (the “Company”), up to [______]
shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share
of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings
indicated in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement
Agency Agreement” means the placement agency agreement, dated as of May [__], 2024, by and between the Company, Craig-Hallum
Capital Group LLC and Laidlaw & Company (UK) Ltd., as amended, modified or supplemented from time to time in accordance with its terms.
“Registration
Statement” means the Company’s registration statement on Form S-1, as amended (File No. 333-278890).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Stockholder
Approval” means such approval as may be required by the applicable rules and regulations of the Nasdaq Capital Market (or any
successor entity) from the stockholders of the Company to permit the exercise of the Warrants and with respect to issuance of all the Warrant Shares upon the exercise thereof, including, without limitation,
(i) giving full effect to the adjustment in exercise price and/or number of shares of Common Stock underlying the Warrants following any
Dilutive Issuance (as defined below) and (ii) to consent to any adjustment to the exercise price or number of shares of Common Stock underlying
the Warrants in the event of a Share Combination Event pursuant to Section 3(j) hereof.
“Stockholder
Approval Date” means the first trading day following the Company’s notice to the Holder of Stockholder Approval, which
notice shall be provided within two Trading Days of the Company’s receipt of Stockholder Approval.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, the OTCQB or OTCQX (or any successors to any of the foregoing).
“Transfer
Agent” means Equiniti Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 48 Wall Street,
Floor 23, New York, New York 10005 and an email address of [_________], and any successor transfer agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
“Warrants”
means this Warrant and other Series A Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section
2. Exercise.
a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any
time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed
PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined
in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the
shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the
cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice
of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise
be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to
the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in
which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which
the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $[_____], subject to adjustment
hereunder (the “Exercise Price”).
c)
Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus
contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice
of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the
Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the
time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular
trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered
pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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(B) = |
the Exercise Price of this Warrant, as adjusted hereunder; and |
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(X) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act,
the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2(c).
d)
Mechanics of Exercise.
i. Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the
Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate
or a book entry statement, registered in the Company’s share register in the name of the Holder or its designee, for the number
of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise
by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”).
Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of
the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares,
provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier
of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice
of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant
Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading
Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such
Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain
a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein,
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
ii. Delivery of New Warrants Upon Exercise. If this Warrant
shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the
time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x)
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares
of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
vi.
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
For the avoidance of doubt, nothing in this Section 2(d)(vi) shall require the Company to deliver the Warrant Shares on a date earlier
than the Warrant Share Delivery Date.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have
the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties
shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is
being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock
Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the
Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section
2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.
To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant
is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any
group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice
by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall
be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice
to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall
continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such
notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise
of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way
of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares
of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this
Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or re-classification.
b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that
the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the
Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
d)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any
Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions, provided, however that the sale by the Company of any Subsidiary,
other than a Material Subsidiary, does not constitute a Fundamental Transaction, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted
to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of greater than 50%
of the outstanding Common Stock or greater than 50% of the voting power of the common equity of the Company, (iv) the Company, directly
or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash
or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement
or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement)
with another Person or group of Persons whereby such other Person or group acquires greater than 50% of the outstanding shares of Common
Stock or greater than 50% of the voting power of the common equity of the Company (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).
“Material Subsidiary” shall mean any subsidiary of the Company that is material to the business and operations of the Company
(or has material assets to the Company on a consolidated basis) as described in the Company’s public filings with the Commission.
For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the
event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable
at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the
public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount
of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company's control,
including not approved by the Company's Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this
Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection with the Fundamental Transaction,
whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Stock are given
the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further,
that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders
of Common Stock will be deemed to have received common stock of the Successor Entity (which Successor Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant
based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the
applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the 100 day volatility obtained
from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the
public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such calculation
shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration,
if any, being offered in such Fundamental Transaction and (ii) the VWAP immediately preceding the public announcement of the applicable
contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier), (D) the sum of the remaining
option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the
Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available
funds (or such other consideration) within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation
of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not
the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant
in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to
the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the
Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor
Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such
exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation
of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company”
shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity
or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the
Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other
Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had
been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section
3(d) regardless of (i) whether the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or
(ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any
sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into
other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email
address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to
be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such
notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
g)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by
the board of directors of the Company.
h)
Stockholder Approval. The Company shall hold a special meeting of shareholders (which may also be at the annual meeting
of shareholders) at the earliest practicable date after the date hereof, but in no event later than ninety (90) days after the Closing
Date (as defined in the Placement Agency Agreement) for the purpose of obtaining Stockholder Approval, with the recommendation of the
Company’s Board of Directors that such proposal be approved, and the Company shall solicit proxies from its shareholders in connection
therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall
vote their proxies in favor of such proposal. If the Company does not obtain Stockholder Approval at the first meeting, the Company shall
call a meeting every ninety (90) days thereafter to seek Stockholder Approval until the earlier of the date on which Stockholder Approval
is obtained or the Warrants are no longer outstanding.
i)
Subsequent Equity Sales. If, at any time while this Warrant is outstanding (such period, the “Adjustment Period”),
the Company issues, sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell,
or grants any right to reprice, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other
disposition), or, in accordance with this Section 3(i), is deemed to have issued or sold, any shares of Common Stock or Common Stock Equivalents
for a consideration per share (the “New Issuance Price”) less than a price equal to the Exercise Price in effect immediately
prior to such issue or sale or deemed issuance or sale (such Exercise Price then in effect is referred to as the “Applicable
Price”) (the foregoing a “Dilutive Issuance”), then simultaneously with the consummation (or, if earlier,
the announcement) of such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount (the “New Exercise
Price”) equal to the lower of (a) the New Issuance Price or (b) the lowest VWAP during the five (5) consecutive Trading Days
immediately following the Dilutive Issuance (such lower price, the “Base Share Price”) and the number of Warrant Shares
issuable hereunder shall be proportionately increased such that the aggregate Exercise Price of this Warrant on the Issuance Date for
the Warrant Shares then outstanding shall remain unchanged. Notwithstanding the foregoing, if one or more Dilutive Issuances occurred
prior to the Stockholder Approval being obtained, once the Stockholder Approval is obtained, the Exercise Price will automatically be
reduced to equal the lowest Base Share Price with respect to any Dilutive Issuance that occurred prior to the Stockholder Approval being
obtained and the number of Warrant Shares shall be proportionately adjusted pursuant to the foregoing. If the Company enters into a Variable
Rate Transaction (as defined in the Placement Agency Agreement), the Company shall be deemed to have issued shares of Common Stock or
Common Stock Equivalents at the lowest possible price, conversion price or exercise price at which such securities may be issued, converted
or exercised. Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 3(i) in respect of an Exempt
Issuance (as defined in the Placement Agency Agreement). For the avoidance of doubt, in the event the Exercise Price has been adjusted
pursuant to this Section 3(i) and the Dilutive Issuance that triggered such adjustment does not occur, is not consummated, is unwound
or is cancelled after the facts for any reason whatsoever, in no event shall the Exercise Price be readjusted to the Exercise Price that
would have been in effect if such Dilutive Issuance had not occurred or been consummated. For all purposes of the foregoing, the following
shall be applicable:
1.
Issuance of Options. If, during the Adjustment Period, the Company in any manner grants or sells any Options and the lowest
price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange
of any convertible securities (“Convertible Securities”) issuable upon exercise of any such Option (such shares of
Common Stock issuable upon such exercise of any Option or upon conversion, exercise or exchange of any Convertible Securities, the “Convertible
Securities Shares”) is less than the Applicable Price, then such shares of Common Stock shall be deemed to be outstanding and
to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes
of this Section 3(i)(1), the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option” shall be
equal to (A) the sum of (1) the lowest amount of consideration (if any) received or receivable by the Company with respect to any one
Convertible Securities Share upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange
of any Convertible Security issuable upon exercise of such Option and (2) the lowest exercise price set forth in such Option for which
one Convertible Securities Share is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option, minus (B) the sum of all amounts paid or payable to the holder of such Option (or
any other Person), with respect to any one Convertible Securities Share, upon the granting or sale of such Option, upon exercise of such
Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option plus the value of any
other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other Person), with respect
to any one Convertible Securities Share. Except as contemplated below, no further adjustment of the Exercise Price shall be made upon
the actual issuance of such Convertible Securities Share or of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such Convertible Securities Share upon conversion, exercise or exchange of such Convertible Securities.
2.
Issuance of Convertible Securities. If, during the Adjustment Period, the Company in any manner issues or sells any Convertible
Securities and the lowest price per share for which one Convertible Securities Share is issuable upon the conversion, exercise or exchange
thereof is less than the Applicable Price, then such Convertible Securities Share shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes
of this Section 3(i)(2), the “lowest price per share for which one Convertible Securities Share is issuable upon the conversion,
exercise or exchange thereof” shall be equal to (A) the sum of (1) the lowest amount of consideration (if any) received or receivable
by the Company with respect to one Convertible Securities Share upon the issuance or sale of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security and (2) the lowest conversion price set forth in such Convertible Security for which
one Convertible Securities Share is issuable upon conversion, exercise or exchange thereof, minus (B) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share, upon the issuance
or sale of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the
holder of such Convertible Security (or any other Person), with respect to any one Convertible Securities Share. Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such Convertible Securities Share upon conversion,
exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of the Exercise Price has been or is to be made pursuant to other provisions of this Section 3(i)(2),
except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issue or sale.
3.
Change in Option Price or Rate of Conversion. If, during the Adjustment Period, the purchase or exercise price provided
for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock
increases or decreases at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with
an event referred to in Section 3(a), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise
Price which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased
purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted,
issued or sold. For purposes of this Section 3(i)(3), if the terms of any Option or Convertible Security that was outstanding as of the
date of issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the Convertible Securities Share deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3(i)(3) shall be made if such
adjustment would result in an increase of the Exercise Price then in effect.
4.
Calculation of Consideration Received. If any Option or Convertible Security is issued in connection with the issuance or
sale or deemed issuance or sale of any other securities of the Company (the “Primary Security”, and such Option or
Convertible Security, the “Secondary Securities” and together with the Primary Security, each a “Unit”),
together comprising one integrated transaction, the aggregate consideration per share with respect to such Primary Security shall be deemed
to be the lowest of (x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security, the lowest
price per share for which one share of Common Stock is at any time issuable upon the exercise or conversion of the Primary Security in
accordance with Section 3(i)(1) or 3(i)(2) above and (z) the lowest VWAP of the shares of Common Stock on any Trading Day during the five
(5) consecutive Trading Days immediately following the consummation (or, if applicable, the announcement) of such Dilutive Issuance (for
the avoidance of doubt, if such public announcement, if applicable, is released prior to the opening of the Principal Market on a Trading
Day, such Trading Day shall be the first Trading Day in such five (5) Trading Day period and if this Warrant is exercised on any given
Exercise Date during any such period, the Holder may elect to earlier end such period (including, solely with respect to such portion
of this Warrant exercised on such applicable Exercise Date)). If any shares of Common Stock, Options or Convertible Securities are issued
or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of cash
received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities
will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt.
If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with
any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair market value
of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options
or Convertible Securities (as the case may be). The fair market value of any consideration other than cash or publicly traded securities
will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the
occurrence of an event requiring valuation (the “Valuation Event”), the fair market value of such consideration will
be determined within five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser
jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent
manifest error and the fees and expenses of such appraiser shall be borne by the Company.
5.
Record Date. If, during the Adjustment Period, the Company takes a record of stockholders for the purpose of entitling them
(A) to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe
for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issue or sale of shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or purchase (as the case may be).
j)
Share Combination Event Adjustment. In addition to the adjustments set forth in Section 3(a) above, if at any time and from
time to time on or after the Stockholder Approval Date, there occurs any share split, share dividend, share combination recapitalization
or other similar transaction involving the Common Stock (each, a “Share Combination Event”, and such date thereof,
the “Share Combination Event Date”) and the lowest VWAP during the period commencing five (5) consecutive Trading Days
immediately preceding and the five (5) consecutive Trading Days commencing on the Share Combination Event Date (the “Event Market
Price”) (provided if the Share Combination Event is effective after close of trading on the primary Trading Market, then commencing
on the next Trading Day which period shall be the “Share Combination Adjustment Period”) is less than the Exercise
Price then in effect (after giving effect to the adjustment in Section 3(a) above), then at the close of trading on the primary Trading
Market on the last day of the Share Combination Adjustment Period, the Exercise Price then in effect on such fifth (5th) Trading Day shall
be reduced (but in no event increased) to the Event Market Price and the number of Warrant Shares issuable hereunder shall be increased
such that the aggregate Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged.
Notwithstanding the foregoing, if one or more Share Combination Events occur prior to the Stockholder Approval being obtained and a reduction
of the Exercise Price did not occur, once the Stockholder Approval is obtained, the Exercise Price will automatically be reduced to equal
the lowest Event Market Price with respect to any Share Combination Event that occurred prior to the Stockholder Approval being obtained
and the number of Warrant Shares shall be proportionately adjusted pursuant to the foregoing. For the avoidance of doubt, (a) if the adjustment
in the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made,
and if this Warrant is exercised, on any given Exercise Date during the Share Combination Adjustment Period, solely with respect to such
portion of this Warrant exercised on such applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed
to have ended on, and included, the Trading Day immediately prior to such Exercise Date and the Event Market Price on such applicable
Exercise Date will be the lowest VWAP of the Common Stock immediately during such the Share Combination Adjustment Period prior to such
Exercise Date and ending on, and including the Trading Day immediately prior to such Exercise Date and (b) all adjustments pursuant to
this Section 3(j) shall also be subject to Section 3(a) above, including any Event Market Price.
Section
4. Transfer of Warrant.
a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of
this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
a)
Reverse Stock Split. If at any time this Warrant is outstanding and the Company receives notice from the Nasdaq Listing
Qualifications Department that the Company is failing to satisfy the $1.00 minimum bid requirement (the “Trigger Date”),
then the Company shall take all necessary steps to obtain the necessary consents and approvals to undertake a reverse stock split after
such Trigger Date and shall, prior to the effectiveness of any delisting notice issued by the Nasdaq Capital Market, effect such reverse
stock split.
b)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
c)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
d)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
e)
Authorized Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary
to enable the Company to perform its obligations under this Warrant.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
f)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City
of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant,
the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees
and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
g)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
h)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other
provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
i)
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Company, at Applied DNA Sciences, Inc., 50 Health Sciences Drive, Stony Brook, NY 11790, Attention:
Beth Jantzen, email address: beth.jantzen@adnas.com, or such other email address or address as the Company may specify for such purposes
by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in
writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at
the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via
e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day
after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K.
j)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the
Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
k)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
l)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.
m)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.
n)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
o)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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APPLIED
DNA SCIENCES, INC. |
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Name: |
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Title: |
NOTICE OF EXERCISE
To: APPLIED
DNA SCIENCES, INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.
(2)
Payment shall take the form of (check applicable box):
[ ] in lawful money
of the United States; or
[ ] if permitted the
cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise
this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in
subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following
DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name of Investing Entity: ______________________________________________________
Signature
of Authorized Signatory of Investing Entity: ________________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: ___________________________________________________
Date: ______________________________________________________________________
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name: |
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Address: |
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Phone
Number: |
______________________________________ |
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Email
Address: |
______________________________________ |
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Dated: _______________
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Holder’s Signature: ___________________________________________ |
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Holder’s Address: ____________________________________________ |
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Exhibit 4.16
SERIES B COMMON STOCK PURCHASE WARRANT
APPLIED
DNA SCIENCES, INC.
Warrant Shares: [______] Issuance Date: [_______], 2024
THIS SERIES B COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, [___________] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the Stockholder Approval Date (as defined below) (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York
City time) on the one (1) year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter,
to subscribe for and purchase from Applied DNA Sciences, Inc., a Delaware corporation (the “Company”), up to [______]
shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share
of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings
indicated in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York
City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be
deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch
locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire
transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement
Agency Agreement” means the placement agency agreement, dated as of May __, 2024, by and between the Company, Craig-Hallum Capital
Group LLC and Laidlaw & Company (UK) Ltd., as amended, modified or supplemented from time to time in accordance with its terms.
“Registration
Statement” means the Company’s registration statement on Form S-1, as amended (File No. 333-278890).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Stockholder
Approval” means such approval as may be required by the applicable rules and regulations of the Nasdaq Capital Market (or any
successor entity) from the stockholders of the Company to permit the exercise of the Warrants and with respect to issuance of all the Warrant Shares upon the exercise thereof, including, without limitation,
(i) to give full effect to the alternative cashless exercises pursuant to Section 2(c) hereof and (ii) to consent to any adjustment to
the exercise price or number of shares of Common Stock underlying the Warrants in the event of a Share Combination Event pursuant to Section
3(i) hereof.
“Stockholder
Approval Date” means the first trading day following the Company’s notice to the Holder of Stockholder Approval, which
notice shall be provided within two Trading Days of the Company’s receipt of Stockholder Approval.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, the OTCQB or OTCQX (or any successors to any of the foregoing).
“Transfer
Agent” means Equiniti Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 48 Wall Street,
Floor 23, New York, New York 10005 and an email address of [_________], and any successor transfer agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock
is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
“Warrants”
means this Warrant and other Series B Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section
2. Exercise.
a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy
submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of
Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the
aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check
drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable
Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the
Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the
Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the
applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1)
Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that,
by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of
Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $[_____], subject to adjustment
hereunder (the “Exercise Price”).
c)
Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus
contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice
of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the
Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the
time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular
trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such
Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours”
on such Trading Day; |
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(B) = |
the Exercise Price of this Warrant, as adjusted hereunder; and |
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(X) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act,
the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2(c).
Whether or not an
effective registration statement is available, the Holder may also effect an “alternative cashless exercise”. In such event,
the aggregate number of Warrant Shares issuable in such alternative cashless exercise pursuant to any given Notice of Exercise electing
to effect an alternative cashless exercise shall equal the product of (i) the aggregate number of Warrant Shares that would be issuable
upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than
a cashless exercise, multiplied by (ii) 3.0. Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 2(c) (including an alternative cashless exercise pursuant to
this paragraph).
d)
Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate or a book entry statement, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
ii. Delivery of New Warrants Upon Exercise. If this Warrant
shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the
time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder,
if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of
Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the
amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise
to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded)
or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise
to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay
all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or
another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant
Shares. For the avoidance of doubt, nothing in this Section 2(d)(vi) shall require the Company to deliver the Warrant Shares on a
date earlier than the Warrant Share Delivery Date.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any
other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons,
“Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates
or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.
Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the
limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the
Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number
of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day
confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon
election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the
Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st
day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may
be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
Section
3. Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise
of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way
of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares
of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this
Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or re-classification.
b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the
Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations
on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent
that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions, provided, however that the sale by the Company of any
Subsidiary, other than a Material Subsidiary, does not constitute a Fundamental Transaction, (iii) any, direct or indirect, purchase
offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the
holders of greater than 50% of the outstanding Common Stock or greater than 50% of the voting power of the common equity of the
Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such
other Person or group acquires greater than 50% of the outstanding shares of Common Stock or greater than 50% of the voting power of
the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation
in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or
of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section
2(e) on the exercise of this Warrant). “Material Subsidiary” shall mean any subsidiary of the Company that is material
to the business and operations of the Company (or has material assets to the Company on a consolidated basis) as described in the
Company’s public filings with the Commission. For purposes of any such exercise, the determination of the Exercise Price shall
be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in
respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a
Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at
any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the
public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an
amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date
of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not
within the Company's control, including not approved by the Company's Board of Directors, the Holder shall only be entitled to
receive from the Company or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black
Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the
Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination
thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in
connection with the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not
offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed to have received
common stock of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in such
Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option
Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the
day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable
contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the 100 day volatility obtained
from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following
the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per share used in such
calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash
consideration, if any, being offered in such Fundamental Transaction and (ii) the VWAP immediately preceding the public announcement
of the applicable contemplated Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier),
(D) the sum of the remaining option time equal to the time between the date of the public announcement of the applicable
contemplated Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value
will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five Business
Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any
successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d)
pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to
this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and
such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of
such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any
such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from
and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or
Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company,
may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of
the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the
Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the
avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(d) regardless of (i) whether
the Company has sufficient authorized shares of Common Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental
Transaction occurs prior to the Initial Exercise Date.
e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any
sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into
other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email
address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to
be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such
notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
g)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by
the board of directors of the Company.
h)
Stockholder Approval. The Company shall hold a special meeting of shareholders (which may also be at the annual meeting
of shareholders) at the earliest practicable date after the date hereof, but in no event later than ninety (90) days after the Closing
Date (as defined in the Placement Agency Agreement) for the purpose of obtaining Stockholder Approval, with the recommendation of the
Company’s Board of Directors that such proposal be approved, and the Company shall solicit proxies from its shareholders in connection
therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall
vote their proxies in favor of such proposal. If the Company does not obtain Stockholder Approval at the first meeting, the Company shall
call a meeting every ninety (90) days thereafter to seek Stockholder Approval until the earlier of the date on which Stockholder Approval
is obtained or the Warrants are no longer outstanding.
i)
Share Combination Event Adjustment. In addition to the adjustments set forth in Section 3(a) above, if at any time and
from time to time on or after the Stockholder Approval Date, there occurs any share split, share dividend, share combination recapitalization
or other similar transaction involving the Common Stock (each, a “Share Combination Event”, and such date thereof,
the “Share Combination Event Date”) and the lowest VWAP during the period commencing five (5) consecutive Trading Days
immediately preceding and the five (5) consecutive Trading Days commencing on the Share Combination Event Date (the “Event Market
Price”) (provided if the Share Combination Event is effective after close of trading on the primary Trading Market, then commencing
on the next Trading Day which period shall be the “Share Combination Adjustment Period”) is less than the Exercise
Price then in effect (after giving effect to the adjustment in Section 3(a) above), then at the close of trading on the primary Trading
Market on the last day of the Share Combination Adjustment Period, the Exercise Price then in effect on such fifth (5th) Trading Day shall
be reduced (but in no event increased) to the Event Market Price and the number of Warrant Shares issuable hereunder shall be increased
such that the aggregate Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged.
Notwithstanding the foregoing, if one or more Share Combination Events occur prior to the Stockholder Approval being obtained and a reduction
of the Exercise Price did not occur, once the Stockholder Approval is obtained, the Exercise Price will automatically be reduced to equal
the lowest Event Market Price with respect to any Share Combination Event that occurred prior to the Stockholder Approval being obtained
and the number of Warrant Shares shall be proportionately adjusted pursuant to the foregoing. For the avoidance of doubt, (a) if the adjustment
in the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made,
and if this Warrant is exercised, on any given Exercise Date during the Share Combination Adjustment Period, solely with respect to such
portion of this Warrant exercised on such applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed
to have ended on, and included, the Trading Day immediately prior to such Exercise Date and the Event Market Price on such applicable
Exercise Date will be the lowest VWAP of the Common Stock immediately during such the Share Combination Adjustment Period prior to such
Exercise Date and ending on, and including the Trading Day immediately prior to such Exercise Date and (b) all adjustments pursuant to
this Section 3(i) shall also be subject to Section 3(a) above, including any Event Market Price.
Section
4. Transfer of Warrant.
a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the
denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the
contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this
Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on
which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of
this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
a)
Reverse Stock Split. If at any time this Warrant is outstanding and the Company receives notice from the Nasdaq Listing
Qualifications Department that the Company is failing to satisfy the $1.00 minimum bid requirement (the “Trigger Date”),
then the Company shall take all necessary steps to obtain the necessary consents and approvals to undertake a reverse stock split after
such Trigger Date and shall, prior to the effectiveness of any delisting notice issued by the Nasdaq Capital Market, effect such reverse
stock split.
b)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
c) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.
d)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
e)
Authorized Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except and to
the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the
generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
f)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City
of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant,
the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees
and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
g)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
h) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any
material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
i)
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Company, at Applied DNA Sciences, Inc., 50 Health Sciences Drive, Stony Brook, NY 11790, Attention:
Beth Jantzen, email address: beth.jantzen@adnas.com, or such other email address or address as the Company may specify for such purposes
by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in
writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at
the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via
e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day
after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K.
j)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the
Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
k)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
l) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to
the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
m)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.
n)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
o)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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APPLIED
DNA SCIENCES, INC. |
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By: |
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Name: |
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Title: |
NOTICE OF EXERCISE
To: APPLIED
DNA SCIENCES, INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.
(2)
Payment shall take the form of (check applicable box):
[ ] in lawful money
of the United States; or
[ ] if permitted the
cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise
this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in
subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following
DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE
OF HOLDER]
Name of Investing Entity: ______________________________________________________
Signature
of Authorized Signatory of Investing Entity: ________________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: ___________________________________________________
Date: ______________________________________________________________________
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name: |
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(Please Print) |
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Address: |
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(Please Print) |
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Phone
Number: |
______________________________________ |
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Email
Address: |
______________________________________ |
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Dated: _______________
__, ______ |
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Holder’s Signature: ___________________________________________ |
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Holder’s Address: ____________________________________________ |
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Exhibit 23.1
Independent
Registered Public Accounting Firm’s Consent
We consent to the incorporation by reference in
this Registration Statement of Applied DNA Sciences, Inc. on Amendment No. 4 to Form S-1 (File No. 333-278890) of our report, which includes
an explanatory paragraph as to the Company’s ability to continue as a going concern, dated December 7, 2023 with respect to our
audits of the consolidated financial statements of Applied DNA Sciences, Inc, and Subsidiaries as of September 30, 2023 and 2022 and for
each of the two years in the period ended September 30, 2023 appearing in the Annual Report on Form 10-K of Applied DNA Sciences, Inc.
for the year ended September 30, 2023. We also consent to the reference to our firm under the heading “Experts” in the Prospectus,
which is part of this Registration Statement.
/s/ Marcum llp
Marcum llp
Melville, NY
May 24, 2024
Exhibit 107
Registrant Name in English, if applicable
(Translation of Registrant’s Name into English)
Table 1: Newly Registered and Carry Forward
Securities
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Fee |
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Calculation |
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Proposed |
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Maximum |
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or Carry |
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Maximum |
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Aggregate |
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Amount of |
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Security |
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Security |
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Forward |
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Amount |
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Offering |
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Offering |
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Registration |
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Type |
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Class Title |
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Rule |
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Registered |
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Price |
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Price(1) |
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Fee
Rate |
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Fee
(2) |
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Fees to be Paid |
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Equity |
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Units, each consisting of: (i) one share of common stock,
$0.001 par value per share (“Common Stock”); (ii) one Series A Warrant to purchase one share of Common Stock (the “Series
A Warrant”); and (iii) one Series B Warrant to purchase one share of Common Stock (together with the Series A Warrant, “Series
Warrants”) |
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- |
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- |
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- |
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$ |
12,000,000 |
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$ |
0.00014760 |
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$ |
1,771.20 |
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Equity |
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Common Stock included as part of the Units which include a share
of Common Stock(2) |
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457 |
(o) |
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- |
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- |
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$ |
- |
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$ |
- |
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$ |
- |
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Equity |
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Units, each consisting of: (i) one Pre-Funded Warrant exercisable
for one share of Common Stock; and (ii) the Series Warrants(3) |
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- |
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- |
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- |
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$ |
- |
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$ |
- |
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$ |
- |
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Equity |
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Pre-Funded Warrants to purchase Common Stock, included as part of
the Units which include a Pre-Funded Warrant(3) |
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457 |
(g) |
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- |
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- |
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$ |
- |
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$ |
- |
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$ |
- |
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Equity |
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Common Stock underlying Pre-Funded Warrants(4) |
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457 |
(o) |
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- |
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- |
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$ |
- |
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$ |
- |
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$ |
- |
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Equity |
|
Series Warrants to Purchase Common Stock, included as part of the
Units(4) |
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457 |
(g) |
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- |
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- |
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$ |
- |
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$ |
- |
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$ |
- |
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Equity |
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Common Stock underlying Series Warrants(6) |
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457 |
(o) |
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- |
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- |
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$ |
36,960,000 |
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$ |
0.00014760 |
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$ |
5,455.30 |
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Equity |
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Placement Agent Warrants (4) |
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457 |
(g) |
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Equity |
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Common Stock underlying Placement Agent Warrants(5) |
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457 |
(o) |
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$ |
924,000 |
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0.00014760 |
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136.38 |
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TOTAL OFFERING AMOUNTS |
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$ |
49,884,000 |
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$ |
7,362.88 |
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TOTAL FEES PREVIOUSLY PAID |
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$ |
4,501.80 |
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NET FEES DUE |
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$ |
2,861.08 |
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(1) |
Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”). |
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(2) |
Pursuant to Rule 416 under the Securities Act, this registration statement shall also cover any additional shares of the registrant’s securities that become issuable by reason of any share splits, share dividends or similar transactions. |
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(3) |
The registrant may issue Units which include a Pre-Funded Warrant to purchase Common Stock in lieu of a share of Common Stock in the offering. The purchase price of each Unit which includes a Pre-Funded Warrant will equal the price per share at which Units which include a share of Common Stock are being sold to the public in this offering, minus $0.0001, which constitutes the pre-funded portion of the exercise price of the Pre-Funded Warrants, and the remaining unpaid exercise price of the Pre-Funded Warrants will equal $0.0001 per share (subject to adjustment as provided for therein). The proposed maximum aggregate offering price of the Units which include a share of Common Stock will be reduced on a dollar-for-dollar basis based on the offering price of any Units which include a Pre-Funded Warrant issued in the offering. Accordingly, the proposed maximum aggregate offering price of the Units which include a share of Common Stock and Units which include a Pre-Funded Warrant is $12,000,000. |
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(4) |
No separate registration fee is payable pursuant to Rule 457(g) under the Securities Act. |
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(5) |
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act. The placement agent warrants are exercisable for up to the number of shares of common stock equal to 5.0% of the aggregate number of Units sold in this offering at a per share exercise price equal to the exercise price of the Series A Warrants and Series B Warrants. As estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act, the proposed maximum aggregate offering price of the placement agent warrants is $924,000.00, which is equal to 154% of $600,000.00 (5.0% of the proposed maximum aggregate offering price of $12,000,000.00). |
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(6) |
The exercise price of the Series Warrants will be equal to 154% of the public offering price of the Units. |
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