Form 8-K
8-K — Sonoma Pharmaceuticals, Inc.
Accession: 0001683168-26-003381
Filed: 2026-04-30
Period: 2026-04-24
CIK: 0001367083
SIC: 3841 (SURGICAL & MEDICAL INSTRUMENTS & APPARATUS)
Item: Entry into a Material Definitive Agreement
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K — sonoma_8k.htm (Primary)
EX-1.1 — UNDERWRITING AGREEMENT (sonoma_ex0101.htm)
EX-4.1 — FORM OF WARRANT (sonoma_ex0401.htm)
EX-4.2 — FORM OF PRE-FUNDED WARRANT (sonoma_ex0402.htm)
EX-4.4 — WARRANT AGENCY AGREEMENT (COMMON WARRANTS) (sonoma_ex0404.htm)
EX-4.5 — WARRANT AGENCY AGREEMENT (PRE-FUNDED WARRANTS) (sonoma_ex0405.htm)
EX-99.1 — PRESS RELEASE (sonoma_ex9901.htm)
GRAPHIC (image_001.jpg)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K — CURRENT REPORT
8-K (Primary)
Filename: sonoma_8k.htm · Sequence: 1
Sonoma Pharmaceuticals, Inc. 8-K
false
0001367083
0001367083
2026-04-24
2026-04-24
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported) April 24,
2026
SONOMA
PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware
001-33216
68-0423298
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
5445
Conestoga Court, Suite
150
Boulder, CO 80301
(Address of principal executive offices)
(Zip Code)
(800) 759-9305
(Registrant’s telephone number, including
area code)
Not applicable.
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common
Stock
SNOA
The Nasdaq Stock Market LLC
Indicate by check mark whether the
registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or
Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01
Entry into a Material Definitive Agreement.
On April 24, 2026, Sonoma Pharmaceuticals, Inc. (the “Company”)
entered into an underwriting agreement (the “Underwriting Agreement”) with Dawson James Securities, Inc. (the “Underwriter”).
Pursuant to the terms of the Underwriting Agreement, the Company agreed to issue and sell to the Underwriter an aggregate of 2,962,962
units, each unit consisting of one share of common stock, par value $0.0001 per share or, in lieu of common stock, if purchasing common
stock would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of
the outstanding common stock, a pre-funded warrant, together with one warrant to purchase one share of common stock at an exercise price
equal to $1.35 per share, in a public offering. The public offering price for each unit was $1.35.
Pursuant to the Underwriting Agreement, the Company granted the Underwriter
a 45-day option (the “Over-Allotment Option”) to purchase up to 444,444 additional shares of common stock and/or 444,444 warrants
to purchase an aggregate of 444,444 shares of common stock.
Pursuant to the Underwriting Agreement, The Company agreed to pay the
Underwriter an aggregate fee equal to 7.5% of the gross proceeds of the offering. The Company also agreed to pay the Underwriter a non-accountable
expense allowance equal to 1% of the public offering proceeds, and expenses related to the offering up to $75,000, and to issue to Dawson
James Securities, Inc. or its designees a warrant for the purchase of up to 5% of the aggregate number of securities sold in the offering
(the “Underwriter’s Warrant”). The Underwriter’s Warrant is exercisable for a period commencing six months following
the closing of the offering and ending on the third anniversary of the closing date, with an exercise price equal to 110% of the
public offering price.
The shares of common stock or pre-funded warrants, the warrants, the
Underwriter’s Warrant and the shares issuable upon exercise of the warrants and/or the pre-funded warrants were offered to the public
pursuant to the Company’s registration statement on Form S-1 and an accompanying preliminary prospectus (File No. 333-295171), which
was declared effective by the Securities and Exchange Commission on April 23, 2026, and a final prospectus filed with the Securities and
Exchange Commission on April 27, 2026.
The closing of the offering occurred on April 27 and 28, 2026, including
full exercise of the Over Allotment Option, and the Company issued and sold (i) 1,650,716 shares of common stock, (ii) 1,312,247 pre-funded
warrants to purchase 1,312,247 shares of common stock, and (iii) 3,407,404 warrants to purchase 3,407,404 shares of common stock, at an
exercise price of $1.35 per share, expiring on the fifth anniversary of the date of issuance. The net proceeds to the Company from the
sale of the shares of common stock, the pre-funded warrants, and the warrants are expected to be approximately $3.5 million, after deducting
the underwriting discount, non-accountable expense allowance and other estimated offering expenses. The Company will receive additional
proceeds from the warrants to the extent such warrants are exercised for cash.
The Underwriting Agreement contains customary representations, warranties
and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriter, including
for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. In addition,
pursuant to the terms of the Underwriting Agreement, the Company and its executive officers and directors have entered into agreements
providing that the Company and each of these persons may not, without the prior written approval of the Underwriter, subject to limited
exceptions, offer, sell, transfer or otherwise dispose of the Company’s securities until 90 days following the closing of the
offering.
On April 28, 2026, the Company entered into warrant agency agreements
with Computershare, Inc. and Computershare Trust Company, N.A., which will act as warrant agent for the Company in connection with the
pre-funded warrants and the warrants issued and sold in the offering (the “Warrant Agency Agreements”).
The foregoing summaries of the Underwriting Agreement, the warrants,
the pre-funded warrants, the Underwriter’s Warrant and the Warrant Agency Agreements do not purport to be complete and are subject
to, and qualified in their entirety by, such documents attached as Exhibits 1.1, 4.1, 4.2, 4.3, 4.4 and 4.5, respectively, to this Current
Report on Form 8-K, which are incorporated herein by reference.
2
The Underwriting Agreement is included as an exhibit to this Current
Report on Form 8-K to provide investors and security holders with information regarding its terms. The representations, warranties and
covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely
for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.
This Current Report on Form 8-K does not constitute an offer to sell
any securities or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction
in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any
such state or jurisdiction.
Item 8.01
Other Events.
On April 24, 2026, the Company issued a press release announcing the
pricing of the offering. The press release is filed as Exhibit 99.1 hereto and incorporated herein by reference.
This report contains forward-looking statements. Forward-looking statements
include, but are not limited to, statements that express the Company’s intentions, beliefs, expectations, strategies, predictions
or any other statements related to the Company’s future activities, or future events or conditions. These statements are based on
current expectations, estimates and projections about the Company’s business based, in part, on assumptions made by management.
These statements are not guarantees of future performances and involve risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due
to numerous factors, including those risks discussed in the Company’s Annual Report on Form 10-K and in other documents that the
Company files from time to time with the SEC. Any forward-looking statements speak only as of the date on which they are made, and the
Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of
this report, except as required by law.
Item 9.01 Financial
Statements and Exhibits.
(d) Exhibits.
Exhibit Number
Description
1.1
Underwriting Agreement, dated April 24, 2026, by and between the Company and Dawson James Securities, Inc.
4.1
Form of Warrant
4.2
Form of Pre-Funded Warrant
4.3
Form of Underwriter’s Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1, as amended, originally filed April 17, 2026).
4.4
Warrant Agency Agreement (Common Warrants), dated April 28, 2026, by and among the Company, Computershare, Inc. and Computershare Trust Company, N.A.
4.5
Warrant Agency Agreement (Pre-Funded Warrants), dated April 28, 2026, by and among the Company, Computershare, Inc. and Computershare Trust Company, N.A.
99.1
Press Release, dated April 24, 2026.
104
Cover Page Interactive Data File (formatted in Inline XBRL in Exhibit 101).
* Non-material schedules and exhibits have been omitted
pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby undertakes to furnish supplementally copies of any of the omitted
schedules and exhibits upon request by the SEC.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SONOMA PHARMACEUTICALS, INC.
Date: April 30, 2026
By:
/s/ Amy Trombly
Name:
Title:
Amy Trombly
Chief Executive Officer
4
EX-1.1 — UNDERWRITING AGREEMENT
EX-1.1
Filename: sonoma_ex0101.htm · Sequence: 2
Exhibit 1.1
UNDERWRITING AGREEMENT
April 24, 2026
DAWSON JAMES SECURITIES, INC.
101 N. Federal Highway Suite 600
Boca Raton, Florida 33432
As Representative of the several Underwriters
named on Schedule 1 attached hereto
Ladies and Gentlemen:
The undersigned, Sonoma Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), hereby confirms its agreement (this “Agreement”) with
Dawson James Securities Inc. (the “Representative”) and with the other underwriters, if any, named on Schedule 1
hereto for which the Representative is acting as representative (the Representative and such other underwriters being collectively called
the “Underwriters” or, individually, an “Underwriter”) as follows:
1.
Purchase and Sale of Shares and Warrants.
(a)
Firm Shares and Firm Warrants.
(i)
Nature and Purchase of Firm Shares and Firm Warrants.
(A)
On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth,
the Company agrees to issue and sell to the Underwriters an aggregate of 2,962,962 units (each a “Unit,” and collectively,
the “Units”), each comprised of one share (individually, “Firm Share”; collectively, the “Firm
Shares”) of Company common stock, par value $0.0001 per share (the “Common Shares”), or in lieu of a Common
Share, and (ii) a warrant to purchase one Common Share at an exercise price of $1.35 per share (individually, “Firm Warrant”
and, collectively, the “Firm Warrants”). To the extent that the purchase of Firm Shares would cause the beneficial
ownership of a purchaser in the Offering, together with its affiliates and certain related parties, to exceed 4.99% of the Common Shares,
the Company agrees to issue the Underwriters, for delivery to such purchasers, at the election of the purchasers, a number of Pre-Funded
Warrants (individually “Pre-Funded Warrant”; collectively, the “Pre-Funded Warrants”), which are
initially convertible on a 1-for-1 basis into Common Shares, at an exercise price of $0.0001 per Common Share in lieu of the Firm Shares.
The Firm Warrants, the Firm Shares and the Pre-Funded Warrants are hereafter collectively referred to as the “Firm Securities”.
(B)
The Underwriters, severally and not jointly, agree to purchase from the Company the number of Units set forth opposite their respective
names on Schedule 1 attached hereto and made a part hereof. The combined purchase price for one Unit shall be $1.25 (92.5% of the
public offering price per Unit of $1.35) which shall be allocated as $$1.247825 per Firm Share (or Pre-Funded Warrant) and $0.000925 per
Firm Warrant. The Units are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus
(as defined in Section 2(a)(B) hereof) (the “Purchase Price”). The Firm Shares (or Pre-Funded Warrants) and the Firm
Warrants will be separated immediately upon issuance.
(ii)
Securities Payment and Delivery.
(A)
Delivery and payment for the Units shall be made no later than 2:00 p.m., Eastern Time, on the second (2nd) Business
Day following the effective date (the “Effective Date”) of the Registration Statement (as defined in Section 2(a)(i)(A)
below) (or the third (3rd) Business Day following the Effective Date if the Registration Statement is declared effective after
4:01 p.m., Eastern Time) or at such other time as shall be agreed upon by the Representative and the Company, at the offices of ArentFox
Schiff LLP, 1717 K Street NW, Washington DC 20006 (“Representative’s Counsel”), or at such other place (or by
electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and date of delivery and payment for
the Units is called the “Closing Date.”
1
(B)
Payment for the Units shall be made on the Closing Date by wire transfer in federal (same day) funds, payable to the order of the
Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) (or through the facilities of the Depository
Trust Company (“DTC”)), for the account of the Underwriters. The Firm Shares and Firm Warrants underlying the Units
shall be registered in such name or names and in such authorized denominations as the Representative may request in writing prior to the
Closing Date. The Company shall not be obligated to sell or deliver the Firm Shares and Firm Warrants underlying the Units except upon
tender of payment by the Representative for all of the Units or via delivery versus payment for the Units. The term “Business
Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized
or obligated by law to close in New York, New York.
(b)
Over-Allotment Option.
(i)
Option Securities. For the purposes of covering any over-allotments in connection with the distribution and sale of the
Units, the Company hereby grants to the Representative an option (the “Over-Allotment Option”) to purchase, in the
aggregate, (a) up to 444,444 additional Common Shares (15% of the Firm Shares and Pre-Funded Warrants underlying the Units) at a purchase
price per share of $1.25 (92.5% of the public offering price allocated to each Firm Share) (the “Option Shares” and
together with the Firm Shares, the “Shares”), and/or (b) 444,444 warrants to purchase an aggregate of 444,444
Common Shares (5% of the Firm Warrants) at a purchase price of $0.00925 per warrant (92.5% of the public offering price allocated to each
set of Firm Warrants) (the “Option Warrants” and together with the Firm Warrants, the “Warrants”),
which may be purchased in any combination of Option Shares and/or Option Warrants. The Option Shares and the Option Warrants are referred
to as the “Option Securities”). The Firm Securities and the Option Securities are collectively referred to as the “Public
Securities.” The Public Securities shall be issued directly by the Company and shall have the rights and privileges described
in the Registration Statement, the Pricing Disclosure Package and the Prospectus referred to below. The offering and sale of the Public
Securities is hereinafter referred to as the “Offering.”
(ii)
Exercise of Over-Allotment Option. The Over-Allotment Option granted pursuant to Section 1(b)(i) hereof may be exercised
by the Representative as to all (at any time) or any part (from time to time) of the Option Securities within 45 days after the Closing
Date. An Underwriter shall not be under any obligation to purchase any Option Securities prior to the exercise of the Over-Allotment Option
by the Representative. The Over-Allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the
Representative, which must be confirmed in writing by overnight mail or by email or other electronic transmission setting forth the number
of Option Shares and/or Option Warrants to be purchased and the date and time for delivery of and payment for the Option Shares and/or
Option Warrants, as the case may be (each, an “Option Closing Date”), which shall not be earlier than one (1) Business
Day nor later than five (5) full Business Days after the date of the written notice or such other time as shall be agreed upon by the
Company and the Representative, at the offices of the Representative’s Counsel, or at such other place (including remotely by electronic
transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Shares and/or
Option Warrants does not occur on the Closing Date, each Option Closing Date will be as set forth in the notice. Upon exercise of the
Over-Allotment Option, the Company will become obligated to convey to the Representative, and, subject to the terms and conditions set
forth herein, the Representative will become obligated to purchase, the number of Option Shares and/or Option Warrants specified in such
notice.
(iii)
Payment and Delivery. Payment for the Option Shares and/or Option Warrants shall be made on the Option Closing Date by wire
transfer in federal (same day) funds, payable to the order of the Company upon delivery to the Representative of certificates (in form
and substance satisfactory to the Representative) representing the Option Shares and/or Option Warrants (or through the facilities of
the DTC or Deposit/Withdrawal at Custodian transfer) for the account of the Representative. The Option Shares and/or Option Warrants shall
be registered in such name or names and in such authorized denominations as the Representative may request in writing prior to the Option
Closing Date. The Company shall not be obligated to sell or deliver the Option Shares and/or Option Warrants except upon tender of payment
by the Representative for the applicable Option Shares and/or Option Warrants.
2
(c)
Representative's Warrant.
(i)
Representative's Warrant. The Company hereby agrees to issue to the Representative (and/or its designees) on the Closing
Date a warrant for the purchase of the number of Common Shares equal to 5.0% of the aggregate number of Securities sold in the Offering
(to the extent a unit of securities is being offered, the Representative's Warrant shall take the form of a unit purchase option to purchase
the unit of securities), pursuant to a warrant agreement in the form attached hereto as Exhibit B (the "Representative's Warrant"),
at an initial exercise price equal to 110% of the public offering price per Security issued in the Offering. The Representative's
Warrant and the Common Shares issuable upon exercise of the Representative's Warrant are hereinafter referred to together as the "Representative's
Securities." The Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against
transferring the Representative's Warrant and the underlying securities during the 180 days after the commencement date of sales in the
Offering and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative's
Warrant, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in
the effective economic disposition of such securities for a period of 180 days after the commencement date of sales in the Offering, except
as expressly permitted by FINRA Rule 5110(e), and only if any such transferee agrees to the foregoing lock-up restrictions.
(ii)
Delivery. Delivery of the Representative's Warrant shall be made on the Closing Date, and shall be issued in the name or
names and in such authorized denominations as the Representative may reasonably request.
2.
Representations and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable
Time (as defined below) and as of the Closing Date, or any Option Closing Date, as follows:
(a)
Registration Matters.
(i)
Pursuant to the Securities Act.
(A)
The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”) a registration statement,
and amendments thereto, on Form S-1 (File No. 333-295171), including any related prospectus or prospectuses (the “Prospectus”),
for the registration of the Public Securities, the Representative's Securities and the Underlying Common Stock (as defined below) under
the Securities Act of 1933, as amended (the “Securities Act”), which registration statement and amendment or amendments
have been prepared by the Company in conformity in all material respects with the requirements of the Securities Act and the rules and
regulations of the Commission under the Securities Act (the “Securities Act Regulations”) and will contain all material
statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except as
the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration statement
became effective (including the Preliminary Prospectus included in the registration statement, financial statements, schedules, exhibits
and all other documents filed as a part thereof and all information deemed to be a part thereof as of the Effective Date pursuant to paragraph
(b) of Rule 430A of the Securities Act Regulations (the “Rule 430A Information”)), is referred to herein as the
“Registration Statement.” If the Company files any registration statement pursuant to Rule 462(b) of the Securities
Act Regulations, then after such filing, the term “Registration Statement” shall include such registration statement
filed pursuant to Rule 462(b). The Registration Statement has been declared effective by the Commission on the date hereof.
(B)
Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information
that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “Preliminary
Prospectus.” The Preliminary Prospectus, subject to completion, dated April 23, 2026, that was included in the Registration
Statement immediately prior to the Applicable Time is hereinafter called the “Pricing Prospectus.” The final prospectus
in the form first furnished to the Underwriters for use in the Offering is hereinafter called the “Prospectus.” Any
reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus included
in the Registration Statement.
(C)
The term “Pricing Disclosure Package” means (i) the Preliminary Prospectus, as most recently amended or supplemented
immediately prior to the Applicable Time (as defined herein), and (ii) the information included on Schedule 2 of this Agreement.
3
(D)
“Applicable Time” means 4:30 p.m., Eastern Time, on the date of this Agreement.
(ii)
Pursuant to the Exchange Act. The Company has filed with the Commission a Form 8-A providing for the registration pursuant
to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the Firm Securities.
The registration of the Firm Securities under the Exchange Act will be effective on or prior to the date hereof. The Company has taken
no action designed to, or likely to have the effect of, terminating the registration of the Common Shares or Warrants under the Exchange
Act, nor has the Company received any notification that the Commission is contemplating terminating such registration.
(b)
Stock Exchange Listing. The Common Shares have been approved for listing on The Nasdaq Capital Market (the “Exchange”),
and the Company has taken no action designed to, or likely to have the effect of, delisting the Common Shares from the Exchange, nor has
the Company received any notification that the Exchange is contemplating terminating such listing. The Company is in compliance with all
continued listing criteria and rules of the Exchange, including but not limited to newly-adopted Rule 5608.
(c)
No Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued
any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted
or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied
with each request (if any) from the Commission for additional information.
(d)
Organization; Good Standing; No Subsidiaries. The Company has been duly incorporated and is validly existing as entities
in good standing under the laws of the State of Delaware, with power and authority to own, lease and operate its respective properties
and conduct its respective businesses as described in the Preliminary Prospectus, and has been duly qualified as foreign corporation for
the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except where the failure so to qualify or be in good standing would not have
a Material Adverse Change (as defined in Section 2(f)(i)). The Company is not in violation or default of any of the provisions of its
certificate of incorporation, bylaws or other organizational or charter documents. Other than as set forth in the Pricing Disclosure Package,
the Company does not have any direct or indirect subsidiaries.
(e)
Disclosures in Registration Statement.
(i)
Compliance with Securities Act and 10b-5 Representation.
(A)
Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material
respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including the prospectus
filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus,
at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the
Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the
Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(B)
Neither the Registration Statement nor any amendment thereto, at its respective effective time, contained, contains or will contain
an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to the Underwriters’
Information (as defined below).
(C)
The Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date, did not and does
not, and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and
warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished
to the Company with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Preliminary
Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided
by or on behalf of any Underwriter consists solely of the following disclosure contained in the following paragraphs in the “Underwriting”
section of the Prospectus: (i) the names of the several underwriters, and (ii) the information under the subsections “Discounts
and Commissions; Expenses”; “Discretionary Accounts,” “Price Stabilization, Short Positions and Penalty Bids;”
and “Electronic Distribution” (the “Underwriters’ Information”); and
4
(D)
Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the
time of any filing with the Commission pursuant to Rule 424(b), or at the Closing Date, included, includes or will include an untrue statement
of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply
to the Underwriters’ Information.
(ii)
Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other
documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been
so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which
it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing Disclosure Package and the
Prospectus, and (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is
in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other
parties thereto, in accordance with its terms, except (w) for such agreements or instruments for enforceability of which would not reasonably
be expected to result, individually or in the aggregate, in a Material Adverse Change, (x) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any
indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of
specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought. Except as described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, none of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the
Company’s knowledge, any other party is in material default thereunder and, to the Company’s knowledge, no event has occurred
that, with the lapse of time or the giving of notice, or both, would constitute a material default thereunder, except as disclosed in
the Registration Statement, the Pricing Disclosure Package and the Prospectus, or which would not reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Change. To the Company’s best knowledge, performance by the Company of the material provisions
of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses
(each, a “Governmental Entity”), including, without limitation, those relating to environmental laws and regulations,
except such violations which would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change.
(iii)
Prior Securities Transactions. Since the beginning of the last two full fiscal years, no securities of the Company have
been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common
control with the Company, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Preliminary Prospectus.
(iv)
Regulations. The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning
the effects of federal, state, local and foreign laws, rules and regulations relating to the Company’s business as currently contemplated
are correct in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus which are not so disclosed.
(f)
Changes After Dates in Registration Statement.
(i)
No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse
change in the financial position or results of operations of the Company, nor, to the Company’s knowledge, any change or development
that, singularly or in the aggregate, would involve a material adverse change in or affecting the condition (financial or otherwise),
results of operations, business or assets of the Company, taken as a whole (a “Material Adverse Change”); (ii) there
have been no material transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no
officer or director of the Company has resigned from any position with the Company.
(ii)
Recent Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed
in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities
(other than (i) grants under any stock compensation plan and (ii) Common Shares issued upon exercise or conversion of option, warrants
or convertible securities described in the Registration Statement, the Pricing Disclosure Package and the Prospectus) or incurred any
liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution
on or in respect to its capital stock.
5
(g)
Independent Accountants. To the knowledge of the Company, Frazier & Deeter, LLC, during such time as it was engaged
by the Company (the “Auditors”), has been and is an independent registered public accounting firm as required by the
Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board. During such time period in which
the Auditors served as the Company’s independent registered public accounting firm, the Auditors did not or have not, during the
periods covered by the financial statements included in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
(h)
Financial Statements, etc. The financial statements, including the notes thereto and supporting schedules included in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly present in all material respects the financial position
and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have
been prepared in conformity with United States generally accepted accounting principles (“GAAP”), consistently applied
throughout the periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are
not expected to be material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included
in the Registration Statement present fairly in all material respects the information required to be stated therein. Except as included
therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the Pricing Disclosure
Package or the Prospectus under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial
information and the related notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have
been properly compiled and prepared in all material respects in accordance with the applicable requirements of the Securities Act and
the Securities Act Regulations and present fairly in all material respects the information shown therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances
referred to therein. All disclosures contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding
“non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission), if any, comply with
Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration
Statement, the Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have
a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, (a) the Company has not incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not
declared or paid any dividends or made any distribution of any kind with respect to its capital stock, (c) there has not been any change
in the capital stock of the Company (other than (i) grants under any stock compensation plan and (ii) Common Shares issued upon exercise
or conversion of option, warrants or convertible securities described in the Registration Statement, the Pricing Disclosure Package and
the Prospectus), and (d) there has not been any Material Adverse Change in the Company’s long-term or short-term debt.
(i)
Authorized Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions
stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the
adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing Disclosure
Package and the Prospectus, on the Effective Date, as of the Applicable Time, and on the Closing Date, there will be no stock options,
warrants, or other rights to purchase or otherwise acquire any authorized, but unissued Common Shares or any security convertible or exercisable
into Common Shares, or any contracts or commitments to issue or sell Common Shares or any such options, warrants, rights or convertible
securities.
(j)
Valid Issuance of Securities, etc.
(i)
Outstanding Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated
by this Agreement have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights
of rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities
were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted
by the Company. The offers and sales of the outstanding Common Shares were at all relevant times either registered under the Securities
Act and the applicable state securities or “blue sky” laws or, based in part on the representations and warranties of the
purchasers of such shares, exempt from such registration requirements. The authorized Common Shares and other outstanding securities conform
in all material respects to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and
the Prospectus.
6
(ii)
Securities Sold Pursuant to this Agreement. The Public Securities and the Representative's Securities have been duly authorized
for issuance and sale and, when issued and paid for in accordance with the terms of this Agreement, will be validly issued, fully paid
and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; the Public
Securities and Representative's Securities are not and will not be subject to the preemptive rights of any holders of any security of
the Company or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization,
issuance and sale of the Public Securities and Representative's Securities has been duly and validly taken. The Public Securities and
Representative's Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement,
the Pricing Disclosure Package and the Prospectus. The Common Shares issuable upon exercise of the Warrants and the Representative's Warrant
(the “Underlying Common Stock”) have been duly authorized and reserved for issuance by all necessary corporate action
on the part of the Company and when paid for and issued in accordance with the Warrants and/or the Representative's Warrant, or exercised
on a cashless basis as set forth in the Representative's Warrant, if applicable, as the case may be, such shares of Underlying Common
Stock will be validly issued, fully paid and non-assessable.
(k)
Registration Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities
of the Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include
any such securities in a registration statement to be filed by the Company.
(l)
Validity and Binding Effect of Agreements. This Agreement, the Warrant Agreement by and between the Company and Computershare,
Inc. (the “Warrant Agreement”) have been duly and validly authorized by the Company and, when executed and delivered,
will constitute, the valid and binding agreements of the Company, enforceable against the Company in accordance with their respective
terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, fraudulent
transfer, moratorium or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(m)
No Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Warrant Agreement, and
all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the
Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i)
result in a material breach of, or conflict with any of the terms and provisions of, or constitute a material default under, or result
in the creation, modification, termination or imposition of any material lien, charge or encumbrance upon any property or assets of the
Company pursuant to the terms of any agreement or instrument to which the Company is a party; (ii) result in any violation of the
provisions of the Company’s certificate of incorporation (as the same may be amended or restated from time to time, the “Charter”)
or the by-laws of the Company (as the same may be amended or restated from time to time, the “Bylaws”); or (iii) violate
any existing law, rule, regulation, judgment, order or decree of any Governmental Entity applicable to the Company as of the date hereof
(including, without limitation, those promulgated by the Food and Drug Administration of the U.S. Department of Health and Human Services
(the “FDA”) or by any foreign, federal, state or local regulatory authority performing functions similar to those performed
by the FDA), except in the case of clauses (i) and (iii) above for any such breaches, conflicts or violations which would not reasonably
be expected to result in a Material Adverse Change.
7
(n)
Regulatory. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or as would
not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change: (i) the Company has not received
any FDA Form 483, written notice of adverse finding, warning letter or other correspondence or written notice from the FDA or any other
Governmental Entity alleging or asserting noncompliance with any Applicable Laws (as defined in clause (ii) below) or Authorizations (as
defined in clause (iii) below); (ii) the Company is and has been in material compliance with statutes, laws, ordinances, rules and regulations
applicable to the Company, including, without limitation, all statutes, laws, ordinances, rules and regulations for the ownership, testing,
development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import,
export or disposal of any product manufactured or distributed by the Company, including, without limitation, the Federal Food, Drug, and
Cosmetic Act, 21 U.S.C. § 301, et seq., similar laws of other Governmental Entities and the regulations promulgated pursuant to such
laws (collectively, “Applicable Laws”); (iii) the Company possesses all licenses, certificates, approvals, clearances,
consents, authorizations, qualifications, registrations, permits, and supplements or amendments thereto required by any such Applicable
Laws and/or to carry on its businesses as now conducted (“Authorizations”) and such Authorizations are valid and in
full force and effect and the Company is not in violation of any term of any such Authorizations; (iv) the Company has not received
written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental
Entity or third party alleging that any product, operation or activity is in violation of any Applicable Laws or Authorizations or has
any knowledge that any such Governmental Entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation
or proceeding, nor, to the Company’s knowledge, has there been any material noncompliance with or violation of any Applicable Laws
by the Company that could reasonably be expected to require the issuance of any such communication or result in an investigation, corrective
action, or enforcement action by the FDA or any other Governmental Entity; (v) the Company has not received written notice that any Governmental
Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations or has any knowledge that
any such Governmental Entity has threatened or is considering such action; (vi) the Company has filed, obtained, maintained or submitted
all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable
Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements
or amendments were, in all material respects, complete, correct and not misleading on the date filed (or were corrected or supplemented
by a subsequent submission); and (vii) the Company has not, either voluntarily or involuntarily, initiated, conducted or issued, or caused
to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor”
letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation
and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate or conduct such notice or action.
Neither the Company nor, to the Company's knowledge, any of its directors, officers, employees or agents (in their capacities as such)
has been convicted of any crime under any Applicable Laws or has been the subject of an FDA debarment proceeding. The Company has not
been or is now subject to FDA's Application Integrity Policy. To the Company's knowledge, neither the Company, nor any of its directors,
officers, employees or agents (in their capacities as such), has made, or caused the making of, any false statements on, or material omissions
from, any other records or documentation prepared or maintained to comply with the requirements of the FDA or any other Governmental Entity.
Neither the Company nor, to the Company's knowledge, any of its directors, officers, employees or agents (in their capacities as such),
have with respect to each of the following statutes, or regulations promulgated thereto, as applicable, : (i) engaged in activities under
42 U.S.C. §§ 1320a-7b or 1395nn; (ii) knowingly engaged in any activities under 42 U.S.C. § 1320a-7b or the Federal False
Claims Act, 31 U.S.C. § 3729; or (iii) knowingly and willfully engaged in any activities under 42 U.S.C.§ 1320a-7b, which are
prohibited, cause for civil penalties, or mandatory or permissive exclusion from Medicare, Medicaid, or any other State Health Care Program
or Federal Health Care Program.
(o)
Clinical Studies. The studies, tests and clinical trials conducted by or on behalf of the Company were and, if still pending,
are being conducted in accordance with experimental protocols, procedures and controls pursuant to all Applicable Laws and Authorizations,
except where such failure to comply would not, individually or in the aggregate, result in a Material Adverse Change; the descriptions
of the results of such studies, tests and trials contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus
are accurate and complete in all material respects and fairly present the data derived from such studies, tests and trials; except to
the extent disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has no knowledge of
any studies, tests or trials, the results of which the Company believes reasonably call into question the study, test, or trial results
described or referred to in the Registration Statement, the pricing Disclosure Package and the Prospectus when viewed in the context in
which such results are described and the clinical state of development; and the Company has not received any written notices or correspondence
from any Governmental Entity requiring the termination, suspension or material modification of any studies, tests or preclinical or clinical
trials conducted by or on behalf of the Company.
8
(p)
No Defaults; Violations. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
no default exists in the due performance and observance of any term, covenant or condition of any material license, contract, indenture,
mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money,
or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or to which any of
the properties or assets of the Company is subject, except as would not reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Change. The Company is not (i) in violation of any term or provision of its Charter or Bylaws, or (ii) except as
would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change, in violation of any franchise,
license, permit, applicable law, rule, regulation, judgment or decree of any Governmental Entity applicable to the Company.
(q)
Corporate Power; Licenses; Consents.
(i)
Conduct of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
the Company has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates
and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose
as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except where such failure to have such
necessary authorizations, approvals, orders, licenses, certificates and permits would not reasonably be expected to result in a Material
Adverse Change.
(ii)
Transactions Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to
carry out the provisions and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith
have been obtained. No consent, authorization or order of, and no filing with, any court, government agency or other body is required
for the valid issuance, sale and delivery of the Public Securities and the consummation of the transactions and agreements contemplated
by this Agreement and as contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect
to applicable federal and state securities laws, the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”)
and the rules and regulations of the Exchange, and except with respect to such consent, authorization, order or filing that would not
reasonably be expected to have a Material Adverse Change.
(r)
Litigation; Governmental Proceedings. There is no material action, suit, proceeding, inquiry, arbitration, investigation,
litigation or governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to
the Company’s knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing
Disclosure Package, the Prospectus or in connection with the Company’s listing application for the additional listing of the Shares
on the Exchange and which is required to be disclosed, in each case individually or in the aggregate.
(s)
Good Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under
the laws of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction
in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify,
singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
(t)
Insurance. The Company carries or is entitled to the benefits of insurance, with, to the Company’s knowledge, reputable
insurers, and in such amounts and covering such risks which the Company believes are reasonably adequate, and all such insurance is in
full force and effect. The Company has no reason to believe that it will not be able (i) to renew its existing insurance coverage as and
when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not reasonably be expected to result in a Material Adverse Change.
(u)
Transactions Affecting Disclosure to FINRA.
(i)
Finder’s Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination
fee by the Company or any executive officer or director of the Company (each, an, “Insider”) with respect to the sale
of the Public Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge,
any of its stockholders that may affect the Underwriters’ compensation, as determined by FINRA.
9
(ii)
Payments Within 180 Days. The Company has not made any direct or indirect payments (in cash, securities or otherwise) to:
(i) any U.S. person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the
Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any
person or entity that has any direct or indirect affiliation or association with any FINRA member, within the 180 days prior to the date
of the initial filing of the Registration Statement, other than the payment to the Underwriters as provided hereunder in connection with
the Offering.
(iii)
Use of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member
or its affiliates, except as specifically authorized herein.
(iv)
FINRA Affiliation. There is no (i) officer or director of the Company, (ii) to the Company’s knowledge, beneficial
owner of 5% or more of any class of the Company's securities or (iii) to the Company’s knowledge, beneficial owner of the Company's
unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration Statement
that, in each such case, is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance
with the rules and regulations of FINRA).
(v)
Information. To the Company’s knowledge, all information provided by the Company’s officers and directors in
their FINRA Questionnaires to Representative’s Counsel specifically for use by Representative’s Counsel in connection with
its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.
(v)
Foreign Corrupt Practices Act. Neither the Company nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company (acting in such capacity) or any other person acting on behalf of the Company (acting in such capacity),
has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of
any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection
with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might reasonably been expected to have had a Material Adverse Change or
(iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of the Company. The Company
has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all
material respects with the Foreign Corrupt Practices Act of 1977, as amended.
(w)
Compliance with OFAC. Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company (acting in such capacity) or any other person acting on behalf of the Company (acting in such capacity), is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”).
(x)
Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance in all material
respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect
to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(y)
Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company in connection with the
Offering and delivered to the Representative or to Representative’s Counsel shall be deemed a representation and warranty by the
Company to the Underwriters as to the matters covered thereby.
10
(z)
Related Party Transactions. There are no business relationships or related party transactions involving the Company or any
other person required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been
described as required.
(aa)
Board of Directors. The qualifications of the persons serving as board members and the overall composition of the board
comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the “Sarbanes-Oxley
Act”) applicable to the Company and the listing rules of the Exchange. At least one member of the Audit Committee of the Board of
Directors of the Company qualifies as an “audit committee financial expert,” as such term is defined under Regulation S-K
and the listing rules of the Exchange.
(bb)
Sarbanes-Oxley Compliance.
(i)
Disclosure Controls. The Pricing Disclosure Package and the Prospectus, the Company has developed and currently maintains
disclosure controls and procedures that will comply with Rule 13a-15 or 15d-15 under the Exchange Act Regulations applicable to it, and,
except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, such controls and procedures are
as of the date hereof effective to ensure that all material information concerning the Company will be made known on a timely basis to
the individuals responsible for the preparation of the Company’s Exchange Act filings and other public disclosure documents.
(ii)
Compliance. The Company is in compliance with the provisions of the Sarbanes-Oxley Act applicable to it, and has implemented
or will implement such programs and has taken or will take reasonable steps to ensure the Company’s future compliance (not later
than the relevant statutory and regulatory deadlines therefor) with all of the provisions of the Sarbanes-Oxley Act, except where the
failure to be in compliance would not have or reasonably be expected to result in a Material Adverse Change.
(cc)
Accounting Controls. The Company maintains systems of “internal control over financial reporting” (as defined
under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply in all material respects with the requirements of the Exchange
Act and have been designed by, or under the supervision of, its principal executive and principal financial officers, or persons performing
similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to
any differences. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has
no knowledge of any material weaknesses in its internal controls. The Auditors and the Audit Committee of the Board of Directors of the
Company have been advised of: (i) all significant deficiencies and material weaknesses, if any, in the design or operation of internal
controls over financial reporting which are known to the Company’s management and that have adversely affected or are reasonably
likely to adversely affect the Company’ ability to record, process, summarize and report financial information; and (ii) any fraud,
if any, known to the Company’s management, whether or not material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting.
(dd)
No Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to register
as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
(ee)
No Labor Disputes. No labor dispute with the employees of the Company exists or, to the knowledge of the Company, is imminent.
11
(ff)
Intellectual Property Rights. To the Company’s knowledge, the Company has, or can acquire on reasonable terms, ownership
of and/or license to, or otherwise has the right to use, all inventions, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures), patents and patent rights trademarks, service marks and
trade names and copyrights (collectively “Intellectual Property”) material to carrying on its businesses as described
in the Pricing Prospectus. The Company has not received any written notice relating to any Intellectual Property, including written notice
of: (A) infringement or misappropriation of, or conflict with, any Intellectual Property of a third party; (B) asserted rights of others
with respect to any Intellectual Property of the Company; or (C) assertions that any Intellectual Property of the Company is invalid or
otherwise inadequate to protect the interest of the Company, that in each case (if the subject of any unfavorable decision, ruling or
finding), individually or in the aggregate, would have or would reasonably be expected to have a Material Adverse Change. To the Company’s
knowledge, there are no third parties who have been able to establish any material rights to any Intellectual Property, except for the
retained rights of the owners or licensors of any Intellectual Property that is licensed to the Company. There is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others: (A) challenging the validity, enforceability or scope
of any Intellectual Property of the Company in any material respect or (B) challenging the Company’s rights in or to any Intellectual
Property in any material respect or (C) that the Company materially infringes, misappropriates or otherwise violates or conflicts with
any Intellectual Property or other proprietary rights of others. The Company has complied in all material respects with the terms of each
agreement described in the Registration Statement, Pricing Disclosure Package or Prospectus pursuant to which any Intellectual Property
is licensed to the Company, except for such noncompliance as did not have a Material Adverse Change, and all such agreements related to
products currently made or sold by the Company, or to product candidates currently under development, are in full force and effect. All
patents issued in the name of, or assigned to, or licensed to the Company, and all patent applications made by or on behalf of the Company
(collectively, the “Company Patents”) have been duly and properly filed, except for such failures to file as would
reasonably be expected to result in a Material Adverse Change. The Company has no knowledge of any material information that was required
to be disclosed to the United States Patent and Trademark Office (the “PTO”) but that was not disclosed to the PTO
with respect to any issued Company Patent, or that is required to be disclosed and has not yet been disclosed in any pending application
in the Company Patents and that would preclude the grant of a patent on such application. To the Company’s knowledge, the Company
is the sole owner or exclusive licensee of the Company Patents.
(gg)
Taxes. The Company has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to
the date hereof or has duly obtained extensions of time for the filing thereof. The Company has paid all taxes (as hereinafter defined)
shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company, except (i) such taxes
the Company is challenging in good faith and (ii) for such exceptions as would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Change. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of
the Registration Statement are sufficient for all material accrued and unpaid taxes, whether or not disputed, and for all periods to and
including the dates of such consolidated financial statements. Except as would not reasonably be expected to result in a Material Adverse
Change, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes
asserted as due from the Company, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have
been given by or requested from the Company. The term “taxes” mean all federal, state, local, foreign and other net
income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with
respect thereto. The term “returns” means all returns, declarations, reports, statements and other documents required
to be filed in respect to taxes.
(hh)
Employee Benefit Laws. The operations of the Company are and have, in the last three (3) years, been conducted at all times
in material compliance with the Employee Retirement Income Security Act of 1974, as amended, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the
“Employee Benefit Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company with respect to the Employee Benefit Laws is pending or, to the knowledge of the Company,
threatened.
12
(ii)
Compliance with Laws. The Company in the last three (3) years: (A) to its knowledge is and at all times has been in compliance
with all Applicable Laws, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change;
(B) has not received any written correspondence from any Governmental Entity alleging or asserting noncompliance with any Applicable Laws
or any Authorizations; (C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and
the Company is not in material violation of any term of any such Authorizations, in each case except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Change; (D) has not received written notice of any claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Entity or third party alleging that
any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental
Entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received
written notice that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations;
and (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments were complete and correct in all material respects on the date
filed (or were corrected or supplemented by a subsequent submission).
(jj)
Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time
of effectiveness of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another
offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Public Securities
and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account
of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.
(kk)
Industry Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure
Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and
accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
(ll)
Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act) contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
(mm)
Website. To the knowledge of the Company, none of the information on (or hyperlinked from) the Company’s website at
www.sonomapharma.com includes or constitutes a “free writing prospectus” as defined in Rule 405 under the Securities Act.
(nn)
Reserved.
(oo)
Testing-the-Waters Communications. The Company has not (i) alone engaged in any Testing-the-Waters Communications, and
(ii) authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company confirms that the Representative
has been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written
Testing-the-Waters Communications. “Testing-the-Waters Communication” means any oral or written communication with
potential investors undertaken in reliance on Section 5(d) of the Securities Act. “Written Testing-the-Waters Communication”
means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.
13
(pp)
Margin Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board
of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will
be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any
of the Common Shares to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve
Board.
(qq)
Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause
the Offering to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration
of any such securities issued in such prior offerings under the Securities Act.
(rr)
Confidentiality and Non-Competition. To the Company’s knowledge, no director, officer, key employee or consultant
of the Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer
(other than the Company) or prior employer that could reasonably be expected to materially affect his ability to be and act in his respective
capacity of the Company or reasonably be expected to result in a Material Adverse Change.
(ss)
Smaller Reporting Company. The Company is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange
Act Regulations.
3.
Covenants of the Company. The Company covenants and agrees as follows:
(a)
Amendments to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or
supplement to the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or
supplement to which the Representative shall reasonably object in writing; provided however, that this Section 3(a) shall not be applicable
with respect to any supplements to the Registration Statement filed solely for the purpose of supplementing the Registration Statement
or Prospectus with a report filed with the Commission by the Company pursuant to the Exchange Act.
(b)
Federal Securities Laws.
(i)
Compliance. The Company shall comply with the requirements of Rule 430A of the Securities Act Regulations, and will notify
the Representative promptly, and confirm the notice in writing, (i) when any amendment or supplement to the Prospectus shall have
been filed; (ii) of the receipt of any comments from the Commission related to the Prospectus or Offering; (iii) of any request
by the Commission for any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Public Securities
and Representative's Securities for offering or sale in any jurisdiction, or of the initiation or, to the Company’s knowledge, threatening,
of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning
the Registration Statement; and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities Act
in connection with the Offering of the Public Securities and Representative's Securities. The Company shall effect all filings required
under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without reliance
on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus.
The Company shall use its commercially reasonable efforts to prevent the issuance of any stop order, prevention or suspension and, if
any such order is issued, to obtain the lifting thereof at the earliest possible moment.
14
(ii)
Continued Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act
and the Exchange Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement
and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to the
Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”),
would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend or supplement
the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or the Prospectus, as the case may be, will
not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (ii) amend the Registration Statement
or amend or supplement the Pricing Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements
of the Securities Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event; (B)
prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the
Pricing Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing
or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such amendment
or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representative or counsel
for the Representative shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant to
the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative
notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in full
or expiration of the Over-allotment Option specified in Section 1(b) hereof.
(iii)
Exchange Act Registration. The Company shall use its commercially reasonable efforts to maintain the registration of the
Common Shares under the Exchange Act.
(c)
Delivery to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or
make available to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as
originally filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of
experts, and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed
and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(d)
Delivery to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available
to each Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172,
would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(e)
Events Requiring Notice to the Representative. During the period when a prospectus relating to the Public Securities is
(or, but for the exception afforded by Rule 172, would be) required by the Securities Act to be delivered in connection with sales of
the Public Securities, the Company shall notify the Representative immediately and confirm the notice in writing: (i) of the issuance
by the Commission of any stop order or of the initiation, or to the Company’s knowledge, the threatening, of any proceeding for
that purpose; (ii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification
of the Public Securities for offering or sale in any jurisdiction or of the initiation, or to the Company’s knowledge, the threatening,
of any proceeding for that purpose; (iii) of the delivery to the Commission for filing of any amendment or supplement to the Prospectus;
(iv) of the receipt of any comments or request for any additional information from the Commission related to the Prospectus; and
(v) of the happening of any event during the period described in this Section 3(e) that, in the judgment of the Company, makes any
statement of a material fact made in the Pricing Disclosure Package or the Prospectus untrue or that requires the making of any changes
in in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification
at any time, the Company shall use its commercially reasonable efforts to obtain promptly the lifting of such order.
15
(f)
Listing. The Company shall use its commercially reasonable efforts to maintain the listing of the shares of Common Shares
on the Exchange for a period of three (3) years.
(g)
Transfer Agent; Warrant Agent. The Company shall maintain a transfer agent and registrar for the Common Stock and a Warrant
Agent for the Warrants and the Representative’s Warrants.
(h)
Reserved.
(i)
Application of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent
with the application thereof described under the caption “Use of Proceeds” in the Prospectus.
(j)
Rule 158. The Company will timely file such reports pursuant to the Exchange Act as are necessary in order to make generally
available to its security holders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters
the benefits contemplated by, Rule 158(a) under Section 11(a) of the Securities Act.
(k)
Stabilization. Neither the Company nor, to its knowledge, any of its employees, directors or stockholders (without the consent
of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably
be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Public Securities.
(l)
FINRA. For a period of 90 days from the later of the Closing Date or Option Closing Date, the Company shall advise the Representative
(who shall make an appropriate filing with FINRA) if it has knowledge that (i) any officer or director of the Company, (ii) any beneficial
owner of 5% or more of any class of the Company's securities or (iii) any beneficial owner of the Company's unregistered equity securities
which were acquired during the 180 days immediately preceding the filing of the Registration Statement, is or becomes an affiliate or
associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
(m)
No Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely
contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary
capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions
contemplated by this Agreement.
(n)
OFAC. The Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.
(o)
Company Lock-Up Agreement. The Company, on behalf of itself and any successor entity, agrees that, without the prior written
consent of the Representative, it will not, for a period of three (3) months after the date of this Agreement (the “Lock-Up Period”),
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of
the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file or
caused to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company, other than pursuant to existing
registration rights in favor of stockholders of the Company or on Form S-8 or successor form thereto; or (iii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of
the Company, whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital
stock of the Company or such other securities, in cash or otherwise. The restrictions contained in this Section 3(o) shall not apply to
(i) the Common Shares and Warrants to be sold hereunder, (ii) the issuance by the Company of Common Shares upon the exercise of a stock
option or warrant or the conversion of a security outstanding on the date hereof and disclosed in the Registration Statement, the Pricing
Disclosure Package or the Prospectus, and (iii) the issuance by the Company of stock options or shares of capital stock of the Company
under any equity compensation plan of the Company disclosed in the Registration Statement, the Pricing Disclosure Package or the Prospectus.
16
4.
Conditions of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Public Securities,
as provided herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date
hereof and as of each of the Closing Date, and any Option Closing Date; (ii) the accuracy of the statements of officers of the Company
made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:
(a)
Regulatory Matters.
(i)
Effectiveness of Registration Statement. The Registration Statement has become effective not later than 5:00 p.m., Eastern
Time, on the date of this Agreement or such later date and time as shall be consented to in writing by the Representative, and, at each
of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto shall have been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus shall have been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s
knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information.
The Prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame
required by Rule 424(b) (without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall have been
filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.
(ii)
FINRA Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as
to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.
(iii)
Exchange Stock Market Clearance. On the Closing Date, the Firm Shares shall have been approved for listing on the Exchange.
(b)
Company Counsel Matters.
(i)
Closing Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion and negative
assurance letter of Polsinelli PC, counsel to the Company, dated the Closing
Date and addressed to the Representative, substantially in form and substance reasonably satisfactory to the Representative.
(ii)
Option Closing Date Opinion of Counsel. On each Option Closing Date, if any, the Representative shall have received the
favorable opinion of Polsinelli PC, dated the Option Closing Date, addressed
to the Representative and in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date,
the statements made by such counsel in its respective opinions delivered on the Closing Date.
(iii)
Reliance. In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than
the laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent
specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative)
of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the
extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or good standing of the Company; provided, that copies of
any such statements or certificates shall be delivered to Representative’s Counsel if requested.
(c)
Comfort Letters.
(i)
Comfort Letter. At the time this Agreement is executed, the Representative shall have received from the Auditor a cold comfort
letter containing statements and information of the type customarily included in accountants’ comfort letters with respect to the
financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the
Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to the Representative and to the Auditor,
dated as of the date of this Agreement.
17
(ii)
Bring-Down Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have
received from the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor
reaffirms the statements made in the letter furnished pursuant to Section 4(c)(i), except that the specified date referred to shall be
a date not more than three (3) Business Days prior to the Closing Date or the Option Closing Date, as applicable.
(d)
Officers’ Certificates.
(i)
Officers’ Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date
and any Option Closing Date, as applicable, of its President and Chief Executive Officer and its Chief Financial Officer stating (on behalf
of the Company and not in an individual capacity) that (i) such officers have carefully examined the Registration Statement, the Pricing
Disclosure Package, and the Prospectus and, to their knowledge, the Registration Statement and each amendment thereto, as of the Applicable
Time and as of the Closing Date or Option Closing Date, as applicable, did not include any untrue statement of a material fact and did
not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing
Disclosure Package, as of the Applicable Time and as of the Closing Date or Option Closing Date, as applicable, the Prospectus and each
amendment or supplement thereto, as of the respective date thereof and as of the Closing Date or Option Closing Date, as applicable, did
not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date of the Registration
Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Pricing
Disclosure Package or the Prospectus, (iii) to their knowledge after reasonable investigation, as of the Closing Date or Option Closing
Date, as applicable, the representations and warranties of the Company in this Agreement are true and correct in all material respects
(except for those representations and warranties qualified as to materiality, which shall be true and correct in all respects and except
for those representations and warranties which refer to facts existing at a specific date, which shall be true and correct as of such
date) and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date or Option Closing Date, as applicable, and (iv) there has not been, subsequent to the date of the most
recent audited financial statements included in the Pricing Disclosure Package, any Material Adverse Change, or any change or development
that, singularly or in the aggregate, would reasonably be expected to involve a Material Adverse Change, except as set forth in the Prospectus.
(ii)
Secretary’s Certificate. At each of the Closing Date or Option Closing Date, as applicable, the Representative shall
have received a certificate of the Company signed by the Secretary of the Company, dated the Closing Date, or Option Closing Date, as
applicable, certifying: (i) that each of the Charter and Bylaws is true and complete, has not been modified and is in full force
and effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Offering are in full force and effect
and have not been modified; (iii) the good standing of the Company; and (iv) as to the incumbency of the officers of the Company.
The documents referred to in such certificate shall be attached to such certificate.
(e)
No Material Changes. Prior to and on each of the Closing Date or Option Closing Date, as applicable: (i) there shall
have been no Material Adverse Change that, singularly or in the aggregate, would reasonably be expected to involve a Material Adverse
Change, from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and
the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company
or any Insider before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision,
ruling or finding would reasonably be expected to result in a Material Adverse Change, except as set forth in the Registration Statement,
the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings
therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement, the Pricing Disclosure Package
and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein
in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements
of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Pricing Disclosure Package nor the
Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading.
18
(f)
Other Agreements to be Delivered. The Company has caused each of its officers and directors and each holder of more than
5% of the outstanding shares of Common Stock (as of the effective date of the Registration Statement that the Company is reasonably aware
of) to deliver to the Representative an executed Lock-Up Agreement, in a form substantially similar to that attached hereto as Exhibit
A (the “Lock-Up Agreement”), prior to the execution of this Agreement. On the Closing Date, the Company shall have
delivered to the Representative an executed copy of the Representative's Warrant.
(g)
Additional Documents. At the Closing Date or Option Closing Date, as applicable, Representative’s Counsel shall have
been furnished with such documents and opinions as they may reasonably require for the purpose of enabling Representative’s Counsel
to deliver an opinion to the Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment
of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public
Securities and Representative's Securities as herein contemplated shall be satisfactory in form and substance to the Representative and
Representative’s Counsel.
5.
Indemnification.
(a)
Indemnification of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates
and each person controlling such Underwriter (within the meaning of Section 15 of the Securities Act), and the directors, officers, agents
and employees of each Underwriter, its affiliates and each such controlling person (each Underwriter, and each such entity or person hereafter
is referred to as an “Indemnified Person”) from and against any losses (other than losses of profits), claims, damages,
judgments, assessments, costs and other liabilities (collectively, the “Liabilities”), and shall reimburse each Indemnified
Person for all fees and expenses (including the reasonable fees and expenses of counsel for the Indemnified Persons, except as otherwise
expressly provided in this Agreement) (collectively, the “Expenses”) and agrees to advance payment of such Expenses
as they are incurred by an Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Indemnified
Person is a party thereto, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained
in (i) the Registration Statement, the Pricing Disclosure Package, the Preliminary Prospectus, or the Prospectus (as from time to time
each may be amended and supplemented); (ii) any materials or information provided to investors by, or with the approval of, the Company
in connection with the marketing of the Offering, including any “road show” or investor presentations made to investors by
the Company (whether in person or electronically); or (iii) any application or other document or written communication (in this Section
5, collectively called “application”) executed by the Company or based upon written information furnished by the Company in
any jurisdiction in order to qualify the Public Securities under the securities laws thereof or filed with the Commission, any state securities
commission or agency, the Exchange or any other national securities exchange; or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in reliance upon, and in conformity with, the Underwriters’ Information.
(b)
Procedure. Upon receipt by an Indemnified Person of notice of an action against such Indemnified Person with respect to
which indemnity may reasonably be expected to be sought under this Agreement, such Indemnified Person shall promptly notify the Company
in writing; provided that failure by any Indemnified Person so to notify the Company shall not relieve the Company from any obligation
or liability which the Company may have on account of this Section 5 or otherwise to such Indemnified Person, except to the extent the
Company is materially prejudiced as a proximate result of such failure. An Indemnified Person shall have the right to require that the
Company assume the defense of any such action (including the employment of counsel designated by the Company and reasonably satisfactory
to the Representative). Any Indemnified Person shall have the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company
has failed promptly to assume the defense and employ counsel reasonably satisfactory to the Representative for the benefit of the Underwriters
and the other Indemnified Persons or (ii) such Indemnified Person shall have been advised that in the opinion of counsel that there is
an actual or potential conflict of interest that prevents (or makes it imprudent for) the counsel engaged by the Company for the purpose
of representing the Indemnified Person, to represent both such Indemnified Person and any other person represented or proposed to be represented
by such counsel. The Company shall not be liable for the fees and expenses of more than one separate counsel (together with local counsel),
representing all Indemnified Persons who are parties to such action), which counsel (together with any local counsel) for the Indemnified
Persons shall be selected by the Representative, subject to the Company’s approval (which shall not be unreasonably withheld). The
Company shall not be liable for any settlement of any action effected without its written consent (which shall not be unreasonably withheld).
In addition, the Company shall not, without the prior written consent of the Underwriters, settle, compromise or consent to the entry
of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement, indemnification
or contribution may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement, compromise,
consent or termination (i) includes an unconditional release of that Indemnified Person from all Liabilities arising out of such action
for which indemnification or contribution may be sought hereunder and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any Indemnified Person. The advancement, reimbursement, indemnification and
contribution obligations of the Company required hereby shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as every Liability and Expense is incurred and is due and payable, and in such amounts as fully satisfy
each and every Liability and Expense as it is incurred (and in no event later than 30 days following the date of any invoice therefore);
provided, however, that the Indemnified Persons shall repay such amounts to the extent it ultimately is determined that such persons are
not entitled to indemnification hereunder.
19
(c)
Indemnification of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company,
its directors, its officers, employees and persons who control the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against any and all Liabilities, but only with respect to untrue statements or omissions, or alleged untrue statements
or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment
or supplement thereto or in any application, in reliance upon, and in strict conformity with, the Underwriters’ Information. In
case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration
Statement, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or in any application, and in respect of
which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of Section
5(b). The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company
or any of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, in connection with the issuance and sale of the Public Securities or in connection with the Registration
Statement, the Pricing Disclosure Package, or the Prospectus; provided that failure by the Company so to notify the Representative shall
not relieve any Underwriter from any obligation or liability which such Underwriter may have on account of this Section 5 or otherwise
to the Company, except to the extent such Underwriter is materially prejudiced as a proximate result of such failure.
(d)
Contribution. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient
to hold harmless an indemnified party under Section 5(a) or 5(c) in respect of any Liabilities and Expenses referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such Liabilities and Expenses, (i) in such proportion as shall be appropriate to reflect the relative benefits received
by the Company, on the one hand, and each of the Underwriters, on the other hand, from the Offering, or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other hand,
in connection with the matters as to which such Liabilities or Expenses relate, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, with respect to such Offering
shall be deemed to be in the same proportion as the total proceeds from the Offering purchased under this Agreement (after deducting all
underwriting discounts, commissions and other fees but before deducting expenses) received by the Company bear to the total underwriting
discount, fees and commissions actually received by the Underwriters in connection with the Offering, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company, on the one hand, and the Underwriters, on the other hand,
shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement, omission, act or failure to act; provided that the parties hereto agree that the written information furnished to the Company
through the Representative by or on behalf of any Underwriter for use in any Preliminary Prospectus, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriters’ Information. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to above in this subsection (d). Notwithstanding the above, no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of fraudulent
misrepresentation.
(e)
Survival. The advancement, reimbursement, indemnity and contribution obligations set forth in this Section 5 shall remain
in full force and effect regardless of any termination of, or the completion of any Indemnified Person's services under or in connection
with, this Agreement. Each Indemnified Person is an intended third-party beneficiary of this Section 5, and has the right to enforce the
provisions of Section 5 as if he/she/it was a party to this Agreement.
6.
Default by an Underwriter.
(a)
Default Not Exceeding 10% of Public Securities. If any Underwriter or Underwriters shall default in its or their obligations
to purchase the Firm Securities, and if the number of the Firm Securities with respect to which such default relates does not exceed in
the aggregate 10% of the number of Firm Securities that all Underwriters have agreed to purchase hereunder, then such Firm Securities
to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
20
(b)
Default Exceeding 10% of Public Securities. In the event that the default addressed in Section 6(a) relates to more than
10% of the Firm Securities, the Representative may in its discretion arrange for itself or for another party or parties to purchase such
Firm Securities to which such default relates on the terms contained herein. If, within thirty six (36) hours after such default relating
to more than 10% of the Firm Securities, the Representative does not arrange for the purchase of such Firm Securities, then the Company
shall be entitled to a further period of thirty six (36) hours within which to procure another party or parties satisfactory to the Representative
to purchase said Firm Securities on such terms. In the event that neither the Representative nor the Company arrange for the purchase
of the Firm Securities to which a default relates as provided in this Section 6, this Agreement will automatically be terminated by the
Representative or the Company without liability on the part of the Company (except as provided in Sections 3(f) and 5 hereof) or
the several Underwriters (except as provided in Section 5 hereof); provided that if any such default occurs with respect to any Option
Shares, this Agreement will not terminate in respect of the Firm Securities; and provided, further, that nothing herein shall relieve
a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default
hereunder.
(c)
Postponement of Closing Date. In the event that the Firm Securities to which the default relates are to be purchased by
the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, the Representative or the Company shall
have the right to postpone the Closing Date for a reasonable period, but not in any event exceeding seven (7) Business Days, in order
to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus
or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration Statement, the Pricing
Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made necessary. The term “Underwriter”
as used in this Agreement shall include any party substituted under this Section 6 with like effect as if it had originally been a party
to this Agreement with respect to such Securities.
7.
Additional Covenants.
(a)
Prohibition on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other
publicity, without the Representative’s prior written consent (such consent not to be unreasonably withheld), for a period ending
at 5:00 p.m., Eastern Time, on the first (1st) Business Day following the forty-fifth (45th) day after the Closing Date, other than normal
and customary releases issued in the ordinary course of the Company’s business or such press release or communication is required
by law.
8.
Effective Date of this Agreement and Termination Thereof.
(a)
Effective Date. This Agreement shall become effective when both the Company and the Representative have executed the same
and delivered counterparts of such signatures to the other party.
(b)
Termination. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date,
(i) if any domestic or international event or act or occurrence has materially disrupted, or in Representative’s opinion will
in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock
Exchange or The Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other
Government Entity having jurisdiction; or (iii) if a banking moratorium has been declared by a New York State or federal authority;
or (iv) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities
markets; or (v) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage
or other calamity or malicious act which, whether or not such loss shall have been insured, will, in Representative’s opinion, make
it inadvisable to proceed with the delivery of the Firm Securities; or (vi) if the Company is in material breach of its representations,
warranties or covenants hereunder; or (vii) if the Representative shall have knowledge after the date hereof of such a Material Adverse
Change in the conditions of the Company, or such adverse material change in general market conditions, in each case, as in the Representative’s
reasonable judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Public Securities or to enforce
contracts made by the Underwriters for the sale of the Public Securities. Section 5 of this Agreement shall survive any termination of
this Agreement.
21
(c)
Expenses. The Company will be responsible for and will pay all actual, documented expenses relating to the Offering, including,
without limitation, (i) all filing fees and expenses relating to the registration of the Securities with the Commission; (ii) all FINRA
Public Offering filing fees; (iii) all fees and expenses relating to the listing of the Company's Common Shares on the Exchange; (iv)
all fees, expenses and disbursements relating to the registration or qualification of the Securities under applicable state "blue
sky" securities laws (including, without limitation, all filing and registration fees and the reasonable fees and disbursements of
"blue sky" counsel, which will be the Representative's counsel, only if and to the extent such filings are legally required,
it being agreed that such fees and expenses will be limited to: (A) if the Offering is commenced on the Nasdaq Stock Market or NYSE American,
the Company will make a payment of $10,000 to such counsel at Closing, and (B) if the Offering is not conducted on a national securities
exchange, the Company will make a payment of $25,000 to such counsel at Closing); (v) all fees, expenses and disbursements relating to
the registration, qualification or exemption of the Securities under the securities laws of such foreign jurisdictions as the Representative
may reasonably designate; (vi) the costs of all mailing and printing of the underwriting documents and Offering documents; (vii) transfer
and/or stamp taxes, if any, payable upon the transfer of Securities from the Company to the Representative; (viii) the fees and expenses
of the Company's accountants; (ix) the fees and expenses of the Company's legal counsel and other agents and representatives; and (x)
up to $75,000 to cover the Representative's road show expenses and the Representative's legal and additional diligence expenses not otherwise
covered by this Section 8(c). In addition, the Company shall pay to the Representative a non-accountable expense allowance equal to 1%
of the public offering price (excluding any amounts from the sale of the Over-Allotment Securities). Notwithstanding anything to the contrary
in this Agreement, except in the case of a default by the Underwriters pursuant to Section 6(b) above, in the event that this Agreement
shall not be carried out for any reason whatsoever, within the time specified herein or any extensions thereof pursuant to the terms herein,
the Company shall be obligated to pay to the Representative its actual and accountable out-of-pocket expenses related to the transactions
contemplated herein then due and payable and upon demand the Company shall pay the full amount thereof to the Representative (less amounts
previously advanced to the Underwriters). Notwithstanding the foregoing, any advance received by the Representative will be reimbursed
to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(g)(4)(A).
(d)
Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination
of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force
and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or
any part hereof.
(e)
Representations, Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Underwriter or its affiliates or selling agents, any person controlling any
Underwriter, its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9.
Miscellaneous.
(a)
Notices. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and addressed to the
other party at its address set forth below (or to such other address that the receiving party may designate from time to time in accordance
with this Section 9(a)), and shall be deemed to have been given (a) three (3) days after mailing if sent by certified mail return receipt
requested, (b) one (1) day after mailing if sent by receipted overnight carrier (i.e. Federal Express), provided that proof of delivery
or rejection is obtained, or (c) when delivered if by hand or sent by email to the physical address or email address set forth below.
If to the Representative:
Dawson James Securities, Inc.
101 N. Federal Highway Suite 600
Boca Raton, Florida 33432
Email: [***]
Attention: Chief Executive Officer
22
With copies to (which shall not constitute notice):
ArentFox Schiff LLP
1717 K Street, NW
Washington, DC 20001
Email: [***]
Attention: Ralph V. De Martino, Esq.
If to the Company:
Sonoma Pharmaceuticals, Inc.
5445 Conestoga Court
Suite 150
Boulder, Colorado 80301
Email:
[***]
Attention: Amy Trombly
With copies to (which shall
not constitute notice):
Polsinelli PC
One International Place
Suite 3900
Boston, MA 02110
Email:
[***]
Attention: Andrew J. Merken,
Esq.
(b)
Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit
or affect the meaning or interpretation of any of the terms or provisions of this Agreement.
(c)
Amendment. This Agreement may only be amended by a written instrument executed by each of the parties hereto.
(d)
Entire Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection
with this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Notwithstanding
anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that
certain engagement letter between the Company and Representative, dated as of March 20, 2026 shall remain in full force and effect.
(e)
Binding Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
each Indemnified Person referred to in Section 5, the Company and the controlling persons, directors and officers referred to in Section
5 hereof, and their respective successors, legal representatives, heirs and assigns, and no other person shall have or be construed to
have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained.
The term “successors and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
23
(f)
Governing Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees
that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced
in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting
a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in
Section 9(a) hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding
or claim. THE COMPANY (ON ITS BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS AND AFFILIATES) AND
EACH OF THE UNDERWRITERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(g)
Execution in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the
same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to
each of the other parties hereto. Delivery of a signed counterpart of this Agreement by email/pdf transmission shall constitute valid
and sufficient delivery thereof.
(h)
Waiver, etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall
not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision
hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance
or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
[Signature Page Follows]
24
[Signature
Page]
Underwriting
Agreement
If the foregoing correctly sets forth the understanding
between the Underwriters and the Company, please so indicate in the space below.
Very truly yours,
Sonoma Pharmaceuticals,
Inc.
By:
/s/ Amy Trombly
Name: Amy Trombly
Title: Chief Executive Officer
Confirmed as of the date first written above
mentioned,
on behalf of itself and as Representative of the several
Underwriters named on Schedule 1 hereto:
Dawson
James Securities, Inc.
By: /s/ Robert D. Keyser Jr.
Name: Robert D. Keyser Jr.
Title: CEO
25
SCHEDULE 1
Underwriter
Total Number of Firm Securities to be Purchased
Dawson James Securities, Inc.
2,962,962
Total:
2,962,962
26
SCHEDULE 2
Pricing Information
Number of Firm Shares: 2,962,962
Number of Firm Warrants: 2,962,962 Warrants
Number of Pre-Funded Warrants: 2,962,962 Warrants
Number of Option Shares: 444,444
Number of Option Warrants: 444,444 Warrants
Public Offering Price per one Firm Share and one Warrant: $1.35
Underwriting Discount per one Firm Share and one Warrant: $0.10 (7.5%)
Underwriting Discount per one Pre-Funded Warrant and one Warrant: $0.10
(7.5%)
Price per Option Share: $1.3499
Underwriting Discount per Option Share: $1.247825
Price per Option Warrant: $0.0001
Underwriting Discount per Option Warrant: $0.000925 (7.5%)
27
EXHIBIT A
Form of Lock-Up Agreement
28
EX-4.1 — FORM OF WARRANT
EX-4.1
Filename: sonoma_ex0401.htm · Sequence: 3
Exhibit 4.1
COMMON STOCK PURCHASE WARRANT
SONOMA PHARMACEUTICALS, INC.
Warrant Shares: 3,407,404
Initial Exercise Date: April 27, 2026
CUSIP: 83558L 147
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, CEDE & CO. or its assigns (the
“Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on
April 27, 2031 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Sonoma Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), up to 3,407,404 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). This Warrant shall initially be issued and maintained in
the form of a security held in book-entry form and the Depository Trust Company or its nominee (“DTC”) shall initially
be the sole registered holder of this Warrant, subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant
to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.
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 in 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 except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking
institutions in the City of New York are authorized or required by law or other governmental action to close; 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 $0.0001 per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.
1
“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.
“Registration Statement”
means the Company’s registration statement on Form S-1 (File No. 333-295171).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“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
Nasdaq Capital Market, the NYSE American, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or
any successors to any of the foregoing).
“Transfer
Agent” means Computershare, Inc., the current transfer agent of the Company, 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 in 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.
“Warrant Agency Agreement”
means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company and the Warrant Agent.
“Warrant
Agent” means Computershare Inc., a Delaware corporation, and its affiliate, Computershare Trust Company, N.A., a federally
chartered trust company, collectively as warrant agent, and any successor warrant agent of the Company.
“Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
2
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 Warrant Agent of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (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 Warrant Agent 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 Warrant Agent for cancellation within three (3) Trading
Days of the date on which the final Notice of Exercise is delivered to the Warrant Agent. 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.
Notwithstanding the foregoing in this Section
2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held in book-entry
form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made pursuant to this
Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying
with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable), subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence
shall not apply.
b) Exercise
Price. The exercise price per share of Common Stock under this Warrant shall be $1.35, 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 be exercised, in whole or in part,
at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation
NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. 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;
3
(B) = the Exercise
Price of this Warrant, as adjusted hereunder; and
(X) = the number
of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were
by means of a cash exercise rather than a cashless exercise.
If Warrant Shares are issued
in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant
Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2(c).
Notwithstanding anything herein
to the contrary, on the Termination Date this Warrant shall be automatically exercised via cashless exercise pursuant to this Section
2(c).
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, 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. The Warrant Agent shall have no liability for the Company’s failure
to deliver to the Holders the Warrant Shares as set forth in this paragraph 2(d)(i). As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any
Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at
any time after the time of execution of the Placement Agency Agreement, the Company agrees to deliver the Warrant Shares subject to such
notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery
Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is
received by such Warrant Share Delivery Date.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
4
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.
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.
5
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 the 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.
6
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) [Reserved.]
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of 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).
d) Pro Rata
Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the
record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however,
that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership
of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance
for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).
7
e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one
or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock or 50% or more of the
voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in
one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other
Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity
of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction.
f) 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.
g) Notice to
Holder.
i. Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to
the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow
Exercise by Holder. If (A) the Company 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 facsimile or email to the Holder at its last facsimile number
or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of 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.
8
h) 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.
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, accompanied by a signature guarantee and such other documentation as the Company
or its designated agent may reasonably request. 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. 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 whole or in part. 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.
If this Warrant is not held in global form through DTC (or any successor depositary), 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 Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company and the Warrant Agent may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No Rights
as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.
b) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant
or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of
such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business
Day.
9
d) 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.
e) 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 giving effect to any provision
or rule that would cause the application of the laws of any jurisdictions other than the State of New York.
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.
f) 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.
10
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any 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 facsimile or e-mail, or sent by a nationally recognized overnight courier
service, addressed to the Company, at Sonoma Pharmaceuticals, Inc., 5445 Conestoga Court, Suite 150, Boulder, Colorado 80301, Attention:
CEO, or such other facsimile number, 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 facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number,
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 date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number or 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 date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number or 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.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for
the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors
of the Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder or the beneficial owner of this Warrant, on the other hand. Notwithstanding anything in this Warrant to the contrary, the Warrant
Agent shall not be required to execute any supplement or amendment to this Warrant that it has determined would adversely affect its own
rights, duties, obligations or immunities under the Warrant Agent Agreement.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
11
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
o) Warrant Agency
Agreement. This Warrant is issued subject to the Warrant Agent Agreement. To the extent any provision of this Warrant conflicts
with the express provisions of the Warrant Agent Agreement, the provisions of this Warrant shall govern and be controlling; provided,
however, that with respect to the rights, duties, obligations, protections, immunities and liability of the Warrant Agent, the Warrant
Agent Agreement shall govern and control.
********************
(Signature Page Follows)
12
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.
SONOMA PHARMACEUTICALS, INC.
By:
Name:
Amy Trombly
Title:
Chief Executive
Officer
WARRANT AGENT:
COMPUTERSHARE INC. and
COMPUTERSHARE TRUST COMPANY, N.A.,
on behalf of both parties
By:
Name:
Collin Ekeogu
Title:
Senior Manager, Corporate Actions
13
NOTICE OF EXERCISE
TO: SONOMA PHARMACEUTICALS, 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: _______________________________________________________________________________
14
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name:
(Please Print)
Address:
(Please Print)
Phone Number:
Email Address:
Dated: _______________ __, ______
Holder’s Signature:
Holder’s Address:
15
EX-4.2 — FORM OF PRE-FUNDED WARRANT
EX-4.2
Filename: sonoma_ex0402.htm · Sequence: 4
Exhibit 4.2
PRE-FUNDED COMMON STOCK PURCHASE WARRANT
SONOMA PHARMACEUTICALS, INC.
Warrant Shares: 1,312,247
Initial Exercise Date: April 27, 2026
CUSIP: 83558L 154
THIS
PRE-FUNDED COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, CEDE & CO. or its
assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and until this Warrant is exercised
in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from Sonoma Pharmaceuticals, Inc.,
a Delaware corporation (the “Company”), up to 1,312,247 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). This Warrant shall initially be issued and maintained in
the form of a security held in book-entry form and the Depository Trust Company or its nominee (“DTC”) shall initially
be the sole registered holder of this Warrant, subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant
to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.
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 in 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 except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking
institutions in the City of New York are authorized or required by law or other governmental action to close; 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 $0.0001 per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.
1
“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.
“Registration Statement”
means the Company’s registration statement on Form S-1 (File No. 333-295171).
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“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
Nasdaq Capital Market, the NYSE American, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or
any successors to any of the foregoing).
“Transfer
Agent” means Computershare, Inc., the current transfer agent of the Company, 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 in 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.
“Warrant Agency Agreement”
means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company and the Warrant Agent.
“Warrant
Agent” means Computershare Inc., a Delaware corporation, and its affiliate, Computershare Trust Company, N.A., a federally
chartered trust company, collectively as warrant agent, and any successor warrant agent of the Company.
“Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
2
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 Warrant Agent of a duly executed facsimile
copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (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 Warrant Agent 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 Warrant Agent for cancellation within three (3) Trading
Days of the date on which the final Notice of Exercise is delivered to the Warrant Agent. 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.
Notwithstanding the foregoing in this Section
2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held in book-entry
form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made pursuant to this
Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying
with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable), subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence
shall not apply.
b) Exercise
Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded
to the Company on or prior to the Issue Date and, consequently, no additional consideration (other than the nominal exercise price of
$0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder
shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance
or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining
unpaid exercise price per share of Common Stock under this Warrant shall be $0.0001, subject to adjustment hereunder (the “Exercise
Price”).
c) Cashless
Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation
NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. 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;
3
(B) = the Exercise
Price of this Warrant, as adjusted hereunder; and
(X) = the number
of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were
by means of a cash exercise rather than a cashless exercise.
If Warrant Shares are issued
in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant
Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2(c).
Notwithstanding anything herein
to the contrary, on the Termination Date this Warrant shall be automatically exercised via cashless exercise pursuant to this Section
2(c).
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, 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. The Warrant Agent shall have no liability for the Company’s failure
to deliver to the Holders the Warrant Shares as set forth in this paragraph 2(d)(i). As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any
Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at
any time after the time of execution of the Placement Agency Agreement, the Company agrees to deliver the Warrant Shares subject to such
notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery
Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is
received by such Warrant Share Delivery Date.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
4
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.
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.
5
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 the 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.
6
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) [Reserved.]
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of 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).
d) Pro Rata
Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the
record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however,
that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial
Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership
of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance
for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).
7
e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one
or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock or 50% or more of the
voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in
one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other
Person or group acquires 50% or more of the outstanding shares of Common Stock or 50% or more of the voting power of the common equity
of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among
the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction.
f) 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.
g) Notice to
Holder.
i. Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to
the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow
Exercise by Holder. If (A) the Company 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 facsimile or email to the Holder at its last facsimile number
or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of 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.
8
h) 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.
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, accompanied by a signature guarantee and such other documentation as the Company
or its designated agent may reasonably request. 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. 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 whole or in part. 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.
If this Warrant is not held in global form through DTC (or any successor depositary), 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 Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company and the Warrant Agent may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No Rights
as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.
b) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant
or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of
such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business
Day.
9
d) 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.
e) 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 giving effect to any provision
or rule that would cause the application of the laws of any jurisdictions other than the State of New York.
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.
f) 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.
10
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any 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 facsimile or e-mail, or sent by a nationally recognized overnight courier
service, addressed to the Company, at Sonoma Pharmaceuticals, Inc., 5445 Conestoga Court, Suite 150, Boulder, Colorado 80301, Attention:
CEO, or such other facsimile number, 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 facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number,
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 date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number or 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 date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number or 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.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for
the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors
of the Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder or the beneficial owner of this Warrant, on the other hand. Notwithstanding anything in this Warrant to the contrary, the Warrant
Agent shall not be required to execute any supplement or amendment to this Warrant that it has determined would adversely affect its own
rights, duties, obligations or immunities under the Warrant Agent Agreement.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
11
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
o) Warrant Agency
Agreement. This Warrant is issued subject to the Warrant Agent Agreement. To the extent any provision of this Warrant conflicts
with the express provisions of the Warrant Agent Agreement, the provisions of this Warrant shall govern and be controlling; provided,
however, that with respect to the rights, duties, obligations, protections, immunities and liability of the Warrant Agent, the Warrant
Agent Agreement shall govern and control.
********************
(Signature Page Follows)
12
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.
SONOMA PHARMACEUTICALS, INC.
By:
Name:
Amy Trombly
Title:
Chief Executive
Officer
WARRANT AGENT:
COMPUTERSHARE INC. and
COMPUTERSHARE TRUST COMPANY, N.A.,
on behalf of both parties
By:
Name:
Collin Ekeogu
Title:
Senior Manager, Corporate Actions
13
NOTICE OF EXERCISE
TO: SONOMA PHARMACEUTICALS, 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: _______________________________________________________________________________
14
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name:
(Please Print)
Address:
(Please Print)
Phone Number:
Email Address:
Dated: _______________ __, ______
Holder’s Signature:
Holder’s Address:
15
EX-4.4 — WARRANT AGENCY AGREEMENT (COMMON WARRANTS)
EX-4.4
Filename: sonoma_ex0404.htm · Sequence: 5
Exhibit 4.4
Execution Version
WARRANT AGENCY AGREEMENT
WARRANT AGENCY
AGREEMENT, dated as of April 28, 2026 (“Agreement”), between Sonoma Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), and Computershare Inc. (“Computershare”), a Delaware corporation, and its affiliate,
Computershare Trust Company, N.A., a federally chartered trust company, collectively as warrant agent (the “Warrant Agent”).
W I T N E S S E T H
WHEREAS, pursuant to a registered
offering by the Company of units (the “Units”), each consisting of (a) one share of common stock, par value $0.0001
per share (the “Common Stock”), or, in lieu of Common Stock, one pre-funded warrant to purchase a share of Common
Stock (the “Pre-Funded Warrants”), and (b) one warrant to purchase a share of Common Stock (the “Common Warrants”),
pursuant to an effective registration statement on Form S-1 (File No. 333-295171) (the “Registration Statement”),
the Company wishes to issue the Common Warrants in book entry form entitling the respective holders of the Common Warrants (the “Holders”,
which term shall include a Holder’s transferees, successors and assigns and “Holder” shall include, if the Common Warrants
are held in “street name,” a Participant (as defined below) or a designee appointed by such Participant) to purchase an aggregate
of up to 3,407,404 shares of Common Stock upon the terms and subject to the conditions hereinafter set forth (the “Offering”);
WHEREAS,
the shares of Common Stock and Common Warrants to be issued in connection with the Offering shall be immediately separable and will be
issued separately, but will be purchased together in the Offering; and
WHEREAS,
the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange, exercise and replacement of the Common Warrants and, in the Warrant Agent’s capacity
as the Company’s transfer agent, the delivery of the Warrant Shares (as defined below).
NOW, THEREFORE,
in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or any day on which banking institutions in the City of New York are authorized or required by law or other governmental
action to close; 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.
(b)
“Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however,
that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.
(c)
“Person” means an individual, corporation, association, partnership, limited liability company, joint venture,
trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.
(d) “Warrant
Certificate” means a certificate issued to a Holder, representing such number of Warrant Shares as is indicated therein,
provided that any reference to the delivery of a Warrant Certificate in this Agreement shall include delivery of notice from the
Depositary or a Participant (each as defined below) of the transfer or exercise of Warrant in the form of a Global Warrant (as
defined below).
1
(e)
“Warrant Shares” means the shares of Common Stock underlying the Common Warrants and issuable upon exercise
of the Common Warrants.
All other capitalized terms used
but not otherwise defined herein shall have the meaning ascribed to such terms in the Common Warrant.
Section 2. Appointment of Warrant
Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the express terms and conditions
(and no implied terms and conditions) set forth herein, and the Warrant Agent hereby accepts such appointment.
Section 3. Global Warrants.
(a)
The Common Warrants shall be issuable in book entry form (the “Global Warrants”). All of the Common Warrants
shall initially be represented by one or more Global Warrants, in the form of the Warrant Certificate, deposited with the Warrant Agent
and registered in the name of Cede & Co., a nominee of The Depository Trust Company (the “Depositary”), or as otherwise
directed by the Depositary. Ownership of beneficial interests in the Common Warrants shall be shown on, and the transfer of such ownership
shall be effected through, records maintained by (i) the Depositary or its nominee for each Global Warrant or (ii) institutions that have
accounts with the Depositary (such institution, with respect to a Common Warrant in its account, a “Participant”).
(b)
If the Depositary subsequently ceases to make its book-entry settlement system available for the Common Warrants, the Company
may instruct the Warrant Agent regarding other arrangements for book-entry settlement. In the event that the Common Warrants are not
eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written
instructions to the Depositary to deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the
Warrant Agent to deliver to each Holder a Warrant Certificate.
(c)
A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate
Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the exchange of some or all of such Holder’s
Global Warrants for a Warrant Certificate evidencing the same number of Common Warrants, which request shall be in the form attached
hereto as Annex A (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate
Request Notice by the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender upon delivery
by the Holder of a number of Global Warrants for the same number of Common Warrants evidenced by a Warrant Certificate, a “Warrant
Exchange”), the Warrant Agent shall promptly effect the Warrant Exchange and shall promptly issue and deliver to the Holder
a Warrant Certificate for such number of Common Warrants in the name set forth in the Warrant Certificate Request Notice. Such Warrant
Certificate shall be dated the original issue date of the Common Warrants and shall be manually executed by an authorized signatory of
the Company. In connection with a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant Agent to deliver, the Warrant
Certificate to the Holder as promptly as practicable pursuant to the delivery instructions in the Warrant Certificate Request Notice
(“Warrant Certificate Delivery Date”). If the Company fails for any reason to deliver to the Holder the Warrant Certificate
subject to the Warrant Certificate Request Notice by the Warrant Certificate 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 evidenced by such Warrant Certificate (based on the VWAP
(as defined in the Common Warrant) of the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business Day (increasing
to $20 per Business Day on the fifth Business Day after such liquidated damages begin to accrue) for each Business Day after such Warrant
Certificate Delivery Date until such Warrant Certificate is delivered or, prior to delivery of such Warrant Certificate, the Holder rescinds
such Warrant Exchange. Notwithstanding the foregoing, the Warrant Agent shall not be liable for any liquidated damages or any other damages
associated with the Company’s failure to timely deliver a Warrant Certificate. The Company covenants and agrees that, upon the
date of delivery of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder of the Warrant Certificate and,
notwithstanding anything to the contrary set forth herein, the Warrant Certificate shall be deemed for all purposes to contain all of
the terms and conditions of the Common Warrants evidenced by such Warrant Certificate and the terms of this Agreement. In the event a
beneficial owner requests a Warrant Exchange, upon issuance of the paper Warrant Certificate, the Company shall act as warrant agent
and the terms of the paper Warrant Certificate so issued shall exclusively govern in respect thereof. A party requesting a Warrant Exchange
must provide to the Warrant Agent any evidence of authority that may reasonably be required by the Warrant Agent, including but not limited
to, a Signature Guarantee (as defined below). For purposes of clarity, if there is a conflict between the express terms of this Agreement
and any Warrant Certificate with respect to the terms of the Common Warrants, the terms of such Warrant Certificate shall govern and
control; provided, however, that the express terms of this Agreement shall control and supersede any provision in a Warrant Certificate
concerning the rights, duties, obligations, liabilities, protections and immunities of the Warrant Agent.
2
Section 4. Form of Warrant.
The Common Warrants, together with the form of election to purchase Common Stock (the “Exercise Notice”) and the form
of assignment to be printed on the reverse thereof, whether a Warrant Certificate or a Global Warrant, shall be substantially in the form
of Exhibit 1 hereto.
Section 5. Countersignature and Registration.
(a) The
Common Warrants shall be executed on behalf of the Company by its Chief Executive Officer, Chief Financial Officer or other
authorized officer, either manually or by facsimile signature, and have affixed thereto the Company’s seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile or other
electronic signature. The Common Warrants shall be countersigned by the Warrant Agent either manually or by facsimile or other
electronic signature and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall
have signed a Common Warrant shall cease to be such officer of the Company before countersignature by the Warrant Agent and issuance
and delivery by the Company, such Common Warrant, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with
the same force and effect as though the person who signed such Common Warrant had not ceased to be such officer of the Company; and
any Common Warrant may be signed on behalf of the Company by any person who, at the actual date of the execution of such Common
Warrant, shall be a proper officer of the Company to sign such Common Warrant, although at the date of the execution of this
Agreement any such person was not such an officer.
(b)
Upon the receipt of all relevant information from the Company or its agents, the Warrant Agent will keep or cause to be kept, at one
of its offices, or at the office of one of its agents, books for registration and transfer of the Warrant Certificates issued
hereunder. Such books shall show the names and addresses of the respective Holders of the Warrant Certificates, the number of
warrants evidenced on the face of each of such Warrant Certificate and the date of each of such Warrant Certificate. The Warrant
Agent will create a special account for the issuance of Warrant Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates.
(a) Subject
to the provisions of the Common Warrant and the last sentence of this first paragraph of Section 6 and subject to applicable law,
rules or regulations, or any “stop transfer” instructions the Company may give to the Warrant Agent, at any time after
the closing date of the Offering, and at or prior to the Close of Business on the Termination Date, any Warrant Certificate or
Warrant Certificates or Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Warrant
Certificate or Warrant Certificates or Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares
of Common Stock as the Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants surrendered then entitled
such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Warrant Certificate or Global Warrant
shall make such request in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant
Certificates to be transferred, split up, combined or exchanged at the principal office of the Warrant Agent, provided that no such
surrender is applicable to the Holder of a Global Warrant, together with the form of assignment and certificate duly executed and
properly completed and such other documentation that the Company or the Warrant Agent may reasonably request, to be transferred,
split up, combined or exchanged at the office of the Warrant Agent designated for such purpose. Any requested transfer of Warrants,
whether a Global Warrant or a Warrant Certificate, shall be accompanied by reasonable evidence of authority of the party making such
request, which evidence shall include a signature guarantee from an eligible guarantor institution participating in a signature
guarantee program approved by the Securities Transfer Association (a “Signature Guarantee”), and any other reasonable
evidence of authority that may be required by the Warrant Agent. Thereupon the Warrant Agent shall, subject to the last sentence of
this first paragraph of Section 6, countersign and deliver to the Person entitled thereto any Warrant Certificate or Global Warrant,
as the case may be, as so requested. The Company may require payment from the Holder of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Common Warrants. The
Warrant Agent shall not have any duty or obligation to take any action under any section of this Agreement that requires the payment
of taxes and/or charges unless and until it is satisfied that all such payments have been made.
(b) Upon receipt by the Warrant Agent of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence shall include
an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of loss,
theft or destruction, of indemnity or security acceptable to the Company and the Warrant Agent (which shall include posting of an
open penalty surety bond satisfactory to the Warrant Agent and holding it and Company harmless), and satisfaction of any other
reasonable requirements established by Section 8-405 of the Uniform Commercial Code as in effect in the State of Delaware, and
reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant
Agent and cancellation of the Warrant Certificate if mutilated, absent notice to the Warrant Agent that such certificates have been
acquired by a bona fide purchaser, the Company will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent
for delivery to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.
3
Section 7. Exercise of Warrants; Exercise Price; Termination
Date.
(a) The Common
Warrants shall be exercisable commencing on the Initial Exercise Date. The Common Warrants shall cease to be exercisable and shall terminate
and become void, and all rights thereunder and under this Agreement shall cease, at or prior to the Close of Business on the Termination
Date. Subject to the foregoing and to Section 7(b) below, the Holder of a Common Warrant may exercise the Common Warrant in whole or in
part upon providing the items required by Section 7(c) below to the Warrant Agent at the principal office of the Warrant Agent or to the
office of one of its agents as may be designated by the Warrant Agent from time to time. In the case of the Holder of a Global Warrant,
the Holder shall deliver the executed Exercise Notice and payment of the Exercise Price pursuant to Section 2(a) of the Common Warrant.
Notwithstanding any other provision in this Agreement, a holder whose interest in a Global Warrant is a beneficial interest in a Global
Warrant held in book-entry form through the Depositary (or another established clearing corporation performing similar functions), shall
effect exercises by delivering to the Depositary (or such other clearing corporation, as applicable) the appropriate instruction form
for exercise, complying with the procedures to effect exercise that are required by the Depositary (or such other clearing corporation,
as applicable). The Company acknowledges that the bank accounts maintained by the Warrant Agent in connection with the services provided
under this Agreement will be in its name and that the Warrant Agent may receive investment earnings in connection with the investment
at Warrant Agent risk and for its benefit of funds held in those accounts from time to time. Neither the Company nor the Holders will
receive interest on any deposits or Exercise Price. No ink-original Exercise Notice shall be required, nor shall any medallion guarantee
(or other type of guarantee or notarization) of any Exercise Notice be required.
(b)
Upon receipt of an Exercise Notice for a cashless exercise pursuant to Section 2(c) of the Common Warrant (each, a “Cashless
Exercise”), the Company will promptly calculate and transmit to the Warrant Agent, and the Warrant Agent shall have no obligation
to calculate, the number of Warrant Shares issuable in connection with such Cashless Exercise and deliver a copy of the Exercise Notice
to the Warrant Agent, which shall issue such number of Warrant Shares in connection with such Cashless Exercise. The Warrant Agent shall
have no duty or obligation to investigate or confirm whether the Company’s determination of the number of shares of Common Stock
to be issued on such exercise, pursuant to this Section 7(b), is accurate or correct.
(c)
Upon the Warrant Agent’s receipt, at or prior to the Close of Business on the Termination Date set forth in a Common Warrant,
of the executed Exercise Notice, accompanied by payment of the Exercise Price pursuant to Section 2(a) of the Common Warrant, the shares
to be purchased (other than in the case of a Cashless Exercise), an amount equal to any applicable tax, governmental charge or expense
reimbursement referred to in Section 6 by certified check or bank draft payable to the order of the Company and, in the case of an exercise
of a Common Warrant in the form of a Warrant Certificate for all of the Warrant Shares represented thereby, the Warrant Certificate,
the Warrant Agent shall cause the Warrant Shares underlying such Common Warrant to be delivered to or upon the order of the Holder of
such Common Warrant, registered in such name or names as may be designated by such Holder, as promptly as practicable. If the Company
is then a participant in the DWAC system of the Depositary 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) the Common Warrant is being exercised via Cashless
Exercise, then the certificates for Warrant Shares shall be transmitted by the Warrant Agent to the Holder by crediting the account of
the Holder’s broker with the Depositary through its DWAC system. For the avoidance of doubt, if the Company becomes obligated to
pay any amounts to any Holders pursuant to Section 2(d)(iv) of the Common Warrant, such obligation shall be solely that of the Company
and not that of the Warrant Agent. Notwithstanding anything else to the contrary in this Agreement, except in the case of a Cashless
Exercise, if any Holder fails to duly deliver payment to the Warrant Agent of an amount equal to the aggregate Exercise Price of the
Warrant Shares to be purchased upon exercise of such Holder’s Common Warrant as set forth in Section 7(a) hereof, the Warrant Agent
will not obligated to deliver certificates representing any such Warrant Shares (via DWAC or otherwise) until following receipt of such
payment, and the applicable Warrant Share Delivery Date shall be deemed extended by one day for each day (or part thereof) until such
payment is delivered to the Warrant Agent.
(d)
All funds received by Computershare under this Agreement that are to be distributed or applied by Computershare in the performance
of Services (the “Funds”) shall be held by Computershare as agent for the Company and deposited in one or more bank
accounts to be maintained by Computershare in its name as agent for the Company. Until paid pursuant to this Agreement, Computershare
may hold or invest the Funds through such accounts in: (a) funds backed by obligations of, or guaranteed by, the United States of America;
(b) debt or commercial paper obligations rated A-1 or P-1 or better by S&P Global Inc. (“S&P”) or Moody's Investors
Service, Inc. (“Moody’s”), respectively; (c) Government and Treasury backed AAA-rated Fixed NAV money market
funds that comply with Rule 2a-7 of the Investment Company Act of 1940, as amended; or (d) short term certificates of deposit, bank repurchase
agreements, and bank accounts with commercial banks with Tier 1 capital exceeding $1 billion, or with an investment grade rating by S&P
(LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported
by Bloomberg Finance L.P.). The Warrant Agent shall have no responsibility or liability for any diminution of the Funds that may result
from any deposit or investment made by Computershare in accordance with this paragraph, including any losses resulting from a default
by any bank, financial institution or other third party. Computershare may from time to time receive interest, dividends or other earnings
in connection with such deposits or investments. The Warrant Agent shall not be obligated to pay such interest, dividends or earnings
to the Company, any holder or any other party. The Warrant Agent shall forward funds received for warrant exercises in a given month by
the 5th business day of the following month by wire transfer to an account designated by the Company.
4
(e)
In case the Holder of any Warrant Certificate exercises fewer than all Common Warrants evidenced thereby and surrenders such Warrant
Certificate in connection with such partial exercise, a new Warrant Certificate evidencing the number of Warrant Shares equivalent to
the number of Warrant Shares remaining unexercised may be issued by the Warrant Agent to the Holder of such Warrant Certificate or to
his duly authorized assigns in accordance with Section 2(d)(ii) of the Common Warrant, subject to the provisions of Section 6 hereof.
(f) Cost Basis Information.
(i) In
the event of a cash exercise, the Company hereby instructs the Warrant Agent to record cost basis for newly issued shares in a
manner to be subsequently communicated by the Company in writing to the Warrant Agent.
(ii)
In the event of a Cashless Exercise, the Company shall provide cost basis for shares issued pursuant to a cashless exercise at
the time the Company confirms the number of Warrant Shares issuable in connection with the cashless exercise to the Warrant Agent pursuant
to Section 7 hereof.
Section 8. Cancellation and
Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination
or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for cancellation or in canceled
form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant Agent for cancellation and
retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. At the expense of the Company, the Warrant Agent shall deliver all canceled Warrant Certificates to the
Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to retain
such canceled certificates.
Section 9. Certain Representations;
Reservation and Availability of Shares of Common Stock or Cash.
(a)
This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and
delivery hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company
in accordance with its terms, and the Common Warrants have been duly authorized, executed and issued by the Company and, assuming due
authentication thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration Statement,
constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled
to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
(b)
The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares
of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares
of Common Stock that will be sufficient to permit the exercise in full of all outstanding Common Warrants.
(c)
The Warrant Agent will create a special account for the issuance of Common Stock upon the exercise of Common Warrants.
(d)
The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common
Stock upon exercise of the Common Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may
be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates
for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Common Warrants surrendered for exercise
or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Common Warrants until any such tax or governmental
charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of
surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge is
due. The Warrant Agent shall not have any duty or obligation to take any action under any section of this Agreement or any Warrant that
requires the payment of taxes and/or charges unless and until the Warrant Agent is reasonably satisfied that all such payments have been
made.
5
(e) The Company
shall provide to the Warrant Agent an opinion of counsel, which shall state that all Warrants or Warrant Shares, as applicable, (i) were
offered, sold or issued as part of an offering that was registered in compliance with the Securities Act of 1933, as amended or pursuant
to an exemption from the registration requirements of the 1933 Act, as amended (as the case may be), (ii) were issued in compliance with
all applicable state securities or “blue sky” laws, and (iii) are validly issued, fully paid and non-assessable.
Section 10. Common Stock Record
Date. Each Holder shall be deemed to have become the holder of record for the Warrant Shares pursuant to Section 2(d)(i) of the Common
Warrants.
Section 11. Adjustment of
Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price, the number of shares covered
by each Common Warrant and the number of Common Warrants outstanding are subject to adjustment from time to time as provided in Section
3 of the Common Warrant. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Common Warrant,
the Holder of any Common Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other
than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Common Warrant shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares
contained in Section 3 of the Common Warrant, and the provisions of Sections 7, 9 and 13 of this Agreement with respect to the shares
of Common Stock shall apply on like terms to any such other shares. All Common Warrants originally issued by the Company subsequent to
any adjustment made to the Exercise Price pursuant to the Common Warrant shall evidence the right to purchase, at the adjusted Exercise
Price, the number of shares of Common Stock purchasable from time to time hereunder upon exercise of the Common Warrants, all subject
to further adjustment as provided herein. The Company hereby agrees that it will provide the Warrant Agent with reasonable notice of
such adjustment event. The Company further agrees that it will provide to the Warrant Agent with any new or amended exercise terms.
Section 12. Certification
of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of shares of Common Stock
issuable upon the exercise of each Common Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare
a certificate setting forth the Exercise Price of each Common Warrant as so adjusted, and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate
and (c) instruct the Warrant Agent to send a brief summary thereof to each Holder of a Common Warrant. The Warrant Agent shall be fully
protected in relying on such certificate and on any adjustment or statement contained therein and shall have no duty or liability with
respect to, and shall not be deemed to have knowledge of any such adjustment or any such event unless and until it shall have received
such certificate. The Warrant Agent shall have no obligation under any Section of this Agreement to determine whether an such an adjustment
event has occurred or to calculate any of the adjustments set forth herein.
Section 13. Fractional Shares of Common Stock.
(a)
The Company shall not issue fractions of Common Warrants or distribute a Global Warrant or Warrant Certificates that evidence fractional
Common Warrants. Whenever any fractional Common Warrant would otherwise be required to be issued or distributed, the actual issuance or
distribution shall reflect a rounding of such fraction either up or down to the nearest whole Common Warrant.
(b)
The Company shall not issue fractions of shares of Common Stock upon exercise of Common Warrants or distribute stock certificates
that evidence fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued
or distributed, the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Common
Warrant.
(c)
The Company shall provide the Warrant Agent an initial funding of one thousand dollars ($1000) for the purpose of issuing cash
in lieu of fractional shares. From time to time thereafter, Computershare may request additional funding to cover payments of fractional
shares. The Warrant Agent shall have no obligation to make payments of fractional shares unless the Company shall have provided the necessary
funds to pay in full all amounts due and payable with respect thereto.
6
Section 14. Conditions of
the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the express terms and conditions
hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to
time of the Common Warrants shall be subject:
(a) Compensation
and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation detailed on the fee schedule mutually
agreed upon between the Company and the Warrant Agent in writing (the “Fee Schedule”) for all services rendered
by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable and documented
counsel fees and other disbursements incurred in the preparation, delivery, negotiation, amendment, administration and execution of
this Agreement and the exercise and performance of its duties hereunder) by the Warrant Agent in connection with the services
rendered hereunder by the Warrant Agent. The Company covenants and agrees to indemnify and to hold the Warrant Agent harmless
against any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including the reasonable
fees and expenses of legal counsel) which may be paid, incurred or suffered by or to which it may become subject, arising from or
out of, directly or indirectly, any claims or liability resulting from any action taken, suffered or omitted by the Warrant Agent in
connection with the execution, acceptance, administration, exercise and performance of its duties under this Agreement, including
the reasonable costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly, or of
enforcing its rights under this Agreement; provided, that such covenant and agreement does not extend to, and the Warrant Agent
shall not be indemnified with respect to, such costs, expenses, losses and damages incurred or suffered by the Warrant Agent as a
result of, or arising out of, its gross negligence, bad faith, or willful misconduct (each as determined by a final, non-appealable
order, judgment, ruling or decree of a court of competent jurisdiction). Notwithstanding anything in this Agreement to the contrary,
the Warrant Agent’s aggregate liability during any term of this Agreement with respect to, arising from, or arising in
connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract,
or in tort, or otherwise, is limited to, and shall not exceed, the amount of annual fees paid by the Company to the Warrant Agent
during the twelve (12) months immediately preceding the event for which recovery from the Warrant Agent is being sought.
Notwithstanding anything in this Agreement to the contrary, the Warrant Agent shall not be liable for any consequential, indirect,
punitive, special or incidental damages under any provisions of this Agreement or for any consequential, indirect, punitive, special
or incidental damages arising out of any act or failure to act hereunder even if Warrant Agent has been advised of or has foreseen
the possibility of such damages.
(b) Agent
for the Company. In acting under this Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely
as agent of the Company and does not assume any obligations or relationship of agency or trust for or with any of the Holders of
Warrant Certificates or beneficial owners of Common Warrants.
(c) Instructions.
From time to time, the Company may provide the Warrant Agent with instructions concerning the services performed by the Warrant
Agent hereunder. In addition, at any time the Warrant Agent may apply to the Chief Executive Officer or Chief Financial Officer of
the Company for instruction, and may consult with legal counsel for the Warrant Agent or the Company with respect to any matter
arising in connection with the services to be performed by the Warrant Agent under this Agreement. The Warrant Agent and its agents
and subcontractors shall not be liable and shall be indemnified by the Company for any action taken or omitted by the Warrant Agent
in reliance upon any Company instructions. The Warrant Agent shall not be held to have notice of any change of authority of any
person, until receipt of written notice thereof from the Company.
(d) Counsel.
The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the advice of such
counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by
it hereunder in the absence of bad faith and in accordance with the advice of such counsel.
(e) Documents.
The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance
upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the proper parties.
(f) Certain Transactions. The Warrant
Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Common Warrants or
other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal
entity.
7
(g) No
Liability for Interest. The Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant to
any of the provisions of this Agreement or of the Warrant Certificates.
(h) No
Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or any of the
Warrant Certificates (except as to the Warrant Agent's countersignature thereon).
(i) No
Responsibility for Representations. The Warrant Agent shall not be liable for or by reason of any of the statements of fact,
recitals or representations contained in this Agreement or in the Warrant Certificates (except its countersignature, by either
manual, electronic or facsimile signature, thereof) by the Company or be required to verify the same, but all such statements,
recitals and representations are and shall be deemed to have been made by the Company only.
(j) Agents.
The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or any act, omission, default, neglect
or misconduct of any such attorneys or agents or for any loss to the Company, to the Holders or any other Person resulting from any
such act, omission, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment
thereof.
Section 15. Purchase or Consolidation
or Change of Name of Warrant Agent. Any Person into which the Warrant Agent or any successor Warrant Agent may be merged or with which
it may be consolidated, or any Person resulting from any merger or consolidation to which the Warrant Agent or any successor Warrant Agent
shall be party, or any Person succeeding to the corporate trust business of the Warrant Agent or any successor Warrant Agent, shall be
the successor to the Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Warrant Agent under the provisions
of Section 17. In case at the time such successor Warrant Agent shall succeed to the agency created by this Agreement any of the Common
Warrants shall have been countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor
Warrant Agent and deliver such Common Warrants so countersigned; and in case at that time any of the Common Warrants shall not have been
countersigned, any successor Warrant Agent may countersign such Common Warrants either in the name of the predecessor Warrant Agent or
in the name of the successor Warrant Agent; and in all such cases such Common Warrants shall have the full force provided in the Common
Warrants and in this Agreement.
In case at any time the name
of the Warrant Agent shall be changed and at such time any of the Common Warrants shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under its prior name and deliver Common Warrants so countersigned; and in case at
that time any of the Common Warrants shall not have been countersigned, the Warrant Agent may countersign such Common Warrants
either in its prior name or in its changed name; and in all such cases such Common Warrants shall have the full force provided in
the Common Warrants and in this Agreement.
Section 16. Duties of Warrant
Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following express terms and conditions,
by all of which the Company, by its acceptance hereof, and the Holders of Warrant Certificates, by their acceptance thereof, shall be
bound:
(a)
The Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or
omitted by it in the absence of bad faith and in accordance with such opinion.
(b)
Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate
signed by the Chief Executive Officer or Chief Financial Officer of the Company; and such certificate shall be full authentication to
the Warrant Agent for any action taken, suffered or omitted to be taken by it in the absence of bad faith by it under the provisions of
this Agreement in reliance upon such certificate.
8
(c)
Subject to the limitations set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence,
bad faith or willful misconduct (in each case, as determined by a final, non-appealable order, judgment, ruling or decree of a court of
competent jurisdiction).
(d)
The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Common Warrant (except
its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this
Agreement or in any Common Warrant; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in
the number of shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the manner, method or amount
of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect
to the exercise of Common Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor
shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of
Common Stock to be issued pursuant to this Agreement or any Common Warrant or as to whether any shares of Common Stock will, when issued,
be duly authorized, validly issued, fully paid and nonassessable. Notwithstanding anything to the contrary herein, the Warrant Agent shall
not be liable for the Company’s failure to timely deliver Warrant Shares pursuant to the terms of the Warrants, nor shall the Warrant
Agent be liable for any liquidated damages or any other damages associated therewith.
(e)
Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for
the carrying out or performing by any party of the provisions of this Agreement.
(f)
The Warrant Agent shall be obligated to perform only such duties as are expressly set forth herein and in the Warrant Certificates
and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant
Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment
of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under
any duty or responsibility for the use by the Company of any of the Warrant Certificates countersigned by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements
contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a Holder of a Warrant Certificate
with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt
to initiate any proceedings at law.
(g)
The Warrant Agent shall not be required to take notice or be deemed to have notice of any event or condition hereunder, including
any event or condition that may require action by the Warrant Agent, unless the Warrant Agent shall be specifically notified in writing
of such event or condition by the Company, and all notices or other instruments required by this Agreement to be delivered to the Warrant
Agent must, in order to be effective, be received by the Warrant Agent as specified in Section 19 hereof, and in the absence of such notice
so delivered, the Warrant Agent may conclusively assume no such event or condition exists.
(h)
The Warrant Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature
by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion Program
or other comparable “signature guarantee program” or insurance program in addition to, or in substitution for, the foregoing;
or (b) any related law, act, regulation or any interpretation of the same.
(i) Section
14 and this Section 16 shall survive the termination, exercise or expiration of the Common Warrants, the termination of this
Agreement and the resignation, replacement or removal of the Warrant Agent.
9
Section 17. Change of Warrant
Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 10 days’ notice in writing sent
to the Company and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. In the event the transfer
agency relationship in effect between the Company and the Warrant Agent terminates, the Warrant Agent will be deemed to have resigned
automatically and be discharged from its duties under this Agreement as of the effective date of such termination, and the Company shall
be responsible for sending any required notice thereunder. The Company may remove the Warrant Agent or any successor Warrant Agent upon
30 days’ notice in writing, sent to the Warrant Agent or successor Warrant Agent, as the case may be, and to each transfer agent
of the Common Stock, and to the Holders of the Warrant Certificates. If the Warrant Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment
within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Warrant Agent or by the Holder of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate
for inspection by the Company), then the Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment
of a new Warrant Agent, provided that, for purpose of this Agreement, the Company shall be deemed to be the Warrant Agent until a new
warrant agent is appointed. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of a state thereof, in good standing, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of
its appointment as Warrant Agent a combined capital and surplus (together with its Affiliates) of at least $50,000,000. After appointment,
the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named
as Warrant Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent
any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose, but such predecessor Warrant Agent shall not be required to make any additional expenditure (without prompt reimbursement by
the Company) or assume any additional liability in connection with the foregoing. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail
a notice thereof in writing to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this Section
17, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment
of the successor Warrant Agent, as the case may be.
Section 18. Issuance of New Warrants. Notwithstanding
any of the provisions of this Agreement or of the Common Warrants to the contrary, the Company may, at its option, issue a new Global
Warrant or Warrant Certificates, if any, evidencing Common Warrants in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property
purchasable under the Global Warrant or Warrant Certificates, if any, made in accordance with the provisions of this Agreement.
Section 19. Notices. Notices
or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate to or
on the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant Certificate to or on the
Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate, shall be deemed given (a) on the
date delivered, if delivered personally, (b) on the date deposited thereof with Federal Express or another recognized overnight courier,
if sent by Federal Express or another recognized overnight courier, (c) on the date of the mailing thereof with postage prepaid, if mailed
by registered or certified mail (return receipt requested), and (d) the date of transmission, if such notice or communication is delivered
via facsimile or, except in the case of the Warrant Agent, email attachment at or prior to 5:30 p.m. (New York City time) on a Business
Day and (e) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or email
attachment on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, in each case to the
parties at the following addresses (or at such other address for a party as shall be specified by like notice):
(a) If to the Company, to:
Sonoma Pharmaceuticals, Inc.
5445 Conestoga Court Suite 150
Boulder, Colorado 80301
Attention: General Counsel
(b) If to the Warrant Agent, to:
Computershare, Inc.
Computershare Trust Company N.A.
150 Royall Street
Canton, MA 02021
Attention: Client Services
10
For any notice
delivered by email to be deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered
on the next business day following such email, unless the recipient of such email has acknowledged via return email receipt of such email.
(c)
If to the Holder of any Warrant Certificate, to the address of such Holder as shown on the registry books of the Company. Any
notice required to be delivered by the Company to the Holder of any Pre-Funded Warrant may be given by the Warrant Agent on behalf of
the Company. Notwithstanding any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder
of any Warrant Certificate, for a Global Warrant, such notice shall be sufficiently given if given to the Depositary (or its designee)
pursuant to the procedures of the Depositary or its designee.
Section 20. Supplements and Amendments.
(a) The Company
and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Warrant Certificates
in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the Holders of the Warrants Certificates in any material
respect.
(b)
In addition to the foregoing, with the consent of Holders of Warrants, the Company and the Warrant Agent may modify this Agreement
for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or modifying
in any manner the rights of the Holders of the Warrant Certificates; provided, however, that no modification of the terms
(including but not limited to the adjustments described in Section 11) upon which the Common Warrants are exercisable or the rights of
the holders of Common Warrants to received liquidated damages or other payments in cash from the Company or reducing the percentage required
for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding warrant certificate affected
thereby. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent
a certificate from a duly authorized officer of the Company that states that the proposed amendment complies with the terms of this Section
20. The Warrant Agent may, but shall not be obligated to, execute any supplement, amendment or modification that affects the Warrant Agent’s
own rights, duties, obligations or immunities. No amendment to this Agreement shall be effective unless duly executed by the Warrant Agent.
Section 21. Successors.
All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 22. Benefits of this
Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates
and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.
Section 23. Governing Law.
This Agreement and each Pre-Funded Warrant issued hereunder shall be governed by, and construed in accordance with, the laws of the State
of New York, without giving effect to any provision or rule that would cause the application of the laws of any jurisdictions other than
the State of New York. The Company 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 brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper.
Section 24. Counterparts.
This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement transmitted electronically
shall have the same authority, effect and enforceability as an original signature.
Section 25. Captions. The
captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
11
Section 26. Information.
The Company agrees to promptly provide to the Holders of the Common Warrants any information it provides to all holders of the Common
Stock, except to the extent any such information is publicly available on the EDGAR system (or any successor thereof) of the Securities
and Exchange Commission.
Section 27. Force Majeure.
Notwithstanding anything to the contrary contained herein, Warrant Agent shall not be liable for any delays or failures in performance
resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, pandemics, epidemics, shortage
of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical
difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest, it being understood that the Warrant
Agent shall use reasonable best efforts which are consistent with accepted practices in the banking industry to resume performance as
soon as practicable under the circumstances; provided, however, that this provision shall not, in any respect, affect the obligations
of the Company to the Holders under the terms of the Common Warrants.
Section 28. Confidentiality.
The Warrant Agent and the Company agree that all books, records, information and data pertaining to the business of the other party, including
inter alia, personal, non-public warrant holder information, which are exchanged or received pursuant to the negotiation or the carrying
out of this Agreement including the fees for services set forth in the attached schedule shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law, including, without limitation, pursuant to subpoenas from state or federal
government authorities (e.g., in divorce and criminal actions).
Section 29. Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable
term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to
such invalid or unenforceable provision as may be possible and be valid and enforceable. If an invalid or unenforceable provision shall
affect the rights, immunities, liabilities, duties or obligations of the Warrant Agent, the Warrant Agent shall be entitled to resign
immediately upon written notice to the Company.
Section 30. Entire Agreement. This Agreement
contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. Notwithstanding anything to the contrary contained in this Agreement, in the event
of inconsistency between any provision in this Agreement and any provision in a Warrant Certificate, as it may from time to time be amended,
all provisions with respect to the rights, duties, obligations, liabilities and immunities of the Warrant Agent shall be determined and
interpreted solely by the provisions of this Agreement. The Company shall not amend any provisions of the Warrant Certificate without
the prior consent of the Warrant Agent, not to be unreasonably withheld or delayed.
12
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the day and year first above written.
SONOMA PHARMACEUTICALS, INC.
By:
/s/ Amy Trombly
Name: Amy Trombly
Title: Chief Executive Officer
COMPUTERSHARE,
INC.
COMPUTERSHARE TRUST, N.A.
By:
/s/ Collin
Ekeogu
Name: Collin Ekeogu
Title: Senior Manager, Corporate Actions
13
Annex A: Form of Warrant Certificate
Request Notice
WARRANT CERTIFICATE REQUEST NOTICE
To: Computershare, Inc. as Warrant Agent for Sonoma Pharmaceuticals,
Inc. (the “Company”)
The undersigned
Holder of Common Stock Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to
receive a Warrant Certificate evidencing the Warrants held by the Holder as specified below:
1. Name of Holder of Warrants in form of Global
Warrants: _______________________
2. Name of Holder in
Warrant Certificate (if different from name of Holder of Warrants in form of Global Warrants):
_______________________
3. Number of Warrants in name of Holder in form of Global Warrants: _______________________
4. Number of Warrants for which Warrant Certificate
shall be issued: _______________________
5. Number of Warrants in name of Holder in form of Global Warrants after issuance of Warrant Certificate, if
any: _______________________
6. Warrant Certificate shall be delivered to the following address:
________________________________________
________________________________________
________________________________________
________________________________________
The undersigned
hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder
is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants
evidenced by the Warrant Certificate.
[SIGNATURE OF HOLDER]
Name of Investing Entity: ____________________________________________
Signature of Authorized
Signatory of Investing Entity: ____________________________________________
Name of Authorized Signatory:
____________________________________________
Title of Authorized Signatory:
____________________________________________
Date: ____________________________________________
14
Exhibit 1: Form of Warrant
15
COMMON STOCK PURCHASE WARRANT
SONOMA PHARMACEUTICALS, INC.
Warrant Shares: 3,407,404
Initial Exercise Date: April 27, 2026
CUSIP: 83558L 147
THIS COMMON
STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, CEDE & CO. or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on April 27, 2031 (the “Termination
Date”) but not thereafter, to subscribe for and purchase from Sonoma Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
up to 3,407,404 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). This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository
Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence
shall not apply.
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 in 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 except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the City of New York are authorized or required by law or other governmental action to close; 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 $0.0001 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.
16
“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.
“Registration
Statement” means the Company’s registration statement on Form S-1 (File No. 333-295171).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“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 Nasdaq Capital Market, the NYSE American, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock
Exchange (or any successors to any of the foregoing).
“Transfer Agent”
means Computershare, Inc., the current transfer agent of the Company, 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 in 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.
“Warrant
Agency Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company
and the Warrant Agent.
“Warrant
Agent” means Computershare Inc., a Delaware corporation, and its affiliate, Computershare Trust
Company, N.A., a federally chartered trust company, collectively as warrant agent, and any successor warrant agent of the Company.
“Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
17
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 Warrant Agent of a duly executed
facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (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 Warrant Agent 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 Warrant Agent for cancellation within three (3) Trading Days of the
date on which the final Notice of Exercise is delivered to the Warrant Agent. 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.
Notwithstanding the foregoing
in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held
in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made
pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form
for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable),
subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement,
in which case this sentence shall not apply.
b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $1.35, 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 be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation
NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice
of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including
until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)
the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise
is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading
Day;
(B) = the Exercise Price of this Warrant, as adjusted hereunder;
and
(X) =
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
18
If Warrant
Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities
Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any
position contrary to this Section 2(c).
Notwithstanding
anything herein to the contrary, on the Termination Date this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
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,
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. The Warrant Agent shall have no
liability for the Company’s failure to deliver to the Holders the Warrant Shares as set forth in this paragraph 2(d)(i). As used
herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the
Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on
the Initial Exercise Date, which may be delivered at any time after the time of execution of the Placement Agency Agreement, the Company
agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the
Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise
Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new
Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
19
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.
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.
20
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 the 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.
21
b) [Reserved.]
c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of 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).
d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
e)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or
any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all
or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted
to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with
another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding shares of Common Stock
or 50% or more of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon
any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable
upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to
any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this
Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.
22
f)
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.
g) Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company 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 facsimile or email to the Holder at
its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior
to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the
holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective
or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares
of 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.
h)
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.
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, accompanied by a signature guarantee and such other documentation
as the Company or its designated agent may reasonably request. 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. 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 whole or in part. 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.
23
b)
New Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), 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 Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for
that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company and the
Warrant Agent may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof
or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation
of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor
and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.
d) 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.
24
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
e)
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
giving effect to any provision or rule that would cause the application of the laws of any jurisdictions other than the State of New York.
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.
f)
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.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other
provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h)
Notices. Any 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 facsimile or e-mail, or sent by a nationally recognized
overnight courier service, addressed to the Company, at Sonoma Pharmaceuticals, Inc., 5445 Conestoga Court, Suite 150, Boulder, Colorado
80301, Attention: CEO, or such other facsimile number, 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 facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder
at the facsimile number, 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 date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or 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 date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number or 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.
25
i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the
Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand. Notwithstanding anything in this Warrant to
the contrary, the Warrant Agent shall not be required to execute any supplement or amendment to this Warrant that it has determined would
adversely affect its own rights, duties, obligations or immunities under the Warrant Agent Agreement.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.
o)
Warrant Agency Agreement. This Warrant is issued subject to the Warrant Agent Agreement. To the extent any provision of
this Warrant conflicts with the express provisions of the Warrant Agent Agreement, the provisions of this Warrant shall govern and be
controlling; provided, however, that with respect to the rights, duties, obligations, protections, immunities and liability of the Warrant
Agent, the Warrant Agent Agreement shall govern and control.
********************
(Signature Page Follows)
26
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.
SONOMA PHARMACEUTICALS, INC.
By:
Name: Amy Trombly
Title: Chief Executive
Officer
WARRANT AGENT:
COMPUTERSHARE INC. and
COMPUTERSHARE TRUST COMPANY, N.A.,
on behalf of both parties
By:
Name:
Title:
27
NOTICE OF EXERCISE
TO: SONOMA PHARMACEUTICALS, 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: _______________________________________________________________________________
28
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name:
(Please Print)
Address:
(Please Print)
Phone Number:
Email Address:
Dated: _______________ __, ______
Holder’s Signature:
Holder’s Address:
29
EX-4.5 — WARRANT AGENCY AGREEMENT (PRE-FUNDED WARRANTS)
EX-4.5
Filename: sonoma_ex0405.htm · Sequence: 6
Exhibit 4.5
Execution Version
WARRANT AGENCY AGREEMENT
WARRANT AGENCY
AGREEMENT, dated as of April 28, 2026 (“Agreement”), between Sonoma Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), and Computershare Inc. (“Computershare”), a Delaware corporation, and its affiliate,
Computershare Trust Company, N.A., a federally chartered trust company, collectively as warrant agent (the “Warrant Agent”).
W I T N E S S E T H
WHEREAS, pursuant to a
registered offering by the Company of units (the “Units”), each consisting of (a) one share of common stock, par
value $0.0001 per share (the “Common Stock”), or, in lieu of Common Stock, one pre-funded warrant to purchase a
share of Common Stock (the “Pre-Funded Warrants”), and (b) one warrant to purchase a share of Common Stock (the
“Common Warrants”), pursuant to an effective registration statement on Form S-1 (File No. 333-295171) (the
“Registration Statement”), the Company wishes to issue the Pre-Funded Warrants in book entry form entitling the
respective holders of the Pre-Funded Warrants (the “Holders”, which term shall include a Holder’s
transferees, successors and assigns and “Holder” shall include, if the Pre-Funded Warrants are held in “street
name,” a Participant (as defined below) or a designee appointed by such Participant) to purchase an aggregate of up to
1,312,247 shares of Common Stock upon the terms and subject to the conditions hereinafter set forth (the
“Offering”);
WHEREAS,
the shares of Common Stock and Pre-Funded Warrants to be issued in connection with the Offering shall be immediately separable and will be
issued separately, but will be purchased together in the Offering; and
WHEREAS,
the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange, exercise and replacement of the Pre-Funded Warrants and, in the Warrant Agent’s capacity
as the Company’s transfer agent, the delivery of the Warrant Shares (as defined below).
NOW, THEREFORE,
in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or any day on which banking institutions in the City of New York are authorized or required by law or other governmental
action to close; 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.
(b)
“Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however,
that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.
(c)
“Person” means an individual, corporation, association, partnership, limited liability company, joint venture,
trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.
(d) “Warrant
Certificate” means a certificate issued to a Holder, representing such number of Warrant Shares as is indicated therein,
provided that any reference to the delivery of a Warrant Certificate in this Agreement shall include delivery of notice from the
Depositary or a Participant (each as defined below) of the transfer or exercise of Warrant in the form of a Global Warrant (as
defined below).
1
(e)
“Warrant Shares” means the shares of Common Stock underlying the Pre-Funded Warrants and issuable upon exercise
of the Pre-Funded Warrants.
All other capitalized terms used
but not otherwise defined herein shall have the meaning ascribed to such terms in the Pre-Funded Warrant.
Section 2. Appointment of Warrant
Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the express terms and conditions
(and no implied terms and conditions) set forth herein, and the Warrant Agent hereby accepts such appointment.
Section 3. Global Warrants.
(a)
The Pre-Funded Warrants shall be issuable in book entry form (the “Global Warrants”). All of the Pre-Funded Warrants
shall initially be represented by one or more Global Warrants, in the form of the Warrant Certificate, deposited with the Warrant Agent
and registered in the name of Cede & Co., a nominee of The Depository Trust Company (the “Depositary”), or as otherwise
directed by the Depositary. Ownership of beneficial interests in the Pre-Funded Warrants shall be shown on, and the transfer of such ownership
shall be effected through, records maintained by (i) the Depositary or its nominee for each Global Warrant or (ii) institutions that have
accounts with the Depositary (such institution, with respect to a Pre-Funded Warrant in its account, a “Participant”).
(b)
If the Depositary subsequently ceases to make its book-entry settlement system available for the Pre-Funded Warrants, the Company
may instruct the Warrant Agent regarding other arrangements for book-entry settlement. In the event that the Pre-Funded Warrants are not
eligible for, or it is no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written
instructions to the Depositary to deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the
Warrant Agent to deliver to each Holder a Warrant Certificate.
(c)
A Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate
Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the exchange of some or all of such Holder’s
Global Warrants for a Warrant Certificate evidencing the same number of Pre-Funded Warrants, which request shall be in the form attached
hereto as Annex A (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate
Request Notice by the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender upon delivery
by the Holder of a number of Global Warrants for the same number of Pre-Funded Warrants evidenced by a Warrant Certificate, a “Warrant
Exchange”), the Warrant Agent shall promptly effect the Warrant Exchange and shall promptly issue and deliver to the Holder
a Warrant Certificate for such number of Pre-Funded Warrants in the name set forth in the Warrant Certificate Request Notice. Such Warrant
Certificate shall be dated the original issue date of the Pre-Funded Warrants and shall be manually executed by an authorized signatory of
the Company. In connection with a Warrant Exchange, the Company agrees to deliver, or to direct the Warrant Agent to deliver, the Warrant
Certificate to the Holder as promptly as practicable pursuant to the delivery instructions in the Warrant Certificate Request Notice
(“Warrant Certificate Delivery Date”). If the Company fails for any reason to deliver to the Holder the Warrant Certificate
subject to the Warrant Certificate Request Notice by the Warrant Certificate 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 evidenced by such Warrant Certificate (based on the VWAP
(as defined in the Pre-Funded Warrant) of the Common Stock on the Warrant Certificate Request Notice Date), $10 per Business Day (increasing
to $20 per Business Day on the fifth Business Day after such liquidated damages begin to accrue) for each Business Day after such Warrant
Certificate Delivery Date until such Warrant Certificate is delivered or, prior to delivery of such Warrant Certificate, the Holder rescinds
such Warrant Exchange. Notwithstanding the foregoing, the Warrant Agent shall not be liable for any liquidated damages or any other damages
associated with the Company’s failure to timely deliver a Warrant Certificate. The Company covenants and agrees that, upon the
date of delivery of the Warrant Certificate Request Notice, the Holder shall be deemed to be the holder of the Warrant Certificate and,
notwithstanding anything to the contrary set forth herein, the Warrant Certificate shall be deemed for all purposes to contain all of
the terms and conditions of the Pre-Funded Warrants evidenced by such Warrant Certificate and the terms of this Agreement. In the event a
beneficial owner requests a Warrant Exchange, upon issuance of the paper Warrant Certificate, the Company shall act as warrant agent
and the terms of the paper Warrant Certificate so issued shall exclusively govern in respect thereof. A party requesting a Warrant Exchange
must provide to the Warrant Agent any evidence of authority that may reasonably be required by the Warrant Agent, including but not limited
to, a Signature Guarantee (as defined below). For purposes of clarity, if there is a conflict between the express terms of this Agreement
and any Warrant Certificate with respect to the terms of the Pre-Funded Warrants, the terms of such Warrant Certificate shall govern and
control; provided, however, that the express terms of this Agreement shall control and supersede any provision in a Warrant Certificate
concerning the rights, duties, obligations, liabilities, protections and immunities of the Warrant Agent.
2
Section 4. Form of Warrant.
The Pre-Funded Warrants, together with the form of election to purchase Common Stock (the “Exercise Notice”) and the form
of assignment to be printed on the reverse thereof, whether a Warrant Certificate or a Global Warrant, shall be substantially in the form
of Exhibit 1 hereto.
Section 5. Countersignature and Registration.
(a) The
Pre-Funded Warrants shall be executed on behalf of the Company by its Chief Executive Officer, Chief Financial Officer or other
authorized officer, either manually or by facsimile signature, and have affixed thereto the Company’s seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile or other
electronic signature. The Pre-Funded Warrants shall be countersigned by the Warrant Agent either manually or by facsimile or other
electronic signature and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall
have signed a Pre-Funded Warrant shall cease to be such officer of the Company before countersignature by the Warrant Agent and issuance
and delivery by the Company, such Pre-Funded Warrant, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with
the same force and effect as though the person who signed such Pre-Funded Warrant had not ceased to be such officer of the Company; and
any Pre-Funded Warrant may be signed on behalf of the Company by any person who, at the actual date of the execution of such Pre-Funded Warrant, shall be a proper officer of the Company to sign such Pre-Funded Warrant, although at the date of the execution of this
Agreement any such person was not such an officer.
(b)
Upon the receipt of all relevant information from the Company or its agents, the Warrant Agent will keep or cause to be kept, at one
of its offices, or at the office of one of its agents, books for registration and transfer of the Warrant Certificates issued
hereunder. Such books shall show the names and addresses of the respective Holders of the Warrant Certificates, the number of
warrants evidenced on the face of each of such Warrant Certificate and the date of each of such Warrant Certificate. The Warrant
Agent will create a special account for the issuance of Warrant Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates.
(a) Subject
to the provisions of the Pre-Funded Warrant and the last sentence of this first paragraph of Section 6 and subject to applicable law,
rules or regulations, or any “stop transfer” instructions the Company may give to the Warrant Agent, at any time after
the closing date of the Offering, and at or prior to the Close of Business on the Termination Date, any Warrant Certificate or
Warrant Certificates or Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Warrant
Certificate or Warrant Certificates or Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares
of Common Stock as the Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants surrendered then entitled
such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Warrant Certificate or Global Warrant
shall make such request in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant
Certificates to be transferred, split up, combined or exchanged at the principal office of the Warrant Agent, provided that no such
surrender is applicable to the Holder of a Global Warrant, together with the form of assignment and certificate duly executed and
properly completed and such other documentation that the Company or the Warrant Agent may reasonably request, to be transferred,
split up, combined or exchanged at the office of the Warrant Agent designated for such purpose. Any requested transfer of Warrants,
whether a Global Warrant or a Warrant Certificate, shall be accompanied by reasonable evidence of authority of the party making such
request, which evidence shall include a signature guarantee from an eligible guarantor institution participating in a signature
guarantee program approved by the Securities Transfer Association (a “Signature Guarantee”), and any other reasonable
evidence of authority that may be required by the Warrant Agent. Thereupon the Warrant Agent shall, subject to the last sentence of
this first paragraph of Section 6, countersign and deliver to the Person entitled thereto any Warrant Certificate or Global Warrant,
as the case may be, as so requested. The Company may require payment from the Holder of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Pre-Funded Warrants. The
Warrant Agent shall not have any duty or obligation to take any action under any section of this Agreement that requires the payment
of taxes and/or charges unless and until it is satisfied that all such payments have been made.
(b) Upon receipt by the Warrant Agent of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence shall include
an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of loss,
theft or destruction, of indemnity or security acceptable to the Company and the Warrant Agent (which shall include posting of an
open penalty surety bond satisfactory to the Warrant Agent and holding it and Company harmless), and satisfaction of any other
reasonable requirements established by Section 8-405 of the Uniform Commercial Code as in effect in the State of Delaware, and
reimbursement to the Company and the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant
Agent and cancellation of the Warrant Certificate if mutilated, absent notice to the Warrant Agent that such certificates have been
acquired by a bona fide purchaser, the Company will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent
for delivery to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.
3
Section 7. Exercise of Warrants; Exercise Price; Termination
Date.
(a) The Pre-Funded Warrants shall be exercisable commencing on the Initial Exercise Date. The Pre-Funded Warrants shall cease to be exercisable and shall terminate
and become void, and all rights thereunder and under this Agreement shall cease, at or prior to the Close of Business on the Termination
Date. Subject to the foregoing and to Section 7(b) below, the Holder of a Pre-Funded Warrant may exercise the Pre-Funded Warrant in whole or in
part upon providing the items required by Section 7(c) below to the Warrant Agent at the principal office of the Warrant Agent or to the
office of one of its agents as may be designated by the Warrant Agent from time to time. In the case of the Holder of a Global Warrant,
the Holder shall deliver the executed Exercise Notice and payment of the Exercise Price pursuant to Section 2(a) of the Pre-Funded Warrant.
Notwithstanding any other provision in this Agreement, a holder whose interest in a Global Warrant is a beneficial interest in a Global
Warrant held in book-entry form through the Depositary (or another established clearing corporation performing similar functions), shall
effect exercises by delivering to the Depositary (or such other clearing corporation, as applicable) the appropriate instruction form
for exercise, complying with the procedures to effect exercise that are required by the Depositary (or such other clearing corporation,
as applicable). The Company acknowledges that the bank accounts maintained by the Warrant Agent in connection with the services provided
under this Agreement will be in its name and that the Warrant Agent may receive investment earnings in connection with the investment
at Warrant Agent risk and for its benefit of funds held in those accounts from time to time. Neither the Company nor the Holders will
receive interest on any deposits or Exercise Price. No ink-original Exercise Notice shall be required, nor shall any medallion guarantee
(or other type of guarantee or notarization) of any Exercise Notice be required.
(b)
Upon receipt of an Exercise Notice for a cashless exercise pursuant to Section 2(c) of the Pre-Funded Warrant (each, a “Cashless
Exercise”), the Company will promptly calculate and transmit to the Warrant Agent, and the Warrant Agent shall have no obligation
to calculate, the number of Warrant Shares issuable in connection with such Cashless Exercise and deliver a copy of the Exercise Notice
to the Warrant Agent, which shall issue such number of Warrant Shares in connection with such Cashless Exercise. The Warrant Agent shall
have no duty or obligation to investigate or confirm whether the Company’s determination of the number of shares of Common Stock
to be issued on such exercise, pursuant to this Section 7(b), is accurate or correct.
(c)
Upon the Warrant Agent’s receipt, at or prior to the Close of Business on the Termination Date set forth in a Pre-Funded Warrant,
of the executed Exercise Notice, accompanied by payment of the Exercise Price pursuant to Section 2(a) of the Pre-Funded Warrant, the shares
to be purchased (other than in the case of a Cashless Exercise), an amount equal to any applicable tax, governmental charge or expense
reimbursement referred to in Section 6 by certified check or bank draft payable to the order of the Company and, in the case of an exercise
of a Pre-Funded Warrant in the form of a Warrant Certificate for all of the Warrant Shares represented thereby, the Warrant Certificate,
the Warrant Agent shall cause the Warrant Shares underlying such Pre-Funded Warrant to be delivered to or upon the order of the Holder of
such Pre-Funded Warrant, registered in such name or names as may be designated by such Holder, as promptly as practicable. If the Company
is then a participant in the DWAC system of the Depositary 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) the Pre-Funded Warrant is being exercised via Cashless
Exercise, then the certificates for Warrant Shares shall be transmitted by the Warrant Agent to the Holder by crediting the account of
the Holder’s broker with the Depositary through its DWAC system. For the avoidance of doubt, if the Company becomes obligated to
pay any amounts to any Holders pursuant to Section 2(d)(iv) of the Pre-Funded Warrant, such obligation shall be solely that of the Company
and not that of the Warrant Agent. Notwithstanding anything else to the contrary in this Agreement, except in the case of a Cashless
Exercise, if any Holder fails to duly deliver payment to the Warrant Agent of an amount equal to the aggregate Exercise Price of the
Warrant Shares to be purchased upon exercise of such Holder’s Pre-Funded Warrant as set forth in Section 7(a) hereof, the Warrant Agent
will not obligated to deliver certificates representing any such Warrant Shares (via DWAC or otherwise) until following receipt of such
payment, and the applicable Warrant Share Delivery Date shall be deemed extended by one day for each day (or part thereof) until such
payment is delivered to the Warrant Agent.
(d)
All funds received by Computershare under this Agreement that are to be distributed or applied by Computershare in the performance
of Services (the “Funds”) shall be held by Computershare as agent for the Company and deposited in one or more bank
accounts to be maintained by Computershare in its name as agent for the Company. Until paid pursuant to this Agreement, Computershare
may hold or invest the Funds through such accounts in: (a) funds backed by obligations of, or guaranteed by, the United States of America;
(b) debt or commercial paper obligations rated A-1 or P-1 or better by S&P Global Inc. (“S&P”) or Moody's Investors
Service, Inc. (“Moody’s”), respectively; (c) Government and Treasury backed AAA-rated Fixed NAV money market
funds that comply with Rule 2a-7 of the Investment Company Act of 1940, as amended; or (d) short term certificates of deposit, bank repurchase
agreements, and bank accounts with commercial banks with Tier 1 capital exceeding $1 billion, or with an investment grade rating by S&P
(LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported
by Bloomberg Finance L.P.). The Warrant Agent shall have no responsibility or liability for any diminution of the Funds that may result
from any deposit or investment made by Computershare in accordance with this paragraph, including any losses resulting from a default
by any bank, financial institution or other third party. Computershare may from time to time receive interest, dividends or other earnings
in connection with such deposits or investments. The Warrant Agent shall not be obligated to pay such interest, dividends or earnings
to the Company, any holder or any other party. The Warrant Agent shall forward funds received for warrant exercises in a given month by
the 5th business day of the following month by wire transfer to an account designated by the Company.
4
(e)
In case the Holder of any Warrant Certificate exercises fewer than all Pre-Funded Warrants evidenced thereby and surrenders such Warrant
Certificate in connection with such partial exercise, a new Warrant Certificate evidencing the number of Warrant Shares equivalent to
the number of Warrant Shares remaining unexercised may be issued by the Warrant Agent to the Holder of such Warrant Certificate or to
his duly authorized assigns in accordance with Section 2(d)(ii) of the Pre-Funded Warrant, subject to the provisions of Section 6 hereof.
(f) Cost Basis Information.
(i) In
the event of a cash exercise, the Company hereby instructs the Warrant Agent to record cost basis for newly issued shares in a
manner to be subsequently communicated by the Company in writing to the Warrant Agent.
(ii)
In the event of a Cashless Exercise, the Company shall provide cost basis for shares issued pursuant to a cashless exercise at
the time the Company confirms the number of Warrant Shares issuable in connection with the cashless exercise to the Warrant Agent pursuant
to Section 7 hereof.
Section 8. Cancellation and
Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination
or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for cancellation or in canceled
form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant Agent for cancellation and
retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. At the expense of the Company, the Warrant Agent shall deliver all canceled Warrant Certificates to the
Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to retain
such canceled certificates.
Section 9. Certain Representations;
Reservation and Availability of Shares of Common Stock or Cash.
(a)
This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and
delivery hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company
in accordance with its terms, and the Pre-Funded Warrants have been duly authorized, executed and issued by the Company and, assuming due
authentication thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration Statement,
constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled
to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
(b)
The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares
of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares
of Common Stock that will be sufficient to permit the exercise in full of all outstanding Pre-Funded Warrants.
(c)
The Warrant Agent will create a special account for the issuance of Common Stock upon the exercise of Pre-Funded Warrants.
(d)
The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common
Stock upon exercise of the Pre-Funded Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may
be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates
for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Pre-Funded Warrants surrendered for exercise
or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Pre-Funded Warrants until any such tax or governmental
charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of
surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge is
due. The Warrant Agent shall not have any duty or obligation to take any action under any section of this Agreement or any Warrant that
requires the payment of taxes and/or charges unless and until the Warrant Agent is reasonably satisfied that all such payments have been
made.
5
(e) The Company
shall provide to the Warrant Agent an opinion of counsel, which shall state that all Warrants or Warrant Shares, as applicable, (i) were
offered, sold or issued as part of an offering that was registered in compliance with the Securities Act of 1933, as amended or pursuant
to an exemption from the registration requirements of the 1933 Act, as amended (as the case may be), (ii) were issued in compliance with
all applicable state securities or “blue sky” laws, and (iii) are validly issued, fully paid and non-assessable.
Section 10. Common Stock Record
Date. Each Holder shall be deemed to have become the holder of record for the Warrant Shares pursuant to Section 2(d)(i) of the Pre-Funded Warrants.
Section 11. Adjustment of
Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price, the number of shares covered
by each Pre-Funded Warrant and the number of Pre-Funded Warrants outstanding are subject to adjustment from time to time as provided in Section
3 of the Pre-Funded Warrant. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Pre-Funded Warrant,
the Holder of any Pre-Funded Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other
than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Pre-Funded Warrant shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares
contained in Section 3 of the Pre-Funded Warrant, and the provisions of Sections 7, 9 and 13 of this Agreement with respect to the shares
of Common Stock shall apply on like terms to any such other shares. All Pre-Funded Warrants originally issued by the Company subsequent to
any adjustment made to the Exercise Price pursuant to the Pre-Funded Warrant shall evidence the right to purchase, at the adjusted Exercise
Price, the number of shares of Common Stock purchasable from time to time hereunder upon exercise of the Pre-Funded Warrants, all subject
to further adjustment as provided herein. The Company hereby agrees that it will provide the Warrant Agent with reasonable notice of
such adjustment event. The Company further agrees that it will provide to the Warrant Agent with any new or amended exercise terms.
Section 12. Certification
of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of shares of Common Stock
issuable upon the exercise of each Pre-Funded Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare
a certificate setting forth the Exercise Price of each Pre-Funded Warrant as so adjusted, and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate
and (c) instruct the Warrant Agent to send a brief summary thereof to each Holder of a Pre-Funded Warrant. The Warrant Agent shall be fully
protected in relying on such certificate and on any adjustment or statement contained therein and shall have no duty or liability with
respect to, and shall not be deemed to have knowledge of any such adjustment or any such event unless and until it shall have received
such certificate. The Warrant Agent shall have no obligation under any Section of this Agreement to determine whether an such an adjustment
event has occurred or to calculate any of the adjustments set forth herein.
Section 13. Fractional Shares of Common Stock.
(a)
The Company shall not issue fractions of Pre-Funded Warrants or distribute a Global Warrant or Warrant Certificates that evidence fractional
Pre-Funded Warrants. Whenever any fractional Pre-Funded Warrant would otherwise be required to be issued or distributed, the actual issuance or
distribution shall reflect a rounding of such fraction either up or down to the nearest whole Pre-Funded Warrant.
(b)
The Company shall not issue fractions of shares of Common Stock upon exercise of Pre-Funded Warrants or distribute stock certificates
that evidence fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued
or distributed, the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Pre-Funded Warrant.
(c)
The Company shall provide the Warrant Agent an initial funding of one thousand dollars ($1000) for the purpose of issuing cash
in lieu of fractional shares. From time to time thereafter, Computershare may request additional funding to cover payments of fractional
shares. The Warrant Agent shall have no obligation to make payments of fractional shares unless the Company shall have provided the necessary
funds to pay in full all amounts due and payable with respect thereto.
6
Section 14. Conditions of
the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the express terms and conditions
hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to
time of the Pre-Funded Warrants shall be subject:
(a) Compensation
and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation detailed on the fee schedule mutually
agreed upon between the Company and the Warrant Agent in writing (the “Fee Schedule”) for all services rendered
by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable and documented
counsel fees and other disbursements incurred in the preparation, delivery, negotiation, amendment, administration and execution of
this Agreement and the exercise and performance of its duties hereunder) by the Warrant Agent in connection with the services
rendered hereunder by the Warrant Agent. The Company covenants and agrees to indemnify and to hold the Warrant Agent harmless
against any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including the reasonable
fees and expenses of legal counsel) which may be paid, incurred or suffered by or to which it may become subject, arising from or
out of, directly or indirectly, any claims or liability resulting from any action taken, suffered or omitted by the Warrant Agent in
connection with the execution, acceptance, administration, exercise and performance of its duties under this Agreement, including
the reasonable costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly, or of
enforcing its rights under this Agreement; provided, that such covenant and agreement does not extend to, and the Warrant Agent
shall not be indemnified with respect to, such costs, expenses, losses and damages incurred or suffered by the Warrant Agent as a
result of, or arising out of, its gross negligence, bad faith, or willful misconduct (each as determined by a final, non-appealable
order, judgment, ruling or decree of a court of competent jurisdiction). Notwithstanding anything in this Agreement to the contrary,
the Warrant Agent’s aggregate liability during any term of this Agreement with respect to, arising from, or arising in
connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract,
or in tort, or otherwise, is limited to, and shall not exceed, the amount of annual fees paid by the Company to the Warrant Agent
during the twelve (12) months immediately preceding the event for which recovery from the Warrant Agent is being sought.
Notwithstanding anything in this Agreement to the contrary, the Warrant Agent shall not be liable for any consequential, indirect,
punitive, special or incidental damages under any provisions of this Agreement or for any consequential, indirect, punitive, special
or incidental damages arising out of any act or failure to act hereunder even if Warrant Agent has been advised of or has foreseen
the possibility of such damages.
(b) Agent
for the Company. In acting under this Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely
as agent of the Company and does not assume any obligations or relationship of agency or trust for or with any of the Holders of
Warrant Certificates or beneficial owners of Pre-Funded Warrants.
(c) Instructions.
From time to time, the Company may provide the Warrant Agent with instructions concerning the services performed by the Warrant
Agent hereunder. In addition, at any time the Warrant Agent may apply to the Chief Executive Officer or Chief Financial Officer of
the Company for instruction, and may consult with legal counsel for the Warrant Agent or the Company with respect to any matter
arising in connection with the services to be performed by the Warrant Agent under this Agreement. The Warrant Agent and its agents
and subcontractors shall not be liable and shall be indemnified by the Company for any action taken or omitted by the Warrant Agent
in reliance upon any Company instructions. The Warrant Agent shall not be held to have notice of any change of authority of any
person, until receipt of written notice thereof from the Company.
(d) Counsel.
The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the advice of such
counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by
it hereunder in the absence of bad faith and in accordance with the advice of such counsel.
(e) Documents.
The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance
upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the proper parties.
(f) Certain Transactions. The Warrant
Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Pre-Funded Warrants or
other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal
entity.
7
(g) No
Liability for Interest. The Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant to
any of the provisions of this Agreement or of the Warrant Certificates.
(h) No
Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or any of the
Warrant Certificates (except as to the Warrant Agent's countersignature thereon).
(i) No
Responsibility for Representations. The Warrant Agent shall not be liable for or by reason of any of the statements of fact,
recitals or representations contained in this Agreement or in the Warrant Certificates (except its countersignature, by either
manual, electronic or facsimile signature, thereof) by the Company or be required to verify the same, but all such statements,
recitals and representations are and shall be deemed to have been made by the Company only.
(j) Agents.
The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or any act, omission, default, neglect
or misconduct of any such attorneys or agents or for any loss to the Company, to the Holders or any other Person resulting from any
such act, omission, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment
thereof.
Section 15. Purchase or Consolidation
or Change of Name of Warrant Agent. Any Person into which the Warrant Agent or any successor Warrant Agent may be merged or with which
it may be consolidated, or any Person resulting from any merger or consolidation to which the Warrant Agent or any successor Warrant Agent
shall be party, or any Person succeeding to the corporate trust business of the Warrant Agent or any successor Warrant Agent, shall be
the successor to the Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Warrant Agent under the provisions
of Section 17. In case at the time such successor Warrant Agent shall succeed to the agency created by this Agreement any of the Pre-Funded Warrants shall have been countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor
Warrant Agent and deliver such Pre-Funded Warrants so countersigned; and in case at that time any of the Pre-Funded Warrants shall not have been
countersigned, any successor Warrant Agent may countersign such Pre-Funded Warrants either in the name of the predecessor Warrant Agent or
in the name of the successor Warrant Agent; and in all such cases such Pre-Funded Warrants shall have the full force provided in the Pre-Funded Warrants and in this Agreement.
In case at any time the name
of the Warrant Agent shall be changed and at such time any of the Pre-Funded Warrants shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under its prior name and deliver Pre-Funded Warrants so countersigned; and in case at
that time any of the Pre-Funded Warrants shall not have been countersigned, the Warrant Agent may countersign such Pre-Funded Warrants
either in its prior name or in its changed name; and in all such cases such Pre-Funded Warrants shall have the full force provided in
the Pre-Funded Warrants and in this Agreement.
Section 16. Duties of Warrant
Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following express terms and conditions,
by all of which the Company, by its acceptance hereof, and the Holders of Warrant Certificates, by their acceptance thereof, shall be
bound:
(a)
The Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or
omitted by it in the absence of bad faith and in accordance with such opinion.
(b)
Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate
signed by the Chief Executive Officer or Chief Financial Officer of the Company; and such certificate shall be full authentication to
the Warrant Agent for any action taken, suffered or omitted to be taken by it in the absence of bad faith by it under the provisions of
this Agreement in reliance upon such certificate.
8
(c)
Subject to the limitations set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence,
bad faith or willful misconduct (in each case, as determined by a final, non-appealable order, judgment, ruling or decree of a court of
competent jurisdiction).
(d)
The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Pre-Funded Warrant (except
its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this
Agreement or in any Pre-Funded Warrant; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in
the number of shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the manner, method or amount
of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect
to the exercise of Pre-Funded Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor
shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of
Common Stock to be issued pursuant to this Agreement or any Pre-Funded Warrant or as to whether any shares of Common Stock will, when issued,
be duly authorized, validly issued, fully paid and nonassessable. Notwithstanding anything to the contrary herein, the Warrant Agent shall
not be liable for the Company’s failure to timely deliver Warrant Shares pursuant to the terms of the Warrants, nor shall the Warrant
Agent be liable for any liquidated damages or any other damages associated therewith.
(e)
Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for
the carrying out or performing by any party of the provisions of this Agreement.
(f)
The Warrant Agent shall be obligated to perform only such duties as are expressly set forth herein and in the Warrant Certificates
and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant
Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment
of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under
any duty or responsibility for the use by the Company of any of the Warrant Certificates countersigned by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements
contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a Holder of a Warrant Certificate
with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt
to initiate any proceedings at law.
(g)
The Warrant Agent shall not be required to take notice or be deemed to have notice of any event or condition hereunder, including
any event or condition that may require action by the Warrant Agent, unless the Warrant Agent shall be specifically notified in writing
of such event or condition by the Company, and all notices or other instruments required by this Agreement to be delivered to the Warrant
Agent must, in order to be effective, be received by the Warrant Agent as specified in Section 19 hereof, and in the absence of such notice
so delivered, the Warrant Agent may conclusively assume no such event or condition exists.
(h)
The Warrant Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature
by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion Program
or other comparable “signature guarantee program” or insurance program in addition to, or in substitution for, the foregoing;
or (b) any related law, act, regulation or any interpretation of the same.
(i) Section
14 and this Section 16 shall survive the termination, exercise or expiration of the Pre-Funded Warrants, the termination of this
Agreement and the resignation, replacement or removal of the Warrant Agent.
9
Section 17. Change of Warrant
Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 10 days’ notice in writing sent
to the Company and to each transfer agent of the Common Stock, and to the Holders of the Warrant Certificates. In the event the transfer
agency relationship in effect between the Company and the Warrant Agent terminates, the Warrant Agent will be deemed to have resigned
automatically and be discharged from its duties under this Agreement as of the effective date of such termination, and the Company shall
be responsible for sending any required notice thereunder. The Company may remove the Warrant Agent or any successor Warrant Agent upon
30 days’ notice in writing, sent to the Warrant Agent or successor Warrant Agent, as the case may be, and to each transfer agent
of the Common Stock, and to the Holders of the Warrant Certificates. If the Warrant Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment
within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Warrant Agent or by the Holder of a Warrant Certificate (who shall, with such notice, submit his Warrant Certificate
for inspection by the Company), then the Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment
of a new Warrant Agent, provided that, for purpose of this Agreement, the Company shall be deemed to be the Warrant Agent until a new
warrant agent is appointed. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of a state thereof, in good standing, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of
its appointment as Warrant Agent a combined capital and surplus (together with its Affiliates) of at least $50,000,000. After appointment,
the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named
as Warrant Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent
any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose, but such predecessor Warrant Agent shall not be required to make any additional expenditure (without prompt reimbursement by
the Company) or assume any additional liability in connection with the foregoing. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail
a notice thereof in writing to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this Section
17, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment
of the successor Warrant Agent, as the case may be.
Section 18. Issuance of New Warrants. Notwithstanding
any of the provisions of this Agreement or of the Pre-Funded Warrants to the contrary, the Company may, at its option, issue a new Global
Warrant or Warrant Certificates, if any, evidencing Pre-Funded Warrants in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property
purchasable under the Global Warrant or Warrant Certificates, if any, made in accordance with the provisions of this Agreement.
Section 19. Notices. Notices
or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate to or
on the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant Certificate to or on the
Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate, shall be deemed given (a) on the
date delivered, if delivered personally, (b) on the date deposited thereof with Federal Express or another recognized overnight courier,
if sent by Federal Express or another recognized overnight courier, (c) on the date of the mailing thereof with postage prepaid, if mailed
by registered or certified mail (return receipt requested), and (d) the date of transmission, if such notice or communication is delivered
via facsimile or, except in the case of the Warrant Agent, email attachment at or prior to 5:30 p.m. (New York City time) on a Business
Day and (e) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or email
attachment on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, in each case to the
parties at the following addresses (or at such other address for a party as shall be specified by like notice):
(a) If to the Company, to:
Sonoma Pharmaceuticals, Inc.
5445 Conestoga Court Suite 150
Boulder, Colorado 80301
Attention: General Counsel
(b) If to the Warrant Agent, to:
Computershare, Inc.
Computershare Trust Company N.A.
150 Royall Street
Canton, MA 02021
Attention: Client Services
10
For any notice
delivered by email to be deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered
on the next business day following such email, unless the recipient of such email has acknowledged via return email receipt of such email.
(c)
If to the Holder of any Warrant Certificate, to the address of such Holder as shown on the registry books of the Company. Any
notice required to be delivered by the Company to the Holder of any Pre-Funded Warrant may be given by the Warrant Agent on behalf of
the Company. Notwithstanding any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder
of any Warrant Certificate, for a Global Warrant, such notice shall be sufficiently given if given to the Depositary (or its designee)
pursuant to the procedures of the Depositary or its designee.
Section 20. Supplements and Amendments.
(a) The Company
and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Warrant Certificates
in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the Holders of the Warrants Certificates in any material
respect.
(b)
In addition to the foregoing, with the consent of Holders of Warrants, the Company and the Warrant Agent may modify this Agreement
for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or modifying
in any manner the rights of the Holders of the Warrant Certificates; provided, however, that no modification of the terms
(including but not limited to the adjustments described in Section 11) upon which the Pre-Funded Warrants are exercisable or the rights of
the holders of Pre-Funded Warrants to received liquidated damages or other payments in cash from the Company or reducing the percentage required
for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding warrant certificate affected
thereby. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent
a certificate from a duly authorized officer of the Company that states that the proposed amendment complies with the terms of this Section
20. The Warrant Agent may, but shall not be obligated to, execute any supplement, amendment or modification that affects the Warrant Agent’s
own rights, duties, obligations or immunities. No amendment to this Agreement shall be effective unless duly executed by the Warrant Agent.
Section 21. Successors.
All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 22. Benefits of this
Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates
and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.
Section 23. Governing Law.
This Agreement and each Pre-Funded Warrant issued hereunder shall be governed by, and construed in accordance with, the laws of the State
of New York, without giving effect to any provision or rule that would cause the application of the laws of any jurisdictions other than
the State of New York. The Company 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 brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper.
Section 24. Counterparts.
This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement transmitted electronically
shall have the same authority, effect and enforceability as an original signature.
Section 25. Captions. The
captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
11
Section 26. Information.
The Company agrees to promptly provide to the Holders of the Pre-Funded Warrants any information it provides to all holders of the Common
Stock, except to the extent any such information is publicly available on the EDGAR system (or any successor thereof) of the Securities
and Exchange Commission.
Section 27. Force Majeure.
Notwithstanding anything to the contrary contained herein, Warrant Agent shall not be liable for any delays or failures in performance
resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, pandemics, epidemics, shortage
of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical
difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest, it being understood that the Warrant
Agent shall use reasonable best efforts which are consistent with accepted practices in the banking industry to resume performance as
soon as practicable under the circumstances; provided, however, that this provision shall not, in any respect, affect the obligations
of the Company to the Holders under the terms of the Pre-Funded Warrants.
Section 28. Confidentiality.
The Warrant Agent and the Company agree that all books, records, information and data pertaining to the business of the other party, including
inter alia, personal, non-public warrant holder information, which are exchanged or received pursuant to the negotiation or the carrying
out of this Agreement including the fees for services set forth in the attached schedule shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law, including, without limitation, pursuant to subpoenas from state or federal
government authorities (e.g., in divorce and criminal actions).
Section 29. Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable
term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to
such invalid or unenforceable provision as may be possible and be valid and enforceable. If an invalid or unenforceable provision shall
affect the rights, immunities, liabilities, duties or obligations of the Warrant Agent, the Warrant Agent shall be entitled to resign
immediately upon written notice to the Company.
Section 30. Entire Agreement. This Agreement
contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. Notwithstanding anything to the contrary contained in this Agreement, in the event
of inconsistency between any provision in this Agreement and any provision in a Warrant Certificate, as it may from time to time be amended,
all provisions with respect to the rights, duties, obligations, liabilities and immunities of the Warrant Agent shall be determined and
interpreted solely by the provisions of this Agreement. The Company shall not amend any provisions of the Warrant Certificate without
the prior consent of the Warrant Agent, not to be unreasonably withheld or delayed.
12
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the day and year first above written.
SONOMA PHARMACEUTICALS, INC.
By:
/s/ Amy Trombly
Name: Amy Trombly
Title: Chief Executive Officer
COMPUTERSHARE,
INC.
COMPUTERSHARE TRUST, N.A.
By:
/s/ Collin
Ekeogu
Name: Collin Ekeogu
Title: Senior Manager, Corporate Actions
13
Annex A: Form of Warrant Certificate
Request Notice
WARRANT CERTIFICATE REQUEST NOTICE
To: Computershare, Inc. as Warrant Agent for Sonoma Pharmaceuticals,
Inc. (the “Company”)
The undersigned
Holder of Common Stock Purchase Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to
receive a Warrant Certificate evidencing the Warrants held by the Holder as specified below:
1. Name of Holder of Warrants in form of Global
Warrants: _______________________
2. Name of Holder in
Warrant Certificate (if different from name of Holder of Warrants in form of Global Warrants):
_______________________
3. Number of Warrants in name of Holder in form of Global Warrants: _______________________
4. Number of Warrants for which Warrant Certificate
shall be issued: _______________________
5. Number of Warrants in name of Holder in form of Global Warrants after issuance of Warrant Certificate, if
any: _______________________
6. Warrant Certificate shall be delivered to the following address:
________________________________________
________________________________________
________________________________________
________________________________________
The undersigned
hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder
is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants
evidenced by the Warrant Certificate.
[SIGNATURE OF HOLDER]
Name of Investing Entity: ____________________________________________
Signature of Authorized
Signatory of Investing Entity: ____________________________________________
Name of Authorized Signatory:
____________________________________________
Title of Authorized Signatory:
____________________________________________
Date: ____________________________________________
14
Exhibit 1: Form of Warrant
15
PRE-FUNDED COMMON
STOCK PURCHASE WARRANT
SONOMA PHARMACEUTICALS, INC.
Warrant Shares: 1,312,247
Initial Exercise Date: April 27, 2026
CUSIP: 83558L 154
THIS PRE-FUNDED COMMON STOCK PURCHASE WARRANT (the “Warrant”)
certifies that, for value received, CEDE & CO. or its assigns (the “Holder”) is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial
Exercise Date”) and until this Warrant is exercised in full (the “Termination Date”) but not thereafter,
to subscribe for and purchase from Sonoma Pharmaceuticals, Inc., a Delaware corporation (the “Company”), up to 1,312,247
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). This Warrant shall initially be
issued and maintained in the form of a security held in book-entry form and the Depository Trust Company or its nominee (“DTC”)
shall initially be the sole registered holder of this Warrant, subject to a Holder’s right to elect to receive a Warrant in certificated
form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.
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 in 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 except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the City of New York are authorized or required by law or other governmental action to close; 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 $0.0001 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.
16
“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.
“Registration
Statement” means the Company’s registration statement on Form S-1 (File No. 333-295171).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“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 Nasdaq Capital Market, the NYSE American, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock
Exchange (or any successors to any of the foregoing).
“Transfer Agent”
means Computershare, Inc., the current transfer agent of the Company, 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 in 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.
“Warrant
Agency Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company
and the Warrant Agent.
“Warrant
Agent” means Computershare Inc., a Delaware corporation, and its affiliate, Computershare Trust
Company, N.A., a federally chartered trust company, collectively as warrant agent, and any successor warrant agent of the Company.
“Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
17
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 Warrant Agent of a duly executed
facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (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 Warrant Agent 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 Warrant Agent for cancellation within three (3) Trading Days of the
date on which the final Notice of Exercise is delivered to the Warrant Agent. 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.
Notwithstanding the foregoing
in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held
in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made
pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form
for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable),
subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement,
in which case this sentence shall not apply.
b)
Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share,
was pre-funded to the Company on or prior to the Issue Date and, consequently, no additional consideration (other than the nominal exercise
price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant.
The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any
circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination
Date. The remaining unpaid exercise price per share of Common Stock under this Warrant shall be $0.0001, subject to adjustment hereunder
(the “Exercise Price”).
c) Cashless
Exercise. This Warrant may also be exercised, in whole or in part, at such time by
means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable:
(i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)
both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant
to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation
NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice
of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including
until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii)
the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise
is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading
Day;
(B) = the Exercise Price of this Warrant, as adjusted hereunder;
and
(X) =
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
18
If Warrant
Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities
Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any
position contrary to this Section 2(c).
Notwithstanding
anything herein to the contrary, on the Termination Date this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).
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,
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. The Warrant Agent shall have no
liability for the Company’s failure to deliver to the Holders the Warrant Shares as set forth in this paragraph 2(d)(i). As used
herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the
Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on
the Initial Exercise Date, which may be delivered at any time after the time of execution of the Placement Agency Agreement, the Company
agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the
Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise
Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new
Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
19
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.
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.
20
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 the 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.
21
b) [Reserved.]
c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of 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).
d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
e)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or
any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all
or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted
to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with
another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding shares of Common Stock
or 50% or more of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon
any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable
upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to
any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this
Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.
22
f)
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.
g) Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company 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 facsimile or email to the Holder at
its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior
to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the
holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective
or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares
of 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.
h)
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.
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, accompanied by a signature guarantee and such other documentation
as the Company or its designated agent may reasonably request. 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. 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 whole or in part. 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.
23
b)
New Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), 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 Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for
that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company and the
Warrant Agent may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof
or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation
of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor
and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.
d) 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.
24
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
e)
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
giving effect to any provision or rule that would cause the application of the laws of any jurisdictions other than the State of New York.
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.
f)
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.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other
provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses
including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h)
Notices. Any 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 facsimile or e-mail, or sent by a nationally recognized
overnight courier service, addressed to the Company, at Sonoma Pharmaceuticals, Inc., 5445 Conestoga Court, Suite 150, Boulder, Colorado
80301, Attention: CEO, or such other facsimile number, 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 facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder
at the facsimile number, 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 date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or 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 date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number or 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.
25
i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the
Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company,
on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand. Notwithstanding anything in this Warrant to
the contrary, the Warrant Agent shall not be required to execute any supplement or amendment to this Warrant that it has determined would
adversely affect its own rights, duties, obligations or immunities under the Warrant Agent Agreement.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.
o)
Warrant Agency Agreement. This Warrant is issued subject to the Warrant Agent Agreement. To the extent any provision of
this Warrant conflicts with the express provisions of the Warrant Agent Agreement, the provisions of this Warrant shall govern and be
controlling; provided, however, that with respect to the rights, duties, obligations, protections, immunities and liability of the Warrant
Agent, the Warrant Agent Agreement shall govern and control.
********************
(Signature Page Follows)
26
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.
SONOMA PHARMACEUTICALS, INC.
By:
Name: Amy Trombly
Title: Chief Executive
Officer
WARRANT AGENT:
COMPUTERSHARE INC. and
COMPUTERSHARE TRUST COMPANY, N.A.,
on behalf of both parties
By:
Name:
Title:
27
NOTICE OF EXERCISE
TO: SONOMA PHARMACEUTICALS, 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: _______________________________________________________________________________
28
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name:
(Please Print)
Address:
(Please Print)
Phone Number:
Email Address:
Dated: _______________ __, ______
Holder’s Signature:
Holder’s Address:
29
EX-99.1 — PRESS RELEASE
EX-99.1
Filename: sonoma_ex9901.htm · Sequence: 7
Exhibit 99.1
April 24, 2026
Sonoma
Pharmaceuticals Announces Pricing of $4 Million Public Offering
BOULDER, CO / ACCESS
Newswire / April 24, 2026 /Sonoma Pharmaceuticals, Inc. (the "Company or "Sonoma Pharmaceuticals")
(NASDAQ:SNOA), a global healthcare leader in hypochlorous acid (HOCl) technology, today announced the pricing of its public offering made
on a firm commitment basis with gross proceeds to the Company expected to be approximately $4.0 million, before deducting fees and other
expenses payable by the Company. The offering consists of 2,962,963 shares of common stock and 2,962,963 warrants. Each share of common
stock is being sold at a purchase price of $1.35 per share. The warrants have an exercise price of $1.35 per share.
In addition, Sonoma Pharmaceuticals has granted Dawson
James Securities a 45-day option to purchase up to 15% of the number of shares or warrants sold in the offering solely to cover over-allotments,
if any.
The offering is expected to close on April 27, 2026, subject
to the satisfaction of customary closing conditions.
The Company expects to use the net proceeds from the offering
for general corporate purposes, including working capital.
Dawson James Securities is acting as sole bookrunner for the
offering.
A registration statement on Form S-1 relating to the offering
of the securities was filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on April 23, 2026.
The offering is being made only by means of a prospectus. A final prospectus describing the terms of the proposed transaction may be obtained,
when available, on the SEC's website, www.sec.gov or by contacting Dawson James Securities. This press
release does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of the
securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state or jurisdiction.
About Sonoma Pharmaceuticals
Sonoma Pharmaceuticals is a global healthcare leader for
developing and producing stabilized hypochlorous acid (HOCl) products for a wide range of applications, including wound care, eye care,
dermatological conditions, podiatry, animal health care and non-toxic disinfectants. Sonoma's products are clinically proven to reduce
itch, pain, scarring, and irritation safely and without damaging healthy tissue. In-vitro and clinical studies of HOCl show it to safely
manage skin abrasions, lacerations, minor irritations, cuts, and intact skin. Sonoma's products are sold either directly or via partners
in 55 countries worldwide and the company actively seeks new distribution partners. The company's principal office is in
Boulder, Colorado, with manufacturing operations in Guadalajara,
Mexico. European marketing and sales are headquartered in Roermond, Netherlands. More information can be found at www.sonomapharma.com.
1
Forward-Looking Statements
Except for historical information herein, matters set
forth in this press release are forward-looking within the meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, including statements about the commercial and technology progress and future financial performance of Sonoma
Pharmaceuticals, Inc. and its subsidiaries (the "company"). These forward-looking statements are identified by the use of words
such as "continue," "develop," "anticipate," "expect" and "expand," among others. Forward-looking
statements in this press release are subject to certain risks and uncertainties inherent in the company's business that could cause actual
results to vary, including such risks that regulatory clinical and guideline developments may change, scientific data may not be sufficient
to meet regulatory standards or receipt of required regulatory clearances or approvals, clinical results may not be replicated in actual
patient settings, protection offered by the company's patents and patent applications may be challenged, invalidated or circumvented by
its competitors, the available market for the company's products will not be as large as expected, the company's products will not be
able to penetrate one or more targeted markets, revenues will not be sufficient to meet the company's cash needs, fund further development,
the ability to meet a multitude of diverse regulatory and marketing requirements in different countries and municipalities, and other
risks detailed from time to time in the company's filings with the Securities and Exchange Commission. The company disclaims any obligation
to update these forward-looking statements, except as required by law.
Sonoma Pharmaceuticals™
and Microcyn® are trademarks or registered trademarks of Sonoma Pharmaceuticals, Inc.
All other trademarks and service marks are the property of their respective owners.
Media and Investor Contact:
Sonoma Pharmaceuticals, Inc.
ir@sonomapharma.co
SOURCE: Sonoma Pharmaceuticals, Inc.
View the original press
release on ACCESS Newswire
2
GRAPHIC
GRAPHIC
Filename: image_001.jpg · Sequence: 8
Binary file (7930 bytes)
Download image_001.jpg
XML — IDEA: XBRL DOCUMENT
XML
Filename: R1.htm · Sequence: 13
v3.26.1
Cover
Apr. 24, 2026
Cover [Abstract]
Document Type
8-K
Amendment Flag
false
Document Period End Date
Apr. 24, 2026
Entity File Number
001-33216
Entity Registrant Name
SONOMA
PHARMACEUTICALS, INC.
Entity Central Index Key
0001367083
Entity Tax Identification Number
68-0423298
Entity Incorporation, State or Country Code
DE
Entity Address, Address Line One
5445
Conestoga Court
Entity Address, Address Line Two
Suite
150
Entity Address, City or Town
Boulder
Entity Address, State or Province
CO
Entity Address, Postal Zip Code
80301
City Area Code
(800)
Local Phone Number
759-9305
Written Communications
false
Soliciting Material
false
Pre-commencement Tender Offer
false
Pre-commencement Issuer Tender Offer
false
Title of 12(b) Security
Common
Stock
Trading Symbol
SNOA
Security Exchange Name
NASDAQ
Entity Emerging Growth Company
false
X
- Definition
Boolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
No definition available.
+ Details
Name:
dei_AmendmentFlag
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Area code of city
+ References
No definition available.
+ Details
Name:
dei_CityAreaCode
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Cover page.
+ References
No definition available.
+ Details
Name:
dei_CoverAbstract
Namespace Prefix:
dei_
Data Type:
xbrli:stringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
For the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
No definition available.
+ Details
Name:
dei_DocumentPeriodEndDate
Namespace Prefix:
dei_
Data Type:
xbrli:dateItemType
Balance Type:
na
Period Type:
duration
X
- Definition
The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
No definition available.
+ Details
Name:
dei_DocumentType
Namespace Prefix:
dei_
Data Type:
dei:submissionTypeItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Address Line 1 such as Attn, Building Name, Street Name
+ References
No definition available.
+ Details
Name:
dei_EntityAddressAddressLine1
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Address Line 2 such as Street or Suite number
+ References
No definition available.
+ Details
Name:
dei_EntityAddressAddressLine2
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Name of the City or Town
+ References
No definition available.
+ Details
Name:
dei_EntityAddressCityOrTown
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Code for the postal or zip code
+ References
No definition available.
+ Details
Name:
dei_EntityAddressPostalZipCode
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Name of the state or province.
+ References
No definition available.
+ Details
Name:
dei_EntityAddressStateOrProvince
Namespace Prefix:
dei_
Data Type:
dei:stateOrProvinceItemType
Balance Type:
na
Period Type:
duration
X
- Definition
A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityCentralIndexKey
Namespace Prefix:
dei_
Data Type:
dei:centralIndexKeyItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Indicate if registrant meets the emerging growth company criteria.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityEmergingGrowthCompany
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
No definition available.
+ Details
Name:
dei_EntityFileNumber
Namespace Prefix:
dei_
Data Type:
dei:fileNumberItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Two-character EDGAR code representing the state or country of incorporation.
+ References
No definition available.
+ Details
Name:
dei_EntityIncorporationStateCountryCode
Namespace Prefix:
dei_
Data Type:
dei:edgarStateCountryItemType
Balance Type:
na
Period Type:
duration
X
- Definition
The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityRegistrantName
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityTaxIdentificationNumber
Namespace Prefix:
dei_
Data Type:
dei:employerIdItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Local phone number for entity.
+ References
No definition available.
+ Details
Name:
dei_LocalPhoneNumber
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
+ Details
Name:
dei_PreCommencementIssuerTenderOffer
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
+ Details
Name:
dei_PreCommencementTenderOffer
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Title of a 12(b) registered security.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
+ Details
Name:
dei_Security12bTitle
Namespace Prefix:
dei_
Data Type:
dei:securityTitleItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Name of the Exchange on which a security is registered.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
+ Details
Name:
dei_SecurityExchangeName
Namespace Prefix:
dei_
Data Type:
dei:edgarExchangeCodeItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
+ Details
Name:
dei_SolicitingMaterial
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Trading symbol of an instrument as listed on an exchange.
+ References
No definition available.
+ Details
Name:
dei_TradingSymbol
Namespace Prefix:
dei_
Data Type:
dei:tradingSymbolItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
+ Details
Name:
dei_WrittenCommunications
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration