As filed with the Securities and Exchange Commission on October 10,
2023
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SIYATA MOBILE INC.
(Exact name of registrant as specified in its
charter)
British Columbia (Canada) |
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4812 |
|
Not Applicable |
(State or other jurisdiction of
incorporation or organization) |
|
(Primary Standard Industrial
Classification Code Number) |
|
(I.R.S. Employer
Identification Number) |
7404 King George Blvd., Suite 200, King’s
Cross
Surrey, British Columbia V3W 1N6, Canada
514-500-1181
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Cogency Global Inc.
122 East 42nd Street, 18th Floor
New York, New York 10168
(800) 221-0102
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies of all communications, including communications
sent to agent for service, should be sent to:
Sichenzia Ross Ference Carmel LLP
1185 Avenue of the Americas, 31st floor
New York, NY 10036
(646) 838-1310
Copies to: |
|
Ross Carmel, Esq.
Thiago Spercel, Esq.
Sichenzia Ross Ference
Carmel LLP
1185 Avenue of the Americas,
31st floor
New York, NY 10036
(212) 930-9700 |
Mitchell S. Nussbaum,
Esq.
Angela Dowd, Esq.
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
(212) 407-4000 |
Approximate date of commencement of proposed
sale to the public: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.
☒
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant
is an emerging growth company. Emerging growth company ☒
If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for comply with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of Securities
Act. ☐
† |
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a),
may determine.
The information in this prospectus
is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities
in any state where the offer or sale is not permitted.
PRELIMINARY
PROSPECTUS |
SUBJECT
TO COMPLETION |
DATED
OCTOBER 10, 2023 |
Maximum of $5,000,000
of
Common Shares and/or
Pre-Funded Warrants to Purchase Common Shares
We are offering on a best-efforts basis up to common shares, no par
value per share (each a “Common Share” and together, the “Common Shares”), of Siyata Mobile Inc., at public offering
price of $ per Common Share.
We are also offering to certain purchasers whose
purchase of Common Shares in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties,
beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Shares immediately following
the consummation of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants, or the pre-funded
warrants, in lieu of Common Shares that would otherwise result in such purchaser’s beneficial ownership exceeding 4.99% (or, at
the election of the purchaser, 9.99%) of our outstanding Common Shares. The purchase price of each pre-funded warrant is $ (which is equal
to the assumed public offering price per Common Share to be sold in this offering minus $0.01, the exercise price per Common Share of
each pre-funded warrant). The pre-funded warrants are immediately exercisable (subject to the beneficial ownership cap) and may be exercised
at any time until all of the pre-funded warrants are exercised in full. For each pre-funded warrant we sell (without regard to any limitation
on exercise set forth therein), the number of Common Shares we are offering will be decreased on a one-for-one basis. See “Description
of Securities” for more information.
We are also registering the Common Shares issuable
from time to time upon the exercise of the pre-funded warrants offered hereby. We refer to the Common Shares and pre-funded warrants,
if any, collectively, as the Securities.
Our Common Shares are listed on the Nasdaq under the symbol “SYTA.”
On October 09, 2023, the last reported sale price of our Common Shares on Nasdaq was $3.11 per Common Share. Except for our
Common Shares, we also have our warrants that were issued in connection with our initial public offering (“Prior Warrants”)
and are listed on the Nasdaq Capital Market under the symbol “SYTAW”. There is no established trading market for the pre-funded
warrants, and we do not expect an active trading market to develop. We do not intend to list the pre-funded warrants on any securities
exchange or other trading market. Without an active trading market, the liquidity of the pre-funded warrants will be limited.
The public offering price for the Securities in
this offering will be determined at the time of pricing, and may be at a discount to the then current market price. Therefore, the assumed
public offering price used throughout this prospectus may not be indicative of the final public offering price. The final public offering
price will be determined through negotiation between us and the investors based upon a number of factors, including our history and our
prospects, the industry in which we operate, our past and present operating results, the previous experience of our executive officers
and the general condition of the securities markets at the time of this offering.
There is no minimum number of Securities or minimum
aggregate amount of proceeds for this offering to close. We expect this offering to be completed not later than two business days following
the commencement of this offering and we will deliver all Securities to be issued in connection with this offering by delivery versus
payment upon receipt of investor funds. Accordingly, neither we nor the Maxim Group LLC (“Maxim” or the “Placement Agent”)
have made any arrangements to place investor funds in an escrow account or trust account since the Placement Agent will not receive investor
funds in connection with the sale of the Securities offered hereunder.
We have engaged the Placement Agent as our exclusive
placement agent to use its reasonable best efforts to solicit offers to purchase our Securities in this offering. The Placement Agent
is not purchasing or selling any of the Securities we are offering and is not required to arrange for the purchase or sale of any specific
number or dollar amount of the Securities. Because there is no minimum offering amount required as a condition to closing in this offering,
the actual offering amount, Placement Agent’s fee and proceeds to us, if any, are not presently determinable and may be substantially
less than the total maximum offering amounts described throughout this prospectus. We have agreed to pay the Placement Agent the Placement
Agent fees set forth in the table below and to provide certain other compensation to the Placement Agent. See “Plan of Distribution”
for more information regarding these arrangements.
Effective August 9, 2023, we effected a 1-for-100
reverse share split of our authorized Common Share, including our issued and outstanding Common Shares, with no change to the par value
of our Common Shares. Unless specifically provided otherwise herein, the share and per share information that follows in this prospectus,
other than in the historical financial statements and related notes incorporated by reference in this prospectus, reflects the effects
of this reverse share split.
Investing in our Securities involves a high
degree of risk. See the “Risk Factors” section beginning on page 15 of this prospectus.
We are both an “emerging growth
company” and a “foreign private issuer” as defined under the federal securities laws and as such, may elect to
comply with reduced public company reporting requirements. Please read “Prospectus Summary - Implications of Our Being an
Emerging Growth Company” and “Prospectus Summary - Foreign Private Issuer Status” beginning on page 8
and 9 of this prospectus for more information.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these Securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
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Per Common
Share | | |
Per
Pre-Funded
Warrant | | |
Total | |
Public offering price | |
$ | [●] | | |
| | | |
$ | [●] | |
Placement agent fees(1) | |
$ | [●] | | |
| | | |
$ | [●] | |
Proceeds, before expenses, to us(2) | |
$ | [●] | | |
| | | |
$ | [●] | |
(1) |
See “Plan of Distribution” for a complete description of the compensation arrangements for the Placement Agent. |
(2) |
We estimate the total expenses of this offering, excluding the Placement Agent fees and expenses, will be approximately $[●]. |
We expect to deliver the Securities against payment
on or about , 2023.
Sole Placement Agent
Maxim Group LLC
The date of this prospectus is , 2023
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
We incorporate by reference important
information into this prospectus. You may obtain the information incorporated by reference without charge by following the instructions
under “Where You Can Find More Information.” You should carefully read this prospectus as well as additional information
described under “Documents Incorporated by Reference,” before deciding to invest in our Securities.
Neither we nor the Placement Agent has authorized
anyone to provide you with information that is different from that contained in, or incorporated by reference into, this prospectus or
in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide
no assurance as to the reliability of, any other information that others may give you. We are offering to sell our Securities and seeking
offers to buy our Securities only in jurisdictions where offers and sales are permitted. The information contained in this prospectus
is accurate only as of its date, regardless of the time of delivery of this prospectus or any sale of our Securities. Our business, financial
condition, results of operations and prospects may have changed since that date.
For investors outside the United States:
Neither we nor the Placement Agent has done anything that would permit this offering, or possession or distribution of this prospectus,
in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who
come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our Securities
and the distribution of this prospectus outside of the United States. See the section of this prospectus entitled “Plan of Distribution”
for additional information on these restrictions.
Unless otherwise indicated, information in this
prospectus concerning economic conditions, our industries and our markets is based on a variety of sources, including information from
third-party industry analysts and publications and our own estimates and research. This information involves a number of assumptions,
estimates and limitations. The industry publications, surveys and forecasts and other public information generally indicate or suggest
that their information has been obtained from sources believed to be reliable. None of the third-party industry publications used in this
prospectus were prepared on our behalf nor have we taken any steps to independently verify such information. The industries in which we
operate are subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk
Factors” in this prospectus. These and other factors could cause results to differ materially from those expressed in these
publications.
We own or have rights to various trademarks, service
marks and trade names that we use in connection with the operation of our businesses. Solely for convenience, the trademarks, service
marks and trade names referred to in this prospectus may appear without the ®, TM or SM symbols, but the omission of such references
is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right
of the applicable owner of these trademarks, service marks and trade names.
PROSPECTUS SUMMARY
This summary highlights information contained
elsewhere in or incorporated by reference into this prospectus. This summary does not contain all of the information that you should consider
before deciding to invest in our Securities. You should carefully read this entire prospectus and the documents and reports incorporated
by reference into this prospectus before making an investment decision, including the information presented under the headings “Risk
Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this
prospectus and the historical financial statements and the notes thereto incorporated by reference into this prospectus. You should pay
special attention to the information contained under the caption titled “Risk Factors” in this prospectus, in our most recent
Annual Report on Form 20-F, in any subsequent Current Reports on Form 6-K and in our other reports filed from time to time with the Securities
and Exchange Commission, or the SEC, which are incorporated by reference into this prospectus, before deciding to buy our Securities.
Unless otherwise indicated, all share amounts
and per share amounts in this prospectus have been presented on a retroactive basis to reflect a reverse share split of our outstanding
Common Shares at a ratio of 1 for 100, which was implemented on August 9, 2023.
Our Company
Overview
Siyata Mobile Inc. is a leading global developer
of innovative cellular-based communications solutions over advanced mobile networks under the Uniden® Cellular and Siyata brands to
global first responders and enterprise customers. Siyata’s three complementary product categories include rugged handheld mobile
devices and in-vehicle communications solutions designed for first responders, school safety, military, enterprise customers, commercial
fleet vehicles and industrial workers, and cellular amplifiers to boost the cellular signal inside homes, buildings and vehicles.
The Company develops, markets and sells a portfolio
of rugged handheld Push-to-Talk over Cellular (“PoC”) smartphone devices. These rugged business-to-business (“B2B”)
environments are focused on enterprise customers, first responders, school safety, construction workers, security guards, government agencies,
utilities, transportation, waste management, amusement parks and mobile workers in multiple industries.
Prior to 2021, Siyata sold rugged handsets, such
as the Uniden UR5 and Uniden UR7 only in international markets. In the second quarter of 2022, Siyata unveiled its next generation rugged
device, the SD7. The SD7 is Siyata’s first mission critical push-to-talk device (“MCPTT”) and is also the first rugged
communications solution Siyata launched in North America and is expected to launch in Europe in 2024.
Siyata will be offering to sell in Q1 2024 the
SD7+, a single platform solution that integrates PoC and bodycam functionality.
Our second product category is purpose built in-vehicle communication
devices. In Q1 2023, Siyata began to sell the K7, a first-of-its-kind, patent-pending car kit with an integrated 10-watt speaker, a simple
slide-in connection sleeve for the SD7, and an external antenna connection for connecting to a windshield or roof mount antenna to allow
for an in-vehicle experience for the user that is similar to that from a traditional land mobile radio (“LMR”) device. The
VK7 has been uniquely designed to be used with the SD7, while connecting directly into the vehicle’s power and can also connect
to a Uniden cellular amplifier for better cellular connectivity. The VK7 can also be equipped with an external remote speaker microphone
to ensure compliance with hands-free communication legislation.
The Uniden® UV350 4G/LTE, is a
purpose built In-Vehicle communication device designed specifically for professional vehicles such as trucks, vans, buses, emergency service
vehicles and other enterprise vehicles. This platform is designed to facilitate replacement of the current in-vehicle, multi-device status-quo
with a single device that incorporates voice, PoC, data, fleet management solutions and other Android based professional applications.
The UV350 also supports Band 14 for the First Responder Network Authority, or FirstNet®, compatibility which is the U.S.
First Responders 4G/LTE network with PoC capabilities that aims to replace aging two-way radio systems currently in use.
The Uniden® UV350 4G/LTE, is a purpose built-in
vehicle communication device designed specifically for professional vehicles such as trucks, vans, buses, emergency service vehicles and
other enterprise vehicles. This platform is designed to facilitate replacement of the current in-vehicle, multi-device status-quo with
a single device that incorporates voice, PoC, data, fleet management solutions and other Android based professional applications. The
UV350 also supports Band 14 for the First Responder Network Authority, or FirstNet®, compatibility which is the U.S. First Responders
4G/LTE network with PoC capabilities that aims to replace aging LMR systems currently in use.
Cellular boosters are our third product category
with approximately 30 million of these devices sold globally every year. Siyata manufactures and sells Uniden® Cellular
boosters and accessories for enterprise, first responder and consumer customers with a focus on the North America markets. Cellular communication
provides a robust, secure environment not just for remote workers, in-home and in-vehicles; but also for restaurant patrons who wish to
download menus; for patients at pharmacies who need to verify identity and download scripts; for remote workers who require strong clear
cellular signals; and for first responders where connectivity literally means the difference between life and death - just to name a few
examples. The vehicle vertical in this portfolio complements Siyata’s in-vehicle and rugged handheld smartphones as these sales
can be bundled through the Company’s existing sales channels.
We offer a full line of cellular boosters, to
boost cellular reception, under the brand name Uniden®. We have entered into a partnership whereby Uniden America Corporation,
the North American subsidiary of Japan-based Uniden Corporation, has granted the exclusive license to us to market cellular signal boosters
under the Uniden® brand name within the U.S. and Canada, on a rolling three year contract term, with the current extension
expiring December 31, 2031 unless sooner terminated pursuant to the terms of this Agreement. As a world-wide leader in wireless communications,
Uniden America Corporation manufactures and markets wireless consumer electronic products. Based in Fort Worth, Texas, Uniden sells its
products through dealers and distributors throughout North, Central and South America. Uniden Cellular booster kits solve issues of poor
reception, dropped calls, lost data and transmission quality issues that users routinely experience on every cellular network. These easy-to-install
cellular booster kits are designed for homes, cabins, offices, and buildings to improve the cellular signal reception indoors, allowing
people to use their cellular phones indoors where they previously could not do so. We also offer models designed for vehicles, both wired
and wireless boosters, to improve the cellular reception inside a vehicle that is driving in a weak cellular signal area. Uniden cellular
signal boosters offer kits designed to offer cellphone coverage for difference distances, including kits for a small area of 1 or 2 rooms,
and more expansive solutions that will cover over 100,000 sq. ft. Our cellular signal boosters are carrier agnostic to ensure the best
signal integrity, supporting 2G, 3G, 4G and soon 5G (in development) technologies on all carriers operating in North America.
The aforementioned portfolio of solutions offers
the benefits of PoC without any of the difficulties managing the current generation of rugged smart/feature phones and is ideally suited
as a perfect upgrade from LMR used for generations. LMR has a significant number of limitations, including network incompatibility, limited
coverage areas, and restricted functionality that leave a huge need for a unified network and platform. Siyata’s innovative PoC
product lines are helping to service the generational shift from LMR to PoC. While LMR licensing activity is near historical lows, the
PoC is growing at a rapid pace. According to Allied Market Research, the PoC market is expected to grow at an estimated 9.4% compound
annual growth rate (“CAGR”) to approximately $6.96 billion by 2027.
Our Customers and Channels
The North American Tier 1 cellular carriers that
Siyata is working with have large scale distribution and sales channels. With an estimated 25 million commercial vehicles including 7.0
million first responder vehicles, the Company sees the North American market as its largest opportunity with a total addressable market
over $19 billion. These Tier 1 cellular carriers have a keen interest in launching the UV350 as it allows for new SIM card activations
in commercial vehicles and increased ARPU from existing customers with corporate and first responder fleets while targeting new customers
with a unique, dedicated, multi-purpose in-vehicle IoT smartphone.
In addition, our rugged handsets are targeted
to approximately 47 million enterprise task and public sector workers across North America including school safety, construction, transport
and logistics, manufacturing, energy & utility, public safety and federal government. As of June 30, 2023, Siyata had secured North
American wireless carrier approvals of the SD7 Handset for use on their networks from AT&T, FirstNet, Verizon, and Bell Mobility.
During 2023, Siyata has since added T-Mobile and US Cellular to its list of North American wireless carriers who have approved SD7 for
use on their networks. Internationally, Telstra from Australia has also approved SD7 for use on their network during 2023.
AT&T, our largest channel partner, represented
28.1% of our revenues in 2022 and 37.5% of our revenues in the six-month period ended June 30, 2023. AT&T did not enter into a master
services agreement with us, but rather, enters into standard purchase order forms on a per order basis. We do not obligate AT&T to
fulfill any required minimum purchase orders. Our typical purchase order contracts with AT&T involve standard warranties and indemnification,
insurance requirement and delivery terms.
With an estimated 17 million commercial vehicles
as well as 3.5 million first responder vehicles, we view the U.S. market as our largest opportunity with, according to the U.S. Department
of Transportation, an estimated total addressable market of over $17 billion. The Tier 1 cellular carriers that we work with have expressed
interest in marketing and selling the UV350 as it would allow for new SIM card activations in commercial vehicles and increased average
revenue per user from existing customers with corporate and first responder fleets while targeting new customers with a unique, dedicated,
multi-purpose in-vehicle smartphone.
Competitive Strengths
We believe that the following competitive strengths
contribute to our success and differentiate us from our competitors:
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Our innovative technology solutions and integration approach with minimal known competition. |
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Our reputation and recognition achieved from our previous success in this space. |
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Our experienced management team. |
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Our relationships and device approvals with leading North American wireless networks. |
Growth Strategies
We intend to further grow our business by pursuing
the following strategies:
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Ramp up sales with our North American and global cellular carrier partners. |
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Entering new customer bases and markets. |
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Implementing effective resources management to improve operational efficiency and boost core competency. |
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Designing new products and improving our existing products for our current and future customer base. |
Our Challenges
We face challenges, risks and uncertainties in
realizing our business objectives and executing our strategies, including those relating to our ability to:
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Grow our market share in the United States which is a large-scale market for us. |
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Navigate in the fast-changing regulatory environment. |
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Maintain and improve our relationship with leading cellular carriers and business partners. |
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Recruit and retain qualified personnel. |
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Manage our growth effectively and efficiently. |
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Enhance our product lines in a cost-effective manner. |
Recent Developments
Changes in the Company’s Accountants.
On May 24, 2022, we received a letter from Davidson & Company LLP (“Davidson”) that stated that Davidson did not wish
to be reappointed as our independent registered public accounting firm for the fiscal year ending December 31, 2022. Davidson ceased to
serve as our independent registered accounting firm as of May 24, 2022.
On May 24, 2022, our management notified Friedman
LLP (“Friedman”) that Friedman had been approved by audit committee (“Audit Committee”) of our board of directors
and the board of directors as our independent registered public accounting firm for the fiscal year ended December 31, 2022. Friedman
LLP combined with Marcum LLP effective September 1, 2022 (“Marcum”).
As of March 21, 2023, Marcum notified us that
Marcum had resigned as our independent certified public accounting firm effective as of March 21, 2023. Marcum’s resignation as
our independent registered public accounting firm was accepted by the Audit Committee of our board of directors as of March 21, 2023.
On March 21, 2023, we engaged Barzily & Co.
(“Barzily”) as our new independent registered public accountant for the fiscal year ending December 31, 2022. This decision
was approved by the Audit Committee of the board of directors in accordance with the authority of the Audit Committee as specified in
its Charter. Barzily has applied to register with the Canadian Public Accountability Board, which like the Public Company Accounting Oversight
Board in the United States, oversees public accounting firms that audit Canadian reporting issuers.
At our 2023 Annual and Special Meeting of Shareholders
held on August 3, 2023 (the “2023 AGM”), our shareholders approved Barzily as our auditor for the ensuing year, i.e. the fiscal
year ending December 31, 2024.
Also in our 2023 AGM, the shareholders of Siyata
Mobile Inc. approved a reverse stock split of our Common Shares (which also resulted in adjustments to the Company’s outstanding
stock options, warrants and restricted share units) for an amount to be determined by our board of directors. Our board of directors approved
a 100-to-1 reverse stock split the same day.
Furthermore in our 2023 AGM, the shareholders of the Company approved
the following changes: (i) an alteration to the articles of the Company (the “Company Articles”) to amend the quorum for the
transaction of business at a meeting of Shareholders at 5%; (ii) an alteration to the Company Articles to amend Section 9.1 to authorize
the Board by resolution to take certain actions pertaining to the authorized share structure that under the Company Articles currently
require Shareholder approval by ordinary resolution; (iii) and the creation of Preferred Shares (as defined hereafter), issuable in series,
and the issuance of an unlimited number of Preferred Shares and the necessary alteration of the Company Articles to add Articles 27, 28,
and 29.
Restatement of Financial Statements.
As part of our normal quarterly reporting process for the six months ended June 30, 2023, our management and the Audit Committee concluded
that a material error was made related to the accounting for our outstanding warrants (the “Warrants”) and therefore were
misstated in our financial statements for the three months ended March 31, 2023 (the “Prior Period Financial Statements”).
Our management and the Audit Committee concluded that the material error was made related to the accounting for the treatment for the
classification of the our Warrants due to incorrect fair valuation and subsequent adjustment resulting in a decrease in loss on fair value
of $2,705,253 and a reduction in our share capital for the same amount.
As a result, on August 14, 2023, management and
the Audit Committee determined that our condensed consolidated unaudited interim financial statements for the three month period ended
March 31, 2023, filed with the SEC on Form 6-K on May 24, 2023 should no longer be relied upon. There was no impact on any of the year-end
financial statements previously filed.
We filed our restated condensed consolidated unaudited
interim financial statements for the three-month period ended March 31, 2023 as Exhibit 99.1 to our Form 6-K with the SEC on August 14,
2023 together with our restated Management’s Discussion and Analysis of Results of Operations and Financial Condition for the three
months ended March 31, 2023.
Recent Offerings.
On January 18, 2023, we entered into warrant exercise
agreements with fourteen existing accredited investors to exercise certain outstanding warrants to purchase up to an aggregate of 18,042,857
(180,429 post reverse split) of our Common Shares. The gross proceeds to us from the exercise totaled $3,608,571, prior to deducting warrant
inducement agent fees and estimated offering expenses. In consideration for the immediate exercise of the existing warrants for cash,
the exercising holders received new unregistered warrants to purchase up to an aggregate of 18,042,857 (180,429 post reverse split) Common
Shares (equal to 100% of the Common Shares issued in connection with the Exercise) in a private placement pursuant to Section 4(a)(2)
of the Securities Act. In connection with the exercise, we also agreed to reduce the exercise price of the existing warrants from $0.23
($23 post reverse split) to $0.20 ($20 post reverse split) per share. The warrant exercise agreements and the new warrants each include
a beneficial ownership limitation that prevents the warrant holder from owning more than 4.99% (which may be increased to 9.99% in accordance
with the terms of the new warrants) of our outstanding Common Shares at any time. The new warrants are exercisable immediately upon issuance
at a cash exercise price of $0.20 per share ($20 post reverse split) and have a term of exercise equal to five years. However, the holder
of the new warrant may also effect an “alternative cashless exercise” on or after the earlier of: (i) one hundred and eighty
(180) day anniversary of the initial exercise date (January 19, 2023) or (ii) the day after effectiveness of the registration statement
of which this prospectus is a part. In such event, the aggregate number of Common Shares issuable in such alternative cashless exercise
pursuant to any given Notice of Exercise electing to effect an alternative cashless exercise will equal the product of (x) the aggregate
number of Common Shares that would be issuable upon exercise of the new warrant in accordance with the terms of the new warrant if such
exercise were by means of a cash exercise rather than a cashless exercise and (y) 1.0, which would result in an effective exercise price
of $0.00 at such time. In connection with the exercise, we reduced the exercise price of 2,989,130 (29,892 post reverse split) of certain
of our remaining unexercised Common Share purchase warrants from $0.23 ($23, post reverse split) per Common Share to an exercise price
of $0.20 ($20 post reverse split) per Common Share, which warrants may subsequently be repriced to $0.00 if the cashless exercise price
of the new warrants is triggered. However, previously issued warrants: (i) for 1,805,585 (18,056 post reverse split) Common Shares that
currently trade on the Nasdaq Capital Market under the symbol “SYTAW” that have an exercise price of $6.85 ($685 post reverse
split) per share; (ii) for 1,294,500 Common Shares (12,946 post reverse split) that were issued in a private transaction that have an
exercise price of $11.50 per share ($1,150 post reverse split); and (iii) for 9,999,999 (10,000 post reverse split) Common Shares that
were issued in a private transaction that have an exercise price of $2.30 per share ($230 post reverse split) are not required by their
terms to be repriced.
In April 2023, cashless warrants were exercised
in exchange for a total of 17,116,987 (171,170 post reverse split) Common Shares issued by us. Since no cash was used for the exercise
of such warrants, we received no proceeds from such exercise.
On June 27, 2023, we announced that we had entered
into a Securities Purchase Agreement, dated as of June 26, 2023 with certain institutional investors, pursuant to which we agreed to issue
and sell to the Purchaser and to certain additional institutional investors an aggregate of 50,000,000 (500,000 post reverse split) of
the our Common Shares, at a purchase price of $0.045 ($4.5 post reverse split) per Common Share (the “June 2023 Offering”).
The closing of the June 2023 Offering occurred on June 28, 2023. The June 2023 Offering resulted in gross proceeds to us of $2,250,000
before deducting the fees payable to Maxim Group LLC, as sole placement agent for the June 2023 Offering, and certain related June 2023
Offering expenses. The Common Shares were offered pursuant to a registration statement on Form F-1 (SEC File No. 333-272512), filed with
the SEC on June 8, 2023, as amended, which was declared effective on June 26, 2023.
On July 11, 2023, we announced that we had entered
into a Securities Purchase Agreement with certain institutional investors named therein, pursuant to which we agreed to issue and sell,
in a registered direct offering (the “July 2023 Offering”) 51,450,000 (514,500 post reverse split) of the our Common Shares,
at a purchase price of $0.045 ($4.50 post reverse split) per Common Share. The Purchase Agreement contained customary representations
and warranties and agreements of the Company and the purchasers and customary indemnification rights and obligations of the parties. The
closing of the July 2023 Offering occurred on July 13, 2023. The July 2023 Offering resulted in gross proceeds to us of $2,315,250 before
deducting the fees payable to Maxim Group LLC, as sole placement agent for the July 2023 Offering, and certain related July 2023 Offering
expenses. The Common Shares were offered pursuant to a prospectus supplement, filed with the SEC on July 13, 2023, to our effective shelf
registration statement on Form F-3 (File No. 333-265998), which was filed with the SEC on July 1, 2022 and was declared effective on July
18, 2022.
Going Concern. Our auditor has included
a “going concern” explanatory paragraph in its report on our consolidated financial statements for the fiscal year ended December
31, 2022, expressing substantial doubt about our ability to continue as an ongoing business for the next twelve months. Our consolidated
financial statements do not include any adjustments that may result from the outcome of this uncertainty and have thus been prepared under
IFRS on a going concern basis of accounting. If we cannot secure the financing needed to continue as a viable business, our shareholders
may lose some or all of their investment in us.
Reverse Share Split. On August 9,
2023, we effected a 1-for-100 reverse share split of our authorized Common Share, including our issued and outstanding Common Shares,
with no change to the par value of our Common Share The reverse split resulted in certain adjustments being made to the existing terms
of the Prior Warrants. Unless otherwise indicated, all other share and per share data in this prospectus have been adjusted on a retroactive
basis, where applicable, to reflect the reverse share split as if it had occurred at the beginning of the earliest period presented. On
August 24, 2023, we announced that it had received formal notice from Nasdaq stating that we had regained compliance with the minimum
bid price requirement in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Stock Market.
British Columbia Securities Commission Cease
Trade Order. On April 6, 2023, the British Columbia Securities Commission (“BCSC”) issued a cease trade order (the
“April 2023 Order”) in respect of each of our securities as a result of our failure to file our December 31, 2022, annual
audited financial statements, management’s discussion and analysis, annual information form, and certification for the annual filings
in Canada. We had also received a letter dated May 17, 2023 from the BCSC, noting our failure to file our interim financial statements
and management’s discussion and analysis for the fiscal quarter ended March 31, 2023 and pay the required filing fee, and requesting
us to correct the deficiencies by filing the required materials. As of May 25, 2023, we had filed the outstanding continuous disclosure
documents required under the securities legislation of British Columbia. The April 2023 Order did not affect the trading of our Common
Shares or the Prior Warrants on the Nasdaq Capital Market. The April 2023 Order was revoked by the BCSC as of May 25, 2023 and, as a result
of the revocation of the April 2023 Order, our shares are no longer subject to a cease trade order.
Insurance Proceeds. In August, 2023,
our insurers had proceeded with a net insurance payout to us of CAD $513,617.84 (approx. USD $380,458) relating to our water damaged inventory,
which was first disclosed and filed with the SEC on Form 6-K on December 26, 2022. This payout was separate and over and above the USD
$454,635 recovered from the salvaged inventory (at cost), which will be reflected and added back to our inventory in our financial statements
for the nine months ended September 30, 2023. In our financial statements for the nine months ended September 30, 2023, USD $454,635 shall
be added back as an inventory asset and be included as income to partially reverse the previously impaired and written off (expensed)
damaged inventory, and the current insurance proceeds of USD $380,458 shall be recorded as a separate line income item with the increase
in cash due to these proceeds received.
Recent Marketing Milestones.
On January 9, 2023, we announced that T-Mobile
US, Inc. is expected to launch Siyata’s rugged SD7 device onto T-Mobile’s United States IoT network in the first quarter 2023.
On January 18, 2023, we announced that we had received follow-on orders from an existing customer, a leading Saudi Arabian cellular carrier,
for its Uniden® UV350, a 4G/LTE all-in-one in-vehicle communication device.
On January 23, 2023, we announced that we had
received an order for its next-generation mission critical push-to-talk solution, which includes its SD7 device and related accessories,
from a multi-billion-dollar, integrated resort and residential property development located in The Bahamas.
On February 21, 2023, we announced that we had received an order for
$750,000 for our next-generation MCPTT (mission critical push-to-talk) solution to equip an independent emergency management service provider
with our SD7 devices and related accessories.
On February 27, 2023, we announced the launch
of the Siyata T600 Cellular Booster for T-Mobile 5G enterprise customers.
On March 6, 2023, we announced that we had successfully donated and
deployed our mission critical push-to-talk solution for security and volunteer personnel at the 2023 Special Olympics New York Winter
Games in Syracuse, New York.
On March 13, 2023, we announced that we will host
an exhibitor’s booth at the International Wireless Communications Expo 2023 showcasing its new SD7 Mission Critical Push-To-Talk
solution, the SD7+ MCPTT solution with built in Body Camera and accessories from March 27-30 in Booth 2125, North Hall, at the Las Vegas
Convention Center.
On March 20, 2023, we announced the successful certification and approval
of our mission critical PoC SD7 solution by Telstra, Australia’s largest wireless carrier who is anticipated to begin sales of the
SD7 to its enterprise and government customers in the second quarter of 2023.
On March 27, 2023, we announced that we are collaborating
with CrisisGo, Inc. (“CrisisGo”), the provider of the CrisisGo Panic app, an incident management platform for first responders,
to introduce next generation, cellular-based paging services for use by emergency response personnel.
On April 3, 2027, we announced that we received
our largest order to date for the SD7 handset and accessories from a single customer in the United States education market.
On April 17, 2023, we announced that Entropia
Investments BV, a leading provider of secure mobile mission-critical communications services to a wide range of end-users in the Netherlands,
northern Belgium and the United Kingdom, is to commence selling Siyata’s mission-critical PoC SD7 solution in the second quarter of 2023.
On April 24, 2023, we announced that Two Way Direct,
Inc., a reseller of two-way radios and push-to-talk over cellular, is now a distributor of Siyata’s mission-critical PoC (MCPTT) SD7 solution
and its broad range of accessories.
On June 1, 2023, we announced that we
received an order for our UV350 In Vehicle Devices and ‘Siyata Real Time View,’ the Company’s newest product,
valued at over $1.2 million.
On June 5, 2023, we announced that we received
new orders for its SD7 Handsets and VK7 Vehicle Kits totaling more than $400,000 in aggregate.
On June 12, 2023, we announced that Minnesota
Coaches, Inc., a privately held motor coach and school bus transportation company, had taken delivery of our first SD7 Handsets and VK7
Vehicle Kits and we expect Minnesota Coaches to deploy its SD7 Handset and VK7 Vehicle Kit in the balance of their fleet of over 900 vehicles.
On June 14, 2023, we announced that we had launched
ours latest product, the Siyata Mobile Command Center, an all-in-one, mobile communications solution with built-in redundancy primarily
for providers of Emergency Management Services that need to set up a mobile telecommunications command center in the field.
On June 20, 2023, we announced that Mobile Tornado Group Plc (AIM:
MBT) (“Mobile Tornado”), a leading provider of critical communications solutions for Tier 1 Mobile operators, would offer
our robust Push-to-Talk application on Siyata Mobile’s SD7 Handset.
On June 22, 2023, we announced that we had received
new orders during the second quarter 2023 in addition to orders previously announced on June 5, 2023, for our SD7 Handsets and VK7 Vehicle
Kits totaling approximately $600,000, in aggregate revenue, from customers of leading cellular carriers.
On July 6, 2023, we announced that we had secured
its largest SD7 order ever in the Company’s history from a single customer. The order was valued at approximately $1.4 million.
On August 7, 2023, we announced that Tango Tango,
a leading provider of critical Push-to-Talk (PTT) communications solutions and an existing reseller of Siyata products, will offer its
public safety focused app on Siyata Mobile’s SD7 Handset along with related SD7 accessories.
On September 6, 2023, we announced that we had
received an order for its Siyata SD7 handsets and VK7 vehicle kits from a global provider of healthcare and emergency health and safety
services.
On September 18, 2023, we announced that we had
received a follow-on order from an existing customer, a large North American waste management company, for additional units of its SD7
handsets and VK7 vehicle kits.
On October 2, 2023, we announced that Consort
Digital PTE Ltd. (“Consort Digital”), a leading provider of mission critical communications solutions, will offer its MCX
ONE Push-to-Talk application on our SD7 handset.
On October 4, 2023, we announced that we had received an order from the U.S. federal government for our Hero
Series UM50 FN cellular boosters, which are compatible with the FirstNet wireless network.
Implications of Our Being an “Emerging
Growth Company”
As a company with less than $7.5 million in revenue
during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups
Act of 2012 (the “JOBS Act”). An “emerging growth company” may take advantage of reduced reporting requirements
that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we:
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may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or “MD&A;” |
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are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as “compensation discussion and analysis;” |
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are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; |
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are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on frequency” and “say-on-golden-parachute” votes); |
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are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and chief executive officer pay ratio disclosure; |
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are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act; and |
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will not be required to conduct an evaluation of our internal control over financial reporting. |
Foreign Private Issuer Status
We are a foreign private issuer within the meaning
of the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As such, we are
exempt from certain provisions applicable to United States domestic public companies. For example:
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we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; |
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for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; |
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we are not required to provide the same level of disclosure on certain issues, such as executive compensation; |
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we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; |
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we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and |
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we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction. |
Risk Factors Summary
An investment in our securities involves a high
degree of risk. You should carefully consider the risks summarized below. These risks are discussed more fully in the “Risk Factors”
section immediately following this Prospectus Summary. These risks include, but are not limited to, the following:
Risks Related to Our Financial Condition and
Capital Requirements
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We have a history of operating losses, and we may never achieve or maintain profitability. |
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Our consolidated audited financial statements for the fiscal year ended December 31, 2022 includes a “going concern” explanatory paragraph expressing substantial doubt about our ability to continue as an ongoing business for the next twelve months. Our consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty and have thus been prepared under IFRS on a going concern basis of accounting. If we cannot secure the financing needed to continue as a viable business, our shareholders may lose some or all of their investment in us. |
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In 2022, our independent registered public accountants identified three material weaknesses in our internal controls over financial reporting. If we are unable to remediate these material weaknesses, we may not be able to report our financial results accurately, prevent fraud or file our periodic reports as a public company in a timely manner. In 2021, our independent registered public accountants identified five material weaknesses in our internal controls over financial reporting, which have only been partially remediated. |
Risks Related to Our Business and Industry
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We rely on our channel partners to generate a substantial majority of our revenues. If these channel partners fail to perform or if we cannot enter into agreements with channel partners on favorable terms, our operating results could be significantly harmed. |
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We are materially dependent on the adoption of our solutions by both the industrial enterprise and public sector markets, and if end customers in those markets do not purchase our solutions, our revenues will be adversely impacted, and we may not be able to expand into other markets. |
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The markets for our devices and related accessories may not develop as quickly as we expect or may not develop at all. Our dependence on our cellular carrier channel partners and their success in promoting Push to Talk over Cellular to their client base is key for the success of the business. |
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A security breach or other significant disruption of our information technology (“IT”) systems or those of our partners, suppliers or manufacturers, caused by cyberattacks or other means, could have a negative impact on our operations, sales, and operating results. |
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We experience lengthy sales cycles for our products and the delay of an expected large order could result in a significant unexpected revenue shortfall. |
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We have a limited history of contracting with third party manufacturers in Asia for the high-volume commercial production of our devices, and we may face manufacturing capacity constraints. |
Risks Related to our Reliance on Third Parties
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As we work with multiple vendors for our components, if we fail to adequately forecast demand for our inventory and supply needs, we could incur additional costs or experience manufacturing delays, which could reduce our gross margin or cause us to delay or even lose sales. |
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Because we rely on a small number of channel partners/customers for a large portion of our revenue, the loss of any of these customers would have a material adverse effect on our operating results and cash flows. |
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If dedicated public safety LTE networks are not deployed at the rate we anticipate or at all, demand for our solutions may not grow as expected. |
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The application development ecosystem supporting our devices and related accessories is new and evolving. |
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The nature of our business may result in undesirable press coverage or other negative publicity, which would adversely impact our brand identity, future sales and results of operations. |
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Changes in the availability of federal funding to support local public safety or other public sector efforts could impact our opportunities with public sector end customers. |
Risks Related to Government Regulation
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We are subject to a wide range of product regulatory and safety, consumer, worker safety and environmental laws and regulations. |
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Changes in laws and regulations concerning the use of telecommunication bandwidth could increase our costs and adversely impact our business. |
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We are subject to a wide range of privacy and data security laws, regulations and other legal obligations. |
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Siyata purchases various components for its devices and uses a contract manufacturer for its production in China. The current hostility in US-China relations poses risks for potential trade wars, tariffs or product bans which could negatively effect the Company. |
Risks Related to Our Intellectual Property
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Our use of open-source software could subject us to possible litigation or otherwise impair the development of our products. |
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Our inability to obtain and maintain any third-party license required to develop new products and product enhancements could seriously harm our business, financial condition and results of operations. |
Risks Related to our Locations in Israel and
Canada and Our International Operations
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Conditions in Israel could materially and adversely affect our business. |
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It may be difficult to enforce a U.S. judgment against us, our officers and directors named herein in Israel or the United States, or to assert U.S. securities laws claims in Israel or serve process on our officers and directors. |
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Operating outside of the United States presents specific risks to our business, and we have substantial operations outside of the United States. |
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Relations between the People’s Republic of China (“PRC”) and Taiwan could negatively affect our business and financial status and, therefore, the market value of your investment. |
Risks Related to This Offering and Ownership
of Our Securities
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This is a reasonable best efforts offering, in which no minimum number or dollar amount of Securities is required to be sold, and we may not raise the amount of capital we believe is required for our business plans. |
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Outstanding warrants and future sales of our Securities may further dilute the Common Shares and adversely impact the price of our Common Shares. |
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Common Shares representing a substantial percentage of our outstanding shares may be sold in this offering, which could cause the price of our Common Shares to decline. |
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There is no public market for the pre-funded warrants being offered in this offering. |
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Holders of our pre-funded
warrants will have no rights as holders of Common Shares until such warrants are exercised. |
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Since we do not expect to pay any cash dividends for the foreseeable future, investors may be forced to sell their stock in order to obtain a return on their investment. |
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We may issue additional debt and equity securities, which are senior to our Common Shares as to distributions and in liquidation, which could materially adversely affect the market price of our Common Shares. |
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We are governed by the corporate laws of British Columbia, Canada which in some cases have a different effect on shareholders than the corporate laws of the United States. |
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U.S. holders of the Company’s shares may suffer adverse tax consequences if we are characterized as a passive foreign investment company. |
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If we fail to file our financial disclosures with the securities regulators in British Columbia on time, we could be subject to such regulator issuing a cease trade order that would affect the trading of our Common Shares in Canada, but not on the Nasdaq Capital Market. |
Risks Related to This Offering and Ownership
of Our Common Shares
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We are an “emerging growth company,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our Common Shares less attractive to investors. |
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We incur significant increased costs as a result of operating as a public company in the United States, and our management is required to devote substantial time to new compliance initiatives. |
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If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired. |
Corporate Information
We are organized as a corporation under the laws
of British Columbia, Canada, and maintain our registered and records office at 7404 King George Blvd., Suite 200, King’s Cross,
Surrey, British Columbia V3W 1N6, Canada. The principal place of business is located at 1751 Richardson Suite 2207, Montreal, Quebec Canada
H3K-1G6. Our telephone number is (514) 500-1181 and our website is located on the internet at https://www.siyatamobile.com. The information
contained on our website does not constitute part of this prospectus.
The Company was incorporated on October 15,
1986 as Big Rock Gold Ltd. as a corporation under the Company Act of British Columbia. On April 5, 1988, the Company changed
its name to International Cruiseshipcenters Corp. On June 24,1991, the Company changed its name to Riley Resources Ltd. Effective
January 23, 1998, the Company consolidated its share capital on an eight-to-one basis and changed its name to International Riley
Resources Ltd. Effective November 22, 2001, the Company consolidated its share capital on a five-to-one basis and changed its name
to Wind River Resources Ltd. On January 3, 2008, the Company changed its name to Teslin River Resources Corp.
On July 24, 2015, Teslin River Resources
Corp, completed a reverse acquisition by way of a three-cornered amalgamation, pursuant to which the Company acquired certain telecom
operations of an Israel-based cellular technology company and changed its name to Siyata Mobile Inc.
On June 7, 2016, the Company acquired all
of the issued and outstanding shares of Signifi Mobile Inc. (“Signifi”).
In March 2021, the Company acquired, through
a wholly owned subsidiary formed by Signifi, all the outstanding units of Clear RF LLC (“Clear RF”).
The Company was registered with the TSXV under
the symbol SIM, commenced trading on OTCQX under the symbol SYATF from May 11, 2017 until September 25, 2020, at which time
the Company’s Common Shares were listed only on the Nasdaq Capital Market.
The following diagram illustrates our corporate
structure as of the date of this prospectus:
The Offering
Securities being offered: |
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Up to a maximum of $5,000,000 of Common Shares, on a best-efforts basis at a public offering price of $ per Common Share. |
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We are also offering to certain purchasers whose
purchase of Common Shares in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties,
beneficially owning more than 4.99% (or, at the election of each purchaser, 9.99%) of our outstanding Common Shares immediately following
the consummation of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants, or the pre-funded
warrants, in lieu of Common Shares that would otherwise result in such purchaser’s beneficial ownership exceeding 4.99% (or, at
the election of each purchaser, 9.99%) of our outstanding Common Shares. The purchase price of each pre-funded warrant is $ (which is
equal to the assumed public offering price per Common Share to be sold in this offering minus $0.01, the exercise price per Common Share
of each pre-funded warrant). The pre-funded warrants are immediately exercisable (subject to the beneficial ownership cap) and may be
exercised at any time until all of the pre-funded warrants are exercised in full. For each pre-funded warrant we sell (without regard
to any limitation on exercise set forth therein), the number of Common Shares we are offering will be decreased on a one-for-one basis.
We are also registering the Common Shares issuable from time to time upon the exercise of the pre-funded warrants offered hereby. See
“Description of Securities” for more information.
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Best efforts offering: |
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We have agreed to offer
and sell the Common Shares offered hereby directly to the purchasers. We have retained Maxim Group LLC to act as our exclusive
placement agent (the “Placement Agent”) to use its reasonable best efforts to solicit offers to purchase the securities
offered by this prospectus. The Placement Agent is not required to buy or sell any specific number or dollar amount of the Common
Shares offered hereby. See “Plan of Distribution” section beginning on page 86 for more information. |
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Assumed Public Offering Price:
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[●] per Common Share and/or pre-funded warrant (minus $0.01), which is the assumed public offering price and the closing price of our Common Shares on Nasdaq on [●], 2023. |
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Common Shares outstanding immediately prior to this offering: |
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1,854,834 Common Shares. |
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Common Shares to be outstanding after this offering:(1) |
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[●] Common Shares (assuming no sale of any pre-funded warrants). |
Use of proceeds: |
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Assuming the maximum
number of Common Shares are sold in this offering at an assumed public offering price of $[●] per Common Share, which represents
the closing price of our Common Shares on Nasdaq on October [●], 2023, and assuming no issuance of pre-funded warrants in connection
with this offering, we estimate the net proceeds of the offering will be approximately $[●] million, after deducting the placement
agent fees and estimated offering expenses payable by us. However, this is a best efforts offering with no minimum number of securities
or amount of proceeds as a condition to closing, and we may not sell all or any of these securities offered pursuant to this prospectus;
as a result, we may receive significantly less in net proceeds.
We intend to use the net proceeds from this offering for general corporate
purposes, which could include working capital to fund inventory purchases for customers based on sales orders on hand and expected inventory
demands as well as future acquisitions and capital expenditures. See “Use of Proceeds” for more information. |
Dividend policy: |
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We have never declared or paid any dividends on our Common Shares. We do not anticipate paying any dividends in the foreseeable future. We currently intend to retain any future earnings to fund business development and growth, and we do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. |
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Placement Agent’s
Warrants |
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We
will issue to the Placement Agent, following the commencement of sales related to this offering, compensation warrants entitling
the Placement Agent to purchase a number of common shares equal to 5% of the Securities sold in this offering. The Placement Agent’s
Warrants will have (i) a term of five (5) years and may be exercised after six (6) months following the commencement of sales related
to this offering, and (ii) an exercise price equal of 110% of the public offering price per Common Share. This prospectus also relates
to the offering of [●] Common Shares issuable upon exercise of the Placement Agent’s Warrants. |
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Risk factors: |
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Investing in our Securities involves a high degree of risk. As an investor, you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the “Risk Factors” section. |
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Lock-up: |
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We, all of our directors
and officers, and the holders of 5% or more of our outstanding Common Shares (and all holders of securities exercisable for or
convertible into Common Shares), have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber,
grant any option for the sale of or otherwise dispose of any of our Common Shares or other securities convertible into or
exercisable or exchangeable for our Common Shares for a period of three (3) months after this offering is completed without the
prior written consent of the Placement Agent. See “Plan of Distribution” for more information. |
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Trading market and symbol: |
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Our Common Shares and Prior Warrants are listed on the Nasdaq Capital Market under the symbols “SYTA” and “SYTAW,” respectively. The Common Shares offered hereby will trade on the Nasdaq Capital Market under the symbol “SYTA.” We do not intend to apply for listing of the pre-funded warrants on any securities exchange or recognized trading system. |
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Transfer Agent and Warrant Agent: |
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The transfer agent and
registrar for our Common Shares is Computershare Inc. The Warrant Agent for our pre-funded warrants is Computershare Inc. |
(1) |
The number of Common Shares outstanding immediately following this
offering is based on 1,854,834 Common Shares outstanding as of October [●], 2023 and excludes: |
| ● | 1,506,138
(15,062, after reverse split) Common Shares issuable upon the exercise of stock options outstanding under our 2016 Stock Option Plan,
as amended, with a weighted-average exercise price of $3.67 per share ($367, after reverse split); |
| ● | 3,165,000
(31,650, after reverse split) Common Shares issuable upon the exercise of restricted share units outstanding under the 2016 Stock
Option Plan, as amended, |
| ● | 10,025,111
(100,252, after reverse split) Common Shares reserved for future issuance under our 2016 Stock Option Plan, as amended; |
| ● | 13,100,084
(131,001, after reverse split) Common Shares issuable upon the exercise of outstanding warrants with a weighted average exercise price
of $3.81 ($381, after reverse split) per share; |
| ● | 931,507
(9,316, after reverse split) Common Shares issuable upon the exercise of outstanding investment banker’s warrants with a weighted
average exercise price of $4.87 ($487.00, after reverse split) per share; and |
Unless otherwise indicated, all information in
this prospectus assumes or gives effect to:
| ● | no
exercise of the warrants or options described above; and |
| ● | the
Reverse Split effective on August 9, 2023. |
See “Description of Securities”
for additional information.
Summary
Consolidated Financial Information
The following tables summarize certain financial
data regarding our business and should be read in conjunction with our financial statements and related notes incorporated by reference
into this prospectus.
Our summary consolidated financial data as of
December 31, 2022 and 2021 and for the years then ended are derived from our audited consolidated financial statements incorporated by
reference into this prospectus. We derived our summary consolidated financial data as of June 30, 2023 and for the six months ended June
30, 2023 and 2022 from our unaudited condensed consolidated interim financial statements incorporated by reference into this prospectus.
All financial statements included in this prospectus
are prepared and presented in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”). The summary financial information is only a summary and should be read in conjunction
with our historical financial statements and related notes. Our financial statements fully represent our financial condition and operations;
however, they are not indicative of our future performance.
| |
Six Months | | |
Six Months | | |
| | |
| |
| |
Ended | | |
Ended | | |
Year Ended | | |
Year Ended | |
| |
June 30, 2023 | | |
June 30, 2022 | | |
December 31, 2022 | | |
December 31, 2021 | |
| |
(Unaudited) | | |
(Unaudited) | | |
| | |
| |
| |
| | |
| | |
| | |
| |
Revenue | |
$ | 4,513,354 | | |
$ | 1,802,502 | | |
$ | 6,481,910 | | |
$ | 7,545,488 | |
Cost of sales | |
| (3,212,347 | ) | |
| (1,438,778 | ) | |
| (5,092,011 | ) | |
| (5,677,317 | ) |
Gross profit | |
| 1,301,007 | | |
| 363,724 | | |
| 1,389,899 | | |
| 1,868,171 | |
| |
| | | |
| | | |
| | | |
| | |
EXPENSES | |
| | | |
| | | |
| | | |
| | |
Amortization and depreciation | |
| 855,139 | | |
| 459,924 | | |
| 1,142,165 | | |
| 1,008,321 | |
Development expenses | |
| 85,450 | | |
| 263,370 | | |
| 339,828 | | |
| 846,242 | |
Selling and marketing | |
| 2,041,168 | | |
| 2,208,726 | | |
| 4,723,309 | | |
| 4,504,992 | |
General and administrative (Note 10) | |
| 3,095,812 | | |
| 3,510,661 | | |
| 7,435,016 | | |
| 4,932,450 | |
Inventory impairment | |
| - | | |
| 303,316 | | |
| 813,205 | | |
| 3,087,999 | |
Loss from water damage | |
| - | | |
| - | | |
| 544,967 | | |
| - | |
Bad debts | |
| 10,148 | | |
| 63,285 | | |
| 86,103 | | |
| 930,971 | |
Impairment of intangibles | |
| - | | |
| - | | |
| - | | |
| 4,739,286 | |
Impairment of goodwill | |
| - | | |
| - | | |
| - | | |
| 852,037 | |
Share-based payments | |
| 571,533 | | |
| 1,939,035 | | |
| 2,888,704 | | |
| 1,338,931 | |
Total operating expenses | |
| (6,659,250 | ) | |
| (8,748,317 | ) | |
| (17,973,297 | ) | |
| (22,241,229 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net operating loss | |
| (5,358,243 | ) | |
| (8,384,593 | ) | |
| (16,583,398 | ) | |
| (20,373,058 | ) |
| |
| | | |
| | | |
| | | |
| | |
OTHER EXPENSES | |
| | | |
| | | |
| | | |
| | |
Finance expense | |
| 75,349 | | |
| 45,726 | | |
| 181,413 | | |
| 1,984,040 | |
Foreign exchange loss (gain) | |
| (78,599 | ) | |
| 19,168 | | |
| 586,794 | | |
| 108,632 | |
Change in fair value of convertible promissory note | |
| - | | |
| 3,250,848 | | |
| 4,794,710 | | |
| 295,492 | |
Change in fair value of warrant liability | |
| 1,856,623 | | |
| (4,482,585 | ) | |
| (8,245,662 | ) | |
| (390,322 | ) |
Transaction costs | |
| - | | |
| 965,247 | | |
| 1,398,598 | | |
| 1,254,642 | |
Total other expenses | |
| (1,853,373 | ) | |
| (201,596 | ) | |
| 1,284,147 | | |
| (3,252,484 | ) |
Net loss for the year | |
| (7,211,616 | ) | |
| (8,182,997 | ) | |
| (15,299,251 | ) | |
| (23,625,542 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other comprehensive income | |
| | | |
| | | |
| | | |
| | |
Translation adjustment | |
| - | | |
| 1,518 | | |
| 137,609 | | |
| 138,764 | |
| |
| | | |
| | | |
| | | |
| | |
Comprehensive loss for the year | |
$ | (7,211,616 | ) | |
$ | (8,181,479 | ) | |
$ | (15,161,642 | ) | |
$ | (23,486,778 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares (before the 100-1 reverse split) | |
| 68,257,292 | | |
| 13,805,757 | | |
| 20,912,391 | | |
| 4,849,250 | |
Basic and diluted loss per share (before the 100-1 reverse split) | |
$ | (0.11 | ) | |
$ | (0.59 | ) | |
$ | (0.73 | ) | |
$ | (4.87 | ) |
Weighted average shares (after the 100-1 reverse split) | |
| 682,573 | | |
| 138,058 | | |
| 209,124 | | |
| 48,493 | |
Basic and diluted loss per share (before the 100-1 reverse split) | |
$ | (10.57 | ) | |
$ | (59.27 | ) | |
$ | (73.16 | ) | |
$ | (487.19 | ) |
| |
As of | | |
As of | | |
As of | |
Balance Sheet Data | |
June-23 | | |
31-Dec-22 | | |
31-Dec-21 | |
| |
(unaudited) | | |
| | |
| |
Cash and cash equivalents | |
$ | 2,026,640 | | |
$ | 1,913,742 | | |
$ | 1,619,742 | |
Total current assets | |
| 7,839,759 | | |
| 7,910,276 | | |
| 6,186,073 | |
Total assets | |
| 16,577,570 | | |
| 16,142,531 | | |
| 12,050,589 | |
Total current liabilities | |
| 4,098,866 | | |
| 6,266,842 | | |
| 6,855,046 | |
Total liabilities | |
| 4,583,164 | | |
| 6,902,059 | | |
| 9,563,941 | |
Total shareholders’ equity | |
| 11,994,406 | | |
| 9,240,472 | | |
| 2,486,648 | |
Total liabilities and shareholders’ equity | |
| 16,577,570 | | |
| 16,142,531 | | |
| 12,050,589 | |
RISK FACTORS
An investment in our securities involves a
high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this prospectus,
before purchasing our securities. We have listed below (not necessarily in order of importance or probability of occurrence) what we believe
to be the most significant risk factors applicable to us, but they do not constitute all of the risks that may be applicable. Any of the
following factors could harm our business, financial condition, results of operations or prospects, and could result in a partial or complete
loss of your investment. Some statements in this prospectus, including statements in the following risk factors, constitute forward-looking
statements. Please refer to the section titled “Cautionary Statement Regarding Forward-Looking Statements.”
Risks Related to Our Financial Position and
Capital Requirements
We have a history of operating losses,
and we may never achieve or maintain profitability.
We have a limited operating
history and a history of losses from operations. As of December 31, 2022 and June 30, 2023, we had an accumulated deficit of $77,818,663
and $85,030,279, respectively. Our existing cash and cash equivalents will be insufficient to fully fund our business plan. Our ability
to achieve profitability will depend on whether we can obtain additional capital when we need it, complete the development of our technology,
obtain required regulatory approvals and continue to develop arrangements with channel partners. There can be no assurance that we will
ever achieve profitability.
Our independent registered
public accounting firm, in its report on our financial statements for the year ended December 31, 2022, concurs with management representation
that raises doubts about our ability to continue as a going concern.
We may require
additional capital to fund our business and support our growth, and our inability to generate and obtain such capital on acceptable terms,
or at all, could harm our business, operating results, financial condition and prospects.
We intend to continue
to make substantial investments to fund our business and support our growth. In addition, we may require additional funds to respond to
business challenges, including the need to develop new features or enhance our solutions, improve our operating infrastructure or acquire
or develop complementary businesses and technologies. As a result, in addition to the revenues we generate from our business, we may need
to engage in additional equity or debt financings to provide the funds required for these and other business endeavors. If we raise additional
funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution,
and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Common Shares.
Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and
other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities,
including potential acquisitions. We may not be able to obtain such additional financing on terms favorable to us, if at all. If we are
unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our
business growth and to respond to business challenges could be significantly impaired, and our business may be adversely impacted. In
addition, our inability to generate or obtain the financial resources needed may require us to delay, scale back, or eliminate some or
all of our operations, which may have a significant adverse impact on our business, operating results and financial condition.
Our independent
registered public accountants have noted that we may not survive as a going concern.
Our independent registered public accountants
have included a “going concern” explanatory paragraph in its report on our consolidated financial statements for the fiscal
year ended December 31, 2022, concurring with management representation of expressing substantial doubt about our ability to continue
as an ongoing business for the next twelve months. Our consolidated financial statements do not include any adjustments that may result
from the outcome of this uncertainty and have thus been prepared under IFRS on a going concern basis of accounting. If we cannot secure
the financing needed to continue as a viable business, our shareholders may lose some or all of their investment in us.
Our independent
registered public accountants have identified material weaknesses in our internal controls over financial reporting in both 2022 and 2021.
If we are unable to remediate these material weaknesses, we may not be able to report our financial results accurately, prevent fraud
or file our periodic reports as a public company in a timely manner.
In connection with the
audit of our consolidated financial statements for the years ended December 31, 2022 and 2021, our independent registered public accountants
identified several material weaknesses in our internal control over financial reporting. A “material weakness” is a deficiency,
or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
In 2022, our independent
registered public accountants identified the following material weaknesses in our internal control over financial reporting. The first
material weakness related to our revenue recognition practices where we do not sufficiently review (i) product returns in relation to
product sales and (ii) for title transfer terms to determine when revenue should be recorded. The second material weakness related to
insufficient documentation of inventory controls relating to our inventory balances, advances to suppliers, and off-site inventory tracking
is limited. The third material weakness related to internal control weaknesses in the capitalization and coordination of development costs
to prevent excess payments and erroneously recorded invoices.
For the material weaknesses
identified in our 2022 audit, we have taken steps to remediate these material weaknesses, and to further strengthen our accounting staff
and internal controls, as detailed below:
| ● | With
respect to the revenue recognition practices, management will consistently apply of IFRS15 with respect to the five criterion for revenue
recognition, In addition, management will institute peer review of North American sales by the Israeli subsidiary’s chief financial
officer and peer review by Company’s Chief Financial Officer of Israeli sales recognition policy on a quarterly basis and engage
in dialogue on new customers to ensure the revenue recognition policy and the customer contracts are consistently applied. |
| ● | With
respect to the inventory control weaknesses, management will institute the following remediation procedures: |
| ● | Monthly
comparison of inventory first and last cost in USD$ between periods to note any changes and to investigate the reason for these discrepancies
to provide a more accurate quantum of write downs and consistent costing. |
| ● | The
implementation of an IT system to track the inventory movements in North America; |
| ● | Monthly
comparison of inventory units between periods to note any changes and to investigate the reason for any inconsistencies. |
| ● | Obtain
confirmation of goods in transit with external vendors and consignment customers on a more timely basis. |
| ● | With
respect to the development cost weaknesses, the research and development team will be required to approve all invoices from the R&D
sub-contractor and ensure they fall within the budget to ensure the amounts capitalized are not in excess of the original budget with
its discounted cash flows. Once the R&D team has approved the invoice based on the above criteria, the Company’s Chief Executive
Officer will review the documentation and once approved, will forward said documentation to the Company’s Chief Financial Officer
in Canada for wire initiation. |
In 2021, our independent
registered public accountants identified the following material weaknesses in our internal control over financial reporting. The first
material weakness related to the insufficient review of inventory balances for products which are slow-moving. The second material weakness
related to the insufficient review of advances to suppliers on products that are no longer selling, the third material weakness relates
to insufficient controls surrounding off-site inventory tracking. The fourth material weakness related to insufficient review of whether
product returns relate to sales recorded in the fiscal year. The fifth material weakness relates to insufficient review of title transfer
terms to determine the period in which revenue should be recorded.
For the material weaknesses
identified in our 2021 audit, we have taken steps to remediate these material weaknesses, and to further strengthen our accounting staff
and internal controls, as detailed below:
| ● | On
a quarterly basis, the Company now reviews inventory on hand for slow moving merchandise and reviews inventory on hand regularly. For
the year ended 2021, it was determined that $4,659,648 (2020- $1,571,649) of the inventory was impaired due to slow movement. The accessories
and spare parts related to these products amounted to $839,693 (2020 - $316,000), which was also impaired. |
| ● | The
Company now reviews quantities on hand before approving purchase orders. |
| ● | As
of April 1, 2022, the Company signed a lease for their own exclusive warehouse space so that outside contract warehouses will not be
required. |
| ● | The
Company now reviews product returns to compare and ensure that they occur in the same fiscal year. |
| ● | The
Company’s controller scrutinizes all revenues earned in the period to ensure compliance with IFRS15. |
| ● | The
Company’s controller and CFO in Canada coordinates full scheduling of the year end process to ensure timely close off of accounting
periods. |
To date, we have only partially remediated the
material weaknesses identified in 2022 and 2021 above. We cannot be certain that other material weaknesses and control deficiencies will
not be discovered in the future. If our efforts are not successful or other material weaknesses or control deficiencies occur in the future,
we may be unable to report our financial results accurately on a timely basis or help prevent fraud, which could cause our reported financial
results to be materially misstated and result in the loss of investor confidence or delisting and cause the market price of our Common
Shares to decline.
We began to take steps to remediate these material
weaknesses and strengthen our internal control over financial reporting, including the following:
| (i) | documenting
and formally assessing our accounting and financial reporting policies and procedures; and |
| (ii) | increasing
the use of third-party consultants in assessing significant accounting transactions and other technical accounting and financial reporting
issues, preparing accounting memoranda addressing these issues and maintaining these memoranda in our corporate records. |
While we believe that these efforts will improve
our internal control over financial reporting, the implementation of these measures is ongoing and will require validation and testing
of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. We cannot assure
you that the measures we have taken to date, and are continuing to implement, will be sufficient to maintain effective internal control
over financial reporting. Accordingly, there could continue to be a reasonable possibility that a misstatement of our accounts or disclosures
would result in a material misstatement of our financial statements that would not be prevented or detected on a timely basis.
Risks Related to Our Business and Industry
We rely on our
channel partners to generate a substantial majority of our revenues. If these channel partners fail to perform or if we cannot enter into
agreements with channel partners on favorable terms, our operating results could be significantly harmed.
More than 49%, 54% and
44% of our revenues for the years ended December 31, 2022 and 2021 and for the six months ended June 30, 2023, were generated through
sales by our channel partners, which are primarily wireless carriers who sell our devices through their sales channels. To the extent
our channel partners are unsuccessful in selling or do not promote our products, or we are unable to obtain and retain a sufficient number
of high-quality channel partners, our business and operating results could be significantly harmed. Our channel partners are wireless
carriers who have direct and indirect sales channels which we are leveraging to get to their customers. Our wireless carrier channel partners
currently include:
| ● | AT&T,
in the United States; |
| ● | FirstNet,
in the United States; |
| ● | Verizon,
in the United States; |
| ● | T-Mobile,
in the United States; |
| ● | Bell
Mobility, in Canada; |
| ● | a
leading global land mobile radio, or LMR, vendor and distributor in North America and international markets. |
While these arrangements
are typically long term, they generally do not contain any firm purchase volume commitments. As a result, our channel partners are not
contractually obligated to purchase from us any minimum number of products. We are generally required to satisfy any and all purchase
orders delivered to us within specified delivery windows, with limited exceptions (such as orders significantly in excess of forecasts).
If we are unable to efficiently manage our supply and satisfy purchase orders on a timely basis to our channel partners, we may be in
breach of our sales arrangements and lose potential sales. If a technical issue with any of our covered products exceeds certain present
failure thresholds for the relevant performance standard or standards, the channel partner typically has the right to cease selling the
product, cancel open purchase orders and levy certain monetary penalties. If our products suffer technical issues or failures following
sales to our channel partners, we may be subject to significant monetary penalties and our channel partners may cease making purchase
orders, which would significantly harm our business and results of operations. In addition, our channel partners retain sole discretion
in which of their stocked products to offer their customers. While we may offer limited customer incentives, we generally have limited
to no control over which products our channel partners decide to offer or promote, which directly impacts the number of products that
our partners will purchase from us.
In addition, our channel
partners may be unsuccessful in marketing, selling and supporting our solutions. They may also market, sell and support solutions that
are somewhat competitive with ours, and may devote more resources to the marketing, sales and support of such products. They may have
incentives to promote our competitors’ products in lieu of our products, particularly for our bigger competitors with larger volumes
of orders, more diverse product offerings and a longer relationship with our generally large-scale channel partners. As a result, our
channel partners may stop selling our products completely. While we employ a small direct sales force, our channel partners have significantly
larger sales teams who are not contractually obligated to promote any of our devices and often have multiple competing devices in stock
to offer their customers. In addition, downstream sales by our channel partners often succeed due to attractive device prices and monthly
rate plans, which we do not control. In certain cases, we may promote our own devices through customer incentives, however, there can
be no assurance that any such incentives would contribute to increased purchases of our products. Further, given the impact of attractive
pricing on ultimate sales, we generally must offer increased promotional funding or price reductions for our more expensive products.
This promotional funding or price reductions operate to reduce our margins and significantly impact our profitability.
New sales channel partners
may take several months or more to achieve significant sales. Our channel partner sales structure could subject us to lawsuits, potential
liability and reputational harm if, for example, any of our channel partners misrepresents the functionality of our products or services
to their customers or violate laws or our corporate policies.
If we fail to effectively
manage our existing or future sales channel partners, our channel partners fail to promote our products effectively, we are unable to
meet our obligations under our sales arrangements or future agreements that we may enter into with wireless carrier customers have terms
that are more favorable to the customer, our business and results of operations would be harmed.
We are materially
dependent on the adoption of our solutions by both the industrial enterprise and public sector markets, and if end customers in those
markets do not purchase our solutions, our revenues will be adversely impacted, and we may not be able to expand into other markets.
Our revenues have been
primarily in the industrial enterprise market, and we are materially dependent on the adoption of our solutions by both the industrial
enterprise and public sector markets. End customers in the public sector market may remain, for reasons outside our control, tied to LMR
solutions or other competitive alternatives to our devices. Sales of our products to these buyers may also be delayed or limited by these
competitive conditions. If our products are not widely accepted by buyers in those markets, we may not be able to expand sales of our
products into new markets, and our business, results of operations and financial condition may be adversely impacted.
We participate
in a competitive industry, which may become more competitive. Competitors with greater resources and significant experience in high-volume
product manufacturing may be able to respond more quickly and cost-effectively than we can to new or emerging technologies and changes
in customer requirements.
We face significant competition
in developing and selling our solutions. Our primary competitors in the non-rugged mobile device market include LG Corporation, Apple
Inc. and Samsung Electronics Co. Ltd. Our primary competitors in the rugged mobile device market include Sonim Technologies Inc., Bullitt
Mobile Ltd., and Kyocera Corporation. We also face competition from large system integrators and manufacturers of private and public wireless
network equipment and devices. Competitors in this space include Harris Corporation, JVC KENWOOD Corporation, Motorola, and Tait International
Limited. Within the Cellular Booster category, we have several direct competitors, including Wilson Electronics, LLC, or Wilson Electronics,
Nextivity, Inc. and SureCall Company.
We cannot assure you
that we will be able to compete successfully against current or future competitors. Increased competition in mobile computing platforms,
data capture products, or related accessories and software developments may result in price reductions, lower gross profit margins, and
loss of market share, and could require increased spending on research and development, sales and marketing, and customer support. Some
competitors may make strategic acquisitions or establish cooperative relationships with suppliers or companies that produce complementary
products, which may create additional pressures on our competitive position in the marketplace.
Most of our competitors
have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales,
marketing and other resources and experience than we do. In addition, because of the higher volume of components that many of our competitors
purchase from their suppliers, they are able to keep their supply costs relatively low and, as a result, may be able to recognize higher
margins on their product sales than we do. Many of our competitors may also have existing relationships with the channel partners who
we use to sell our products, or with our potential customers. This competition may result in reduced prices, reduced margins and longer
sales cycles for our products. Our competitors may also be able to more quickly and cost-effectively respond to new or emerging technologies
and changes in customer requirements. The combination of brand strength, extensive distribution channels and financial resources of the
larger vendors could cause us to lose market share and could reduce our margins on our products. If any of our larger competitors were
to commit greater technical, sales, marketing and other resources to our markets, our ability to compete would be adversely impacted.
If we are unable to successfully compete with our competitors, our sales will suffer and as a result our financial condition will be adversely
impacted.
Defects in our
products could reduce demand for our products and result in a loss of sales, delay in market acceptance and injury to our reputation,
which would adversely impact our business.
Complex software, as
well as multiple components, displays, plastics and assemblies used in our products may contain undetected defects that are subsequently
discovered at any point in the life of the product. Defects in our products may result in a loss of sales, product malfunction, delay
in market acceptance and potential injuries to our customers which can lead to injury in our reputation and increased warranty costs.
Additionally, our software
may contain undetected errors, defects or bugs. Although we have not suffered significant harm from any errors, defects or bugs to date,
we may discover significant errors, defects, or bugs in the future that we may not be able to correct or correct in a timely manner. It
is possible that errors, defects or bugs will be found in our existing or future software and/or hardware products and related services
with the potential for delays in, or loss of market acceptance of, our products and services, diversion of our resources, injury to our
reputation, increased service and warranty expenses, and payment of damages.
Further, errors, defects
or bugs in our solutions could be exploited by hackers or could otherwise result in an actual or perceived breach of our information systems.
Alleviating any of these problems could require significant expense and could cause interruptions, delays or cessation of our product
licensing, which would reduce demand for our products and result in a loss of sales, delay in market acceptance and injure our reputation
and could adversely impact our business, results of operations and financial condition.
If our business
does not grow as we expect, or if we fail to manage our growth effectively, our operating results and business would suffer.
Our ability to successfully grow our business
depends on a number of factors including our ability to:
| ● | accelerate
the adoption of our solutions by new end customers; |
| ● | expand
into new vertical markets; |
| ● | develop
and deliver new products and services; |
| ● | increase
awareness of the benefits that our solutions offer; and |
| ● | expand
our domestic and international footprint. |
As usage of our solutions
grows, we will need to continue to make investments to develop and implement new or updated solutions, software, technologies, security
features and cloud-based infrastructure operations. In addition, we will need to appropriately scale our internal business systems and
our services organization, including the suppliers of our products and customer support services, to serve our growing customer base.
Any failure of, or delay in, these efforts could impair the performance of our solutions and reduce customer satisfaction.
Further, our growth could
increase quickly and place a strain on our managerial, operational, financial and other resources, and our future operating results depend
to a large extent on our ability to successfully manage our anticipated expansion and growth. To manage our growth successfully, we will
need to continue to invest in sales and marketing, research and development, and general and administrative functions and other areas.
We are likely to recognize the costs associated with these investments earlier than receiving some of the anticipated benefits, and the
return on these investments may be lower, or may develop more slowly, than we expect, which could adversely impact our operating results.
If we are unable to manage
our growth effectively, we may not be able to take advantage of market opportunities or develop new solutions or upgrades to our existing
solutions, satisfy customer requirements, maintain the quality and security of our solutions or execute on our business plan, any of which
could harm our business, operating results and financial condition.
We may not be able
to continue to develop solutions to address user needs effectively in an industry characterized by ongoing change and rapid technological
advances.
To be successful, we
must adapt to rapidly changing technological and application needs by continually improving our products, as well as introducing new products
and services, to address user demands.
Our industry is characterized by:
| ● | evolving
industry standards; |
| ● | frequent
new product and service introductions; |
| ● | increasing
demand for customized product and software solutions; |
| ● | rapid
competitive developments; |
| ● | changing
customer demands; and |
| ● | evolving
distribution channels. |
Future success will depend
on our ability to effectively and economically adapt in this evolving environment. We could incur substantial costs if we must modify
our business to adapt to these changes and may even be unable to adapt to these changes.
The markets for
our devices and related accessories may not develop as quickly as we expect or may not develop at all. Our dependence on our cellular
carrier channel partners and their success in promoting Push to Talk over Cellular to their client base is key for the success of the
business.
Our future success is
substantially dependent upon continued adoption of devices and related accessories in the industrial enterprise and public sector markets,
including the transition from LMR to Push to Talk over Cellular and LTE networks. These market developments and transitions may take longer
than we expect or may not occur at all and may not be as widespread as we expect. If the market does not develop as we expect, our business,
operating results and financial condition would be significantly harmed.
Our future success
is dependent on our ability to create independent brand awareness for our company and products with end customers, and our inability to
achieve such brand awareness could limit our prospects.
We depend on wireless
carriers to promote and distribute our products. While we intend to ramp up direct marketing and end-customer brand awareness initiatives
in the future, our sales and marketing efforts have historically been predominantly focused on channel partners. To increase end-customer
brand awareness, we intend to develop sales tools for key verticals within our target markets, increase usage of social media and expand
product training efforts, among other things. As a result, we expect our sales and marketing expenses to increase in the future, primarily
from increased sales personnel expenses, which will require us to cost-efficiently ramp up our sales and marketing capabilities and effectively
target end customers. However, there can be no assurance that we will successfully increase our brand awareness or do so in a cost-efficient
manner while maintaining market share within our existing sales channels. Our failure to establish stand-alone brand awareness with end
customers of our products will leave us vulnerable to the marketing and selling success of others, including our channel partners, and
these developments could have an adverse impact on our prospects. If we are unable to significantly increase the awareness of our brand
and solutions with end customers in a cost-efficient manner, we will remain significantly dependent on our channel partners for sales
of our products, and our business, financial condition and results of operations could be adversely impacted.
We are dependent
on the continued services and performance of a concentrated group of senior management and other key personnel, the loss of any of whom
could adversely impact our business.
Our future success depends
in large part on the continued contributions of a concentrated group of senior management and other key personnel. In particular, the
leadership of key management personnel is critical to the successful management of our company, the development of our solutions and our
strategic direction. We also depend on the contributions of key technical personnel. Our senior management and key personnel are all employed
on an at-will basis, which means that they could terminate their employment with us at any time, for any reason and without notice. The
loss of any of our key personnel could significantly delay or prevent the achievement of our development and strategic objectives and
harm our business.
We compete in a
rapidly evolving market, and the failure to respond quickly and effectively to changing market requirements could cause our business and
operating results to decline.
The mobile device market
is characterized by rapidly changing technology, changing customer needs, evolving industry standards and frequent introductions of new
products and services. In order to deliver a competitive mobile device, our solutions must be capable of operating in an increasingly
complex network environment. As new wireless phones are introduced and standards in the mobile device market evolve, we may be required
to modify our phones and services to make them compatible with these new products and standards. Likewise, if our competitors introduce
new devices and services that compete with ours, we may be required to reposition our solutions or introduce new phones and solutions
in response to such competitive pressure. We may not be successful in modifying our current devices or introducing new ones in a timely
or appropriately responsive manner, or at all. If we fail to address these changes successfully, our business and operating results could
be significantly harmed.
If we are unable
to sell our solutions into new markets, our revenues may not grow.
Any new market into which
we attempt to sell our solutions may not be receptive. Our ability to penetrate new markets depends on the quality of our solutions, the
continued adoption of our public safety solution by first responders, the perceived value of our solutions as a risk management tool and
our ability to design our solutions to meet the demands of our customers. If the markets for our solutions do not develop as we expect,
our revenues may not grow.
Our ability to successfully
face these challenges depends on several factors, including increasing the awareness of our solutions and their benefits, the effectiveness
of our marketing programs, the costs of our solutions, our ability to attract, retain and effectively train sales and marketing personnel,
and our ability to develop relationships with wireless carriers and other partners. If we are unsuccessful in developing and marketing
our solutions into new markets, new markets for our solutions might not develop or might develop more slowly than we expect, either of
which would harm our revenues and growth prospects.
If we are unable
to attract, integrate and retain additional qualified personnel, including top technical talent, our business could be adversely impacted.
Our future success depends
in part on our ability to identify, attract, integrate and retain highly skilled technical, managerial, sales and other personnel. We
face intense competition for qualified individuals from numerous other companies, including other software and technology companies, many
of whom have greater financial and other resources than we do. Some of these characteristics may be more appealing to high-quality candidates
than those we have to offer. In addition, new hires often require significant training and, in many cases, take significant time before
they achieve full productivity. We may incur significant costs to attract and retain qualified personnel, including significant expenditures
related to salaries and benefits and compensation expenses related to equity awards, and we may lose new employees to our competitors
or other companies before we realize the benefit of our investment in recruiting and training them. Moreover, new employees may not be
or become as productive as we expect, as we may face challenges in adequately or appropriately integrating them into our workforce and
culture. If we are unable to attract, integrate and retain suitably qualified individuals who are capable of meeting our growing technical,
operational and managerial requirements on a timely basis or at all, our business will be adversely impacted.
Volatility or lack of
positive performance in our stock price may also affect our ability to attract and retain our key employees. Many of our senior management
personnel and other key employees have become, or will soon become, vested in a substantial amount of stock or stock options. Employees
may be more likely to leave us if the shares they own or the shares underlying their vested options have significantly appreciated in
value relative to the original purchase prices of the shares or the exercise prices of the options, or, conversely, if the exercise prices
of the options that they hold are significantly above the market price of our Common Shares. If we are unable to appropriately incentivize
and retain our employees through equity compensation, or if we need to increase our compensation expenses in order to appropriately incentivize
and retain our employees, our business, operating results and financial condition would be adversely impacted.
A security breach
or other significant disruption of our IT systems or those of our partners, suppliers or manufacturers, caused by cyberattacks or other
means, could have a negative impact on our operations, sales, and operating results.
All information technology
(“IT”) systems are potentially vulnerable to damage, unauthorized access or interruption from a variety of sources, including
but not limited to, cyberattacks, cyber intrusions, computer viruses, security breaches, energy blackouts, natural disasters, terrorism,
sabotage, war, insider trading and telecommunication failures. A cyberattack or other significant disruption involving our IT systems
or those of our outsource partners, suppliers or manufacturers could result in the unauthorized release of proprietary, confidential or
sensitive information of ours or result in virus and malware installation on our devices. Such unauthorized access to, or release of,
this information or other security breaches could: (i) allow others to unfairly compete with us, (ii) compromise safety or security, (iii)
subject us to claims for breach of contract, tort, and other civil claims, and (iv) damage our reputation. Any or all of the foregoing
could have a negative impact on our business, financial condition and results of operations.
We experience lengthy
sales cycles for our products and the delay of an expected large order could result in a significant unexpected revenue shortfall.
The purchase of our products
is often an enterprise-wide decision for prospective customers, which requires us to engage in sales efforts over an extended period of
time and provide a significant level of education to prospective customers regarding the uses and benefits of such devices. Prospective
customers, especially the wireless carriers that sell our products, often undertake a prolonged evaluation process that may take from
several months to several years in certain cases. Consequently, if our forecasted sales from a specific customer are not realized, we
may not be able to generate revenues from alternative sources in time to compensate for the shortfall. The loss or delay of an expected
large order could also result in a significant unexpected revenue shortfall. Moreover, to the extent we enter into and deliver our products
pursuant to significant contracts earlier than we expected, our operating results for subsequent periods may fall below expectations.
We may spend substantial time, effort and money on our sales and marketing efforts without any assurance that our efforts will produce
any sales. If we are unable to succeed in closing sales with new and existing customers, our business, operating results and financial
condition will be harmed.
We have a limited
history of contracting with third party manufacturers in Asia for the high-volume commercial production of our devices, and we may face
manufacturing capacity constraints.
We have limited history
and experience in contracting with third party manufacturers in Asia for the high-volume commercial production of our devices. Because
of this limited production history, we face challenges in predicting our business and evaluating its prospects, which may result in breakdowns
of our ability to timely supply our devices to our customers. Moreover, we face manufacturing capacity constraints that present further
risks to our business. If overall demand of our devices increases in the future, we will need to expand our third-party manufacturing
capacity in a cost-efficient manner. Failing to meet customer demand due to our failure to successfully address these risks and challenges
could adversely impact our reputation and future sales, which would significantly harm our business, results of operations and financial
condition.
We currently purchase various components
for our devices and use a contract manufacturer for its production in China. The current hostility in US-China relations poses risks for
potential trade wars, tariffs or product bans which could negatively effect us.
Our reliance on contract-manufacturers in China
and other foreign countries could make us vulnerable to supply interruptions related to the political, legal and cultural environment
in such countries. Several components of our devices and equipment are currently manufactured by third-party manufacturers in China. In
the future, we may increase the number of third-party manufacturers we use in foreign countries and we may have third-party manufacturers
produce other products for us.
In addition to the risks related to reliance on
third-party manufactures generally, reliance on international manufacturing is subject to significant, additional risks, including, among
other things:
| ● | social, political and economic instability; |
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| ● | restrictions on transfer of funds; |
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| ● | domestic and international customs and tariffs; |
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| ● | unexpected changes in regulatory environments; and |
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| ● | potentially adverse tax consequences. |
Our business can thus also be impacted by political
events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other
business interruptions.
Political events, trade and other international
disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions can harm or disrupt
international commerce and the global economy, and could have a material adverse effect on us and our customers, suppliers, contract manufacturers,
logistics providers, distributors, and other channel partners. Trade and other international disputes can result in tariffs, sanctions,
and other measures that restrict international trade and can adversely affect the Company’s business. For example, tensions between
the U.S. and China have in the past led to a series of tariffs being imposed by the U.S. on imports from China mainland, as well as other
business restrictions, and vice-versa. Tariffs may increase the cost of our products and the components and raw materials that go into
making them. These increased costs adversely impact the gross margin that we earn on our products. Tariffs can also make our products
more expensive for customers, which could make our products less competitive and reduce consumer demand. Countries may also adopt other
measures, such as controls on imports or exports of goods, technology or data, that could adversely impact our operations and supply chain
and limit our ability to offer our products as designed. These measures can require us to take various actions, including changing suppliers,
and restructuring business relationships. Changing our operations in accordance with new or changed trade restrictions can be expensive,
time-consuming, disruptive to our operations and distracting to management. Such restrictions can be announced with little or no advance
notice and we may not be able to effectively mitigate all adverse impacts from such measures. Political uncertainty surrounding trade
and other international disputes could also have a negative effect on consumer confidence and spending, which could adversely affect our
business.
Our business is subject to the risks associated
with doing business in China.
As a result of our reliance on third-party manufacturers
and suppliers located in China, our results of operations, financial condition, and prospects are subject to a significant degree to economic,
political, and legal developments in China including government control over capital investments or changes in tax regulations that are
applicable to us. China’s economy differs from the economies of most developed countries in many respects, including with respect
to the amount of government involvement, level of development, growth rate and control of foreign exchange, and allocation of resources.
Since we rely on a third-party contract- manufacturer located in China for certain of our parts, our business is subject to the risks
associated with doing business in China, including but not limited to:
| ● | adverse
political and economic conditions, particularly those potentially negatively affecting the
trade relationship between the United States and China; |
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| ● | trade
protection measures, such as tariff increases, and import and export licensing and control
requirements; |
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| ● | potentially
negative consequences from changes in tax laws; |
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| ● | difficulties
associated with the Chinese legal system, including increased costs and uncertainties associated
with enforcing contractual obligations in China; |
| ● | historically
lower protection of intellectual property rights; |
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| ● | changes
and volatility in currency exchange rates; |
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| ● | unexpected
or unfavorable changes in regulatory requirements; and |
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| ● | difficulties
in managing foreign relationships and operations generally. |
Our financial condition and results of operations
as well as those of potential customers could be adversely affected by the Russian invasion of Ukraine, which has caused a material adverse
effect on the level of economic activity around the world, including in the markets we serve.
In February 2022, the Russian Federation
invaded Ukraine. As a result of the invasion, various nations, including the United States, have instituted economic sanctions against
the Russian Federation and Belarus and certain of their citizens. While we currently have no customers or suppliers located in Belarus,
the Russian Federation or Ukraine, nor have we experienced any supply disruptions directly related to the Russian invasion of Ukraine
as we do not knowingly source any materials originating from Belarus, the Russian Federation or Ukraine, as the war in Ukraine continues
or possibly escalates, this may lead to further disruption, instability and volatility in global markets and industries that could negatively
impact our customers, operations and our supply chain. The impact of the conflict and related sanctions on the world economy are subject
to rapid change and are difficult to predict. The war has created disruptions in the supply chain for certain of our products which, to
date, has not had a substantive impact on our operations. None of our critical raw materials are sourced from, and none of our finished
products are manufactured in, the sanctioned regions. We have no operations or other projects in that region.
We are monitoring any broader economic impact
from Russia’s invasion of Ukraine and the ongoing war between the two nations, including heightened risk of cyberattacks, increased
prices of fuel and other commodities, and potential impacts to our partners’ supply chains. Our financial condition, results of
operations, and cash flows may be materially adversely affected, but the specific impact on our financial condition, results of operations,
and cash flows is currently difficult to determine.
We rely on industry data and projections
which may prove to be inaccurate.
We obtained statistical data, market data and
other industry data and forecasts used in this prospectus from market research, publicly available information and industry publications.
These industry data, including the vehicle communications industry, include projections that are based on a number of assumptions which
have been derived from industry and government sources which we believe to be reasonable. The vehicle communications industry may not
grow at the rate projected by industry data, or at all. The failure of the industry to grow as anticipated is likely to have a material
adverse effect on our business and the market price of our Common Shares. In addition, the rapidly changing nature of the vehicle communications
industry subjects any projections or estimates relating to the growth prospects or future condition of our industries to significant uncertainties.
Furthermore, if any one or more of the assumptions underlying the industry data turns out to be incorrect, actual results may, and are
likely to, differ from the projections based on these assumptions. While we believe that the statistical data, industry data and forecasts
and market research are reliable, we have not independently verified the data.
Risks Related to our
Reliance on Third Parties
As we work with
multiple vendors for our components, if we fail to adequately forecast demand for our inventory and supply needs, we could incur additional
costs or experience manufacturing delays, which could reduce our gross margin or cause us to delay or even lose sales.
Because our production
volumes are based on a forecast of channel partner demand rather than purchase commitments from our major customers, there is a risk that
our forecasts could be inaccurate and that we will be unable to sell our products at the volumes and prices we expect, which may result
in excess inventory. We provide, and will continue to provide, forecasts of our demand to our third-party suppliers prior to the scheduled
delivery of products to our channel partners. If we overestimate our requirements, our contract manufacturers may have excess component
inventory, which could increase our costs. If we underestimate our requirements, our contract manufacturers may have inadequate component
inventory, which could interrupt the manufacturing of our products and result in delays in shipments and revenues or even lost sales or
could incur unplanned overtime costs to meet our requirements, resulting in significant cost increases. For example, certain materials
and components used to manufacture our products may reach end of life during any of our product’s life cycles, following which suppliers
no longer provide such expired materials and components. This would require us to either source and qualify an alternative component,
which could require a re-certification of the device by the wireless carriers and/or regulatory agencies or forecast product demand for
a final purchase of such materials and components that may reach end of life to ensure that we have sufficient product inventory through
a product’s life cycle. If we overestimate forecasted demand, we will hold excess end-of-life materials and components resulting
in increased costs. If we underestimate forecasted demand, we could experience delays in shipments and loss of revenues.
In addition, if we underestimate
our requirements and the applicable supplier becomes insolvent or is no longer able to timely supply our needs in a cost-efficient manner
or at all, we may be required to acquire components, which may need to be customized for our products, from alternative suppliers, including
at significantly higher costs. If we cannot source alternative suppliers and/or alternative components, we may suffer delays in shipments
or lost sales. Similarly, credit constraints at our suppliers could require us to accelerate payment of our accounts payable, impacting
our cash flow. Further, lead times for materials and components that we order vary significantly and depend on factors such as the specific
supplier, contract terms, customization needed for any particular component and demand for each component at a given time. Any such failure
to accurately forecast demand and manufacturing and supply requirements, and any need to obtain alternative supply sources, could materially
harm our business, results of operations and financial condition.
Our dependence
on third-party suppliers for key components of our products could delay shipment of our products and reduce our sales.
We depend on certain
suppliers for the delivery of components used in the assembly of our products. Our reliance on third-party suppliers creates risks related
to our potential inability to obtain an adequate supply of components and reduced control over pricing and timing of delivery of components.
In particular, we have little to no control over the prices at which our suppliers sell materials and components to us. Certain supplies
of our components are available only from a single source or limited sources and we may not be able to diversify sources in a timely manner.
We have experienced shortages in the past that have negatively impacted our results of operations and may experience such shortages in
the future.
We also do not have long-term
supply agreements with any of our suppliers. Our current contracts with certain suppliers may be cancelled or not extended by such suppliers
and, therefore, do not afford us with sufficient protection against a reduction or interruption in supplies. Moreover, in the event any
of these suppliers breach their contracts with us, our legal remedies associated with such a breach may be insufficient to compensate
us for any damages we may suffer.
Any interruption of supply
for any material components of our products, or inability to obtain required components from our third-party suppliers, could significantly
delay the production and shipment of our products and harm our revenues, profitability and financial condition.
Because we rely on a small number of channel
partners/customers for a large portion of our revenue, the loss of any of these customers would have a material adverse effect on our
operating results and cash flows.
For our fiscal years ended December 31, 2022 and
2021 and for the six months ended June 30, 2023, we derived 49%, 46% and 44% of our revenue, respectively, from five customers/channel
partners. Any termination of a business relationship with, or a significant sustained reduction in business from, one or more of these
channel partners/customers could have a material adverse effect on our operating results and cash flows.
If dedicated public
safety LTE networks are not deployed at the rate we anticipate or at all, demand for our solutions may not grow as expected.
A key part of our strategy
is to further expand the use of our solutions over dedicated LTE networks in the public safety market. If the deployment of dedicated
LTE networks is delayed or such networks are not adopted at the rate we anticipate, demand for our solutions may not develop as we anticipate,
which would have a negative effect on our revenues.
The application
development ecosystem supporting our devices and related accessories is new and evolving.
The application development
ecosystem supporting our devices and related accessories is new and evolving. Specifically, the number of application developers in the
ecosystem supporting our devices and accessories is small. If the market or the application development ecosystem does not develop, timely
or at all, demand for our products may be limited, and our business and results of operations will be significantly harmed.
Failure of our
suppliers, subcontractors, distributors, resellers, and representatives to use acceptable legal or ethical business practices, or to fail
for any other reason, could negatively impact our business.
We do not control the
labor and other business practices of our suppliers, subcontractors, distributors, resellers and third-party sales representatives, or
TPSRs, and cannot provide assurance that they will operate in compliance with applicable rules, and regulations regarding working conditions,
employment practices, environmental compliance, anti-corruption, and trademark a copyright and patent licensing. If one of our suppliers,
subcontractors, distributors, resellers, or TPSRs violates labor or other laws or implements labor or other business practices that are
regarded as unethical, the shipment of finished products to us could be interrupted, orders could be cancelled, relationships could be
terminated, and our reputation could be damaged. If one of our suppliers or subcontractors fails to procure the necessary license rights
to trademarks, copyrights or patents, legal action could be taken against us that could impact the salability of our products and expose
us to financial obligations to a third party. Any of these events could have a negative impact on our sales and results of operations.
Moreover, any failure
of our suppliers, subcontractors, distributors, resellers and TPSRs, for any reason, including bankruptcy or other business disruption,
could disrupt our supply or distribution efforts and could have a negative impact on our sales and results of operations.
Our products are
subject to risks associated with sourcing and manufacturing.
We do not own or operate
any of the manufacturing facilities for our products and rely on a concentrated number of independent suppliers to manufacture all of
the products we sell. For our business to be successful, our suppliers must provide us with quality products in substantial quantities,
in compliance with regulatory requirements, at acceptable costs and on a timely basis. Our ability to obtain a sufficient selection or
volume of merchandise on a timely basis at competitive prices could suffer as a result of any deterioration or change in our supplier
relationships or events that adversely affect our suppliers.
There can be no assurance
we will be able to detect, prevent or fix all defects that may affect our products manufactured by our suppliers. Failure to detect, prevent
or fix defects, or the occurrence of real or perceived quality or safety problems or material defects in our current and future products,
could result in a variety of consequences, including a greater number of product returns than expected from customers and our wholesale
partners, litigation, product recalls and credit, warranty or other claims, among others, which could harm our brand, results of operations
and financial condition. Such problems could hurt our brand image, which is critical to maintaining and expanding our business. Any negative
publicity or lawsuits filed against us related to the perceived quality and safety of our products could harm our brand and decrease demand
for our products.
If one or more of our
significant suppliers were to sever their relationship with us or significantly alter the terms of our relationship, including due to
changes in applicable trade policies, we may not be able to obtain replacement products in a timely manner, which could have a material
adverse effect on our business, results of operations and financial condition.
In addition, if any of
our primary suppliers fail to make timely shipments, do not meet our quality standards or otherwise fail to deliver us product in accordance
with our plans, there could be a material adverse effect on our results of operations.
Our contractors and suppliers
buy raw materials and are subject to wage rates that are oftentimes regulated by the governments of the countries in which our products
are manufactured. The raw materials used to manufacture our products are subject to availability constraints and price volatility. There
could be a significant disruption in the supply of raw materials from current sources or, in the event of a disruption, our suppliers
might not be able to locate alternative suppliers of materials of comparable quality at an acceptable price or at all. Our business is
dependent upon the ability of our unaffiliated suppliers to locate, train, employ and retain adequate personnel. Our unaffiliated suppliers
have experienced, and may continue to experience in the future, unexpected increases in work wages, whether government-mandated or otherwise.
Our suppliers may increase their pricing if their raw materials became more expensive. Our suppliers may pass the increase in sourcing
costs to us through price increases, thereby impacting our margins. Material changes in the pricing practices of our suppliers could negatively
impact our profitability.
In addition, we cannot
be certain that our unaffiliated suppliers will be able to fill our orders in a timely manner. If we experience significant increases
in demand, or reductions in the availability of materials, or need to replace an existing supplier, there can be no assurance additional
supplies of raw materials or additional manufacturing capacity will be available when required on terms acceptable to us, or at all, or
that any supplier would allocate sufficient capacity to us in order to meet our requirements. In addition, even if we are able to expand
existing or find new manufacturing or sources of materials, we may encounter delays in production and added costs as a result of the time
it takes to train suppliers in our methods, products, quality control standards and labor, health and safety standards. Any delays, interruption
or increased costs in labor or wages, or the supply of materials or manufacture of our products, could have an adverse effect on our ability
to meet wholesale partner and customer and consumer demand for our products and result in lower revenue and net income both in the short
and long term.
Events that adversely
impact our suppliers could impair our ability to obtain adequate and timely supplies. Such events include, among others, difficulties
or problems associated with our suppliers’ business, the financial instability and labor problems of suppliers, merchandise quality
and safety issues, natural or man-made disasters, inclement weather conditions, war, acts of terrorism and other political instability,
economic conditions, transportation delays and shipment issues. Our suppliers may be forced to reduce their production, shut down their
operations or file for bankruptcy. Our suppliers may consolidate, increasing their market power. The occurrence of one or more of these
events could impact our ability to get products to our customers and/or wholesale partners, result in disruptions to our operations, increase
our costs and decrease our profitability.
Global sourcing and foreign
trade involve numerous factors and uncertainties beyond our control, including:
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Our sourcing operations may also be hurt by health
concerns regarding the outbreak of viruses, widespread illness, infectious diseases, contagions and the occurrence of unforeseen epidemics
(including the outbreak of the novel Coronavirus (Covid-19) and its potential impact on our financial results) in countries in which our
merchandise is produced. Moreover, negative press or reports about internationally manufactured products may sway public opinion, and
thus customer confidence, away from our products. Furthermore, changes in U.S. trade policies, including new restrictions, tariffs or
other changes could lead to additional costs, delays in shipments, embargos and other uncertainties that could negatively impact our relationships
with our international suppliers and materially adversely affect our business. These and other issues affecting our international suppliers
or internationally manufactured merchandise could have a material adverse effect on our business, results of operations and financial
condition.
In addition, some of
our suppliers may not have the capacity to supply us with sufficient merchandise to keep pace with our growth plans, especially if we
need significantly greater amounts of inventory. In such cases, our ability to pursue our growth strategy will depend in part upon our
ability to develop new supplier relationships.
The nature of our
business may result in undesirable press coverage or other negative publicity, which would adversely impact our brand identity, future
sales and results of operations.
Our solutions are used
to assist law enforcement and other public safety personnel in situations involving public safety. The incidents in which our solutions
are deployed may involve injury, loss of life and other negative outcomes, and such events are likely to receive negative publicity. Such
negative publicity could have an adverse impact on new sales or renewals or expansions of coverage areas by existing customers, which
would adversely impact our financial results and business.
Changes in the
availability of federal funding to support local public safety or other public sector efforts could impact our opportunities with public
sector end customers.
Many of our public sector
end customers rely to some extent on funds from the U.S. federal government in order to purchase and pay for our solutions. Any reduction
in federal funding for local public safety or other public sector efforts could result in our end customers having less access to funds
required to continue, renew, expand or pay for our solutions. For example, changes in policies with respect to “sanctuary cities”
may result in a reduction in federal funds available to our current or potential end customers. Additionally, any future U.S. government
shutdowns could result in delayed public safety spending or re-allocation of funding into other areas of public safety. If federal funding
is reduced or eliminated and our end customers cannot find alternative sources of funding to purchase our solutions, our business will
be harmed.
Economic uncertainties
or downturns, or political changes, could limit the availability of funds available to our customers and potential customers, which could
significantly adversely impact our business.
Current or future economic
uncertainties or downturns could adversely impact our business and operating results. Negative conditions in the general economy both
in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, changes in general
interest rates, decisions of central banks, financial and credit market fluctuations, political deadlock, natural catastrophes, warfare
and terrorist attacks in North America, Europe, the Asia Pacific region or elsewhere, could cause a decrease in funds available to our
customers and potential customers and negatively affect the growth rate of our business.
These economic conditions
may make it extremely difficult for our customers and us to forecast and plan future budgetary decisions or business activities accurately,
and they could cause our customers to re-evaluate their decisions to purchase our solutions, which could delay and lengthen our sales
cycles or result in cancellations of planned purchases. Furthermore, during challenging economic times or as a result of political changes,
our customers may tighten their budgets and face constraints in gaining timely access to sufficient funding or other credit, which could
result in an impairment of their ability to make timely payments to us. In turn, we may be required to increase our allowance for doubtful
accounts, which would adversely impact our financial results.
We cannot predict the
timing, strength or duration of any economic slowdown, instability or recovery, generally or within any particular industry, or the impact
of political changes. If the economic conditions of the general economy or industries in which we operate worsen from present levels,
or if recent political changes result in less funding being available to purchase our solutions, our business, operating results and financial
condition could be adversely impacted.
Natural or man-made
disasters and other similar events may significantly disrupt our business, and negatively impact our operating results and financial condition.
Any of our facilities
may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes, tornadoes, hurricanes, wildfires, floods,
nuclear disasters, acts of terrorism or other criminal activities, infectious disease outbreaks, and power outages, which may render it
difficult or impossible for us to operate our business for some period of time. Our facilities would likely be costly to repair or replace,
and any such efforts would likely require substantial time. Any disruptions in our operations could negatively impact our business and
operating results, and harm our reputation. In addition, we may not carry business insurance or may not carry sufficient business insurance
to compensate for losses that may occur. Any such losses or damages could have a significant adverse impact on our business, operating
results and financial condition. In addition, the facilities of significant vendors may be harmed or rendered inoperable by such natural
or man-made disasters, which may cause disruptions, difficulties or significant adverse impact on our business.
We are exposed
to risks associated with strategic acquisitions and investments.
We may consider strategic
acquisitions of companies with complementary technologies or intellectual property in the future. Acquisitions hold special challenges
in terms of successful integration of technologies, products, services and employees. We may not realize the anticipated benefits of these
acquisitions or the benefits of any other acquisitions we have completed or may complete in the future, and we may not be able to incorporate
any acquired services, products or technologies with our existing operations, or integrate personnel from the acquired businesses, in
which case our business could be harmed.
Acquisitions and other
strategic decisions involve numerous risks, including:
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adverse impacts on existing business relationships with suppliers and customers; |
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cannibalization of revenues as customers may seek multi-product discounts; |
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risks associated with entering into markets in which we have no, or limited, prior experience; |
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incurrence of significant restructuring charges if acquired products or technologies are unsuccessful; |
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significant diversion of management’s attention from our core business and diversion of key employees’ time and resources; |
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licensing, indemnity or other conflicts between existing businesses and acquired businesses; |
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potential loss of our key employees or the key employees of an acquired organization or as a result of discontinued businesses. |
Financing for future
acquisitions may not be available on favorable terms, or at all. If we identify an appropriate acquisition candidate for any of our businesses,
we may not be able to negotiate the terms of the acquisition successfully, finance the acquisition or integrate the acquired business,
products, service offerings, technologies or employees into our existing business and operations. Future acquisitions and divestitures
may not be well-received by the investment community, which may cause the value of our stock to fall. We cannot ensure that we will be
able to identify or complete any acquisition, divestiture or discontinued business in the future. Further, the terms of our indebtedness
constrain our ability to make and finance additional acquisitions or divestitures.
If we acquire businesses,
new products, service offerings or technologies in the future, we may incur significant acquisition-related costs. In addition, we may
be required to amortize significant amounts of finite-lived intangible assets and we may record significant amounts of goodwill or indefinite-lived
intangible assets that would be subject to testing for impairment. We have in the past and may in the future be required to write off
all or part of the intangible assets or goodwill associated with these investments that could harm our operating results. If we consummate
one or more significant future acquisitions in which the consideration consists of stock or other securities, our existing stockholders’
ownership could be significantly diluted. If we were to proceed with one or more significant future acquisitions in which the consideration
included cash, we could be required to use a substantial portion of our cash and investments. Acquisitions could also cause operating
margins to fall depending on the businesses acquired.
Our strategic investments
may involve joint development, joint marketing, or entry into new business ventures, or new technology licensing. Any joint development
efforts may not result in the successful introduction of any new products or services by us or a third party, and any joint marketing
efforts may not result in increased demand for our products or services. Further, any current or future strategic acquisitions and investments
by us may not allow us to enter and compete effectively in new markets or enhance our business in our existing markets and we may have
to impair the carrying amount of our investments.
We could be adversely impacted by changes
in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters.
International Financial
Reporting Standards and related accounting pronouncements, implementation guidelines, and interpretations with regard to a wide range
of matters that are relevant to our businesses, including, but not limited to, revenue recognition, asset impairment, inventories, customer
rebates and other customer consideration, tax matters, and litigation and other contingent liabilities are highly complex and involve
many subjective assumptions, estimates and judgments. Changes in these rules or their interpretation or changes in underlying assumptions,
estimates or judgments could significantly change our reported or expected financial performance or financial condition. New accounting
guidance may also require systems and other changes that could increase our operating costs and/or change our financial statements. For
example, implementing future accounting guidance related to revenue, accounting for leases and other areas could require us to make significant
changes to our accounting systems, impact existing debt agreements and result in adverse changes to our financial statements.
Risks Related to
Government Regulation
The impact of potential
changes in customs, tariffs, and trade policies in the United States and the potential corresponding actions by other countries, including
recent trade initiatives announced by the U.S. presidential administration against China, in which we do business could adversely impact
our financial performance.
The U.S. government has
made proposals that are intended to address trade imbalances, which include encouraging increased production in the United States. These
proposals could result in increased customs duties and tariffs, and the renegotiation of some U.S. trade agreements. We import a significant
percentage of our products into the United States, and an increase in customs duties and tariffs with respect to these imports could negatively
impact our financial performance. If such customs duties and tariffs are implemented, it also may cause U.S. trading partners to take
actions with respect to U.S. imports or U.S. investment activities in their respective countries. Any potential changes in trade policies
in the United States and the potential corresponding actions by other countries in which we do business could adversely impact our financial
performance. Given the level of uncertainty over which provisions will be enacted, we cannot predict with certainty the impact of the
proposals.
For example, in 2018,
the U.S. presidential administration and Chinese government imposed significant tariffs on exports between the two countries. This evolving
policy dispute between China and the United States is likely to have significant impact on the industries in which we participate, directly
and indirectly, and no assurance can be given that any individual customer or significant groups of companies or a particular industry,
will not be adversely impacted by any governmental actions taken by either China or the United States. In addition, we manufacture our
mobile phones at our facility in Shenzhen, China, which could result in significant additional costs to us when shipping our products
to various customers in the United States. It is not possible to predict with any certainty the outcome of the trade dispute between the
United States and China, and prolonged or increased tariffs on imports from China to the United States would adversely impact our business,
results of operations and financial condition.
In 2020, a Phase One
trade agreement was signed imposing specific targets for Chinese purchases of various exports from the United States. These ambitious
commitments specified numerical targets in U.S. goods and services exports to China for increases of $77 billion in 2020 and $123 billion
in 2021 from the 2017 baseline. The Phase One agreement also imposed numerous tariffs on a variety of goods including but not limited
to imports from China along with steel and aluminum imports from across the world, creating an upward pressure on prices in the United
States. These tariffs currently impact over $350 billion of imports and exports and increase consumer costs by roughly $51 billion annually
based on 2021 import levels. The uncertainty of the Phase One deal, unilaterally imposed in 2020 and substantially still in effect today,
lie in their conditions. For instance, Section 301 enables the president to impose tariffs or quotas wherever the United States Trade
Representative (USTR) finds that other nations are engaging in unfair trade practices and Section 232 allows the president to impose trade
barriers if the Department of Commerce finds that imports threaten U.S. national security. The Company will be unable to pre-empt decisions
of this nature, and as such, the risks and consequences which accompany them.
In 2021, the U.S. presidential
administration signed Executive Order 14017 into order, assessing vulnerabilities in four priority product areas: semiconductors, large
capacity batteries, critical minerals and materials, and pharmaceuticals and active pharmaceutical ingredients. Executive Order 14017
established an interagency Supply Chain Trade Task Force led by USTR. This task force was directed to identify foreign trade practices
that the U.S. deemed unfair or otherwise determined to cause erosion to U.S. critical supply chains. The impact and decisions of this
task force may cause consequential action from other trading partners, potentially impacting the Company’s financial performance.
Later in 2021 and into
2022, the U.S. Administration replaced the Section 232 tariffs on steel and aluminum imports from the EU with a tariff rate quota system
(TRQ), replaced the Section 232 tariffs on steel imports from Japan with a TRQ (the Section 232 aluminum imports from Japan are still
in effect) and, as of March 2022, replaced the Section 232 tariffs on steel and aluminum imports from the UK with a TRQ. To date,
the US Administration has kept in place all of the Section 301 tariffs on Chinese imports, which might influence importers to shift away
from China and reorganize supply chains or otherwise cause decreased trade altogether – both imports and exports – raising
prices and reducing options for consumers and businesses in the U.S. While a number of exclusions and extensions to these tariffs exist
and evolve within the current administration, retaliatory actions by other nations remain a possibility.
In 2022, five nations
had levied retaliatory tariffs up to 70 percent on approximately $73.2 billion of U.S. exports. These tariffs do not include retaliation
by Canada and Mexico; following the reversal of U.S. steel and aluminum tariffs, both Canada and Mexico withdrew their retaliatory tariffs
of 7 percent to 25 percent on approximately $20 billion of U.S. exports. These tariffs also no longer include retaliation by the EU, as
it cancelled its retaliatory tariffs in exchange for the United States replacing the aluminum and steel tariffs with a TRQ for EU imports.
The invasion of Ukraine
by Russia has resulted increased sanctions on trade with Russia which could reverberate to other countries, other economies and other
markets. On February 24, 2023, the United States, in coordination with allies and G7 partners, announced a new set of sanctions, export
controls and tariffs targeting key, revenue-generating sectors of the Russian economy and restricting trade with over 200 persons, including
both Russian and third-country actors across Europe, Asia and the Middle East. These new measures, taken by the U.S. Department of the
Treasury’s Office of Foreign Assets Control, or OFAC, US Department of Commerce’s Bureau of Industry and Security, or BIS,
Office of the US Trade Representative, or USTR and U.S. Department of State, mark the one-year anniversary of Russia’s war against
Ukraine. These measures include the following:
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(i) announced a new determination targeting the metals and mining sector of the Russian Federation economy under Executive Order 14024;
(ii) added 83 entities and 22 individuals to the Specially Designated Nationals and Blocked Persons List, including over 30 third-country
individuals and entities, resulting in the freezing of their assets within U.S. jurisdiction and prohibitions on transactions by U,S,
persons or within the U.S. that involve such persons and their 50 percent or more owned entities; and (iii) made additions and revisions
to several existing general licenses. |
| ● | BIS:
(i) announced four new rules targeting Russia’s defense-industrial base and military and third countries supporting Russia; (ii)
expanded export controls under the Export Administration Regulations, including licensing requirements on several commercial and industrial
items; and (iii) added 86 entities to the Entity List determined to have engaged in sanctions evasion and backfill activities in support
of Russia’s defense-industrial sector, prohibiting the targeted companies from purchasing items, such as semiconductors, whether
made in the US or with certain US technology or software abroad. |
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announced additional tariff increases, primarily targeting metals, minerals and chemical products. |
These sanctions, export controls and tariffs are part of the U.S.’s
ongoing to impose economic costs on Russia in response to its actions in Ukraine.
We are subject
to anti-corruption, anti-bribery, anti-money laundering, economic sanctions, export control, and similar laws. Non-compliance with such
laws can subject us to criminal or civil liability and harm our business, revenues, financial condition and results of operations.
We are subject to the
U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. Section 201, the U.S.
Travel Act, and other anti-bribery and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption and
anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies and their
employees and third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits
to recipients in the public or private sector. As we increase our international presence, we may engage with distributors and third-party
intermediaries to market our solutions and to obtain necessary permits, licenses, and other regulatory approvals. In addition, we or our
third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned
or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees,
representatives, contractors, partners and agents, even if we do not explicitly authorize such activities.
The United States has
imposed economic sanctions that affect transactions with designated foreign countries, nationals and others. In particular, the United
States prohibits U.S. persons from engaging with individuals and entities identified as “Specially Designated Nationals,”
such as terrorists and narcotics traffickers. These prohibitions are administered by the U.S. Department of the Treasury’s Office
of Foreign Assets Control. OFAC rules prohibit U.S. persons from engaging in, or facilitating a foreign person’s engagement in,
transactions with or relating to the prohibited individual, entity or country, and require the blocking of assets in which the individual,
entity or country has an interest. Blocked assets (e.g., property or bank deposits) cannot be paid out, withdrawn, set off or transferred
in any manner without a license from OFAC. Other countries in which we operate, including Canada and the United Kingdom, also maintain
economic and financial sanctions regimes.
Some of our solutions,
including software updates and third-party accessories, may be subject to U.S. export control laws, including the Export Administration
Regulations; however, the vast majority of our products are non-U.S.-origin items, developed and manufactured outside of the United States,
and therefore not subject to these laws. For third-party accessories, we rely on manufacturers to supply the appropriate export control
classification numbers that determine our obligations under these laws.
We cannot assure you
that our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held
responsible. As we increase our international presence, our risks under these laws, rules, and regulations may increase. Further, any
change in the applicability or enforcement of these laws, rules, and regulations could adversely impact our business operations and financial
results.
Detecting, investigating
and resolving actual or alleged violations can require a significant diversion of time, resources, and attention from senior management.
In addition, noncompliance with anti-corruption, anti-bribery, anti-money laundering, or economic sanctions laws, rules, and regulations
could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement
of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting
with certain persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences. If
any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible
civil or criminal litigation, our business, revenues, financial condition, and results of operations would be significantly harmed. In
addition, responding to any action will likely result in a significant diversion of management’s attention and resources and significant
defense costs and other professional fees. Enforcement actions and sanctions could further harm our business, financial condition and
results of operations.
We are subject
to a wide range of product regulatory and safety, consumer, worker safety and environmental laws and regulations.
Our operations and the
products we manufacture and/or sell are subject to a wide range of product regulatory and safety, consumer, worker safety and environmental
laws and regulations. Compliance with such existing or future laws and regulations could subject us to future costs or liabilities, impact
our production capabilities, constrict our ability to sell, expand or acquire facilities, restrict what solutions we can offer and generally
impact our financial performance. Our products are designed for use in potentially explosive or hazardous environments. If our product
design fails for any reason in such environments, we may be subject to product liabilities and future costs. In addition, some of these
laws are environmental and relate to the use, disposal, remediation, emission and discharge of, and exposure to hazardous substances.
These laws often impose liability and can require parties to fund remedial studies or actions regardless of fault. Environmental laws
have tended to become more stringent over time and any new obligations under these laws could have a negative impact on our operations
or financial performance.
Laws focused on the energy
efficiency of electronic products and accessories, recycling of both electronic products and packaging, reducing or eliminating certain
hazardous substances in electronic products, and the transportation of batteries continue to expand significantly. Laws pertaining to
accessibility features of electronic products, standardization of connectors and power supplies, the transportation of lithium-ion batteries,
and other aspects are also proliferating. There are also demanding and rapidly changing laws around the globe related to issues such as
product safety, radio interference, radio frequency radiation exposure, medical related functionality, and consumer and social mandates
pertaining to use of wireless or electronic equipment. These laws, and changes to these laws, could have a substantial impact on whether
we can offer certain products, solutions, and services, and on what capabilities and characteristics our products or services can or must
include.
These laws and regulations
impact our products and could negatively impact our ability to manufacture and sell products competitively. In addition, we anticipate
that we will see increased demand to meet voluntary criteria related to reduction or elimination of certain constituents from products,
increasing energy efficiency and providing additional accessibility.
Changes in laws
and regulations concerning the use of telecommunication bandwidth could increase our costs and adversely impact our business.
Our business depends
on our ability to sell devices that use telecommunication bandwidth allocated to licensed and unlicensed wireless services, and that use
of that bandwidth is subject to laws and regulations that are subject to change over time. Changes in the permitted uses of telecommunication
bandwidth, reallocation of such bandwidth to different uses, and new or increased regulation of the capabilities, manufacture, importation,
and use of devices that depend on such bandwidth could increase our costs, require costly modifications to our products before they are
sold, or limit our ability to sell those products into our target markets. In addition, we are subject to regulatory requirements for
certification and testing of our products before they can be marketed or sold. Those requirements may be onerous and expensive. Changes
to those requirements could result in significant additional costs and could adversely impact our ability to bring new products to market
in a timely fashion.
We are subject
to a wide range of privacy and data security laws, regulations and other legal obligations.
Personal privacy and
information security are significant issues in the United States and the other jurisdictions in which we operate or make our products
and applications available. The legislative and regulatory framework for privacy and security issues worldwide is rapidly evolving and
is likely to remain uncertain for the foreseeable future. Our handling of data is subject to a variety of laws and regulations, including
regulation by various government agencies, including the U.S. Federal Trade Commission, or FTC, and various state, local and foreign agencies.
We may collect personally identifiable information, or PII, and other data from our customers. We use this information to provide services
to our customers and to support, expand and improve our business. We may also share customers’ PII with third parties as allowed
by applicable law and agreements and authorized by the customer or as described in our privacy policy.
The U.S. federal and
various state and foreign governments have adopted or proposed limitations on the collection, distribution, transfer, use and storage
of PII. In the United States, the FTC and many state attorneys general are applying federal and state consumer protection laws as imposing
standards for the online collection, use and dissemination of data. Many foreign countries and governmental bodies, including Canada,
the European Union and other relevant jurisdictions, have laws and regulations concerning the collection and use of PII obtained from
their residents or by businesses operating within their jurisdiction. These laws and regulations often are more restrictive than those
in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security
of data that identifies or may be used to identify or locate an individual, such as names, email addresses and, in some jurisdictions,
Internet Protocol, or IP, addresses. Within the European Union, legislators have adopted the General Data Protection Regulation, or GDPR,
effective May 2018 which may impose additional obligations and risk upon our business, and which may increase substantially the penalties
to which we could be subject in the event of any non-compliance. We may incur substantial expense in complying with the obligations imposed
by the governments of the foreign jurisdictions in which we do business or seek to do business and we may be required to make significant
changes in our business operations, all of which may adversely impact our revenues and our business overall.
Although we are working
to comply with those federal, state, and foreign laws and regulations, industry standards, contractual obligations and other legal obligations
that apply to us, those laws, regulations, standards and obligations are evolving and may be modified, interpreted and applied in an inconsistent
manner from one jurisdiction to another, and may conflict with one another, other requirements or legal obligations, our practices or
the features of our products or applications. At state level, lawmakers continue to pass new laws concerning privacy and data security.
Particularly notable in this regard is the California Consumer Privacy Act, or CCPA, which became effective on January 1, 2020. The CCPA
will introduce significant new disclosure obligations and provide California consumers with significant new privacy rights. Any failure
or perceived failure by us to comply with federal, state or foreign laws or regulations, industry standards, contractual obligations or
other legal obligations, or any actual or suspected security incident, whether or not resulting in unauthorized access to, or acquisition,
release or transfer of PII or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and
penalties or adverse publicity and could cause our customers to lose trust in us, which could have an adverse impact on our reputation
and business. Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable laws, regulations,
policies, industry standards, contractual obligations, or other legal obligations could result in additional cost and liability to us,
damage our reputation, inhibit sales and adversely impact our business.
We also expect that there
will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security
in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws, regulations
and standards may have on our business. New laws, amendments to or re-interpretations of existing laws and regulations, industry standards,
contractual obligations and other obligations may require us to incur additional costs and restrict our business operations. Such laws
and regulations may require companies to implement privacy and security policies, permit users to access, correct and delete personal
information stored or maintained by such companies, inform individuals of security breaches that affect their personal information, and,
in some cases, obtain individuals’ consent to use PII for certain purposes. In addition, a foreign government could require that
any PII collected in a country not be disseminated outside of that country, and we are not currently equipped to comply with such a requirement.
Risks Related to
Our Intellectual Property
If we are unable to successfully protect
our intellectual property, our competitive position may be harmed.
Our ability to compete
is heavily affected by our ability to protect our intellectual property. We rely on a combination of patent licenses, confidentiality
procedures and contractual provisions to protect our proprietary rights. We also enter, and plan to continue to enter, into confidentiality,
invention assignment or license agreements with our employees, consultants and other parties with whom we contract, and control access
to and distribution of our software, documentation and other proprietary information. The steps we take to protect our intellectual property
may be inadequate, and it is possible that some or all of our confidentiality agreements will not be honored, and certain contractual
provisions may not be enforceable. Existing trade secret, trademark and copyright laws offer only limited protection. Unauthorized parties
may attempt to copy aspects of our products or obtain and use information which we regard as proprietary. Policing unauthorized use of
our products is difficult, time consuming and costly, particularly in foreign countries where the laws may not protect our proprietary
rights as fully as in the United States. We cannot assure you that our means of protecting our proprietary rights will be adequate or
that our competitors will not independently develop similar technology, the effect of either of which would harm our competitive position
in the market. Furthermore, disputes can arise with our strategic partners, customers or others concerning the ownership of intellectual
property.
Others may claim
that we infringe on their intellectual property rights, which may result in costly and time-consuming litigation and could delay or otherwise
impair the development and commercialization of our products.
In recent years, there
has been a significant increase in litigation in the United States involving patents and other intellectual property rights, and because
our products are comprised of complex technology, we are often involved in or impacted by assertions, including both requests to take
licenses and litigation, regarding infringement of patent and other intellectual property rights of third parties. Third parties have
asserted, and in the future may assert, intellectual property infringement claims against us and against our channel partners, end customers
and suppliers. For example, we had been approached by Wilson Electronics about potential infringement of several of their patents involving
cellphone boosters. As a result, the Company entered into a product technology licensing agreement with Wilson Electronics that resolved
their claim whereby Wilson is entitled to a 4.5% licensing fee on the revenues earned by the Company for every booster product sold Many
of these assertions are brought by non-practicing entities whose principal business model is to secure patent licensing revenues from
product manufacturing companies. Claims for alleged infringement and any resulting lawsuit, if successful, could subject us to significant
liability for damages and invalidation of our intellectual property rights. Defending any such claims, with or without merit, including
pursuant to indemnity obligations, could be time consuming, expensive, cause product shipment delays or require us to enter into a royalty
or licensing agreement, any of which could delay the development and commercialization of our products or reduce our margins. If we are
unable to obtain a required license, our ability to sell or use certain products may be impaired. In addition, if we fail to obtain a
license, or if the terms of the license are burdensome to us, our operations could be significantly harmed.
Our use of open-source
software could subject us to possible litigation or otherwise impair the development of our products.
A portion of our technologies
incorporates open-source software, including open source operating systems such as Android, and we expect to continue to incorporate open
source software into our platform in the future. Few of the licenses applicable to open-source software have been interpreted by courts,
and their application to the open source software integrated into our proprietary technology platform may be uncertain. If we fail to
comply with these licenses, then pursuant to the terms of these licenses, we may be subject to certain requirements, including requirements
that we make available the source code for our software that incorporates the open-source software. We cannot assure you that we have
not incorporated open-source software in our software in a manner that is inconsistent with the terms of the applicable licenses or our
current policies and procedures. If an author or other third party that distributes such open-source software were to allege that we had
not complied with the conditions of one or more of these licenses, we could incur significant legal expenses defending against such allegations.
Litigation could be costly for us to defend, have a negative effect on our operating results and financial condition or require us to
devote additional research and development resources to change our technology platform.
With respect to open-source
operating systems, if third parties cease continued development of such operating systems or restrict our access to such operating system,
our business and financial results could be adversely impacted. We are dependent on third parties’ continued development of operating
systems, software application ecosystem infrastructures, and such third parties’ approval of our implementations of their operating
and system and associated applications. If such parties cease to continue development or support of such operating systems or restrict
our access to such operating systems, we would be required to change our strategy for our devices. As a result, our financial results
could be negatively impacted because a resulting shift away from the operating systems we currently use, and the associated applications
ecosystem could be costly and difficult.
Our inability to
obtain and maintain any third-party license required to develop new products and product enhancements could seriously harm our business,
financial condition and results of operations.
From time to time, we
are required to license technology from third parties to develop new products or product enhancements. Third-party licenses may not be
available to us on commercially reasonable terms, or at all. If we fail to renew any intellectual property license agreements on commercially
reasonable terms, or any such license agreements otherwise expire or terminate, we may not be able to use the patents and technologies
of these third parties in our products, which are critical to our success. We cannot assure you that we will be able to effectively control
the level of licensing and royalty fees paid to third parties, and significant increase in such fees could have a significant and adverse
impact on our future profitability. Seeking alternative patents and technologies may be difficult and time-consuming, and we may not be
successful in finding alternative technologies or incorporating them into our products. Our inability to obtain any third-party license
necessary to develop new products or product enhancements could require us to obtain substitute technology of lower quality or performance
standards, or at greater cost, which could seriously harm our business, financial condition and results of operations.
Risks relating to our locations in Israel
and Canada and our International Operations
Conditions in Israel could materially and
adversely affect our business.
A number of our officers and directors are residents
of Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business
and operations. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and
its neighboring countries, as well as terrorist acts committed within Israel by hostile elements. Any hostilities involving Israel or
the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and results of
operations. During the summer of 2006, Israel was engaged in an armed conflict with Hezbollah, a Lebanese Islamist Shiite militia group
and political party. In December 2008 and January 2009 there was an escalation in violence among Israel, Hamas, the Palestinian Authority
and other groups, as well as extensive hostilities along Israel’s border with the Gaza Strip, which resulted in missiles being fired
from the Gaza Strip into Southern Israel. During November 2012 and from July through August 2014, Israel was engaged in an armed conflict
with a militia group and political party who controls the Gaza Strip, which resulted in missiles being fired from the Gaza Strip into
Southern Israel, as well as at areas more centrally located near Tel Aviv and at areas surrounding Jerusalem. These conflicts involved
missile strikes against civilian targets in various parts of Israel, including areas in which our employees and some of our consultants
are located, and negatively affected business conditions in Israel. This pattern of activity erupts from time to time with varying degrees
of intensity and for varying periods of time and typically ends with a cease fire until hostilities flare up again.
Since February 2011, Egypt has experienced political
turbulence and an increase in terrorist activity in the Sinai Peninsula. Such political turbulence and violence may damage peaceful and
diplomatic relations between Israel and Egypt and could affect the region as a whole. Similar civil unrest and political turbulence has
occurred in other countries in the region, including Syria, which shares a common border with Israel, and is affecting the political stability
of those countries. Since April 2011, internal conflict in Syria has escalated and chemical weapons have been used in the region. Foreign
actors have intervened and may continue to intervene in Syria. This instability and any intervention may lead to deterioration of the
political and economic relationships that exist between the State of Israel and some of these countries and may lead to additional conflicts
in the region. In addition, Iran has threatened to attack Israel and may be developing nuclear weapons. Iran also has a strong influence
among extremist groups in the region, including Hamas in Gaza, Hezbollah in Lebanon and various rebel militia groups in Syria. These situations
have escalated at various points in recent years and may escalate in the future to more violent events, which may affect Israel and us.
Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could
harm our results of operations and could make it more difficult for us to raise capital. Parties with whom we do business have sometimes
declined to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary,
in order to meet our business partners face to face. In addition, the political and security situation in Israel may result in parties
with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those
agreements pursuant to force majeure provisions in such agreements.
Further, in the past, the State of Israel and
Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with
Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the
expansion of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely
impact our business.
In addition, many Israeli citizens are obligated
to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older, for
reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active
duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible
that there will be military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include
the call-up of members of our management. Such disruption could materially adversely affect our business, prospects, financial condition
and results of operations.
It may be difficult to enforce a U.S. judgment
against us, our officers and directors named in this prospectus on Form F-1 in Israel or the United States, or to assert U.S. securities
laws claims in Israel or serve process on our officers and directors.
Not all of our directors or officers are residents
of the United States and most of their and our assets are located outside the United States. Service of process upon us or our non-U.S.
resident directors and officers may be difficult to obtain within the United States. We have been informed by our legal counsel in Israel
that it may be difficult to assert claims under U.S. securities laws in original actions instituted in Israel or obtain a judgment based
on the civil liability provisions of U.S. federal securities laws. Israeli courts may refuse to hear a claim based on a violation of U.S.
securities laws against us or our non-U.S. officers and directors because Israel may not be the most appropriate forum to bring such a
claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable
to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming
and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing
the matters described above. Additionally, Israeli courts might not enforce judgments obtained in the United States against us or our
non-U.S. our directors and executive officers, which may make it difficult to collect on judgments rendered against us or our non-U.S.
officers and directors.
Moreover, an Israeli court will not enforce a
non-Israeli judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject
to exceptional cases), if its enforcement is likely to prejudice the sovereignty or security of the State of Israel, if it was obtained
by fraud or in the absence of due process, if it is at variance with another valid judgment that was given in the same matter between
the same parties, or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel at the time
the foreign action was brought. For more information, see “Enforceability of Civil Liabilities.”
Because we are a corporation incorporated
in British Columbia and some of our directors and officers are resident in Canada, it may be difficult for investors in the United States
to enforce civil liabilities against us based solely upon the federal securities laws of the United States. Similarly, it may be difficult
for Canadian investors to enforce civil liabilities against our directors and officers residing outside of Canada.
We are a corporation incorporated under the laws
of British Columbia with our principal place of business in Montreal, Canada. Some of our directors and officers and the auditors or other
experts named herein are residents of Canada and all or a substantial portion of our assets and those of such persons are located outside
the United States. Consequently, it may be difficult for U.S. investors to effect service of process within the United States upon us
or our directors or officers or such auditors who are not residents of the United States, or to realize in the United States upon judgments
of courts of the United States predicated upon civil liabilities under the Securities Act. Investors should not assume that Canadian courts:
(i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions
of the U.S. federal securities laws or the securities or blue-sky laws of any state within the United States or (ii) would enforce, in
original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or any such state securities
or blue-sky laws.
Similarly, some of our directors and officers
are residents of countries other than Canada and all or a substantial portion of the assets of such persons are located outside Canada.
As a result, it may be difficult for Canadian investors to initiate a lawsuit within Canada against these non-Canadian residents. In addition,
it may not be possible for Canadian investors to collect from these non-Canadian residents’ judgments obtained in courts in Canada
predicated on the civil liability provisions of securities legislation of certain of the provinces and territories of Canada. It may also
be difficult for Canadian investors to succeed in a lawsuit in the United States, based solely on violations of Canadian securities laws.
We use suppliers based in China, which exposes
us to risks inherent in doing business there.
We use multiple third-party suppliers and manufacturers
based primarily in China. With the rapid development of the Chinese economy, the cost of labor has increased and may continue to increase
in the future. Furthermore, pursuant to Chinese labor laws, employers in China are subject to various requirements when signing labor
contracts, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts. Our results
of operations will be materially and adversely affected if the labor costs of our third-party suppliers and manufacturers increase significantly.
In addition, we and our manufacturers and suppliers may not be able to find a sufficient number of qualified workers due to the intensely
competitive and fluid market for skilled labor in China.
Operating in China exposes us to political, legal
and economic risks. In particular, the political, legal and economic climate in China, both nationally and regionally, is fluid and unpredictable.
Our ability to utilize parties that operate in China may be adversely affected by changes in U.S. and Chinese laws and regulations such
as those related to, among other things, taxation, import and export tariffs, environmental regulations, land use rights, intellectual
property, currency controls, network security, employee benefits, hygiene supervision and other matters. In addition, we may not obtain
or retain the requisite legal permits to continue utilizing third parties that operate in China, and costs or operational limitations
may be imposed in connection with obtaining and complying with such permits. In addition, Chinese trade regulations are in a state of
flux, and we may potentially become subject to other forms of taxation, tariffs and duties in China. Furthermore, the third parties we
rely on in China may disclose our confidential information or intellectual property to competitors or third parties, which could result
in the illegal distribution and sale of counterfeit versions of our products. If any of these events occur, our business, financial condition
and results of operations could be materially and adversely affected.
Operating outside of the United States presents
specific risks to our business, and we have substantial operations outside of the United States.
Most of our employee base and operations are located
outside the United States, primarily in Canada and Israel. Most of our software development, third-party contract manufacturing, and product
assembly operations are conducted outside the United States.
Risks associated with operations outside the United
States include:
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effectively managing and overseeing operations that are distant and remote from corporate headquarters may be difficult and may impose increased operating costs; |
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fluctuating foreign currency rates could restrict sales, increase costs of purchasing, and impact collection of receivables outside of the United States; |
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volatility in foreign credit markets may affect the financial well-being of our customers and suppliers; |
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violations of anti-corruption laws, including the Foreign Corrupt Practices Act and the U.K. Bribery Act could result in large fines and penalties; |
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violations of privacy and data security laws could result in large fines and penalties; and |
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tax disputes with foreign taxing authorities, and any resultant taxation in foreign jurisdictions associated with operations in such jurisdictions, including with respect to transfer pricing practices associated with such operations. |
Relations between the People’s Republic
of China (“PRC”) and Taiwan could negatively affect our business and financial status and, therefore, the market value of
your investment.
Taiwan has a unique international political status.
The PRC does not recognize the sovereignty of Taiwan. Although significant economic and cultural relations have been established in recent
years between Taiwan and the PRC, relations have often been strained. The government of the PRC has threatened to use military force to
gain control over Taiwan in limited circumstances. A substantial portion of our manufacturing and packaging providers are located in Taiwan
and PRC, and a material amount of our revenues are derived from the sales of these products manufactured and packaged in Taiwan and PRC,
some of which are interlinked in production and part of the same supply chain and product development and research and development processes
for us. Therefore, factors affecting military, political, or economic conditions in and between Taiwan, PRC, their adjoining neighbors,
the larger south-east Asia and South-China Sea could have a material adverse effect on our results of operations.
A significant disruption in the operations
of our contract manufacturing in Taiwan and China, such as a trade war or political unrest, could materially adversely affect our business,
financial condition, and the results of operations.
Any disruption in the operations of our contract
manufacturers in Taiwan and/or China or in their ability to meet our needs, whether as a result of a natural disaster or other causes,
could impair our ability to operate our business on a day-to-day basis. Furthermore, since many of these third parties are located outside
the U.S., we are exposed to the possibility of disruption and increased costs in the event of changes in the policies of the U.S. or foreign
governments, political unrest, or unstable economic conditions in any of the countries where we conduct such activities. For example,
a trade war could lead to higher tariffs. Any of these matters could materially and adversely affect our product sales and shipment timelines,
business, and financial condition.
Foreign currency fluctuations may reduce
our competitiveness and sales in foreign markets.
The relative change in currency values creates
fluctuations in product pricing for international customers. These changes in foreign end-customer costs may result in lost orders and
reduce the competitiveness of our products in certain foreign markets. These changes may also negatively impact the financial condition
of some foreign customers and reduce or eliminate their future orders of our products. We also face adverse changes in, or uncertainty
of, local business laws or practices, including the following:
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foreign governments may impose burdensome tariffs, quotas, taxes, trade barriers, or capital flow restrictions; |
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restrictions on the export or import of technology may reduce or eliminate the ability to sell in or purchase from certain markets; |
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political and economic instability, including deterioration of political relations between the United States and other countries, may reduce demand for our solutions or put our non-U.S. assets at risk; |
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potentially limited intellectual property protection in certain countries may limit recourse against infringing on our solutions or cause us to refrain from selling in certain geographic territories; |
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staffing may be difficult along with higher turnover at international operations; |
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a government-controlled exchange rate and limitations on the convertibility of currencies, including the Chinese yuan; |
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transportation delays and customs related delays that may affect production and distribution of our products; and |
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integration and enforcement of laws vary significantly among jurisdictions and may change significantly over time. |
Our failure to manage any of these risks successfully
could harm our international operations and adversely impact our business, operating results and financial condition.
Risks Related to This Offering and Ownership
of Our Securities
This is a reasonable best efforts offering,
in which no minimum number or dollar amount of Securities is required to be sold, and we may not raise the amount of capital we believe
is required for our business plans.
The Placement Agent has agreed to use its reasonable
best efforts to solicit offers to purchase the Securities in this Offering. The Placement Agent has no obligation to buy any of the Securities
from us or to arrange for the purchase or sale of any specific number or dollar amount of the Securities. There is no required minimum
number of Securities that must be sold as a condition to completion of this Offering, and there can be no assurance that the Offering
contemplated hereby will ultimately be consummated. Even if we sell Securities offered hereby, because there is no minimum offering amount
required as a condition to the closing of this Offering, the actual offering amount is not presently determinable and may be substantially
less than the maximum amount set forth on the cover page. We may sell fewer than all of the Securities offered hereby, which may significantly
reduce the amount of proceeds received by us. Thus, we may not raise the amount of capital we believe is required for our operations in
the short-term and may need to raise additional funds, which may not be available or available on terms acceptable to us.
Assuming that we are able to sell the maximum
number of Securities in this offering, we expect that the consummation of this offering could cause the price of our Common Shares to
decline.
In this offering, are offering a maximum of $5,000,000
of our Common Shares at an assumed price per Common Share of $[●]. Assuming that we are able to sell the maximum number of Securities
offered hereby, immediately following the completion of the offering, based on the number of shares outstanding as of October [●],
2023, we will have [●] Common Shares outstanding. We cannot predict the effect, if any, that market sales of those Common Shares
or the availability of those Common Shares for sale will have on the market price of our Common Shares. Any decline in the price of our
Common Shares will also have a negative effect on the price in the market of our Prior Warrants.
The Common Shares offered in the offering may
be resold in the public market immediately without restriction, unless purchased by our “affiliates” as that term is defined
in Rule 144 under the Securities Act, which may be resold only if registered under the Securities Act or in accordance with the requirements
of Rule 144 or another applicable exemption from the registration requirements of the Securities Act. Common Shares held by our directors
and executive officers will be subject to the lock-up agreements described in the “Plan of Distribution” section of
this prospectus. If, after the period during which such lock-up agreements restrict sales of the our Common Shares or if the Placement
Agent waives the restrictions set forth therein (which may occur at any time), one or more of these securityholders sell substantial amounts
of Common Shares in the public market, or the market perceives that such sales may occur, the market price of the Common Shares and our
ability to raise capital through an issue of equity securities in the future could be adversely affected.
Rule 144 sales in the future may have a
depressive effect on our share price.
All of the outstanding common shares held by the
present officers, directors, and affiliate shareholders are “restricted securities” within the meaning of Rule 144 under the
Securities Act of 1933, as amended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act
and as required under applicable state securities laws. Rule 144 provides in essence that a person who is an affiliate or officer or director
who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a
number of shares that does not exceed the greater of 1.0% of a company’s outstanding common shares. There is no limitation on the
amount of restricted securities that may be sold by a non-affiliate after the owner has held the restricted securities for a period of
six months if our company is a current reporting company under the Exchange Act. A sale under Rule 144 or under any other exemption from
the Securities Act, if available, or pursuant to subsequent registration of common shares of present shareholders, may have a depressive
effect upon the price of the common shares in any market that may develop.
Outstanding warrants
and future sales of our Securities may further dilute the Common Shares and adversely impact the price of our Common Shares.
As of October 10, 2023, we had 1,854,834 Common Shares issued
and outstanding. As of October 10, 2023, up to an additional 131,001 Common Shares underlying outstanding warrants that have been
registered with the SEC for resale are unrestricted and freely tradeable. We also have other outstanding unexercised investment banker’s
warrants to purchase 9,315 Common Shares as of October [●], 2023 that expire between June 30, 2024 and March 8, 2027. If the holder
of our free trading shares wanted to sell these shares, there might not be enough purchasers to maintain the market price of our Common
Shares on the date of such sales. Any such sales, or the fear of such sales, could substantially decrease the market price of our Common
Shares and the value of your investment.
If you purchase the Securities, you could
experience immediate dilution as a result of this offering.
Since the price per Common Share being offered
is substantially higher than the net tangible book value per share of our Common Shares, assuming that we are able to sell the maximum
number of Securities offered hereby, you will suffer immediate and substantial dilution in the net tangible book value of the Common Shares
you purchase in this offering. After giving effect to the sale by us of (i) [●] our Common Shares at the offering price of $[●]
per Common Share, you will suffer immediate and substantial dilution of approximately $[●] per share in the net tangible book value
of the Common Shares. In addition, the Common Shares issuable upon the exercise of the pre-funded warrants to be issued pursuant to the
offering will further dilute the ownership interest of shareholders not participating in this offering and holders of pre-funded warrants
who have not exercised their pre-funded warrants. See the section entitled “Dilution” in this prospectus for a more
detailed discussion of the dilution you will incur if you purchase Securities in this offering.
Common Shares representing a substantial
percentage of our outstanding shares may be sold in this offering, which could cause the price of our Common Shares to decline.
We may sell in this offering Common Shares, or
approximately %, of our outstanding Common Shares, prior to this offering, as of , 2023. This sale and any future sales of a substantial
number of Common Shares in the public market, or the perception that such sales may occur, could materially adversely affect the price
of our Common Shares. We cannot predict the effect, if any, that market sales of those Common Shares or the availability of those Common
Shares for sale will have on the market price of our Common Shares.
You may experience future dilution as a
result of future equity offerings.
In order to raise additional capital, we may in
the future offer additional Common Shares or other securities convertible into or exchangeable for our Common Shares that could result
in further dilution to the investor purchasing our Common Shares in this offering or result in downward pressure on the price of our Common
Shares. We may sell our Common Shares or other securities in any other offering at prices that are higher or lower than the prices paid
by the investor in this offering, and the investor purchasing shares or other securities in the future could have rights superior to existing
shareholders. Moreover, to the extent that we issue options or warrants to purchase, or securities convertible into or exchangeable for,
our Common Shares in the future and those options, warrants or other securities are exercised, converted or exchanged, stockholders may
experience further dilution.
The market for our Common Shares may not
provide investors with adequate liquidity.
Liquidity of the market for our Common Shares
depends on a number of factors, including our financial condition and operating results, the number of holders of our Common Shares, the
market for similar securities and the interest of securities dealers in making a market in the securities. We cannot predict the extent
to which investor interest in the Company will maintain a trading market in our Common Shares, or how liquid that market will be. If an
active market is not maintained, investors may have difficulty selling Common Shares that they hold.
There is no public market for the pre-funded
warrants being offered in this offering.
There is no established public trading market
for the pre-funded warrants being offered in this offering, and we do not expect a market to develop. In addition, we do not intend to
apply to list the pre-funded warrants on any securities exchange or nationally recognized trading system. Without an active market, the
liquidity of the pre-funded warrants will be limited.
Holders of our pre-funded warrants will
have no rights as holders of Common Shares until such warrants are exercised.
Until you acquire Common Shares upon exercise
of your pre-funded warrants, you will have no rights with respect to Common Shares issuable upon exercise of your pre-funded warrants.
Upon exercise of your pre-funded warrants, you will be entitled to exercise the rights of a holder of Common Shares only as to matters
for which the record date occurs after the exercise date.
The pre-funded warrants are speculative
in nature.
The pre-funded warrants offered hereby do not
confer any rights of ownership of our Common Shares on their holders, such as voting rights or the right to receive dividends, but rather
merely represent the right to acquire Common Shares at a fixed price. Specifically, commencing on the date of issuance, holders of the
pre-funded warrants may acquire Common Shares issuable upon exercise of such warrants at an exercise price of $0.01 per Common Share.
Moreover, following this offering, the market value of the pre-funded warrants is uncertain, and there can be no assurance that the market
value of the pre-funded warrants will equal or exceed their public offering price.
Since we do not expect to pay any cash dividends
for the foreseeable future, investors may be forced to sell their stock in order to obtain a return on their investment.
We do not anticipate declaring or paying in the
foreseeable future any cash dividends on our capital stock. Instead, we plan to retain any earnings to finance our operations and growth
plans discussed elsewhere or incorporated by reference in this prospectus. Accordingly, investors must rely on sales of their Common Shares
after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking
cash dividends should not purchase our Common Shares.
The trading price of our Common Shares has
been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of
which are beyond our control.
Our share price is highly volatile. During the period from January
1, 2023 to October [●], 2023, the closing price of our Common Shares (on a post-reverse split basis) ranged from a high of $[●]
per share to a low of $[●] per share. The stock market in general has experienced extreme volatility that has often been unrelated
to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your Common Shares at
or above the public offering price and you may lose some or all of your investment.
Our management will have broad discretion
over the use of the proceeds we receive from the sale our Securities pursuant to this prospectus and might not apply the proceeds in ways
that increase the value of your investment.
Our management will have broad discretion to use
the net proceeds from the Offering, and you will be relying on the judgment of our management regarding the application of these proceeds.
Except as described in any prospectus supplement or in any related free writing prospectus that we may authorize to be provided to you,
the net proceeds received by us from our sale of the Securities described in this prospectus will be added to our general funds and will
be used as described under “Use of Proceeds” herein. Our management might not apply the net proceeds from offerings
of our Securities in ways that increase the value of your investment and might not be able to yield a significant return, if any, on any
investment of such net proceeds. You may not have the opportunity to influence our decisions on how to use such proceeds.
If we are not able
to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our Common Shares and Prior Warrants.
In order to maintain
the listing of our Common Shares and Prior Warrants on the Nasdaq Capital Market, we must satisfy minimum financial and other continued
listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’
equity, minimum share price, and certain corporate governance requirements. There can be no assurances that we will be able to comply
with such applicable listing standards.
On August 26, 2022 we received a letter from the
Listing Qualifications Department of The Nasdaq Stock Market LLC, notifying us that we were not in compliance with the minimum bid price
requirement set forth under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”), resulting from the fact that the closing
bid price of the Company’s Common Shares was below $1.00 per share for a period of 30 consecutive business days. Pursuant to Nasdaq
Listing Rule 5810(c)(3)(A), we were given a period of 180 calendar days, or until February 22, 2023 (the “Compliance Period”),
to regain compliance with Nasdaq’s minimum bid price requirement. We did not regain compliance by such date and submitted a written
request to the Nasdaq to afford us an additional 180-day compliance period to cure the deficiency. On February 23, 2023, we received written
notification from the Listing Qualifications Department of Nasdaq granting our request for an additional 180-day extension to regain compliance
with Nasdaq’s minimum bid price requirement until August 21, 2023. On August 9, 2023, we effected a 1-for-100 reverse share split
of our authorized Common Share, including our issued and outstanding Common Shares, with no change to the par value of our Common Share
and our Prior Warrants. On August 24, 2023, we announced that we had received formal notice from Nasdaq stating that we had regained compliance
with the minimum bid price requirement in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Stock Market.
If the Common Shares
are not listed on Nasdaq at any time after this offering, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities; |
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a determination that the Common Shares are a “penny stock” which will require brokers trading in our shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for the Common Shares; |
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a limited amount of news and analyst coverage for our Company; and |
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Upon delisting from the Nasdaq Capital Market,
our Common Shares would be traded over-the-counter inter-dealer quotation system, more commonly known as the OTC. OTC transactions involve
risks in addition to those associated with transactions in securities traded on the securities exchanges, such as the Nasdaq Capital Market,
or Exchange-listed Stocks. Many OTC stocks trade less frequently and in smaller volumes than Exchange-listed Stocks. Accordingly, our
stock would be less liquid than it would be otherwise. Also, the values of OTC stocks are often more volatile than Exchange-listed Stocks.
Additionally, institutional investors are usually prohibited from investing in OTC stocks, and it might be more challenging to raise capital
when needed.
In addition, if our Common Shares are delisted,
your ability to transfer or sell your Common Shares may be limited and the value of those securities will be materially adversely affected.
If our Common Shares become subject to the
penny stock rules, it may be more difficult to sell our Common Shares.
The Securities and Exchange Commission (“SEC”
or the “Commission”) has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities
exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or system). The OTC Bulletin Board does not meet such requirements
and if the price of our Common Shares is less than $5.00 and our Common Shares are no longer listed on a national securities exchange
such as Nasdaq, our stock may be deemed a penny stock. The penny stock rules require a broker-dealer, at least two business days prior
to a transaction in a penny stock not otherwise exempt from those rules, to deliver to the customer a standardized risk disclosure document
containing specified information and to obtain from the customer a signed and dated acknowledgment of receipt of that document. In addition,
the penny stock rules require that prior to effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer
must make a special written determination that the penny stock is a suitable investment for the purchaser and receive: (i) the purchaser’s
written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks;
and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the
trading activity in the secondary market for our Common Shares, and therefore shareholders may have difficulty selling their shares.
Because we are
a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have
less protection than you would have if we were a domestic issuer.
Nasdaq Listing Rules
require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however,
we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above
requirement within one year of listing. The corporate governance practice in our home country does not require a majority of our board
to consist of independent directors. Thus, although a director must act in the best interests of the Company, it is possible that fewer
board members will be exercising independent judgment and the level of board oversight on the management of our company may decrease as
a result. In addition, Nasdaq Listing Rules also require foreign private issuers to have a compensation committee, a nominating/corporate
governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. We, as a foreign
private issuer, are not subject to these requirements. Nasdaq Listing Rules may require shareholder approval for certain corporate matters,
such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those
plans, and certain Common Share issuances. We intend to comply with the requirements of Nasdaq Listing Rules in determining whether shareholder
approval is required on such matters and to appoint a nominating and corporate governance committee. We may, however, consider following
home country practice in lieu of the requirements under Nasdaq Listing Rules with respect to certain corporate governance standards which
may afford less protection to investors.
Our executive officers
and directors, and their affiliated entities, along with our two other largest stockholders, own a significant percentage of our stock
and will be able to exert significant control over matters subject to stockholder approval.
Based on shares outstanding as of October [●], 2023, our executive
officers and directors, together with entities affiliated with such individuals, along with our largest shareholder, will beneficially
own approximately 2.78% of our Common Shares based on [●] Common Shares issued and outstanding on such date. As of October [●],
2023, the Company had 1,339,434 (adjusted for reverse share split) Common Shares issued and outstanding.
We may issue additional debt and equity
securities, which are senior to our Common Shares as to distributions and in liquidation, which could materially adversely affect the
market price of our Common Shares.
In the future, we may attempt to increase our
capital resources by entering into additional debt or debt-like financing that is secured by all or up to all of our assets, or issuing
debt or equity securities, which could include issuances of commercial paper, medium-term notes, senior notes, subordinated notes or shares.
In the event of our liquidation, our lenders and holders of our debt securities would receive a distribution of our available assets before
distributions to our shareholders.
Any additional preferred securities, if issued
by our company, may have a preference with respect to distributions and upon liquidation, which could further limit our ability to make
distributions to our common shareholders. Because our decision to incur debt and issue securities in our future offerings will depend
on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings
and debt financing.
Further, market conditions could require us to accept less favorable
terms for the issuance of our securities in the future. Thus, you will bear the risk of our future offerings reducing the value of your
Common Shares and diluting your interest in us. In addition, we can change our leverage strategy from time to time without approval of
holders of our Common Shares, which could materially adversely affect the market share price of our Common Shares.
We are governed by the corporate laws of
British Columbia, Canada which in some cases have a different effect on shareholders than the corporate laws of the United States.
We are governed by the Business Corporations
Act (British Columbia) (the “Business Corporations Act”) and other relevant laws, which may affect the rights of shareholders
differently than those of a company governed by the laws of a U.S. jurisdiction, and may, together with our charter documents, have the
effect of delaying, deferring or discouraging another party from acquiring control of our company by means of a tender offer, a proxy
contest or otherwise, or may affect the price an acquiring party would be willing to offer in such an instance. The material differences
between the Business Corporations Act and Delaware General Corporation Law (the “DGCL”) that may have the greatest such effect
include, but are not limited to, the following: (i) for certain corporate transactions (such as mergers and amalgamations or amendments
to our articles) the Business Corporations Act generally requires the voting threshold to be a special resolution approved by 662∕3%
of shareholders, or as set out in the articles, as applicable, whereas DGCL generally only requires a majority vote; and (ii) under the
Business Corporations Act a holder of 5% or more of our common shares can requisition a special meeting of shareholders, whereas such
right does not exist under the DGCL. We cannot predict whether investors will find our company and our common shares less attractive because
we are governed by foreign laws.
If we fail to file our financial disclosures
with the securities regulators in British Columbia on time, we could be subject to such regulator issuing a cease trade order that would
affect the trading of our Common Shares in Canada, but not on the Nasdaq Capital Market.
Our securities are regulated in Canada by the
British Columbia Securities Commission. Under the securities laws of British Columbia, we are required to file with the BCSC quarterly
and annual financial statements and management’s discussion and analysis, and must also send this information to shareholders, on
request. Companies must also disclose material events or developments such as takeover bids and merger and acquisitions, which may affect
the value of the company’s shares. When a company fails to do so, a cease trade order banning trading in the securities of the company
or banning certain individuals and/or companies from trading in securities of the company may be issued by the BCSC. On April 6, 2023,the
British Columbia Securities Commission issued a cease trade order in Canada due to the late filing of the Company’s December 31,
2022 financial statements in Canada. The Company had also received a letter dated May 17, 2023 from the BCSC, noting Siyata’s failure
to file its interim financial statements and management’s discussion and analysis for the fiscal quarter ended March 31, 2023 and
pay the required filing fee, and requesting Siyata to correct the deficiencies by filing the required materials. As of May 25, 2023, the
Company had filed the outstanding continuous disclosure documents required under the securities legislation of British Columbia. The April
2023 Order did not affect the trading of Siyata’s Common Shares or Prior Warrants on the Nasdaq Capital Market. That cease trade
order was revoked by the BCSC as of May 25, 2023 and, as a result of the revocation of the April 2023 Order, is legally authorized to
continue trading its shares in Canada.
U.S. holders of the Company’s shares
may suffer adverse tax consequences if we are characterized as a passive foreign investment company.
The rules governing “passive foreign investment
companies” (“PFICs”) can have adverse effects on U.S. Holders (as defined below in “Material U.S. Federal Income
Tax Considerations”) for U.S. federal income tax purposes. Generally, if, for any taxable year, at least 75% of our gross income
is passive income, or at least 50% of the value of our assets (generally, using a quarterly average) is attributable to assets that produce
passive income or are held for the production of passive income (including cash), we would be characterized as a PFIC for U.S. federal
income tax purposes. The determination of whether we are a PFIC, which must be made annually after the close of each taxable year, depends
on the particular facts and circumstances and may also be affected by the application of the PFIC rules, which are subject to differing
interpretations. Our status as a PFIC will depend on the composition of our income and the composition and value of our assets (including
goodwill and other intangible assets), which will be affected by how, and how quickly, we spend any cash that is raised in this offering
or in any other subsequent financing transaction.
If we are a PFIC, a U.S. Holder would be subject
to adverse U.S. federal income tax consequences, such as ineligibility for certain preferred tax rates on capital gains or on actual or
deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income
tax laws and regulations. A U.S. Holder may in certain circumstances mitigate adverse tax consequences of the PFIC rules by filing an
election to treat the PFIC as a qualified electing fund, or QEF, or, if shares of the PFIC are “marketable stock,” which such
term includes the Common Shares, for purposes of the PFIC rules, by making a mark-to-market election with respect to the shares of the
PFIC. U.S. Holders should be aware that, for each tax year, if any, that we are a PFIC, we can provide no assurances that we will satisfy
the record keeping requirements of a PFIC, or that we will make available to U.S. Holders the information such U.S. Holders require to
make a QEF election with respect to us, and as a result, a QEF election may not be available to U.S. Holders. For more information, see
the discussion below under “Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company
Considerations.” You should consult your own tax advisors regarding the potential consequences to you if we were or were to become
a PFIC, including the availability, and advisability, of, and procedure for making, QEF elections and mark-to-market elections.
General Risk Factors
The unfavorable
outcome of any future litigation, arbitration or administrative action could have a significant adverse impact on our financial condition
or results of operations.
From time to time, we
are a party to litigation, arbitration, or administrative actions. Our financial results and reputation could be negatively impacted by
unfavorable outcomes to any future litigation or administrative actions, including those related to the Foreign Corrupt Practices Act,
the U.K. Bribery Act, or other anti-corruption laws. There can be no assurances as to the favorable outcome of any litigation or administrative
proceedings. In addition, it can be very costly to defend litigation or administrative proceedings and these costs could negatively impact
our financial results.
If securities or
industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading
volume could decline.
The trading market for
our securities will depend in part on the research and reports that securities or industry analysts publish about us or our business.
Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts
commence coverage of our company, the trading price for our securities would likely be negatively impacted. In the event securities or
industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable
research about our business, our stock price may decline. If one or more of these analysts ceases coverage of our company or fails to
publish reports on us regularly, demand for our securities could decrease, which might cause our stock price and trading volume to decline.
We may lose our
foreign private issuer status in the future, which could result in significant additional costs and expenses.
As discussed above, we
are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements
of the Securities Exchange Act of 1934, as amended, or the Exchange Act. In the future, we would lose our foreign private issuer status
if (i) more than 50% of our outstanding voting securities are owned by U.S. residents and (ii) a majority of our directors or executive
officers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid loss of foreign private issuer
status. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements
on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also
have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject
to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability
to rely upon exemptions from certain corporate governance requirements under the listing rules of the Nasdaq Capital Market. As a U.S.
listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses
that we will not incur as a foreign private issuer.
We are an “emerging
growth company,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable
to emerging growth companies could make our common shares less attractive to investors.
We are an “emerging
growth company,” as defined in the JOBS Act. For as long as we continue to be an “emerging growth company,” we may choose
to take advantage of exemptions from various reporting requirements applicable to other public companies that are not “emerging
growth companies,” including, but not limited to, not being required to have our independent registered public accounting firm audit
our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We can remain an “emerging
growth company” for up to five fiscal years from the completion of our initial public offering in September 2020, although, if we
have more than US$1.235 billion in annual revenue, if the market value of our common shares held by non-affiliates exceeds US$700 million
as of June 30 of any year, or we issue more than US$1.0 billion of non-convertible debt over a three-year period before the end of that
five-year period, we would cease to be an “emerging growth company” as of the following December 31. Investors could find
our common shares less attractive if we choose to rely on these exemptions. If some investors find our common shares less attractive as
a result of any choices to reduce future disclosure, there may be a less active trading market for our common shares and our share price
may be more volatile. We have elected not to take advantage of the extended transition period allowed for emerging growth companies for
complying with new or revised accounting guidance as allowed by Section 107 of the JOBS Act and Section 7(a)(2)(B) of the Securities Act.
We incur significant increased costs as
a result of operating as a public company in the United States, and our management is required to devote substantial time to new compliance
initiatives.
As a public company in the United States, we incur
significant legal, accounting and other expenses that we did not incur previously. We are subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended, which requires, among other things, that we file with the SEC annual, quarterly and current
reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted
by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including
requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant
corporate governance and executive-compensation-related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules
and regulations in these areas. Recent legislation permits emerging growth companies to implement many of these requirements over a longer
period and up to five years from the pricing of their initial public offering. We intend to take advantage of this new legislation but
cannot assure you that we will not be required to implement these requirements sooner than planned and thereby incur unexpected expenses.
Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may
lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in
which we operate our business in ways we cannot currently anticipate.
We expect the rules and regulations applicable
to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming
and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a
material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income
or increase our consolidated net loss and may require us to reduce costs in other areas of our business or increase the prices of our
products or services. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain
director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We
cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these
requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our
board committees or as executive officers.
Although as a Foreign Private Issuer we
are exempt from certain corporate governance standards applicable to US issuers, if we cannot satisfy, or continue to satisfy, the initial
listing requirements and other rules of the Nasdaq Capital Market, our securities may not be listed or may be delisted, which could negatively
impact the price of our securities and your ability to sell them.
In order to maintain our listing on the Nasdaq
Capital Market, we will be required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum shareholders’
equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Even if we initially meet
the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements
and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could
be subject to delisting. In that regard, on May 18, 2021, we received a notice from Nasdaq indicating that, as a result of not having
timely filed our Annual Report on Form 20-F for the fiscal year ended December 31, 2020, we were not in compliance with Nasdaq Listing
Rule 5250(c)(1), which requires timely filing of all required periodic financial reports with the Securities and Exchange Commission.
Nasdaq required that we submit a plan no later than July 16, 2021 to regain compliance and we have in fact regained compliance with Nasdaq’s
listing requirements since then.
If we fail to maintain proper and effective
internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.
We are subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls
over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements in accordance with International Financial Reporting Standards.
In connection with the
audit of our consolidated financial statements for the years ended December 31, 2022, 2021 and 2020, our independent registered public
accountants identified three, six and two material weaknesses, respectively, in our internal control over financial reporting.
We have taken steps to
remediate these material weaknesses, and to further strengthen our accounting staff and internal controls, as described above. These measures
have only partially remediated the material weaknesses identified in 2022 and 2021 as discussed above. We cannot be certain that other
material weaknesses and control deficiencies will not be discovered in the future. Any failure to maintain internal control over financial
reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If our efforts are
not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial results
accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated and result
in the loss of investor confidence or delisting, cause the market price of our Common Shares to decline, and we could be subject to sanctions
or investigations by Nasdaq, the Securities and Exchange Commission, or other regulatory authorities. Failure to remedy any material weakness
in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies,
could also restrict our future access to the capital markets.
CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated
by reference in this prospectus contain forward-looking statements that are based on our management’s beliefs and assumptions and
on information currently available to us. The words “believe,” “may,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “expect,” “could,” “would,”
“project,” “plan,” “potentially,” “likely,” and similar expressions and variations thereof
are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Those statements appear
in this prospectus and the documents incorporated herein by reference, particularly in the sections titled “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and include statements
regarding the intent, belief or current expectations of our management that are subject to known and unknown risks, uncertainties and
assumptions. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various
factors.
Forward-looking statements include, but are not
limited to, statements about:
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the size and growth potential of the markets for our products, and our ability to serve those markets; |
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the rate and degree of market acceptance of our products; |
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our ability to expand our sales organization to address effectively existing and new markets that we intend to target; |
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impact from future regulatory, judicial, and legislative changes or developments in the U.S. and foreign countries; |
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our ability to compete effectively in a competitive industry; |
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our ability to obtain funding for our operations and effectively utilize the capital raised therefrom; |
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our ability to attract collaborators and strategic partnerships; |
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our ability to meet the continued listing requirements and standards of the Nasdaq Capital Market, or Nasdaq; |
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our ability to meet our financial operating objectives; |
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the availability of, and our ability to attract, qualified employees for our business operations; |
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general business and economic conditions; |
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our ability to meet our financial obligations as they become due; |
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positive cash flows and financial viability of our operations and any new business opportunities; |
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our ability to secure intellectual property rights over our proprietary products or enter into license agreements to secure the legal use of certain patents and intellectual property; |
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our ability to be successful in new markets; |
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our ability to avoid infringement of intellectual property rights; and |
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the effects of the global COVID-19 pandemic and the war in Ukraine. |
Because forward-looking statements are inherently
subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely upon forward-looking statements
as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur
and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law,
including the securities laws of the United States and the rules and regulations of the SEC, we do not plan to publicly update or revise
any forward-looking statements contained herein after we distribute this prospectus, whether as a result of any new information, future
events or otherwise.
In addition, statements that “we believe”
and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available
to us as of the date of this prospectus, and although we believe such information forms a reasonable basis for such statements, such information
may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review
of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly
rely upon these statements.
USE OF PROCEEDS
Assuming the maximum
number of Common Shares are sold in this offering at an assumed public offering price of $[●] per Common Share, which represents
the closing price of our Common Share on Nasdaq on October , 2023, and assuming no issuance of pre-funded
warrants in connection with this offering, we estimate the net proceeds of the offering will be approximately $ million,
after deducting the Placement Agent fees and estimated offering expenses payable by us. However, this is a best efforts offering with
no minimum number of Securities or amount of proceeds as a condition to closing, and we may not sell all or any of these Securities offered
pursuant to this prospectus; as a result, we may receive significantly less in net proceeds.
We intend to use the proceeds of this offering for general corporate purposes,
which could include working capital to fund inventory purchases for customers based on sales orders on hand and expected inventory demands
as well as future acquisitions and capital expenditures. Pending these uses, we may invest the net proceeds in short-and intermediate-term
interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United
States government.
The expected use of net proceeds from this offering
represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business
conditions evolve and change. As a result, our management will retain broad discretion over the allocation of the net proceeds from this
offering. See “Risk Factors—Risks Related to this Offering and the Ownership of Our Common Shares— Our management
will have broad discretion over the use of the proceeds we receive from the sale our Securities pursuant to this prospectus and might
not apply the proceeds in ways that increase the value of your investment.”
CAPITALIZATION
The following table sets forth our capitalization
as of June 30, 2023:
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on a pro
forma basis to reflect the issuance of 514,500 Common Shares on a public offering that closed on July 13, 2023; |
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on a pro-forma as adjusted basis to give further effect to the issuance and sale by us in this offering of our Common Shares offered by us in this prospectus (assuming no sale of pre-funded warrants) at the assumed public offering price of $[●] per Common Share after deducting the Placement Agent fees and other estimated offering expenses payable by us, and after giving effect to the use of proceeds described herein. |
The Pro-forma as adjusted information below is
illustrative only. You should read this table together with our financial statements and the related notes incorporated by reference into
this prospectus.
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Actual As of June 30,
2023 | | |
Pro Forma | | |
Pro-Forma as Adjusted | |
Cash and cash equivalents | |
$ | 2,026,640 | | |
$ | 1,179,464 | | |
$ | | |
Warrant Liability | |
$ | 307,381 | | |
$ | 628,765 | | |
$ | | |
Lease Obligations (short and long term) | |
$ | 813,731 | | |
$ | 838,303 | | |
$ | | |
Total liabilities not included in capitalization | |
$ | 4,583,164 | | |
$ | 3,578,242 | | |
$ | | |
Total Outstanding Long-Term Debt | |
$ | - | | |
$ | - | | |
$ | | |
Stockholders’ Equity | |
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Common shares, no par value: unlimited shares authorized;
1,339,434 shares actual after the reverse split; 1,854,834 shares pro forma; [●] pro-forma as adjusted | |
$ | 82,706,883 | | |
$ | 83,601,736 | | |
$ | | |
Reserves | |
$ | 14,218,932 | | |
$ | 13,958,227 | | |
$ | | |
Accumulated Other Comprehensive Income (loss) | |
$ | 98,870 | | |
$ | 98,870 | | |
$ | | |
Shareholders’ Deficit | |
$ | (85,030,279 | ) | |
$ | (85,401,915 | ) | |
$ | | |
Total Shareholders’ Equity | |
$ | 11,994,406 | | |
$ | 12,256,918 | | |
$ | | |
Total Capitalization | |
$ | 11,994,206 | | |
$ | 12,256,918 | | |
$ | | |
The number of Common Shares outstanding immediately following this
offering is based on 1,854,834 Common Shares outstanding as of October [●], 2023 and excludes:
| ● | 1,506,138
(15,061, after reverse split) Common Shares issuable upon the exercise of stock options outstanding under our 2016 Stock Option Plan,
as amended, with a weighted-average exercise price of $3.53 per share ($353, after reverse split); |
| ● | 3,165,000
(31,650, after reverse split) Common Shares issuable upon the exercise of restricted share units outstanding under the 2016 Stock
Option Plan, as amended, |
| ● | 10,025,111
(100,251 after reverse split) Common Shares reserved for future issuance under our 2016 Stock Option Plan, as amended; |
| ● | 13,100,084
(131,001, after reverse split) Common Shares issuable upon the exercise of outstanding warrants with a weighted average exercise price
of $3.84 ($384, after reverse split) per share; |
| ● | 931,507
(9,315, after reverse split) Common Shares issuable upon the exercise of outstanding investment banker’s warrants with a weighted
average exercise price of $4.87 ($487, after reverse split) per share; and |
Unless otherwise indicated, all information in
this prospectus assumes or gives effect to:
| ● | no
exercise of the warrants or options described above; and |
| ● | the
Reverse Split effective on August 9, 2023. |
See “Description of Securities”
for additional information.
DILUTION
If you invest in our
Common Shares in this offering, your interest will be diluted to the extent of the difference between the public offering price per share
of the Common Share and the pro-forma as adjusted net tangible book value per share of a Common Share immediately after this offering.
Our historical net tangible
book value as of June 30, 2023 after taking into account the reverse stock split was $3.26 per Common Share. Our historical net tangible
book value is the amount of our total tangible assets (Total assets less Intangible Assets and Goodwill) less our liabilities. Historical
net tangible book value per Common Share is our historical net tangible book value divided by the number of outstanding Common Shares
as of June 30, 2023.
The pro forma net tangible
book value of our Common Shares as of June 30, 2023 was $3.26 per Common Share. Pro forma net tangible book value per Common Share
represents our total tangible assets less our total liabilities, divided by the number of outstanding Common Shares, after giving effect
to the pro forma adjustments referenced under “Capitalization.”
After giving effect to
the sale of [●] Common Shares that we are offering at an offering price of $[●] per Common Share (assuming the sale of the
maximum offering amount and that no pre-funded warrants are sold in this offering), after deducting underwriting discounts and commissions
and estimated offering expenses payable by us, our net tangible book value on a pro forma as adjusted basis as of June 30, 2023 would
have been $[●] per Common Share. This amount represents an immediate increase in net tangible book value of $[●] per Common
Share to our existing shareholders and an immediate dilution of $[●] per Common Share to new investors purchasing Common Shares
in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this offering
from the amount of cash that a new investor paid for a Common Share.
The following table illustrates this dilution:
Public offering price per Common Share | |
$ | [●] | |
Pro-forma net tangible book value per Common Share as of June 30, 2023(1) | |
$ | [●] | |
Increase per share attributable to this offering(2) | |
$ | [●] | |
Pro-Forma as adjusted net tangible book value per Common Share after this offering(2) | |
$ | [●] | |
Dilution per share to new investors in this offering(3) | |
$ | [●] | |
(1) |
Pro-form as adjusted net tangible book value is calculated from the following items on the June 30, 2023 (unaudited) financial statements: |
Pro-forma Shareholders’ Equity | |
$ | [●] | |
Less: Intangible Assets | |
$ | [●] | |
Pro-forma net tangible book value at June 30, 2023 | |
$ | [●] | |
Pro-forma net tangible book value per Common Share at June 30, 2023 | |
$ | [●] | |
Pro-forma as adjusted net tangible book value at June 30, 2023 | |
$ | [●] | |
Number of Common Shares outstanding at June 30, 2023 | |
| 1,339,434 | |
Total pro-forma Common Shares outstanding at June 30, 2023 | |
| [●] | |
Total pro-forma as adjusted Common Shares at June 30, 2023 | |
| [●] | |
Pro-forma as adjusted net tangible book value per Common Share at June 30, 2023 | |
$ | [●] | |
(2) |
Increase per share attributable to this offering at June 30, 2023 is as follows |
Number of Common Shares to be issued in the offering | |
| [●] | |
Total pro-forma Common Shares outstanding at June 30, 2023 | |
| | |
Total pro-forma as adjusted Common Shares outstanding at June 30, 2023 | |
| [●] | |
Pro-forma net tangible book value per Common Share at June 30, 2023 | |
$ | 4,775,527 | |
Pro-forma as adjusted net tangible book value per Common Share June 30, 2023 per (1) above | |
$ | [●] | |
Increase per Common Share attributable to this offering | |
$ | [●] | |
(3) |
Dilution per share to new investors |
Offering Price per Common Share | |
$ | [●] | |
Pro-forma as adjusted net tangible book value per Common Share at June 30, 2023 | |
$ | [●] | |
Dilution per Common Share to new investors in this offering | |
$ | [●] | |
The foregoing discussion and table do not take
into account further dilution to new investors that could occur upon the exercise of all currently outstanding warrants having a per share
exercise or conversion price less than the per Common Share offering price to the public in this offering.
The foregoing discussion and table excludes the
following:
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1,506,138 (15,061, after reverse split) Common Shares issuable upon the exercise of stock options outstanding under our 2016 Stock Option Plan, as amended, with a weighted-average exercise price of $3.53 per share ($353, after reverse split); |
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3,165,000 (31,650, after reverse split) Common Shares issuable upon the exercise of restricted share units outstanding under the 2016 Stock Option Plan, as amended, |
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10,025,111 (100,251, after reverse split) Common Shares reserved for future issuance under our 2016 Stock Option Plan, as amended; |
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13,100,084 (131,001, after reverse split) Common Shares issuable upon the exercise of outstanding warrants with a weighted average exercise price of $3.84 ($384, after reverse split) per share; |
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931,507 (9,315, after reverse split) Common Shares issuable upon the exercise of outstanding investment banker’s warrants with a weighted average exercise price of $4.87 ($487, after reverse split) per share; and |
Unless otherwise indicated, all information in
this prospectus assumes or gives effect to:
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no exercise of the warrants or options described above; and |
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the Reverse Split effective on August 9, 2023. |
See “Description of Securities”
for additional information.
MANAGEMENT
Directors and Executive Officers
Set forth below is information concerning our directors, executive
officers, and other key employees.
Name |
|
Age |
|
Position(s) |
Marc Seelenfreund |
|
55 |
|
Director; Chief Executive Officer |
Gerald Bernstein |
|
60 |
|
Chief Financial Officer |
Glenn Kennedy |
|
56 |
|
Vice President of Sales |
Gidi Bracha |
|
46 |
|
Vice President of Technology and Product Development |
Peter Goldstein |
|
59 |
|
Executive Director and Chairman of the Board of Directors |
Gary Herman |
|
58 |
|
Director |
Steven Ospalak |
|
55 |
|
Director |
Lourdes Felix |
|
54 |
|
Director |
Marc Seelenfreund
Marc Seelenfreund is the Founder and CEO of Siyata Mobile Inc. since
July 2015, when the reverse takeover of Teslin Resources created Siyata Mobile Inc. Marc Seelenfreund has over 20 years’ experience
in the telecom and cellular arena as founder of a leading telecom distribution company representing multiple global telecom vendors. From
August 2004 to July 2015, he was the CEO of Accel Telecom Inc. a key importer and integrator of advanced telecom equipment into the Israeli
telecom market. Accel Telecom Inc.’s products and services included importing and distribution of mobile devices, including smartphones
and feature phones, integration of cloud software, and distribution and integration of networking equipment including routers and mobile
broadband solutions. Marc Seelenfreund received a law degree from Bar Ilan University and is the Chairman of Ono Academic College.
Gerald Bernstein
Gerald Bernstein has been CFO of the Company since
July 2016. Mr. Bernstein was previously the VP Finance from July 2015 until June 2016 of Pazazz Printing Inc. a printing and fulfillment
service to ensure a seamless flow throughout projects including printing, graphic design, direct marketing, fulfillment and logistics.
Previously, Mr. Bernstein served as the VP Finance from July 2013 until February 2015 of Amcor Holdings Inc., an international real estate
development and management company. From September 2003 until July 2015, Mr. Bernstein was a self-employed certified public accountant
consultant, working on various mandates in mortgage financing, tax planning, turnaround, process re-engineering and private equity due
diligence. Mr. Bernstein holds a Bachelor of Commerce Degree and a Graduate Diploma in Public Accountancy from McGill University. Mr.
Bernstein has been a member of the Canadian Institute of Chartered Professional Accountants since 1987.
Glenn Kennedy
Glenn Kennedy has over 25 years of sales experience
in the telecommunications industry where he has managed sales nationally for Motorola Canada, HTC Communications Canada and Sonim Technologies;
Glenn Kennedy is the VP Sales of Siyata Mobile Inc. since January 2017 including product certification, sales training and education to
the marketplace. Previously Mr. Kennedy served as the Director of Carrier Sales for Sonim Technologies working exclusively on the Rogers
Wireless account from October 2015 until December 2016. Mr. Kennedy was the National Account Manager for HTC Communications Canada, working
exclusively on the Bell Mobility account from August 2011 until August 2015. From April 2003 until May 2011, Mr. Kennedy was the National
Account Manager for Motorola Mobility, working specifically on the Telus account. Mr. Kennedy has earned a Bachelor of Arts with Honors
in Business Administration from the Richard Ivey School of Business at the University of Western Ontario.
Gidi
Bracha
Gidi
Bracha served as a VP of Technology since 2011 and has spearheaded the development of Siyata’s various cellular products. Mr. Bracha
has over 15 years of technological experience in the telecommunications industry. Mr. Bracha has served in various key positions at Cellcom,
Israel’s leading cellular provider, including Head of Car Mobility Products and as a Director of Type Approvals. Mr. Bracha has
served as an engineer in the Anti-Aircraft division of the air force in the IDF. Mr. Bracha holds a bachelor’s degree in Engineering
and Business Management from the University of Derby.
Peter
Goldstein
Mr.
Goldstein has over 30 years of diverse and global entrepreneurial, client advisory and capital market experience and a successful track
record in leading and building companies in the capital markets. Mr. Goldstein is experienced with mergers and acquisitions, strategic
planning and transaction structuring. In 2006, Mr. Goldstein founded Grandview Capital Partners, Inc. where he continues to serve as
chairman and chief executive officer to this date. He is the chief executive officer of Exchange Listing, LLC, which he founded in 2019.
He currently serves as a member of the board of directors of Cosmos Holdings, Inc. From 2013 to 2015 he served in various roles, including
as a director, interim president and chief financial officer of American Patriot Brands, Inc. In 2012 he co-founded Staffing 360 Solutions,
Inc., where he served in various roles, including chairman of the board of directors and principal financial officer until 2014. He received
his master’s degree in international business from the University of Miami.
Gary Herman
Mr.
Herman, has been a member of the Board since August 10, 2023. Mr. Herman is a seasoned investor with many years of investment and advisory
experience. Since 2005, Mr. Herman has managed Strategic Turnaround Equity Partners, LP (Cayman) and its affiliates. From January 2011
to August 2013, he was a managing member of Abacoa Capital Management, LLC, which managed, Abacoa Capital Master Fund, Ltd. focused on
a Global-Macro investment strategy. From 2005 to 2020, Mr. Herman was affiliated with Arcadia Securities LLC, a FINRA-registered broker-dealer.
From 1997 to 2002, he was an investment banker with Burnham Securities, Inc. From 1993 to 1997, he was a managing partner of Kingshill
Group, Inc., a merchant banking and financial firm with offices in New York and Tokyo. Mr. Herman has a B.S. from the University at Albany
with a major in Political Science and minors in Business and Music. Mr. Herman has many years of experience serving on the boards of
private and public companies. He presently sits on the board of SusGlobal Energy Corp. (OTC: SNRG) as well as the Board and Audit Chairperson
of: XS Financial Inc. (CSE: XS).
Stephen
Ospalak
Stephen
Ospalak combines 25 years in various capacities around the globe with the telecom and technology sector organizations. Currently SVP
Marketing & Operations at BMG Inc., a boutique global consulting firm assisting CEOs, Boards, and various investment institutions.
At BMG, Mr. Ospalak served as interim: CEO for AiTelecom (Mexican Sat Com operator) where he oversaw all aspects of company; human capital,
finance, sales, marketing, products and services. Mr. Ospalak was Global Integration Officer for Virgin Management Inc. (London, UK)
in the capacity as oversaw operations. Focus: alignment, best practices, cost saving. Built and matured intra company relationships,
furthered global business initiatives (Cable – FTTH & HSPA/LTE). Streamlined Intercompany global purchasing, reduced mobile
device portfolio costs, established acquisition standards. Canadian VP & Board Advisor for Brightstar /Softbank (Miami) in the capacity
as BOD as the Acting Vice President / Advisor for the Canadian Market and as SVP Operations at Iusacell (now AT&T) (Mexico City).
Previously,
Mr. Ospalak served at TELUS Communications Inc. a public national quad play telecom and media services provider as Vice President of
Products and Services leading an international group developing, delivering, and managing a large product/services portfolio that consisted
of a $US 2B annual spend. He was responsible for all activities related to Mobile & CPE Subscriber Products including definition,
specifications, design, purchase, build, test, deployment, market & product definition, capital spend, budgets, field customer service,
operations, software, & hardware (LTE, HSPA, FTTH, WiFi, POTS, ADSL). Mr. Ospalak received a Bachelor of Science from the University
of Toronto and an Honors Bachelor of Commerce from the University of Windsor.
Lourdes
Felix
Lourdes
Felix is a corporate finance executive offering over fifteen years of combined experience in public accounting and in the private sector
in building, leading, and advising corporations through complex restructurings. Ms. Felix has been instrumental in assisting in capital
procurement and implementing an audit committee. She is thoroughly experienced in guiding troubled companies to greater efficiency and
profitability. Ms. Felix has acquired expertise in securities laws and knowledge of SOX requirements. She has worked with private and
public SEC reporting companies. Ms. Felix was previously the controller for a mid-size public accounting firm for over seven years and
was responsible for the operations and financial management of regional offices. Her experience includes a wide variety of industries
including advertising, marketing, non-profit organizations, medical practices, mortgage banking, manufacturing and SEC reporting companies.
She has assisted companies with documented contributions leading to improved financial performance, heightened productivity, and enhanced
internal controls. Ms. Felix has been a Director of BioCorRx Inc. since March 7, 2013. Ms. Felix was appointed Chief Executive Officer
of BioCorRx on November 9, 2020 and became Chief Financial Officer of BioCorRx on October 1, 2012. Ms. Felix was President of BioCorRx
from February 26, 2020 until she resigned upon her appointment as CEO on November 9, 2020. Ms. Felix is very active in the Hispanic community
and speaks fluent Spanish. Ms. Felix holds a Bachelor of Science degree in Business Management and Accounting from University of Phoenix.
Board
Diversity Matrix
Board
Diversity (As of October 10, 2023) |
Country
of Principal Executive Offices: |
Canada |
Foreign
Private Issuer: |
Yes |
Disclosure
Prohibited Under Home Country Law: |
No |
Total
Number of Directors: |
5 |
|
Female |
Male |
Non-Binary |
Did
Not Disclose Gender |
Part
I: Gender Identity |
|
|
|
|
Directors |
1 |
4 |
|
|
Part
II: Demographic Background |
|
|
|
|
Underrepresented
Individual in Home Country Jurisdiction |
1 |
4 |
|
|
LGBTQ+ |
|
|
|
5 |
Did
Not Disclose Demographic Background |
1 |
4 |
|
|
Family
Relationships
None
of our directors or executive officers has a family relationship.
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, except as described below, none of our directors or executive officers has, during the past ten years:
|
● |
been convicted in a criminal
proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences); |
|
● |
had any bankruptcy petition
filed by or against the business or property of the person, or of any partnership, corporation or business association of which he
was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time; |
|
● |
been subject to any order,
judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state
authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business,
securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons
engaged in any such activity; |
|
● |
been found by a court of
competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
|
● |
been the subject of, or
a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended
or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any
federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance
companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty
or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire
fraud or fraud in connection with any business entity; or |
|
● |
been the subject of, or
a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined
in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity
Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority
over its members or persons associated with a member. |
Corporate
Governance
Board
of Directors Structure
Our
board of directors currently consists of five directors of which three of our directors have been determined to be “independent”
within the meaning of Section 5605(a)(2) of the NASDAQ Listing Rules and meet the criteria for independence set forth in Rule 10A-3 of
the Securities Exchange Act of 1934, as amended. Our articles provide that, so long as we are a public company, the board of directors
must be composed of the greater of three members and the number set by ordinary resolution of our shareholders, which was set at five
members. Our directors serve until a successor has been duly elected and qualified unless the director was appointed by the board of
directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director
is eligible for re-election.
Terms
of Directors and Executive Officers
Each
of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board of
directors, in which case such director holds office until the next following annual meeting of shareholders at which time such director
is eligible for re-election. All of our executive officers are appointed by and serve at the discretion of our board of directors.
Qualification
There
is currently no shareholding qualification for directors, although a shareholding qualification for directors may be fixed by our shareholders
by ordinary resolution.
Insider
Participation Concerning Executive Compensation
No
executive officer of the Company is involved in determinations regarding executive officer compensation.
Committees
of the Board of Directors
We
have established three committees under the board of directors: an audit committee, a compensation committee, and a nominating and corporate
governance committee, each of which acts pursuant to a charter governing the authority and responsibility of each committee. We have
determined that Stephen Ospalak, Gary Herman and Lourdes Felix will satisfy the “independence” requirements of Section 5605(a)(2)
of the Nasdaq Listing Rules and Rule 10A-3 under the Exchange Act. Each committee’s members and functions are described below.
Audit
Committee. Our audit committee consists of Gary Herman, Stephen Ospalak, and Lourdes Felix. Lourdes Felix is the chairperson
of our audit committee. Our board also has determined that Lourdes Felix qualifies as an audit committee financial expert within the
meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules. The audit committee oversees
our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible
for, among other things:
|
● |
appointing the independent
auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
|
|
|
|
● |
reviewing with the independent
auditors any audit problems or difficulties and management’s response; |
|
|
|
|
● |
discussing the annual audited
financial statements with management and the independent auditors; |
|
|
|
|
● |
reviewing the adequacy
and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major
financial risk exposures; |
|
|
|
|
● |
reviewing and approving
all proposed related party transactions; |
|
|
|
|
● |
meeting separately and
periodically with management and the independent auditors; and |
|
|
|
|
● |
monitoring compliance with
our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
Compensation
Committee. We follow home country rules with respect to the composition and responsibilities of our compensation committee. Our
compensation committee consists of Lourdes Felix, Stephen Ospalak and Gary Herman. Stephen Ospalak is the chairperson of our compensation
committee. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of
compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting
during which his compensation is deliberated. The compensation committee is responsible for, among other things:
|
● |
reviewing and approving
the total compensation package for our most senior executive officers; |
|
|
|
|
● |
approving and overseeing
the total compensation package for our executives other than the most senior executive officers; |
|
|
|
|
● |
reviewing and recommending
to the board with respect to the compensation of our directors; |
|
|
|
|
● |
reviewing periodically
and approving any long-term incentive compensation or equity plans; |
|
|
|
|
● |
selecting compensation
consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence
from management; and |
|
|
|
|
● |
reviewing programs or similar
arrangements, annual bonuses, employee pension and welfare benefit plans. |
Nominating
and Corporate Governance Committee. We follow home country rules with respect to the composition and responsibilities of our
nominating and corporate governance committee. Our nominating and corporate governance committee consists of Stephen Ospalak, Gary Herman,
and Lourdes Felix. Gary Herman is the chairperson of our nominating and corporate governance committee. The nominating and corporate
governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the
composition of the board and its committees. The nominating and corporate governance committee are responsible for, among other things:
|
● |
identifying and recommending
nominees for election or re-election to our board of directors or for appointment to fill any vacancy; |
|
|
|
|
● |
reviewing annually with
our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability
of service to us; |
|
|
|
|
● |
identifying and recommending
to our board the directors to serve as members of committees; |
|
|
|
|
● |
advising the board periodically
with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable
laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective
action to be taken; and |
|
|
|
|
● |
monitoring compliance with
our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
Code of
Business Conduct and Ethics
Our
board of directors has adopted a “Code of Ethical Conduct”. See Item 16B. The Siyata Code of Ethical Conduct establishes
standards of desired behaviors that apply to directors, senior management, all employees and contract workers, including the responsibility
to be truthful, respect others, comply with laws, regulations and our policies, and engage in sales practices that are fair and not misleading.
The
board annually reviews the Code of Ethical Conduct and closely collaborates with management to set the tone from above and promote a
strong governance culture that influences Siyata at every level and across our business. Our Code of Ethical Conduct sets out fundamental
principles that guide the board in its deliberations. It creates a frame of reference for properly addressing sensitive and complex issues,
requiring directors, senior management, and all employees and contract workers to report misconduct. Siyata encourages an open and transparent
environment where team members can speak up and raise concerns without any form of retaliation.
EXECUTIVE
COMPENSATION
Summary
Compensation Table - Years Ended December 31, 2022 and 2021
The
following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons
for services rendered in all capacities during the noted periods. No other executive officers received total annual salary and bonus
compensation in excess of $100,000.
Name
and Principal Position | |
Year | | |
Salary
($) | | |
Bonus
($) | | |
Option
Awards(1)
($) | | |
Total
($) | |
Gerald Bernstein | |
| 2022 | | |
$ | 253,038 | | |
$ | 50,000 | | |
$ | 212,836 | | |
$ | 515,893 | |
| |
| 2021 | | |
$ | 249,750 | | |
$ | 23,500 | | |
$ | 95,106 | | |
$ | 368,356 | |
Marc Seelenfreund (2) | |
| 2022 | | |
$ | 329,904 | | |
$ | 100,000 | | |
$ | 1,229,033 | | |
$ | 1,658,937 | |
| |
| 2021 | | |
$ | 334,610 | | |
| 0 | | |
$ | 325,000 | | |
$ | 659,610 | |
Gidi Bracha | |
| 2022 | | |
$ | 218,500 | | |
$ | 20,800 | | |
$ | 156,203 | | |
$ | 395,505 | |
| |
| 2021 | | |
$ | 214,212 | | |
| 0 | | |
$ | 60,212 | | |
$ | 274,424 | |
Glenn Kennedy | |
| 2022 | | |
$ | 133,712 | | |
$ | 8,895 | | |
$ | 38,636 | | |
$ | 181,343 | |
| |
| 2021 | | |
$ | 120,000 | | |
$ | 17,500 | | |
$ | 58,750 | | |
$ | 196,250 | |
Total | |
| 2022 | | |
$ | 935,154 | | |
| 179,695 | | |
$ | 1,636,730 | | |
$ | 2,771,579 | |
| |
| 2021 | | |
$ | 918,572 | | |
$ | 41,000 | | |
$ | 539,068 | | |
$ | 1,498,640 | |
(1) |
Represents the aggregate
grant date fair value computed in accordance with IFRS 2 Share-based payments. The price for each amount is based on the closing
price of the trading price of our shares on the NASDAQ on the date of grant. Adjusted for 1-for-100 reverse split, effected on August
9, 2023. |
(2) |
Includes 1,800,000 (18,000, after reverse split) restricted
share units that vest over three years that were issued on March 9, 2022. |
Employment
Agreements
Marc
Seelenfreund, Chief Executive Officer
Effective
July 1, 2018, the Company entered into a consulting agreement with BSD Ltd. and Marc Seelenfreund, or the Seelenfreund Consulting Agreement,
pursuant to which Marc Seelenfreund, as Chief Executive Officer, will be paid an initial base salary approximately $300,000. The Seelenfreund
Consulting Agreement also contains change of control provisions such that if the Seelenfreund Consulting Agreement is terminated by us
without good cause or Marc Seelenfreund is constructively dismissed within six months of a change of control, Marc Seelenfreund will
receive a lump-sum payment equal to 36 months’ worth of salary in addition to the continuing payment of a quarterly bonus equal
to 5% of the Company’s EBITDA for three years following the termination or constructive dismissal, as applicable. In the event
of a hostile change of control, Marc Seelenfreund will be entitled to elect to terminate the Seelenfreund Consulting Agreement and will
thereafter be entitled to receive a lump-sum payment equal to 36 months’ worth of salary in addition to the continuing payment
of a quarterly bonus equal to 5% of the Company’s EBITDA for three years following the election. In July 2019, the Seelenfreund
Consulting Agreement was assigned to BASAD Partners Ltd.
Effective
November 1, 2020, the Company entered into a consulting agreement with Mr. Seelenfreund, or the Seelenfreund Director Service Agreement,
pursuant to which Mr. Seelenfreund, as a member of the board of directors, will be paid an initial base salary of approximately $40,000
and granted 100,000 Common Share (1,000, after reverse split) options that vest quarterly over a two-year period. The Seelenfreund Director
Service Agreement also contains change of control provisions such that if there is a change of control, Mr. Seelenfreund’s stock
option vesting will be accelerated.
Effective
March 9, 2022, granted 1,800,000 (18,000, after reverse split) RSU’s to Marc Seelenfreund that vest quarterly over three years
with the first vesting as at the date of the grant.
Effective
November 1, 2022, Siyata amended the consulting agreement with Marc Seelenfreund pursuant to which Marc Seelenfreund, as an officer of
the Company will be paid an annual fee of $360,000. The term of the amended agreement is effective November 1, 2022 and expires on January
1, 2025. The consulting agreement has been re-assigned to BSD Capital Partners Ltd.
Gerald
Bernstein, Chief Financial Officer
Effective
July 1, 2018, we entered into an amended and restated employment agreement with Gerald Bernstein, or the Bernstein Employment Agreement,
pursuant to which Gerald Bernstein, as CFO, will be paid an initial base salary of $102,790 ($140,000 CAD) per year. The Bernstein Employment
Agreement also contains change of control provisions such that if the Bernstein Employment Agreement is terminated without good cause
by us or Gerald Bernstein is constructively dismissed within six months of a change of control, Gerald Bernstein will receive a lump-sum
payment equal to two years’ worth of salary.
Effective
November 1, 2020, we entered into an amended and restated employment agreement with Mr. Bernstein, or the Bernstein Employment Agreement,
pursuant to which Mr. Bernstein, as Chief Financial Officer, will be paid an initial base salary of $225,000 per year on a three- year
term. The Bernstein Employment Agreement also contains change of control provisions such that if the Bernstein Employment Agreement is
terminated without good cause by us or Mr. Bernstein is constructively dismissed within six months of a change of control, Mr. Bernstein
will receive a lump-sum payment equal to two years’ worth of salary. Effective November 1, 2020, Siyata entered into a two-year
employment with Gerald Bernstein, pursuant to which Gerald will continue to be the Chief Financial Officer and will be paid an annual
base salary of CAD$300,000. Additionally, Gerald Bernstein was granted 29,000 stock options (290, after reverse split), to vest over
24-month period in 8 equal tranches beginning on the date of the grant, at $6.00 per share ($600, after reverse split) with an expiry
date of 5 years from the date of granting. In addition, on January 2, 2021, Gerald Bernstein was granted 1,000 stock options (10, after
reverse split), to vest over 24-month period in 8 equal tranches beginning on the date of the grant, at $11.50 per share with an expiry
date of 5 years from the date of granting.
Effective
April 13, 2022, Gerald was granted 300,000 RSU’s (3,000, after reverse split) that vest quarterly over three years with the first
vesting as at the date of the grant. Gerald’s contract was automatically renewed on the same terms and conditions.
Glenn
Kennedy, Vice President of Sales (North America)
Effective
November 26, 2018, we entered into a consulting agreement with Glenn Kennedy, or the Kennedy Consulting Agreement, pursuant to which
Glenn Kennedy, as Vice President of Sales, North America, will be paid an annual fee of CAD$150,000. According to the terms of the Kennedy
Consulting Agreement, Mr. Kennedy received commission of 1.5% on all North American sales of our products exceeding CAD$5,000,000 but
less than CAD$18,500,00, and commission of 0.75% on sales exceeding CAD$18,500,000. Effective January 1, 2021, the Kennedy Consulting
Agreement was amended to update the commission rates to be paid to Mr. Kennedy in connection with the sales of our products. Pursuant
to the amendment, Mr. Kennedy will receive commission of 1.5% of the gross sales of the UV350 and CP250 devices in Canada, in international
markets other than the U.S. and Israel, and to MSI, other than in Israel. Mr. Kennedy will also receive commission of 1.5% of the gross
sales of boosters to Canadian carriers, International Carriers and Motorola worldwide, and 0.25% of gross sales of boosters, UV350 and
CP250 devices to U.S. carriers. The Kennedy Consulting Agreement can be terminated without good cause by either us or Mr. Kennedy upon
90 days’ notice.
Effective
January 1, 2021, we entered into an addendum # 1 to the consulting agreement of Glenn Kennedy dated November 18, 2018, whereby the agreement
is renewed for a further term of two years commencing on January 1, 2021 and expiring on December 31, 2022. The base fee will remain
at $150,000 CAD per annum. The commission will be all of (i) 1.5% of gross sales of the UV350 and the CP250 in any of Canada, international
markets, outside of the USA and Israel, and to Motorola worldwide (other than Motorola Israel). (ii) 1.5% of the gross sales of Boosters
sold to Canadian Carriers, International carriers and Motorola worldwide, (iii) 0.25% of gross sales of boosters to the US carrier and
UV350 and CP250 devices to U.S. carriers.
Effective
April 13, 2022, Glenn Kennedy was granted 90,000 stock options (900, after reverse split) with a $1.10 ($100, after reverse split) exercise
price that vest quarterly over three years with the first vesting as at the date of the grant.
Effective
July 12, 2022, 2022, Glenn Kennedy was granted 90,000 (900, after reverse split) stock options with a $1.10 ($110, after reverse split)
exercise price that vest quarterly over three years with the first vesting as at the date of the grant.
Effective
January 1, 2023, we entered into an addendum # 2 to the consulting agreement of Glenn Kennedy dated November 18, 2018, whereby the agreement
is renewed for a further term of three years commencing on January 1, 2023 and expiring on December 31, 2025. The base fee will remain
at $165,000 CAD per annum. The commission will be all of (i) 1.5% of gross sales of the UV350, CP250, SD7, SD7+, SD8and VK7 Devices (in
any of Canada, international markets, outside of the USA and Israel, and to Motorola worldwide (other than Motorola Israel). (ii) 1.5%
of the gross sales of Boosters sold to Canadian Carriers, International carriers and Motorola worldwide, (iii) 0.25% of gross sales of
boosters to the US carrier and UV350, CP250, SD7, SD7+, SD8 and VK7 devices to U.S. carriers.
Gidi
Bracha, Vice President of Technology and Product Development
Effective
January 1, 2020, we entered into a consulting agreement with Gidi Bracha, or the Bracha Consulting Agreement, pursuant to which Gidi
Bracha, as Vice President of Technology and Product Development, will be paid an annual fee of $194,000. Additionally, Mr. Bracha will
receive a car allowance of $20,000. The Bracha Consulting Agreement can be terminated without good cause by either us or Mr. Bracha upon
90 days’ notice.
Effective
July 12, 2022, 2022, Gidi Bracha was granted 150,000 (1,500, after reverse split) stock options with a $1.10 ($110, after reverse split)
exercise price that vest quarterly over three years with the first vesting as at the date of the grant.
Effective
July 12, 2022, 2022, Gidi Bracha was granted 150,000 (1,500, after reverse split) RSU’s that vest quarterly over three years with
the first vesting as at the date of the grant.
Retirement
Benefits
We
have not maintained, and do not currently maintain, a defined benefit pension plan, nonqualified deferred compensation plan or other
retirement benefits.
Outstanding
Equity Awards at Fiscal Year-End
2022 Outstanding
Option Awards at Fiscal Year Ended (Adjusted for Reverse Share Split, effective, August 9, 2023)
Name | |
Number
of securities underlying unexercised options (#) | | |
Equity
incentive plan awards: Number of securities underlying unexercised unearned options (#) | | |
Option
exercise price $USD | | |
Option
expiration date | |
Number
of shares or units of stock that have not vested (#) | | |
Market
value of shares of units of stock that have not vested ($) | | |
Equity
incentive plan awards: Number of unearned shares, units or other rights that have not
vested (#) | | |
Equity
incentive plan awards: Market or payout value of unearned shares, units or other rights
that have not vested ($) | |
Marc Seelenfreund | |
| 950 | | |
| 0 | | |
$ | 600.00 | | |
15-Nov-25 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 81 | | |
| 0 | | |
$ | 588.8 | | |
21-Mar-24 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 50 | | |
| 0 | | |
$ | 1,150.00 | | |
2-Jan-26 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 18,000 | | |
| 10,500 | | |
| N/A | | |
N/A | |
| 12,000 | | |
$ | 36,000 | | |
| 12,000 | | |
$ | 36,000 | |
| |
| 19,081 | | |
| 10,500 | | |
| | | |
| |
| 12,000 | | |
| 36,000 | | |
| 12,000 | | |
| 36,000 | |
Gerald Bernstein | |
| 3,000 | | |
| 2,250 | | |
| N/A | | |
N/A | |
| 2,250 | | |
| 6,750 | | |
| 2,250 | | |
| 6,750 | |
| |
| 290 | | |
| 0 | | |
$ | 600.00 | | |
15-Nov-25 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 25 | | |
| 0 | | |
$ | 5,353.00 | | |
24-Dec-23 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 10 | | |
| 0 | | |
$ | 1,150.00 | | |
2-Jan-26 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 3,325 | | |
| 2,250 | | |
| | | |
| |
| 2,250 | | |
| 6,750 | | |
| 2,250 | | |
| 6,750 | |
Glenn Kennedy | |
| 900 | | |
| 675 | | |
$ | 110.00 | | |
12-Jul-27 | |
| 675 | | |
| 2,025 | | |
| 675 | | |
$ | 2,025 | |
| |
| 900 | | |
| 675 | | |
$ | 110.00 | | |
13-Apr-27 | |
| 675 | | |
$ | 2,025 | | |
| 675 | | |
$ | 2,025 | |
| |
| 40 | | |
| 0 | | |
$ | 600.00 | | |
15-Nov-25 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 60 | | |
| 0 | | |
$ | 1,150.00 | | |
18-Jan-26 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 1,900 | | |
| 135,000 | | |
| | | |
| |
| 1,350 | | |
$ | 4,050 | | |
| 1,350 | | |
$ | 4,050 | |
Stephen Ospalak | |
| 17 | | |
| 0 | | |
$ | 5,353.00 | | |
24-Dec-23 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 200 | | |
| 0 | | |
$ | 600.00 | | |
15-Nov-25 | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| 900 | | |
| 0 | | |
| N/A | | |
N/A | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 1,117 | | |
| 0 | | |
| | | |
| |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Gidi Bracha | |
| | | |
| | | |
| | | |
| |
| - | | |
| - | | |
| - | | |
| - | |
| |
| 1,500 | | |
| 1,125 | | |
| N/A | | |
N/A | |
| 1,125 | | |
| 3,375 | | |
| 1,125 | | |
| 3,375 | |
| |
| 1,500 | | |
| 1,125 | | |
$ | 110.00 | | |
13-Apr-27 | |
| 1,125 | | |
| 3,375 | | |
| 1,125 | | |
| 3,375 | |
| |
| 200 | | |
| 0 | | |
$ | 600.00 | | |
15-Nov-25 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 25 | | |
| 0 | | |
$ | 5,888.00 | | |
21-Mar-23 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 3,225 | | |
| 2,250 | | |
| | | |
| |
| 2,250 | | |
| 6,750 | | |
| 2,250 | | |
| 6,750 | |
Michael Kron1 | |
| 17 | | |
| 0 | | |
$ | 5,353.00 | | |
24-Dec-23 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 200 | | |
| 0 | | |
$ | 600.00 | | |
15-Nov-25 | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| 900 | | |
| 0 | | |
| N/A | | |
N/A | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 1,117 | | |
| 0 | | |
| | | |
| |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Gary
Herman2 | |
| 0 | | |
| 0 | | |
| 0 | | |
0 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 0 | | |
| 0 | | |
| 0 | | |
0 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 0 | | |
| 0 | | |
| 0 | | |
0 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 0 | | |
| 0 | | |
| 0 | | |
0 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Peter Goldstein | |
| 200 | | |
| 0 | | |
$ | 600.00 | | |
15-Nov-25 | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| 1,800 | | |
| 0 | | |
| N/A | | |
N/A | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 2,000 | | |
| 0 | | |
| | | |
| |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Lourdes Felix | |
| 200 | | |
| 0 | | |
$ | 400.00 | | |
15-Nov-25 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 900 | | |
| 0 | | |
| N/A | | |
N/A | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
| 1,100 | | |
| 0 | | |
| | | |
| |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| 1. | Michael
Kron resigned from the board of directors of the Company, effective August 10, 2023. |
| 2. | Gary
Herman was appointed to the board of directors of the Company, effective August 10, 2023. |
Non-Employee
Director Compensation
The
table below sets forth the compensation paid to our non-employee directors during the fiscal year ended December 31, 2022.
Name | |
Salary | | |
Bonus | | |
Option
Awards(1) | | |
Total | |
| |
| | |
| | |
| | |
| |
Steve Ospalak | |
$ | 87,000 | | |
$ | 20,000.00 | | |
$ | 122,560.00 | | |
| 229,560 | |
Peter Goldstein | |
$ | 81,083 | | |
$ | 30,000.00 | | |
$ | 122,560.00 | | |
| 233,643 | |
Lourdes Felix | |
$ | 96,067 | | |
$ | 15,000.00 | | |
$ | 122,560.00 | | |
| 233,627 | |
Total | |
| 363,483 | | |
$ | 85,000.00 | | |
$ | 490,240.00 | | |
| 938,723 | |
| 1. | Adjusted
for Reverse Share Split, effective, August 9, 2023. |
Stephen
Ospalak, Director (Independent)
Effective
November 1, 2020, Siyata entered into a two-year consulting agreement with Stephen Ospalak, or, the Ospalak Consulting Agreement, pursuant
to which Stephen Ospalak, as a member of the board of directors, will be paid an annual fee of $37,000. Additionally, Stephen Ospalak
was granted 20,000 (200, after reverse split) stock options, to vest over 24-month period in 8 equal tranches beginning on the date of
the grant, at $6.00 ($600, after reverse split) per share with an expiry date of 5 years from the date of granting.
Effective
March 9, 2022, Siyata amended the consulting agreement with Stephen Ospalak, or, the Amended Ospalak Consulting Agreement, pursuant to
which Stephen Ospalak, as a member of the board of directors, will be paid an annual fee of $97,000. Additionally, Stephen Ospalak was
granted 90,000 (900, after reverse split) restricted stock units, RSU’s, to vest immediately. The term of the amended agreement
is effective March 9, 2022 and expires on March 8, 2024.
Lourdes
Felix, Director (Independent)
Effective
October 29, 2021, Siyata entered into a two-year consulting agreement with Lourdes Felix, pursuant to which Lourdes Felix, as a member
of the board of directors, will be paid an annual fee of $43,200. Additionally, Lourdes Felix was granted 20,000 (200, after reverse
split) stock options, to vest over a 24-month period in 8 equal tranches beginning on the date of the grant, at $4.00 ($400, after reverse
split) per share with an expiry date of 5 years from the date of granting.
Effective
March 9, 2022, Siyata amended the consulting agreement with Lourdes Felix, or, the Amended Felix Consulting Agreement, pursuant to which
Lourdes Felix, as a member of the board of directors, will be paid an annual fee of $98,000. Additionally, Lourdes Felix was granted
90,000 (900, after reverse split) restricted stock units, RSU’s, to vest immediately. The term of the amended agreement is
effective March 9, 2022 and expires on March 8, 2024.
Equity
Incentive Plan
On
January 6, 2022, our board of directors approved an amended and restated equity incentive plan (the “Plan”), which has replaced
our previous stock option plan in its entirety. The shareholders of the Company subsequently approved a further amended Plan on February
14, 2022. The Plan permits the Corporation to issue stock options and restricted share units (“RSUs”) to eligible directors,
officers, employees, and consultants of the Company. The maximum number of Common shares issued under the Plan, together with any other
securities-based compensation, may not exceed 15% of the number of the issued and outstanding Common shares on a fully diluted basis.
Stock
options are exercisable for Common shares. The exercise price of each stock option shall not be less than the market price of the Common
shares at the date of grant. Options can have a maximum term of ten years and typically terminate 30 days following the termination of
the optionee’s employment or engagement, except in the case of retirement or death. Vesting of options is at the discretion of
our board of directors at the time the options are granted.
RSUs
are redeemable for Common shares, a cash amount in lieu thereof, or a combination of Common shares and cash. RSUs typically terminate
on the termination of the RSU holder’s employment or engagement, except in the case of retirement or death. Vesting of options
is at the discretion of the Corporation’s board of directors at the time the options are granted. In the event of a change of control,
RSUs will immediately vest and be settled for Common shares, a cash amount in lieu thereof, or a combination of Common shares and cash.
As
of October 10, 2023, the number of Common Shares reserved for the exercise of awards granted under the Plan was 10,025,111 (100,251,
after reverse split). In addition, options to purchase 1,506,138 (15,061, after reverse split) Common Shares were issued and outstanding,
out of which options to purchase 794,888 (7,949, after reverse split) Common Shares were vested as of that date, with an average exercise
price of $3.53 ($353, after reverse split). Exercise prices in CAD$ are translated into U.S. dollars at the rate of CAD$1.324 = U.S.
$1.00, based on the closing rate of exchange between the CAD$ and the U.S. dollar as reported by Bank of Canada on June 30, 2023. In
addition, restricted share units to purchase 3,165,000 (31,650, after reverse split) Common Shares were issued and outstanding out of
which restricted share units to purchase 1,893,750 (189,375, after reverse split) common Shares were vested as of that date.
Under
the Plan, the maximum number of Common Shares reserved for issuance may not exceed 15% of the total number of issued and outstanding
Common Shares on a fully diluted basis at the time of granting.
Our
Plan was adopted by our board of directors on January 6, 2022 and was approved by our shareholders at our annual general and special
meeting on February 14, 2022.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Other
than as disclosed below, and except for the regular salary and bonus payments made to our directors and officers in the ordinary course
of business as described in “Executive Compensation,” there have been no transactions since January 1, 2020, or any currently
proposed transaction or series of similar transactions to which the Company was or is to be a party, in which the amount involved exceeds
USD$120,000 and in which any current or former director or officer of the Company, any 5% or greater shareholder of the Company or any
member of the immediate family of any such persons had or will have a direct or indirect material interest. We believe the terms obtained
or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms
available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.
Loan
to Mr. Seelenfreund
On
April 1, 2019 the Company and BSD Capital Ltd, an entity controlled by Marc Seelenfreund, the CEO and a Director of the Company, entered
into a Loan Agreement, whereby the Company issued a promissory note in the amount of USD$ 200,000 to BSD Capital Ltd (the “Promissory
Note”). This promissory note is due in five years with interest charged at the rate of 7% per annum payable quarterly. There are
no principal repayment requirements until the end of the term when a balloon payment of the principal balance is required.
On
January 1, 2020 the Company, BSD Capital Ltd., and Basad Partners Ltd. entered into an assignment and amending agreement whereby BSD
Capital Ltd assigned its right, title and interest in Basad Partners Ltd. in the Promissory Note and that the interest rate of the note
shall be increased to 12.5% per annum. The loan was repaid on May 23, 2021.
Purchase
of Units by Marc Seelenfreund
Marc
Seelenfreund, the CEO and director of the Company, purchased an aggregate of 360,000 common shares, (3,600, after reverse split) in a
private placement in Canada that closed in August 2020 in for aggregate consideration of CDN$36,000 connection with the Company’s
August 2020 financing.
,Marc
Seelenfreund, the CEO and director of the Company, purchased an aggregate of 1,800,000 common shares, (18,000, after reverse ,split)
in a share purchase agreement that closed in July 2023 for aggregate consideration of $81,000 in connection with the Company’s
July 2023 financing.
Consulting
Agreements with Peter Goldstein
Effective
November 1, 2020, Siyata entered into a two year consulting agreement with Peter Goldstein, or, the Goldstein Consulting Agreement, pursuant
to which Peter Goldstein, as Chair of the Board of Directors, will be paid an annual fee of $42,000. Additionally, Peter Goldstein was
granted 20,000 (200, after reverse split) stock options, to vest over 24 month period in 8 equal tranches beginning on the date of the
grant, at $6.00 ($600, after reverse split) per share with an expiry date of 5 years from the date of granting.
Effective
March 9, 2022, Siyata amended the consulting agreement with Peter Goldstein, or, the Amended Goldstein Consulting Agreement, pursuant
to which Peter Goldstein, as Chair of the Board of Directors, will be paid an annual fee of $97,000. Additionally, Peter Goldstein was
granted 180,000 (1,800, after reverse split) restricted stock units, RSU’s, to vest immediately. The term of the amended agreement
is effective March 9, 2022 and expires on March 8, 2024.
Effective
August 10, 2023, Peter Goldstein became executive chairman of the board of directors.
PRINCIPAL
SHAREHOLDERS
The
following table sets forth certain information with respect to the beneficial ownership of our Common Shares as of October 10, 2023 for
(i) each of our named executive officers and directors; (ii) all of our named executive officers and directors as a group; and (iii)
each other shareholder known by us to be the beneficial owner of more than 5% of our outstanding Common Shares, assuming that we sell
the maximum number of Common Shares being offered.
Beneficial
ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. For
purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares that such person
or any member of such group has the right to acquire within sixty (60) days. For purposes of computing the percentage of outstanding
shares of our Common Shares held by each person or group of persons named above, any shares that such person or persons has the right
to acquire within sixty (60) days of October 10, 2023 are deemed to be outstanding for such person, but not deemed to be outstanding
for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially
owned does not constitute an admission of beneficial ownership by any person. The share ownership numbers after the offering for the
beneficial owners indicated below exclude any potential purchases that may be made by such persons in this offering.
Unless
otherwise indicated, the address of each beneficial owner listed in the table below is c/o Siyata Mobile Inc., 7404 King George Blvd.,
Suite 200, King’s Cross, Surrey, British Columbia V3W 1N6, Canada, 514-500-1181.
| |
Common
Shares Beneficially | | |
Common
Shares Beneficially | |
| |
Owned
Prior to this Offering(1) | | |
Owned
After this Offering(2) | |
Name
of Beneficial Owner | |
Shares | | |
% | | |
Shares | | |
% | |
Marc
Seelenfreund, CEO and Director | |
| 37,313 | | |
| 2.01 | % | |
| [●] | | |
| [●] | |
Gerald
Bernstein, Chief Financial Officer | |
| 3,326 | | |
| 0.18 | % | |
| [●] | | |
| [●] | |
Glenn
Kennedy, VP of Sales | |
| 1,900 | | |
| 0.10 | % | |
| [●] | | |
| [●] | |
Gidi
Bracha, VP of Technology and Product Development | |
| 3,225 | | |
| 0.17 | % | |
| [●] | | |
| [●] | |
Peter
Goldstein**, Director and Chairman of the Board of Directors | |
| 2,400 | | |
| 0.13 | % | |
| [●] | | |
| [●] | |
Stephen
Ospalak | |
| 1,118 | | |
| 0.06 | % | |
| [●] | | |
| [●] | |
Michael
Kron*** | |
| 1,129 | | |
| 0.06 | % | |
| [●] | | |
| [●] | |
Gary
Herman**** | |
| 0 | | |
| 0.00 | % | |
| [●] | | |
| [●] | |
Lourdes
Felix***** | |
| 1,100 | | |
| 0.06 | % | |
| [●] | | |
| [●] | |
All
executive officers and directors (8 persons above) | |
| 51,511 | | |
| 2.78 | % | |
| [●] | | |
| [●] | |
5%
or Greater Shareholders: | |
| | | |
| | | |
| | | |
| | |
N/A | |
| | | |
| | | |
| [●] | | |
| [●] | |
** |
Peter Goldstein became
a Director effective November 1, 2020, became Chairman of the Board of directors effective February 23, 2021 and became executive
chairman of the Board effective ____________. |
*** |
Michael Kron resigned as
a Director effective August 3, 2023. |
|
|
**** |
Gary Herman became a Director
effective August 10, 2023. |
|
|
***** |
Lourdes Felix became a
Director effective October 29, 2021. |
(1) |
Based on 1,854,834 Common
Shares issued and outstanding as of October 10, 2023. As adjusted for reverse share split, effective August 9, 2023. |
|
|
(2) |
Based on [●] Common
Shares issued and outstanding after this offering assuming that we sell the maximum number of Common Shares being offered. |
(3) |
Represents 1,081 options
convertible to Common Shares and 18,000 Restricted shares units convertible to Common Shares and 18,232 Common Shares held by Mr.
Seelenfreund. |
|
|
(4) |
Represents 325 options
and 3,000 Restricted Share Units both convertible to Common Shares plus 1 Common Shares all held by Mr. Bernstein. |
|
|
(5) |
Represents 1,900 options
convertible to Common Shares held by Mr. Kennedy. |
|
|
(6) |
Represents 1,725 options
and 1,500 Restricted Share Units both convertible to Common Shares held by Gidi Bracha. |
|
|
(7) |
Represents 200 options
and 1,800 Restricted Share Units both convertible to Common shares held by Peter Goldstein as well 400 Common Shares that is held
by a Company under his control. |
|
|
(8) |
Represents 217 options
and 900 Restricted Share Units both convertible to Common Shares held by Mr. Ospalak. |
|
|
(9) |
Represents 217 options
and 900 Restricted Share Units both convertible to Common Shares held by Mr. Kron as well as 11 Common Shares. |
|
|
(10) |
Represents 200 options
and 900 Restricted Share Units both convertible to Common Shares held by Ms. Felix. |
We
do not currently have any arrangements which if consummated may result in a change of control of our company.
DESCRIPTION
OF SECURITIES
General
The
following description of our share capital and provisions of our articles are summaries and do not purport to be complete. Reference
is made to our articles, copies of which are filed as an exhibit to the registration statement of which this prospectus is a part (and
which is referred to in this section as the “articles”).
Securities
Offered in this Offering
This
is an offering of our Common Shares.
Our Common
Shares are listed on the Nasdaq Capital Market and currently trade under the symbols “SYTA.”
All
of our issued and outstanding Common Shares are fully paid and non-assessable. Our Common Shares are issued in registered form and are
issued when registered in our register of members. Unless the board of directors determine otherwise, each holder of our Common Shares
will not receive a certificate in respect of such Common Shares. Our shareholders who are non-residents of British Columbia may freely
hold and vote their Common Shares.
We
are authorized to issue an unlimited number of Common Shares with no par value per share. Subject to the provisions of the Business Corporations
Act and our articles regarding redemption and purchase of the shares, the directors have general and unconditional authority to allot
(with or without confirming rights of renunciation), grant options over or otherwise deal with any unissued shares to such persons, at
such times and on such terms and conditions as they may decide. Such authority could be exercised by the directors to allot shares which
carry rights and privileges that are preferential to the rights attaching to Common Shares. No share may be issued at a discount except
in accordance with the provisions of the Business Corporations Act. The directors may refuse to accept any application for shares and
may accept any application in whole or in part, for any reason or for no reason.
On
September 20, 2020, the Company consolidated our issued and outstanding Common Shares on a 145-to-1 basis.
On
August 9, 2023 the Company consolidated our issued and outstanding Common Shares on a 100-to-1 basis. Except where otherwise indicated,
all share and per share data in this prospectus have been retroactively restated to reflect the Reverse Split.
Pre-Funded
Warrants
The
following summary of certain terms and provisions of the Pre-Funded Warrants that are being offered hereby is not complete and is subject
to, and qualified in its entirety by the provisions of, the Pre-Funded Warrant. Prospective investors should carefully review the terms
and provisions of the form of Pre-Funded Warrant for a complete description of the terms and conditions of the Pre-Funded Warrants.
Purchase.
The term “pre-funded” refers to the fact that the purchase price of our Common Shares in this offering includes almost the
entire exercise price that will be paid under the Pre-Funded Warrants, except for a nominal remaining exercise price of $0.01. The purpose
of the Pre-Funded Warrants is to enable investors that may have restrictions on their ability to beneficially own more than 4.99% (or,
upon election of the holder, 9.99%) of our outstanding Common Shares following the consummation of this offering the opportunity to invest
capital into the Company without triggering their ownership restrictions, by receiving Pre-Funded Warrants in lieu of our Common Shares
which would result in such ownership of more than 4.99% (or 9.99%), and receive the ability to exercise their option to purchase the
shares underlying the Pre-Funded Warrants at such nominal price at a later date.
Duration.
The Pre-Funded Warrants offered hereby will entitle the holders thereof to purchase our Common Shares at a nominal exercise price of
$0.01 per share, commencing immediately on the date of issuance.
Exercise
Limitation. A holder will not have the right to exercise any portion of the Pre-Funded Warrant if the holder (together with its affiliates)
would beneficially own in excess of 4.99% (or, upon election of the holder, 9.99%) of the number of shares of our Common Shares outstanding
immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded
Warrants. However, any holder may increase or decrease such percentage, provided that any increase will not be effective until the 61st
day after such election.
Exercise Price. The Pre-Funded Warrants
will have an exercise price of $0.01 per share. The exercise price is subject to appropriate adjustment in the event of certain stock
dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our Common Shares and also
upon any distributions of assets, including cash, stock or other property to our stockholders.
Transferability. Subject to applicable
laws, the Pre-Funded Warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange Listing. There is no established
trading market for the Pre-Funded Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing
of the Pre-Funded Warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity
of the Pre-Funded Warrants will be limited.
Fundamental Transactions. If a fundamental
transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that
we may exercise and will assume all of our obligations under the Pre-Funded Warrants with the same effect as if such successor entity
had been named in the Pre-Funded Warrant itself. If holders of our Common Shares are given a 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 consideration it receives upon any
exercise of the Pre-Funded Warrant following such fundamental transaction.
Rights as a Stockholder. Except as otherwise
provided in the Pre-Funded Warrants or by virtue of such holder’s ownership of our Common Shares, the holder of a Pre-Funded Warrants
does not have the rights or privileges of a holder of our Common Shares, including any voting rights, until the holder exercises the Pre-Funded
Warrant.
Warrant Agent. The pre-funded warrants
will be issued in registered form under a warrant agent agreement between Computershare Inc., as warrant agent, and us. The pre-funded
warrants shall initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of
The Depository Trust Company, or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.
Prior Warrants
Overview. Our Prior Warrants were listed
on the Nasdaq Capital Market and currently trade under the symbols “SYTAW.” The Prior Warrants are not a part of this offering.
On August 9, 2023 the Company consolidated our issued and outstanding Common Shares on a 100-to-1 basis. The Prior Warrants, subject to
their terms, were thus adjusted therein to reflect the Reverse Split.
The following summary of certain terms and provisions
of the Prior Warrants is not complete and is subject to, and qualified in its entirety by, the provisions of the warrant agency agreement
between us and the Warrant Agent, and the form of Prior Warrant, both of which are filed as exhibits to the registration statement of
which this prospectus is a part. Prospective investors should carefully review the terms and provisions set forth in the warrant agency
agreement, including the annexes thereto, and form of Prior Warrant.
The Prior Warrants entitle the registered holder
to purchase Common Shares at a price equal to $685 per share, subject to adjustment as discussed below, immediately following the issuance
of such warrant and terminating at 5:00 p.m., New York City time, five years after the closing of the public offering in September, 2020.
The exercise price and number of Common Shares
issuable upon exercise of the Prior Warrants may be adjusted in certain circumstances, including in the event of a stock dividend or recapitalization,
reorganization, merger or consolidation. However, the Prior Warrants will not be adjusted for issuances of Common Shares at prices below
its exercise price.
Exercisability. The Prior Warrants are
exercisable at any time after their original issuance and at any time up to the date that is five years after their original issuance.
The Prior Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the
Warrant Agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied
by full payment of the exercise price, by certified or official bank check payable to us, for the number of Prior Warrants being exercised.
Under the terms of the Warrant Agreement, we must use our best efforts to maintain the effectiveness of the registration statement and
current prospectus relating to Common Shares issuable upon exercise of the Prior Warrants until the expiration of the warrants. If we
fail to maintain the effectiveness of the registration statement and current prospectus relating to the Common Shares issuable upon exercise
of the Prior Warrants, the holders of the Prior Warrants shall have the right to exercise the Prior Warrants solely via a cashless exercise
feature provided for in the Prior Warrants, until such time as there is an effective registration statement and current prospectus.
Exercise Limitation. A holder may not exercise
any portion of a Prior Warrant to the extent that the holder, together with its affiliates and any other person or entity acting as a
group, would own more than 4.99% of the outstanding Common Shares after exercise, as such percentage ownership is determined in accordance
with the terms of the warrant, except that upon prior notice from the holder to us, the holder may waive such limitation up to a percentage
not in excess of 9.99%.
Exercise Price. The exercise price per
whole Common Share purchasable upon exercise of the Prior Warrants was originally equal to 100% of the public offering price of the units
that were offered by the Company in its initial public offering. The exercise price is subject to appropriate adjustment in the event
of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our Common
Shares and also upon any distributions of assets, including cash, stock or other property to our stockholders. The exercise price of the
Prior Warrants was adjusted in connection with the 100-1 reverse split of our Common Shares.
Fractional Shares. No fractional Common
Shares will be issued upon exercise of the Prior Warrants. As to any fraction of a share which the holder would otherwise be entitled
to purchase upon such exercise, the Company will round up or down, as applicable, to the nearest whole share.
Transferability. Subject to applicable
laws, the Prior Warrants may be offered for sale, sold, transferred or assigned without our consent.
Warrant Agent; Global Certificate. The
Prior Warrants were issued in registered form under a warrant agency agreement between the Warrant Agent and us. The Prior Warrants were
initially represented only by one or more global warrants deposited with the Warrant Agent, as custodian on behalf of The Depository Trust
Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.
Fundamental Transactions. In the event
of a fundamental transaction, as described in the Prior Warrants and generally including any reorganization, recapitalization or reclassification
of our Common Shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation
or merger with or into another person, the acquisition of more than 50% of our outstanding Common Shares, or any person or group becoming
the beneficial owner of 50% of the voting power represented by our outstanding Common Shares, the holders of the Prior Warrants will be
entitled to receive the kind and amount of securities, cash or other property that the holders would have received had they exercised
the Prior Warrants immediately prior to such fundamental transaction.
Rights as a Stockholder. The Prior Warrant
holders do not have the rights or privileges of holders of Common Shares or any voting rights until they exercise their warrants and receive
Common Shares. After the issuance of Common Shares upon exercise of the Prior Warrants, each holder will be entitled to one vote for each
share held of record on all matters to be voted on by shareholders.
Governing Law. The Prior Warrants and the
warrant agency agreement are governed by New York law.
Other Securities
On September 29, 2020 the Company completed an
initial public offering of 2,100,000 (21,000, post reverse split) units (the “Units”) at $6.00 per unit ($600, post reverse
split) for gross proceeds of $12,600,00. Each Unit consisting of one Common Share and one tradeable warrant to purchase one Common Share.
Each warrant has an exercise price of $6.85 per share ($685, post reverse split), is exercisable immediately and will expire five (5)
years from the date of issuance. The Common Shares and the warrants comprising the Units are immediately separable upon issuance and will
be issued separately in this offering. The Common Shares using the residual value approach were valued at $4.73 ($473, post reverse split)
per share and each warrant was valued at $1.27 per warrant ($127, post reverse split). Share issuance costs related to the initial public
offering was $2,810,274 including 113,500 underwriter warrants exercisable at $6.60 ($660, post reverse split) per share, with a Black
Scholes Value of $315,796, and underwriter overallotment 266,000 tradeable warrants with an exercise price of $6.85 ($685, post reverse
split) with a Black Scholes Value of $335,160.
On October 27, 2021, we entered into a securities
purchase agreement with Lind Global Partners II, LP, an investment fund managed by The Lind Partners, a New York City-based institutional
fund manager (“Lind”), relating to the purchase and sale of a senior secured convertible note (the “Lind Partners Note”)
for gross proceeds of $6,000,000 (the “Securities Purchase Agreement”). While the Lind Partners Note was repaid in full on
November 14, 2022, the Securities Purchase Agreement pursuant to which Lind Partners acquired the Lind Notes prohibited the Company from
entering into any Prohibited Transactions (as defined) without Lind Partner’s prior written consent until thirty days after such
time as the Lind Note had been repaid in full and/or had been converted into Common Shares. Because the Company issued Common Shares and
pre-funded warrants in a registered offering and issued Common Share purchase warrants in a concurrent private offering, both of which
closed on October 12, 2022, Lind Partners waived such Prohibited Transaction provision in consideration of participating in that offering
and receiving without payment therefor Common Share purchase warrants in the private placement to acquire up to 1,739,130 Common Shares
(17,392, post reverse split) at an exercise price of $0.23 ($23, post reverse split) per Common Share (the “Lind Waiver Warrants”).
Lind did not exercise any of the said Lind Waiver Warrants pursuant to the Warrant Exercise Agreement. The Common Shares underlying the
Lind Waiver Warrant have been registered on a registration statement of the Company on Form F-1, filed with the SEC on February 15, 2023,
amended by Amendment No.1 to the registration statement on Form F-1/A, as filed with the SEC on March 27, 2023, and declared effective
with the SEC on March 30, 2023.
On January 11, 2022, the Company completed an
underwritten public offering of 8,695,652 (86,957, post reverse split) Common Shares (or pre-funded warrants to purchase Common Shares
in lieu thereof) and accompanying warrants to purchase up to 8,695,652 (86,957, post reverse split) Common Shares. Each Common Share (or
pre-funded warrant in lieu thereof) was sold together with one common warrant at a combined effective offering price of $2.30 ($230, post
reverse split). In addition, the Company issued 1,480,000 (14,800, post reverse split) pre-funded units (“2022 Pre-Funded Units”)
at $2.29 ($229, post reverse split) per 2022 Pre-Funded Unit. Each 2022 Pre-Funded Unit is comprised of a one-pre-funded warrant (a “2022
Pre-Funded Warrant”) to purchase one Common Share, and one warrant to purchase one Common Share. The 2022 Pre-Funded Warrant allows
the holder to acquire one Common Share of the Company at an exercise price of $0.01 per Common Share, and a warrant to purchase a Common
Share at an exercise price of $2.30 per share ($230, post reverse split). The Company also issued warrants to the placement agents to
purchase 434,783 (4,348, post reverse split) Common Shares at an exercise price of $2.53 ($253, post reverse split) per share (the “Placement
Agent Warrants”), which are exercisable 180 days from January 11, 2022, with a term of five years. The fair value of the Placement
Agent Warrants was determined to be $307,189 using the Black-Scholes model with the following assumptions: initial stock price $1.73 ($173,
post reverse split), strike rate $2.53 ($253, post reverse split), dividend yield 0%, term 5 years, volatility 60.0% and risk-free rate
0.50%.
On October 13, 2022, the Company closed a $4.0
million underwritten registered direct offering. The Company previously entered into a securities purchase agreement with certain institutional
investors to purchase approximately 15,810,000 (158,100, post reverse split) Common Shares and 1,590,000 pre-funded warrants. In a private
placement, which was consummated concurrently with the offering, the Company issued warrants to purchase up to an aggregate of 17,400,000
(174,000, post reverse split) Common Shares. The warrants are immediately exercisable, expire 5 years from the date of issuance and have
an exercise price of $0.23 per Common Share ($23, post reverse split).
On January 19, 2023, the Company entered into
warrant exercise agreements with fourteen existing accredited investors to exercise certain outstanding warrants to purchase up to an
aggregate of 18,042,857 (180,429, post reverse split) of the Company’s Common Shares. In consideration for the immediate exercise
of the outstanding warrants for cash, the Company agreed to reduce the exercise price from $0.23 ($23, post reverse split) to $0.20 ($20,
post reverse split) per share and issue new unregistered warrants to purchase up to an aggregate of 18,042,857 Common Shares (180,429,
post reverse split) with an exercise price of $0.20 per share ($20, post reverse split). The gross proceeds to the Company from the exercise
totaled approximately $3,608,571, prior to deducting warrant inducement agent fees and offering expenses. The new warrants are exercised
immediately upon issuance at an exercise price of $0.20 per share ($20, post reverse split) and have a term of exercise equal to five
years. In connection with the exercise, the Company will be required pursuant to the terms of 2,989,130 (29,892, post reverse split) of
its remaining unexercised common share purchase warrants, to reduce the exercise price of such warrants from $0.23 per Common Share ($23,
post reverse split) to an exercise price of $0.20 per Common Share ($20, post reverse split). The Company has registered for resale 18,042,857
(180,429, post reverse split) Common Shares underlying these warrants on a registration statement of the Company on Form F-1, filed with
the SEC on February 15, 2023, amended by Amendment No.1 to the registration statement on Form F-1/A, as filed with the SEC on March 27,
2023, and declared effective with the SEC on March 30, 2023.
In April 2023, cashless warrants were exercised
in exchange for a total of 17,116,987 (171,170 post reverse split) Common Shares issued by the Company. Since no cash was used for the
exercise of such warrants, the Company received no proceeds from such exercise.
On June 27, 2023, the Company announced that it
had entered into a Securities Purchase Agreement, dated as of June 26, 2023 with a certain institutional investor (the “Purchaser”),
pursuant to which the Company agreed to issue and sell to the Purchaser and to certain additional institutional investors an aggregate
of 50,000,000 (500,000 post reverse split) of the Company’s Common Shares, at a purchase price of $0.045 ($4.5 post reverse split)
per Common Share (the “June 2023 Offering”). The closing of the June 2023 Offering occurred on June 28, 2023. The June 2023
Offering resulted in gross proceeds to the Company of $2,250,000 before deducting the fees payable to Maxim Group LLC, as sole placement
agent for the June 2023 Offering, and certain related June 2023 Offering expenses. The Common Shares were offered pursuant to a registration
statement on Form F-1 (SEC File No. 333-272512), filed with the SEC on June 8, 2023, as amended, which was declared effective on June
26, 2023.
On July 11, 2023, the Company announced that it
had entered into a Securities Purchase Agreement with certain institutional investors named therein (the “Purchasers”), pursuant
to which the Company agreed to issue and sell, in a registered direct offering (the “July 2023 Offering”) 51,450,000 (514,500
post reverse split) of the Company’s Common Shares, at a purchase price of $0.045 ($4.50 post reverse split) per Common Share. The
Purchase Agreement contained customary representations and warranties and agreements of the Company and the Purchasers and customary indemnification
rights and obligations of the parties. The closing of the July 2023 Offering occurred on July 13, 2023. The July 2023 Offering resulted
in gross proceeds to the Company of $2,315,250 before deducting the fees payable to Maxim Group LLC, as sole placement agent for the Offering,
and certain related July 2023 Offering expenses. The Common Shares were offered pursuant to a prospectus supplement, filed with the SEC
on July 13, 2023, to the Company’s effective shelf registration statement on Form F-3 (File No. 333-265998), which was filed with
the SEC on July 1, 2022 and was declared effective on July 18, 2022.
On August 18, 2023, the Company filed a Notice
of Alteration creating the Preferred Shares. The special rights and restrictions attached to the Class A Preferred Shares and Class B
Preferred Shares are the same and are described below:
| ● | the holders of Preferred Shares (the “Preferred Shareholders”) are entitled to vote on the
basis of one vote per Preferred Share, voting together as a single class with holders of Common Shares; |
| ● | if the Board authorizes any of the Preferred Shares to be issued as convertible, each convertible Preferred
Share will be convertible into only one Common Share; |
| ● | the Preferred Shares shall, as to the payment of dividends and return of capital in the event of liquidation,
dissolution or winding up of the Company, rank in priority to the Common Shares; and |
| ● | the Preferred Shares may be issued with certain preferences over the Common Shares with respect to dividends
or the power to approve the declaration of a dividend. |
As of the date hereof, no Preferred Shares have
been issued.
Listing
Our Common Shares and Prior Warrants are listed on the Nasdaq Capital
Market under the symbol “SYTA” and “SYTAW,” respectively. The Common Shares offered hereby will trade on the Nasdaq
Capital Market under the symbol “SYTA.”
There is no established trading market for the
pre-funded warrants, and we do not expect an active trading market to develop. We do not intend to list the pre-funded warrants on any
securities exchange or other trading market. Without an active trading market, the liquidity of the pre-funded warrants will be limited.
Transfer Agent
The transfer agent for the Common Shares is Computershare
Inc., 510 Burrard Street, 2nd Floor, Vancouver, British Columbia V6C 3B9, Canada.
Dividends
Subject to the provisions of the Business Corporations
Act and any rights attaching to any class or classes of shares under and in accordance with the articles:
|
a) |
the directors may declare dividends or distributions out of our funds which are lawfully available for that purpose; and |
|
b) |
our shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors. |
Unless provided by the rights attached to a share,
no dividend shall bear interest.
Voting Rights
Subject to any rights or restrictions as to voting
attached to any shares, unless any share carries special voting rights, on a show of hands every shareholder who is present in person
and every person representing a shareholder by proxy shall have one vote per Common Shares. During a shareholder vote, every shareholder
who is present in person and every person representing a shareholder by proxy shall have one vote for each share of which he or the person
represented by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting
of the holders of that class of shares. Votes may be given either personally or by proxy.
Variation of Rights of Shares
Whenever our capital is divided into different
classes of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that class)
may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with
the sanction of a resolution passed by a majority of not less than two-thirds of the holders of shares of the class present in person
or by proxy at a separate general meeting of the holders of shares of that class.
Unless the terms on which a class of shares was
issued state otherwise, the rights conferred on the shareholder holding shares of any class shall not be deemed to be varied by the creation
or issue of further shares ranking pari passu with the existing shares of that class.
Alteration of Share Capital
Subject to the Business Corporations Act, the Company may, by a resolution
of the directors:
|
1) |
create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares; |
|
2) |
increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established; |
|
3) |
or consolidate all or any of its unissued, or fully paid issued, shares; |
|
4) |
if the Company is authorized to issue shares of a class of shares with par value: |
|
a) |
decrease the par value of those shares; or |
|
b) |
if none of that class of shares are allotted or issued, increase the par value of those shares; |
|
5) |
change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value; |
|
6) |
alter the identifying name of any of its shares; or |
|
7) |
otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act. |
General Meetings
Under the Business Corporations Act, the Company
must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after
that much hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference
date at such time and place as may be determined by the directors.
If all the shareholders who are entitled to vote
at an annual general meeting consent by a unanimous resolution to all of the business that is required to be transacted at that annual
general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders much,
in any unanimous resolution, select as the Company’s annual reference date, a date that would be appropriate for the holding of
the applicable annual general meeting.
The directors may also, whenever they think fit,
call a meeting of the shareholders.
A general meeting of the Company may be held anywhere
in North America, as determined by the directors.
The Company must send notice of the date, time
and location of any meeting of shareholders in the manner provided in the Business Corporations Act to each shareholder entitled to attend
the meeting and to each director of the Company if and for so long as the Company is a public company, twenty-one days, and otherwise
ten days.
The directors may set a date as the record date
for the purpose of determining shareholders entitled to, or the non-receipt of any notice by, any of the persons entitled to notice does
not invalidate any proceeding at that meeting. Any persons entitled to notice of a meeting of shareholders may, in writing or otherwise,
waive or reduce the period of notice of such meeting.
Accidental omission to send notice of any meeting
of shareholder to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceeding at that
meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice
of such meeting.
If a meeting of shareholders is to consider special
business, as defined in the Company’s articles, the notice of meeting must:
|
1) |
state the general nature of the special business; |
|
2) |
if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders: |
|
a) |
at the Company’s record office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and |
|
b) |
during statutory business hours on any one or more specified days before the day set for the holding of the meeting. |
A shareholder may participate in a meeting of
the shareholders in person or by telephone if all shareholders participate in the meeting, whether in person or by telephone or other
communications medium, are able to communicate with each other and if all shareholders who wish to participate in the meeting agree to
such participation.
The quorum for the transaction of business at
a meeting of shareholders is two persons, who are or representing by proxy, shareholders holding, in the aggregate, at least 33.33 percent
of the issued shares entitled to be voted at the meeting. On a show of hands, every person present who is a shareholder or proxy holder
entitled to vote on the matter has one vote.
Directors
Under the Business Corporations Act, as a publicly
traded company, the Company must have at least three directors, and as many directors as set by ordinary resolution. The shareholders
may elect or appoint the directors needed to fill any vacancies in the board of directors up to the number of opened vacancies. A director
is entitled to remuneration for acting as directors.
At every annual general meeting, the shareholder
entitled to vote must elect, or in a unanimous resolution, appoint, a board of directors consisting of the number of directors for the
time being.
The shareholding qualification for directors may
be fixed by our shareholders by ordinary resolution and unless and until so fixed no share qualification shall be required.
Each director holds office for the term, if any,
fixed by the terms of his appointment or until his earlier death, bankruptcy, insanity, resignation or removal. If no term is fixed on
the appointment of a director, the director serves indefinitely until his earlier death, bankruptcy, insanity, resignation or removal.
A director may be removed by ordinary resolution.
A director may at any time resign or retire from
office by giving us notice in writing. Unless the notice specifies a different date, the director shall be deemed to have resigned on
the date that the notice is delivered to us.
Subject to the provisions of the articles, the
office of a director may be terminated forthwith if:
|
a) |
he resigns his office by notice to us; |
|
b) |
he only held office as a director for a fixed term and such term expires; |
|
d) |
he is removed pursuant to the articles of the Company. |
Each of the compensation committee and the nominating
and corporate governance committee shall consist of at least three directors and the majority of the committee members are independent
within the meaning of Section 5605(a)(2) of the NASDAQ Listing Rules. The audit committee consists of at least three directors, all of
whom are independent within the meaning of Section 5605(a)(2) of the NASDAQ Listing Rules and meet the criteria for independence set forth
in Rule 10A-3 or Rule 10C-1 of the Exchange Act.
Powers and Duties of Directors
Subject to the provisions of the Business Corporations
Act and our articles of association, our business shall be managed by the directors, who may exercise all our powers. No prior act of
the directors shall be invalidated by any subsequent alteration of our articles of association. To the extent allowed by the Business
Corporations Act, however, shareholders may by special resolution validate any prior or future act of the directors which would otherwise
be in breach of their duties.
The directors may delegate any of their powers
to any person to be the attorney of the Company.
The board of directors may establish any local
or divisional board of directors or agency and delegate to it its powers and authorities (with power to sub-delegate) for managing any
of our affairs.
The directors may from time to time and at any
time by power of attorney or in any other manner they determine appoint any person, either generally or in respect of any specific matter,
to be our agent with or without authority for that person to delegate all or any of that person’s powers.
The directors may from time to time and at any
time by power of attorney or in any other manner appoint any person, whether nominated directly or indirectly by the directors, to be
our attorney or our authorized signatory and for such period and subject to such conditions as they may think fit. The powers, authorities
and discretions, however, must not exceed those vested in, or exercisable, by the directors under the articles.
The board of directors may remove any person so
appointed and may revoke or vary the delegation.
A director may, as a director, vote (and be counted
in the quorum) in respect of any contract, transaction, arrangement or proposal in which he has an interest which is not a material interest.
However, a director who holds a disclosable interest in a contract or transaction win which the Company has entered or proposes to enter
is not entitled to vote on any directors’ resolutions to approve the contract or transaction, unless the directors have disclosable
interest in that contract or transaction, in which case any or all of those directors may vote on such resolution. Such director who holds
a disclosable interest that is present for a meeting of directors may be counted in the quorum at the meeting, whether or not the director
votes on any or all of the resolutions considered at the meeting.
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
Subject to the limitations and qualifications
stated herein, the following discussion sets forth the material U.S. federal income tax
considerations relating to the acquisition, ownership and disposition by U.S. Holders (as defined below) of Common Shares acquired pursuant
to this offering. The discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), its legislative
history, existing and proposed regulations thereunder, published rulings and court decisions, all as currently in effect and all subject
to change at any time, possibly with retroactive effect. This summary applies only to U.S. Holders and does not address tax consequences
to a non-U.S. Holder (as defined below) investing in Common Shares.
This discussion of a U.S. Holder’s tax consequences
addresses only those persons that hold Common Shares as capital assets and does not address the tax consequences to any special class
of holders, including without limitation, holders (directly, indirectly or constructively) of 10% or more of the Company’s equity
(based on value or voting power), dealers in securities or currencies, banks, tax-exempt organizations, insurance companies, financial
institutions, broker-dealers, regulated investment companies, real estate investment trusts, traders in securities that elect the mark-to-market
method of accounting for their securities holdings, persons that hold Common Shares that are a hedge or that are hedged against currency
or interest rate risks or that are part of a straddle, conversion or “integrated” transaction, persons required to accelerate
the recognition of any item of gross income as a result of such income being recognized on an applicable financial statement, persons
subject to the “base erosion and anti-avoidance” tax, U.S. expatriates or former long-term residents of the United States,
partnerships or other pass-through entities for U.S. federal income tax purposes, U.S. Holders that acquire Common Shares in connection
with the exercise of employee stock options or otherwise as compensation for services and U.S. Holders whose functional currency for U.S.
federal income tax purposes is not the U.S. dollar. This discussion does not address the effect of alternative minimum taxes, U.S. federal
estate and gift tax, the 3.8% Medicare contribution tax on net investment income or any state, local or non-U.S. tax laws applicable to
a holder of Common Shares. This discussion does not take into account the individual facts and circumstances of any particular U.S. Holder
that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under
an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income
tax advice with respect to any particular U.S. Holder. Each U.S. Holder should consult its own tax advisor regarding the U.S. federal,
U.S. state and local, U.S. federal estate and gift, alternative minimum, and non-U.S. tax consequences of the acquisition, ownership and
disposition of Common Shares.
This discussion also does not address the U.S.
federal income tax considerations applicable to U.S. Holders who are: (a) persons that have been, are, or will be a resident or deemed
to be a resident in Canada for purposes of the Income Tax Act (Canada); (b) persons that use or hold, will use or hold, or that are or
will be deemed to use or hold securities in connection with carrying on a business in Canada; (c) persons whose securities constitute
“taxable Canadian property” under the Income Tax Act (Canada); or (e) persons that have a permanent establishment in Canada
for the purposes of the Canada-U.S. Tax Convention.
For purposes of this discussion, a “U.S.
Holder” is a beneficial owner of Common Shares acquired pursuant to this offering that is for U.S. federal income tax purposes:
(a) an individual who is a citizen or resident of the United States; (b) a corporation (or other entity taxable as a corporation for U.S.
federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
(c) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (d) a trust (i) if a court within
the United States can exercise primary supervision over its administration, and one or more U.S. persons have the authority to control
all of the substantial decisions of that trust, or (ii) that has a valid election in effect under applicable Treasury regulations to be
treated as a U.S. person. The term “non-U.S. Holder” means any beneficial owner of Common Shares acquired pursuant to this
offering that is not a U.S. Holder, a partnership (or an entity or arrangement that is treated as a partnership or other pass-through
entity for U.S. federal income tax purposes) or a person holding Common Shares through such an entity or arrangement.
If a partnership or an entity or arrangement that
is treated as a partnership for U.S. federal income tax purposes holds Common Shares, the tax treatment of a partner generally will depend
upon the status of the partner and the activities of the partnership. Partners in partnerships that hold Common Shares should consult
their own tax advisors. You are urged to consult your own independent tax advisor regarding the specific U.S. federal, state, local
and non-U.S. income and other tax considerations relating to the acquisition, ownership and disposition of Common Shares.
Cash Dividends and Other Distributions
Subject to the rules described below under the
heading “Passive Foreign Investment Company Considerations,” any distributions (including constructive distributions) made
with respect to a Common Share, a U.S. Holder generally will be required to include the amount of such distribution in gross income (including
the amount of Canadian taxes withheld, if any) as dividend income to the extent of the Company’s current and accumulated earnings
and profits (computed using U.S. federal income tax principles). A dividend generally will be taxed to a U.S. Holder at ordinary income
tax rates if the Company is a PFIC for the tax year of such distribution or the preceding tax year. To the extent that a distribution
exceeds the Company’s current and accumulated “earnings and profits,” such distribution will be treated first as a non-taxable
return of capital to the extent of the holder’s adjusted tax basis in such Common Shares and, thereafter, as gain from the sale
or exchange of such Common Shares (see “Sale or Disposition” below). There can be no assurance that the Company will maintain
calculations of the Company’s earnings and profits in accordance with U.S. federal income tax accounting principles. U.S. Holders
should therefore assume that any distribution with respect to the Common Shares will constitute ordinary dividend income. Dividends paid
on such Common Shares generally will not be eligible for the dividends received deduction generally allowed to U.S. corporations.
Dividends paid to a non-corporate U.S. Holder
by a “qualified foreign corporation” may be subject to reduced rates of taxation if certain holding period and other requirements
are met. A qualified foreign corporation generally includes a foreign corporation (other than a foreign corporation that is a PFIC in
the taxable year in which the dividend is paid or the preceding taxable year) if (i) its securities are readily tradable on an established
securities market in the United States or (ii) it is eligible for benefits under a comprehensive U.S. income tax treaty that includes
an exchange of information program and which the U.S. Treasury Department has determined is satisfactory for these purposes. The Common
Shares are readily tradable on an established securities market in the United States, the Nasdaq. However, the Company may also be eligible
for the benefits of the Canada-U.S. Tax Convention. Accordingly, subject to the PFIC rules discussed below, the Company expects that a
non-corporate U.S. Holder should qualify for the reduced rate on dividends so long as the applicable holding period requirements are met.
U.S. Holders should consult their own tax advisors regarding the availability of the reduced tax rate on dividends in light of their particular
circumstances.
Non-corporate U.S. Holders will not be eligible
for reduced rates of taxation on any dividends received from us if the Company is a PFIC in the taxable year in which such dividends are
paid or in the preceding taxable year.
A U.S. Holder who pays (whether directly or through
withholding) Canadian taxes with respect to dividends paid on the Common Shares (or with respect to any constructive dividend on the warrants)
may be entitled to receive, at the election of such U.S. Holder, either a deduction or a foreign tax credit for such Canadian taxes paid.
Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate
share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income
bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income
and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” In addition,
this limitation is calculated separately with respect to specific categories of income. Dividends paid by us generally will constitute
“foreign source” income and generally will be categorized as “passive category income.” However, if 50% or more
of the Company’s equity (based on voting power or value) is treated as held by U.S. persons, the Company will be treated as a “United
States-owned foreign corporation,” in which case dividends may be treated for foreign tax credit limitation purposes as “foreign
source” income to the extent attributable to the Company’s non-U.S. source earnings and profits and as “U.S. source”
income to the extent attributable to the Company’s U.S. source earnings and profits. Because the foreign tax credit rules are complex,
each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.
Sale or Disposition
Subject to the PFIC rules discussed below, a U.S.
Holder generally will recognize gain or loss on the taxable sale or exchange of its Common Shares in an amount equal to the difference
between the U.S. dollar amount realized on such sale or exchange and the U.S. Holder’s adjusted tax basis in the Common Shares sold
or otherwise disposed.
Assuming the Company is not a PFIC and has not
been treated as a PFIC during your holding period for Common Shares, such gain or loss will be capital gain or loss and will be long-term
gain or loss if the Common Shares have been held for more than one year. Under current law, long-term capital gains of non-corporate U.S.
Holders generally are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Capital gain
or loss, if any, recognized by a U.S. Holder generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes.
Consequently, a U.S. Holder may not be able to use the foreign tax credit arising from any Canadian tax imposed on the disposition of
Common Shares unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived
from foreign sources. U.S. Holders are encouraged to consult their own tax advisors regarding the availability of the U.S. foreign tax
credit in their particular circumstances.
Passive Foreign Investment Company Considerations
Status as a PFIC
The rules governing PFICs can have adverse tax
effects on U.S. Holders. The Company generally will be classified as a PFIC for U.S. federal income tax purposes if, for any taxable year,
either: (1) 75% or more of its gross income consists of certain types of passive income, or (2) the average value (determined on a quarterly
basis), of its assets that produce, or are held for the production of, passive income is 50% or more of the value of all of its assets.
For purposes of the PFIC provisions, “gross
income” generally means sales revenues less cost of goods sold, plus income from investments and from incidental or outside operations
or sources. Passive income generally includes dividends, interest, rents and royalties (other than certain rents and royalties derived
in the active conduct of a trade or business), annuities and gains from assets that produce passive income. If a non-U.S. corporation
owns at least 25% by value of the stock of another corporation, the non-U.S. corporation is treated for purposes of the PFIC tests as
owning its proportionate share of the assets of the other corporation and as directly receiving its proportionate share of the other corporation’s
income.
Additionally, if the Company is classified as
a PFIC in any taxable year with respect to which a U.S. Holder owns Common Shares, the Company generally will continue to be treated as
a PFIC with respect to such U.S. Holder in all succeeding taxable years, regardless of whether the Company continues to meet the tests
described above, unless the U.S. Holder makes the “deemed sale election” described below.
The Company does not believe that it is currently
a PFIC and does not anticipate becoming a PFIC in the foreseeable future. Notwithstanding the foregoing, the determination of whether
the Company is a PFIC is made annually and depends on the particular facts and circumstances (such as the valuation of its assets, including
goodwill and other intangible assets) and also may be affected by the application of the PFIC rules, which are subject to differing interpretations.
The Company’s status as PFIC depends upon the composition of its income and assets, which will be affected by how, and how quickly,
the Company spends any cash that is raised in any financing transaction, including this offering. In light of the foregoing, no assurance
can be provided that the Company is not currently a PFIC or that it will not become a PFIC in any future taxable year. Prospective investors
should consult their own tax advisors regarding the Company’s potential PFIC status.
U.S. Federal Income Tax Treatment of a Shareholder
of a PFIC
If the Company is classified as a PFIC for any
taxable year during which a U.S. Holder owns Common Shares, the U.S. Holder, absent certain elections (including the mark-to-market and
QEF elections described below), generally will be subject to adverse rules (regardless of whether the Company continues to be classified
as a PFIC) with respect to (i) any “excess distributions” (generally, any distributions received by the U.S. Holder on its
Common Shares in a taxable year that are greater than 125% of the average annual distributions received by the U.S. Holder in the three
preceding taxable years or, if shorter, the U.S. Holder’s holding period for the Common Shares) and (ii) any gain realized on the
sale or other disposition, including a pledge, of Common Shares.
Under these adverse rules (a) the excess distribution
or gain will be allocated ratably over the U.S. Holder’s holding period, (b) the amount allocated to the current taxable year and
any taxable year prior to the first taxable year in which the Company is classified as a PFIC will be taxed as ordinary income, (c) the
amount allocated to each other taxable year during the U.S. Holder’s holding period in which the Company was classified as a PFIC
(i) will be subject to tax at the highest rate of tax in effect for the applicable category of taxpayer for that year and (ii) will be
subject to an interest charge at a statutory rate with respect to the resulting tax attributable to each such other taxable year, and
(d) loss recognized on the disposition of the Common Shares will not be deductible.
If the Company is classified as a PFIC, a U.S.
Holder generally will be treated as owning a proportionate amount (by value) of stock or shares owned by the Company in any direct or
indirect subsidiaries that are also PFICs and will be subject to similar adverse rules with respect to any distributions the Company receives
from, and dispositions the Company makes of, the stock or shares of such subsidiaries. You are urged to consult your tax advisors about
the application of the PFIC rules to any of the Company’s subsidiaries.
If the Company is classified as a PFIC and then
cease to be so classified, a U.S. Holder may make an election (a “deemed sale election”) to be treated for U.S. federal income
tax purposes as having sold such U.S. Holder’s Common Shares on the last day the Company’s taxable year during which the Company
was a PFIC. A U.S. Holder that makes a deemed sale election with respect to its Common Shares would then cease to be treated as owning
stock in a PFIC by reason of ownership of the Common Shares. However, gain recognized as a result of making the deemed sale election would
be subject to the adverse rules described above and loss would not be recognized.
PFIC “Mark-to-Market” Election
In certain circumstances, a U.S. Holder can avoid
certain of the adverse rules described above by making a mark-to-market election with respect to its Common Shares, provided that such
shares are “marketable.” The Common Shares generally will be marketable if they are “regularly traded” on certain
U.S. stock exchanges or on a foreign stock exchange that meets certain conditions. For these purposes, the Common Shares will be considered
regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during
each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded. The Common Shares
are listed on the Nasdaq, which is a qualified exchange for these purposes. Consequently, if the Common Shares remain listed on the Nasdaq
and are regularly traded, and you are a holder of Common Shares, it is expected the mark-to-market election would be available to you
if the Company is a PFIC. There can be no assurance that the shares will be “regularly traded” in subsequent calendar quarters.
You should consult your own tax advisor as to the whether a mark-to-market election is available or advisable with respect to the Common
Shares.
A U.S. Holder that makes a mark-to-market election
must include in gross income, as ordinary income, for each taxable year that the Company is a PFIC an amount equal to the excess, if any,
of the fair market value of the U.S. Holder’s Common Shares at the close of the taxable year over the U.S. Holder’s adjusted
tax basis in such Common Shares. An electing U.S. Holder may also claim an ordinary loss deduction for the excess, if any, of the U.S.
Holder’s adjusted tax basis in its Common Shares over the fair market value of such Common Shares at the close of the taxable year,
but this deduction is allowable only to the extent of any net mark-to-market gains previously included in income. A U.S. Holder that makes
a mark-to-market election generally will adjust such U.S. Holder’s tax basis in its Common Shares to reflect the amount included
in gross income or allowed as a deduction because of such mark-to-market election. Gains from an actual sale or other disposition of Common
Shares in a year in which the Company is a PFIC will be treated as ordinary income, and any losses incurred on a sale or other disposition
of such Common Shares will be treated as ordinary losses to the extent of any net mark-to-market gains previously included in income.
If the Company is classified as a PFIC for any
taxable year in which a U.S. Holder owns Common Shares but before a mark-to-market election is made, the adverse PFIC rules described
above will apply to any mark-to-market gain recognized in the year the election is made. Otherwise, a mark-to-market election will be
effective for the taxable year for which the election is made and all subsequent taxable years. The election cannot be revoked without
the consent of the IRS, unless the Common Shares cease to be marketable, in which case the election is automatically terminated.
A U.S. Holder makes a mark-to-market election
by attaching a completed IRS Form 8621 to a timely filed U.S. federal income tax return. Each U.S. Holder should consult its own tax advisor
regarding the availability of, and procedure for making, a mark-to-market election.
A mark-to-market election is not permitted for
the shares of any of the Company’s subsidiaries that are also classified as PFICs. Prospective investors should consult their own
tax advisors regarding the availability of, and the procedure for making, a mark-to-market election.
PFIC “QEF” Election
In some cases, a shareholder of a PFIC can avoid
the interest charge and the other adverse PFIC consequences described above by obtaining certain information from such PFIC and by making
a QEF election to be taxed currently on its share of the PFIC’s undistributed income. The Company does not, however, expect to provide
the information regarding its income that would be necessary in order for a U.S. Holder to make a QEF election with respect to Common
Shares if the Company is classified as a PFIC.
PFIC Information Reporting Requirements
If the Company is a PFIC in any year, a U.S. Holder
will be required to file an annual information return on IRS Form 8621 regarding distributions received on its Common Shares and any gain
realized on disposition of such Common Shares. In addition, if the Company is a PFIC, a U.S. Holder generally will be required to file
an annual information return with the IRS (also on IRS Form 8621, which PFIC shareholders are required to file with their U.S. federal
income tax or information return) relating to their ownership of Common Shares. This new filing requirement is in addition to the pre-existing
reporting requirements described above that apply to a U.S. Holder’s interest in a PFIC (which this requirement does not affect).
NO ASSURANCE CAN BE GIVEN THAT THE COMPANY IS
NOT CURRENTLY A PFIC OR THAT IT WILL NOT BECOME A PFIC IN THE FUTURE. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE OPERATION OF THE PFIC RULES AND RELATED REPORTING REQUIREMENTS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE ADVISABILITY
OF MAKING ANY ELECTION THAT MAY BE AVAILABLE.
Reporting Requirements and Backup Withholding
Under U.S. federal income tax law and applicable
Treasury Regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement
in, a non-U.S. corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on U.S. Holders that hold
certain specified foreign financial assets in excess of certain threshold amounts. The definition of specified foreign financial assets
includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial
institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer
or counterparty other than a U.S. person, and any interest in a non-U.S. entity. U.S. Holders may be subject to these reporting requirements
unless such U.S. Holder’s Common Shares are held in an account at certain financial institutions. Penalties for failure to file
certain of these information returns are substantial.
Payments made within the United States or by a
U.S. payor or U.S. middleman of (a) distributions on the Common Shares, and (b) proceeds arising from the sale or other taxable disposition
of Common Shares generally may be subject to information reporting and backup withholding, currently at the rate of 24%, if a U.S. Holder
(a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on IRS Form W-9), (b) furnishes an
incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report
items subject to backup withholding, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct
U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding. However,
certain exempt persons generally are excluded from these information reporting and backup withholding rules. Any amounts withheld under
the U.S. backup withholding rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any,
or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. The information reporting and backup
withholding rules may apply even if, under the Canada-U.S. Tax Convention, payments may be exempt from the dividend withholding tax rules
or otherwise eligible for a reduced withholding rate. Each U.S. Holder should consult its own tax advisor regarding the information reporting
and backup withholding rules.
THE ABOVE DISCUSSION DOES NOT COVER ALL TAX
MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. YOU ARE STRONGLY URGED TO CONSULT YOUR OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES
TO YOU OF AN INVESTMENT IN THE COMMON SHARES.
CERTAIN CANADIAN FEDERAL INCOME TAX IMPLICATIONS
The following summary describes, as of the date
hereof, the principal Canadian federal income tax considerations under the Income Tax Act (Canada) (the “Tax Act”)
and the regulations thereunder (the “Regulations”) generally applicable to an investor who acquires Common Shares pursuant
to this offering. This summary applies only to an investor who is a beneficial owner of Common Shares and who, for the purposes of the
Tax Act, and at all relevant times: (i) deals at arm’s length with the Company, (ii) is not affiliated with the Company; and (iii)
acquires and holds the Common Shares as capital property (a “Holder”).
Common Shares will generally be considered to
be capital property to a Holder unless they are held in the course of carrying on a business of trading or dealing in securities or were
acquired in one or more transactions considered to be an adventure or concern in the nature of trade.
This summary is not applicable to a Holder: (i)
that is a “financial institution” for the purposes of the mark-to-market rules contained in the Tax Act, (ii) that is a “specified
financial institution” (as defined in the Tax Act); (iii) an interest in which is a “tax shelter investment” for purposes
of the Tax Act; (iv) that has made a functional currency reporting election under section 261 of the Tax Act to report its “Canadian
tax results” as defined in the Tax Act in a currency other than Canadian currency; (v) that has entered into, or will enter into,
a “derivative forward agreement” or “synthetic disposition arrangement” (each as defined in the Tax Act) with
respect to the Common Shares; or (vi) that receives dividends on Common Shares under or as part of a “dividend rental arrangement”
(as defined in the Tax Act). This summary does not address the deductibility of interest by a Holder who has borrowed money to acquire
the Common Shares. Such Holders should consult their own tax advisors.
Additional considerations, not discussed herein,
may apply to a Holder that is a corporation resident in Canada, and is or becomes (or does not deal at arm’s length for purposes of the
Tax Act with a corporation resident in Canada that is or becomes), as part of a transaction or event or series of transactions or events
that includes the acquisition of the Common Shares, controlled by a non-resident person or a group of non-resident persons that do not
deal with each other at arm’s length for purposes of the “foreign affiliate dumping” rules in section 212.3 of the Tax Act.
Such Holders should consult their own tax advisors.
This summary is based on the facts set out herein,
the provisions of the Tax Act and Regulations in force as of the date prior to the date hereof, counsel’s understanding of the current
administrative policies and assessing practices of the Canada Revenue Agency (“CRA”) published in writing by the CRA prior
to the date hereof. This summary takes into account all specific proposals to amend the Tax Act and the Regulations publicly announced
by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and assumes that
the Proposed Amendments will be enacted in the form proposed, although no assurance can be given that the Proposed Amendments will be
enacted in their current form or at all. This summary does not take into account or anticipate any changes in the law or in the administrative
practices or assessing policies of CRA, whether by legislative, governmental, administrative or judicial decision or action, nor does
it take into account or consider other federal or any provincial, territorial or foreign tax considerations, which may differ significantly
from the Canadian federal income tax considerations discussed in this summary.
This summary is not exhaustive of all possible
Canadian federal income tax considerations applicable to an investment in Common Shares. The following description of income tax matters
is of a general nature only and is not intended to be, nor should it be construed to be, legal or income tax advice to any particular
Holder. Holders are urged to consult their own tax advisors with respect to the tax consequences applicable to them based on their own
particular circumstances.
Taxation of Resident Holders
The following portion of this summary applies
to a Holder who, for the purposes of the Tax Act, is or is deemed to be resident in Canada at all relevant times (a “Resident Holder”).
A Resident Holder whose Common Shares might not otherwise qualify as capital property may be entitled to make an irrevocable election
permitted by subsection 39(4) of the Tax Act to deem the Common Shares, and every other “Canadian security” (as defined in
the Tax Act), held by such person, in the taxation year of the election and each subsequent taxation year to be capital property. Resident
Holders should consult their own tax advisors regarding this election.
Dividends
Dividends received or deemed to be received on
the Common Shares will be included in computing a Resident Holder’s income. In the case of an individual (other than certain trusts),
such dividends will be subject to the gross-up and dividend tax credit rules normally applicable in respect of “taxable dividends”
received from “taxable Canadian corporations” (as such terms are defined in the Tax Act). An enhanced gross-up and dividend
tax credit will be available to individuals in respect of “eligible dividends” designated by the Company to the Resident Holder
in accordance with the provisions of the Tax Act. There may be limitations on the ability of the Company to designate dividends as eligible
dividends.
Dividends received or deemed to be received on
the Common Shares by a Resident Holder that is a corporation will be included in computing its income for the taxation year in which such
dividends are received, but such dividends will generally be deductible in computing the corporation’s taxable income. In certain
circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received or deemed to be received by a Resident Holder that
is a corporation as proceeds of disposition or a capital gain. Resident Holders that are corporations should consult their own tax advisors
having regard to their own circumstances.
A Resident Holder that is a “private corporation”
as defined in the Tax Act or a “subject corporation” as defined in subsection 186(3) of the Tax Act may be liable under Part
IV of the Tax Act to pay a refundable tax on dividends received or deemed to be received on the Common Shares to the extent that such
dividends are deductible in computing the Resident Holder’s taxable income for the taxation year. Such Resident Holders should consult
their own tax advisors in this regard.
Disposition of Common Shares
A Resident Holder who disposes, or is deemed to
dispose, of a Common Share (other than on a disposition to the Company that is not a sale in the open market in the manner in which shares
would normally be purchased by any member of the public in an open market) generally will realize a capital gain (or capital loss) in
the taxation year of the disposition equal to the amount, if any, by which the proceeds of disposition, net of any reasonable costs of
disposition, are greater (or are less) than the adjusted cost base to the Resident Holder of such Common Share immediately before the
disposition or deemed disposition. The taxation of capital gains and capital losses is generally described below under the heading “Capital
Gains and Capital Losses”.
Capital Gains and Capital Losses
Generally, a Resident Holder is required to include
in computing income for a taxation year one-half of the amount of any capital gain (a “taxable capital gain”) realized by
the Resident Holder in such taxation year. Subject to and in accordance with the rules contained in the Tax Act, a Resident Holder is
required to deduct one-half of the amount of any capital loss (an “allowable capital loss”) realized in a particular taxation
year against taxable capital gains realized by the Resident Holder in the year. Allowable capital losses in excess of taxable capital
gains realized in a taxation year may be carried back and deducted in any of the three preceding taxation years or carried forward and
deducted in any subsequent taxation year against net taxable capital gains realized in such years, to the extent and under the circumstances
described in the Tax Act.
The amount of any capital loss realized by a Resident
Holder that is a corporation on the disposition or deemed disposition of a Common Share may be reduced by the amount of any dividends
received or deemed to have been received by such Resident Holder on such shares, to the extent and under the circumstances described in
the Tax Act. Similar rules may apply where a Resident Holder that is a corporation is a member of a partnership or a beneficiary of a
trust that owns Common Shares, directly or indirectly, through a partnership or trust. Resident Holders to whom these rules may be relevant
should consult their own tax advisors.
Additional Refundable Tax
A Resident Holder that is throughout the relevant
taxation year a “Canadian-controlled private corporation” (as defined in the Tax Act) may be liable to pay an additional tax
(refundable in certain circumstances) on certain investment income, including any dividends or deemed dividends that are not deductible
in computing the Resident Holder’s taxable income and taxable capital gains. Proposed Amendments announced by the Minister of Finance
(Canada) on April 7, 2022 are intended to extend this additional tax and refund mechanism in respect of such investment income to “substantive
CCPCs” as defined in such Proposed Amendments and draft legislation implementing such Proposed Amendments that was released on August
9, 2022. Such Resident Holders should consult their own tax advisors.
Alternative Minimum Tax
Generally, a Resident Holder that is an individual
(other than certain trusts) that receives or is deemed to have received taxable dividends on the Common Shares or realizes a capital gain
on the disposition or deemed disposition of the Common Shares may be liable for alternative minimum tax under the Tax Act. Resident Holders
should consult their own tax advisors with respect to the application of alternative minimum tax.
Taxation of Non-Resident Holders
The following portion of this summary is generally
applicable to Holders who, for the purposes of the Tax Act and at all relevant times: (i) are not resident or deemed to be resident in
Canada, and (ii) do not use or hold Common Shares in the course of a business carried on or deemed to be carried on in Canada (“Non-Resident
Holders”). Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying
on business in Canada and elsewhere or that is an “authorized foreign bank” (as defined in the Tax Act). Such Non-Resident
Holders should consult their own tax advisors.
Dividends
Dividends paid or credited or deemed to be paid
or credited to a Non-Resident Holder on the Common Shares will generally be subject to Canadian withholding tax at the rate of 25% on
the gross amount of the dividend, unless such rate is reduced by the terms of an applicable income tax treaty or convention. Under the
Canada-United States Tax Convention (1980), as amended (the “Treaty”), the rate of withholding tax on dividends paid or credited
to a Non-Resident Holder who is resident in the U.S. for purposes of the Treaty, is the beneficial owner of the dividends, and is fully
entitled to benefits under the Treaty (a “Treaty Holder”) is generally reduced to 15% of the gross amount of the dividend.
The rate of withholding tax is further reduced to 5% if the beneficial owner of such dividend is a Treaty Holder that is a company that
owns, directly or indirectly, at least 10% of the voting stock of the Company. Non-Resident Holders should consult their own tax advisors
regarding the application of the Treaty or any other tax treaty.
Disposition of Common Shares
A Non-Resident Holder will not be subject to tax
under the Tax Act in respect of any capital gain realized on a disposition or deemed disposition of a Common Shares, nor will capital
losses arising therefrom be recognized under the Tax Act, unless the Common Shares constitute “taxable Canadian property”
(as defined in the Tax Act) of the Non-Resident Holder at the time of disposition and the Non-Resident Holder is not entitled to relief
under an applicable income tax treaty or convention between Canada and the country in which the Non-Resident Holder is resident.
Provided that the Common Shares are listed on
a “designated stock exchange” for the purposes of the Tax Act (which currently includes the Nasdaq), at the time of disposition,
the Common Shares generally will not constitute taxable Canadian property of a Non-Resident Holder at that time, unless at any time during
the 60 month period immediately preceding the disposition, (i) 25% or more of the issued shares of any class or series of the capital
stock of the Company were owned by, or belonged to, any combination of (a) the Non-Resident Holder, (b) persons with whom the Non-Resident
Holder did not deal at arm’s length (for purposes of the Tax Act), and (c) partnerships in which the Non-Resident Holder or a person
described in (b) holds a membership interest directly or indirectly through one or more partnerships, and (ii) at such time, more than
50% of the fair market value of such shares was derived, directly or indirectly, from any combination of real or immovable property situated
in Canada, “Canadian resource property” (as defined in the Tax Act), “timber resource property” (as defined in
the Tax Act), or options in respect of, interests in, or for civil law rights in such properties, whether or not such property exists.
Notwithstanding the foregoing, the Common Shares may also be deemed to be taxable Canadian property to a Non-Resident Holder for purposes
of the Tax Act in certain other circumstances. Non-Resident Holders should consult their own tax advisors as to whether their Common Shares
constitute “taxable Canadian property” in their own particular circumstances.
In the event that a Common Share constitutes taxable
Canadian property of a Non-Resident Holder and any capital gain that would be realized on the disposition thereof is not exempt from tax
under the Tax Act pursuant to an applicable income tax treaty or convention, the income tax consequences discussed above for Resident
Holders under “Taxation of Resident Holders – Disposition of Common Shares” and “Capital Gains and Capital Losses”
will generally apply to the Non-Resident Holder. Non-Resident Holders whose Common Shares are taxable Canadian property should consult
their own tax advisors.
THE FOREGOING SUMMARY IS NOT INTENDED TO CONSTITUTE
A COMPLETE DESCRIPTION OF ALL TAX CONSEQUENCES THAT MAY BE RELEVANT TO PARTICULAR HOLDERS OF COMMON SHARES AND IS NOT TAX OR LEGAL ADVICE.
HOLDERS OF COMMON SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF ACQUIRING, HOLDING AND
DISPOSING OF THE COMMON SHARES.
PLAN OF DISTRIBUTION
Pursuant to a placement agency agreement, we have
engaged Maxim Group LLC to act as our exclusive placement agent to solicit offers to purchase the Securities offered by this prospectus.
The placement agent is not purchasing or selling any securities, nor is it required to arrange for the purchase and sale of any specific
number or dollar amount of Securities, other than to use its “reasonable best efforts” to arrange for the sale of the Securities
by us. Therefore, it is possible that we will not sell the entire amount of Securities being offered. There is no minimum amount of proceeds
that is a condition to closing of this offering. Investors purchasing Securities offered hereby will have the option to execute a securities
purchase agreement with us. In addition to rights and remedies available to all investors in this offering under federal securities and
state law, the investors which enter into a securities purchase agreement will also be able to bring claims of breach of contract against
us. Investors who do not enter into a securities purchase agreement with us shall rely solely on this prospectus in connection with the
purchase of our Securities in this offering. The placement agent may engage one or more subagents or selected dealers in connection with
this offering.
We are offering up to a maximum of $5.0 million
of our Securities in this offering. There will be no minimum amount of proceeds as a condition to closing of this offering. The actual
amount of gross proceeds, if any, in this offering could vary substantially from the gross proceeds from the sale of the maximum amount
of Securities being offered in this prospectus.
In connection with this offering, the Placement Agent may distribute
prospectuses electronically.
Placement Agent, Commissions and Expenses
Upon the closing of this offering, we will pay
the Placement Agent a cash transaction fee equal to seven percent (7.0%) of the aggregate gross cash proceeds to us from the sale of the
Securities in the offering. In addition, we will reimburse the Placement Agent for its out-of-pocket expenses incurred in connection with
this offering, including the fees and expenses of the counsel for the Placement Agent of up to $90,000.
The following table shows the public offering
price, Placement Agent fees and proceeds, before expenses, to us.
| |
Per Common
Share | | |
Per Pre-
Funded
Warrant | | |
Total
Maximum
Offering
Amount | |
Public offering price | |
$ | | | |
| | | |
$ | | |
Placement Agent fee | |
$ | | | |
| | | |
$ | | |
Proceeds, before expenses, to us | |
$ | | | |
| | | |
$ | | |
We estimate that the total expenses of the offering,
including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding Placement Agent fees and
the Placement Agent’s accountable expense, will be approximately $90,000, all of which are payable by us.
Placement Agent’s Warrants
We have also agreed to issue to the Placement
Agent (or its permitted assignees) warrants to purchase [●] common shares, which is equal to an aggregate of 5% of the total
number of Securities sold in this offering, or the Placement Agent’s Warrants. The Placement Agent’s Warrants will have an
exercise price equal to $[●] (110% of the offering price of the common shares sold in this offering) and may be exercised on a cashless
basis. The Placement Agent’s Warrants are exercisable commencing six months after the commencement of sales related to this offering,
and will expire five years after such date. The Placement Agent’s Warrants are not redeemable by us. We have agreed to a one-time demand
registration of the common shares underlying the Placement Agent’s Warrants at our expense and an additional demand registration
at the warrant holders’ expense, for a period of five years from the commencement of sales related to this offering. The Placement
Agent’s Warrants also provide for unlimited “piggyback” registration rights at our expense with respect to the underlying
common shares during the five-year period following commencement of sales related to this offering. The Placement Agent’s Warrants
and the common shares underlying the Placement Agent’s Warrants, have been deemed compensation by the Financial Industry Regulatory
Authority, or FINRA, and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA. The Placement Agent
(or permitted assignees under the Rule) may not sell, transfer, assign, pledge or hypothecate the Placement Agent’s Warrants or
the securities underlying the Placement Agent’s Warrants, nor will they engage in any hedging, short sale, derivative, put or call
transaction that would result in the effective economic disposition of the Placement Agent’s Warrants or the underlying securities
for a period of six months from the commencement of sales related to this offering, except to any FINRA member participating in the offering
and their bona fide officers or partners. The Placement Agent’s Warrants will provide for adjustment in the number and price of
such Placement Agent’s Warrants (and the common shares underlying such Placement Agent’s Warrants) to prevent dilution in
the event of a forward or reverse stock split, stock dividend or similar recapitalization.
Lock-Up Agreements
We, all of our directors and officers, and the
holders of 5% or more of our outstanding Common Shares (and all holders of securities exercisable for or convertible into shares of common
stock), have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale
of or otherwise dispose of any of our Common Shares or other securities convertible into or exercisable or exchangeable for our Common
Shares for a period of three (3) months after this offering is completed without the prior written consent of the Placement Agent.
The Placement Agent may in its sole discretion
and at any time without notice release some or all of the shares subject to lock-up agreements prior to the expiration of the lock-up
period. When determining whether or not to release shares from the lock-up agreements, the Placement Agent will consider, among other
factors, the security holder’s reasons for requesting the release, the number of shares for which the release is being requested
and market conditions at the time.
Right of First Refusal
Upon the closing of the offering, we have agreed
to grant the Placement Agent a right of first refusal for a period of twelve (12) months from such closing, to act as sole managing underwriter
and sole book runner, sole placement agent, or sole sales agent, for any and all future public or private equity, equity-linked or debt
(excluding commercial bank debt) offerings for which the Company retains the service of an underwriter, agent, advisor, finder or other
person or entity in connection with such offering during such twelve (12) month period of the Company, or any successor to or any subsidiary
of the Company. The Company shall not offer to retain any entity or person in connection with any such offering on terms more favorable
than terms on which it offers to retain the Placement Agent. Such offer shall be made in writing in order to be effective.
Indemnification
We have agreed to indemnify the Placement Agent
against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the Placement Agent may
be required to make for these liabilities.
Tail
If there is a closing of this offering, or if
our agreement with the Placement Agent is terminated prior to closing of this offering, then if within twelve (12) months following such
time, the Company completes any financing of equity, equity-linked, convertible or debt or other capital raising activity with, or receives
any proceeds from, any of the investors contacted or introduced by the Placement Agent during the term of the engagement agreement, then
the Company will pay the Placement Agent upon the closing of such financing or receipt of such proceeds a cash transaction fee equal to
seven percent (7.0%) of the aggregate gross cash proceeds of such transaction plus accountable expenses not to exceed $90,000.
Regulation M
The Placement Agent may be deemed to be an underwriter
within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit realized on the resale
of the securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities
Act. As an underwriter, the Placement Agent would be required to comply with the requirements of the Securities Act and the Exchange Act,
including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of
purchases and sales of our securities by the placement agent acting as principal. Under these rules and regulations, the Placement Agent
(i) may not engage in any stabilization activity in connection with our securities and (ii) may not bid for or purchase any of our securities
or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed
its participation in the distribution.
Determination of Offering Price
The actual offering price of the Securities were
negotiated between us, the Placement Agent and the investors in the offering based on the trading of our Common Shares prior to the offering,
among other things. Other factors considered in determining the public offering price of the Securities we are offering, include our history
and prospects, the stage of development of our business, our business plans for the future and the extent to which they have been implemented,
an assessment of our management, the general conditions of the securities markets at the time of the offering and such other factors as
were deemed relevant.
Electronic Distribution
A prospectus in electronic format may be made
available on a website maintained by the Placement Agent. In connection with the offering, the Placement Agent or selected dealers may
distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe® PDF
will be used in connection with this offering.
Other than the prospectus in electronic format,
the information on the Placement Agent’s website and any information contained in any other website maintained by the Placement
Agent is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or
endorsed by us or the Placement Agent in its capacity as placement agent and should not be relied upon by investors.
Certain Relationships
The Placement Agent and its affiliates have and
may in the future provide, from time to time, investment banking and financial advisory services to us in the ordinary course of business,
for which they may receive customary fees and commissions.
Selling Restrictions
Other than in the United States of America, no
action has been taken by us or the Placement Agent that would permit a public offering of the Securities offered by this prospectus in
any jurisdiction where action for that purpose is required. The Securities offered by this prospectus may not be offered or sold, directly
or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such
Securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable
rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about
and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any Securities offered by this prospectus in any jurisdiction in which such an offer
or a solicitation is unlawful.
European Economic Area
In relation to each Member State of the European
Economic Area (each, a Member State), no Securities have been offered or will be offered pursuant to this offering to the public in that
Member State prior to the publication of a prospectus in relation to our Securities which has been approved by the competent authority
in that Member State or, where appropriate, approved in another Member State and notified to the competent authority in that Member State,
all in accordance with the Prospectus Regulation, except that offers of shares may be made to the public in that Member State at any time
under the following exemptions under the Prospectus Regulation:
|
(a) |
to any legal entity which is a qualified investor as defined in the Prospectus Regulation; |
|
(b) |
by the placement agent to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining the prior written consent of the representatives for any such offer; or |
|
(c) |
in any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
provided that no such offer of our Securities
shall result in a requirement for us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation
or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
Each person in a Member State who initially acquires
any of our Securities or to whom any offer is made will be deemed to have represented, acknowledged, and agreed with us and the representatives
that it is a qualified investor within the meaning of the Prospectus Regulation.
In the case of any of our Securities are being
offered to a financial intermediary as that term is used in Article 5(1) of the Prospectus Regulation, each such financial intermediary
will be deemed to have represented, acknowledged and agreed that the Securities acquired by it in the offer have not been acquired on
a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances
which may give rise to an offer to the public other than their offer or resale in a Member State to qualified investors, in circumstances
in which the prior written consent of the representatives has been obtained to each such proposed offer or resale.
We, the Placement Agent, and their affiliates
will rely upon the truth and accuracy of the foregoing representations, acknowledgments, and agreements.
For the purposes of this provision, the expression
an “offer to the public” in relation to any of our Securities in any Member State means the communication in any form and
by any means of sufficient information on the terms of the offer and any of our Securities to be offered so as to enable an investor to
decide to purchase or subscribe for our Securities, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
United Kingdom
No shares have been offered or will be offered
pursuant to this offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the shares which
has been approved by the Financial Conduct Authority, except that the shares may be offered to the public in the United Kingdom at any
time:
|
(a) |
to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation; |
|
(b) |
to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or |
|
(c) |
in any other circumstances falling within Section 86 of the Financial Services and Markets Act 2000, or FSMA; |
provided that no such offer of the shares shall
require the us or any placement agent to publish a prospectus pursuant to Section 85 of the FSMA or supplement a prospectus pursuant
to Article 23 of the UK Prospectus Regulation. For the purposes of this provision, the expression an “offer to the public”
in relation to the shares in the United Kingdom means the communication in any form and by any means of sufficient information on the
terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or subscribe for any shares and the
expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the
European Union (Withdrawal) Act 2018.
Canada
The Securities may be sold in Canada only to purchasers
purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus
Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument
31 103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Securities must be made
in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or
territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement (including any amendment
thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the
time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any
applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or
consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument
33 105 Underwriting Conflicts (NI 33 105), the placement agent are not required to comply with the disclosure requirements
of NI 33-105 regarding placement agent conflicts of interest in connection with this offering.
Israel
This document does not constitute a prospectus
under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel Securities Authority.
In the State of Israel, this document is being distributed only to, and is directed only at, and any offer of the shares is directed only
at, investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint investment in
trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange,
placement agent, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,”
each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case
purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in
the Addendum). Qualified investors will be required to submit written confirmation that they fall within the scope of the Addendum, are
aware of the meaning of same and agree to it.
Hong Kong
Our Securities may not be offered or sold in Hong
Kong by means of any document other than (1) in circumstances which do not constitute an offer to the public within the meaning of
the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) (“Companies (Winding Up and
Miscellaneous Provisions) Ordinance”) or which do not constitute an invitation to the public within the meaning of the Securities
and Futures Ordinance (Cap. 571 of the Laws of Hong Kong), or the Securities and Futures Ordinance, or (2) to “professional
investors” as defined in the Securities and Futures Ordinance and any rules made thereunder, or (3) in other circumstances
which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, and no advertisement, invitation or document relating to our Common Shares may be issued or may be in the possession of any
person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely
to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with
respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors”
in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.
Singapore
This prospectus has not been registered as a prospectus
with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer
or sale, or invitation for subscription or purchase, of our Securities may not be circulated or distributed, nor may our Securities be
offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore
other than (1) to an institutional investor (as defined under Section 4A of the Securities and Futures Act, Chapter 289 of Singapore,
or the SFA) under Section 274 of the SFA, (2) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to
Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified
in Section 275 of the SFA or (3) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision
of the SFA, in each case subject to conditions set forth in the SFA.
Where our Securities are subscribed or purchased
under Section 275 of the SFA by a relevant person which is a corporation (which is not an accredited investor (as defined in Section 4A
of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals,
each of whom is an accredited investor, the securities (as defined in Section 239(1) of the SFA) of that corporation shall not be
transferable for six months after that corporation has acquired our Common Shares under Section 275 of the SFA except: (1) to
an institutional investor under Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), (2) where
such transfer arises from an offer in that corporation’s securities pursuant to Section 275(1A) of the SFA, (3) where
no consideration is or will be given for the transfer, (4) where the transfer is by operation of law, (5) as specified in Section 276(7)
of the SFA, or (6) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures)
Regulations 2005 of Singapore, or Regulation 32.
Where our Securities are subscribed or purchased
under Section 275 of the SFA by a relevant person which is a trust (where the trustee is not an accredited investor (as defined in
Section 4A of the SFA)) whose sole purpose is to hold investments and each beneficiary of the trust is an accredited investor, the
beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferable for six months after that
trust has acquired our Common Shares under Section 275 of the SFA except: (1) to an institutional investor under Section 274
of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), (2) where such transfer arises from an offer that
is made on terms that such rights or interest are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign
currency) for each transaction (whether such amount is to be paid for in cash or by exchange of securities or other assets), (3) where
no consideration is or will be given for the transfer, (4) where the transfer is by operation of law, (5) as specified in Section 276(7)
of the SFA, or (6) as specified in Regulation 32.
Japan
The Securities have not been and will not be registered
under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended), or the FIEA. The Securities may not be offered
or sold, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (including any person resident in Japan or
any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan
or to or for the benefit of any resident of Japan, except pursuant to an exemption from the registration requirements of the FIEA and
otherwise in compliance with any relevant laws and regulations of Japan.
Dubai International Financial Centre
This prospectus relates to an “Exempt Offer”
in accordance with the Offered Securities Rules of the Dubai Financial Services Authority, or the DFSA. This prospectus is intended for
distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on
by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA
has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus.
Our Securities to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers
of our Securities should conduct their own due diligence on such shares. If you do not understand the contents of this prospectus, you
should consult an authorized financial advisor.
Switzerland
Our Securities may not be publicly offered in
Switzerland and will not be listed on the SIX Swiss Exchange, or the SIX, or on any other stock exchange or regulated trading facility
in Switzerland. This document does not constitute a prospectus within the meaning of, and has been prepared without regard to the disclosure
standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing
prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility
in Switzerland. Neither this document nor any other offering or marketing material relating to our Securities or this offering may be
publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering or
marketing material relating to this offering, our company or our Securities have been or will be filed with or approved by any Swiss regulatory
authority. In particular, this document will not be filed with, and the offer of our Securities will not be supervised by, the Swiss Financial
Market Supervisory Authority and the offer of our Securities have not been and will not be authorized under the Swiss Federal Act on Collective
Investment Schemes, or the CISA. The investor protection afforded to acquirers of interests in collective investment schemes under the
CISA does not extend to acquirers of our Securities.
Australia
No placement document, prospectus, product disclosure
statement or other disclosure document has been lodged with the Australian Securities and Investments Commission, or ASIC, in relation
to this offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the
Corporations Act 2001, or the “Corporations Act”, and does not purport to include the information required for a prospectus,
product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of our Common Shares may
only be made to persons, or “Exempt Investors”, who are “sophisticated investors” (within the meaning of section
708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act)
or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer our Securities
without disclosure to investors under Chapter 6D of the Corporations Act.
Our Securities applied for by Exempt Investors
in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under this offering,
except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption
under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter
6D of the Corporations Act. Any person acquiring our Securities must observe such Australian on-sale restrictions.
This prospectus contains general information only
and does not take account of the investment objectives, financial situation, or particular needs of any particular person. It does not
contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether
the information in this prospectus is appropriate to their needs, objectives, and circumstances, and, if necessary, seek expert advice
on those matters.
We have not engaged counsel outside of the United
States to review any other country’s securities laws and therefore, notwithstanding the above, neither we nor the placement agent
can assure you that the summary of the laws above are accurate as of the date of this prospectus.
LEGAL MATTERS
Certain legal matters with respect to Canadian law and with respect to the validity of the offered Common Shares under the law of British
Columbia, Canada, will be passed upon for us by our Canadian legal counsel CC Corporate Counsel Professional Corporation. Certain legal
matters with respect to the validity of the offered Pre-Funded Warrants under New York law and with respect to U.S. federal securities
law will be passed upon for us by Sichenzia Ross Ference Carmel LLP. Loeb & Loeb LLP, New York, New York is acting as counsel to the
Placement Agent.
EXPERTS
The consolidated financial statements of the Company
incorporated in this prospectus by reference to our Annual Report on Form 20-F for the year ended December 31, 2022 have been audited
by Barzily and Co., CPA’s, an independent registered public accounting firm, as set forth in their reports, which are incorporated
herein by reference. Such consolidated financial statements have been so incorporated by reference in reliance upon such reports given
on the authority of such firm as experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
Insofar as indemnification for liabilities arising
under the Securities Act, may be permitted to our directors, officers or persons controlling us, we have been advised that it is the SEC’s
opinion that such indemnification is against public policy as expressed in such act and is, therefore, unenforceable.
EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses,
other than underwriting discounts and commissions, payable by us in connection with the sale of the securities being registered. All amounts,
other than the SEC registration fee and FINRA filing fee, are estimates. We will pay all these expenses.
| |
| Amount | |
SEC registration fee | |
$ | 778.59 | |
FINRA filing fee | |
$ | 1,441.25 | |
Accounting fees and expenses | |
| * | |
Legal fees and expenses | |
| * | |
Transfer agent fees and expenses | |
| * | |
Printing and related fees and expenses | |
| * | |
Miscellaneous fees and expenses | |
| * | |
Total | |
$ | * | |
|
* |
To be included by amendment. |
ENFORCEMENT OF CIVIL LIABILITIES
We are incorporated under the laws of British
Columbia. Some of our directors and officers, and some of the experts named in this prospectus, are residents of Canada, Israel or otherwise
reside outside of the United States, and all or a substantial portion of their assets, and all or a substantial portion of our assets,
are located outside of the United States. We have appointed an agent for service of process in the United States, but it may be difficult
for shareholders who reside in the United States to effect service within the United States upon those directors, officers and experts
who are not residents of the United States. It may also be difficult for shareholders who reside in the United States to realize in the
United States upon judgments of courts of the United States predicated upon our civil liability and the civil liability of our directors,
officers and experts under the United States federal securities laws. Furthermore, because substantially all of our assets and substantially
all of our directors and officers are located outside the United States, any judgment obtained in the United States against us or any
of our directors and officers may not be collectible within the United States. There can be no assurance that U.S. investors will be able
to enforce against us, members of our board of directors, officers or certain experts named herein who are residents of Canada, Israel
or other countries outside the United States, any judgments in civil and commercial matters, including judgments under the federal securities
laws.
Service of process upon directors and officers
which reside in Israel may be difficult to obtain within the United States. Furthermore, because substantially all of our assets and substantially
all of our Israeli directors and officers are located outside the United States, any judgment obtained in the United States against us
or any of our Israeli directors and officers may not be collectible within the United States.
We have been informed by our legal counsel in
Israel, Naschitz, Brandes, Amir & Co., Advocates, our legal counsel in Israel that it may be difficult to assert U.S. securities laws
claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws
because Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear
a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content
of applicable U.S. law must be proven as a fact which can be a time-consuming and costly process. Matters of procedure will also be governed
by Israeli law.
Subject to specified time limitations and legal
procedures, Israeli courts may enforce a U.S. judgment in a civil matter which is non- appealable, provided that, among other things:
|
● |
the judgment was rendered by a court of competent jurisdiction, according to the laws of the state in which the judgment is given; |
|
● |
the judgment is enforceable according to the laws of Israel and according to the law of the foreign state in which the relief was granted; and |
|
● |
the judgment is not contrary to public policy of Israel. |
Even if such conditions are met, an Israeli court
may not declare a foreign civil judgment enforceable if:
|
● |
the prevailing law of the foreign state in which the judgment is rendered does not allow for the enforcement of judgments of Israeli courts (subject to exceptional cases); |
|
● |
the defendant did not have a reasonable opportunity to be heard and to present his or her evidence, in the opinion of the Israeli court; |
|
● |
the enforcement of the civil liabilities set forth in the judgment is likely to impair the security or sovereignty of Israel |
|
● |
the judgment was obtained by fraud; |
|
● |
the judgment was rendered by a court not competent to render it according to the rules of private international law prevailing in Israel; |
|
● |
the judgment conflicts with any other valid judgment in the same matter between the same parties; or |
|
● |
an action between the same parties in the same matter was pending in any Israeli court or tribunal at the time at which the lawsuit was instituted in the foreign court |
If a foreign judgment is enforced by an Israeli
court, it generally will be payable in Israeli currency, which can then be converted into non-Israeli currency and transferred out of
Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli court
to issue a judgment for the equivalent amount in Israeli currency at the rate of exchange in force on the date of the judgment, but the
judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated in Israeli
currency ordinarily will be linked to the Israeli consumer price index plus interest at the annual statutory rate set by Israeli regulations
prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements
and other information regarding issuers, including us, that file electronically with the SEC. As a foreign private issuer, we are exempt
under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our officers,
directors and principal shareholders are exempt from the “short-swing profits” reporting and liability provisions contained
in Section 16 of the Exchange Act and related Exchange Act rules. In addition, we are not required under the Exchange Act to file periodic
reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the
Exchange Act.
You may access the documents that we file with
the SEC at the SEC’s website at www.sec.gov. Copies of certain information filed by us with the SEC are also available on our website
at www.siyatamobile.com. Information contained in or accessible through our website does not constitute a part of this prospectus and
is not incorporated by reference in this prospectus.
This prospectus is part of a registration statement
on Form F-1 we filed with the SEC. This prospectus does not contain all of the information set forth in the registration statement and
the exhibits to the registration statement. For further information with respect to us and the securities that are being offered under
this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement.
You should rely only on the information contained in this prospectus or incorporated by reference in prospectus. We have not authorized
anyone else to provide you with different information.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference
much of the information that we file with the SEC (File Number 001-39557), which means that we can disclose important information to you
by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered
to be part of this prospectus. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated,
and those future filings may modify or supersede some of the information included or incorporated by reference in this prospectus. This
means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus
or in any document previously incorporated by reference have been modified or superseded. This prospectus incorporates by reference the
documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, except
for information “furnished” to the SEC that is not deemed filed and not incorporated by reference into this prospectus (unless
otherwise indicated below), until the termination of the offering of securities described in the applicable prospectus supplement or post-effective
amendment:
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● |
our Annual Report on Form 20-F for the fiscal year ended on December 31, 2022, initially filed with the SEC on May 15, 2023, and as amended by Amendment No. 1 to our Annual Report on Form 20-F/A for the fiscal year ended on December 31, 2022, filed with the SEC on May 18, 2023 (together hereinafter referred to as the “Form 20-F”); and |
|
● |
our Report of Foreign
Private Issuer on Form 6-K furnished to the SEC on January
9, 2023, January 18,
2023, January 19,
2023, January 23,
2023; February 21,
2023; February 23,
2023; February 27, 2023; March
06, 2023; March 13, 2023; March
20, 2023; March 22, 2023; March
27, 2023; March 27,
2023; April 03,
2023; April 06,
2023; April 07,
2023; April 17, 2023; April
24, 2023; April 25,
2023; April 26, 2023; May
03, 2023; May 11, 2023; May
16, 2023; May 17, 2023; May
19, 2023; May 22,
2023; May 24,
2023; June 1, 2023; June
5, 2023; June
15, 2023; June 20,
2023; June 21,
2023; June 22,
2023; June 28,
2023; July 3, 2023; July
6, 2023; July 13,
2023; July 13, 2023; August
7, 2023; August 8, 2023; August
10, 2023; August 14,
2023; August 24, 2023; August
28, 2023; September 6,
2023; September 19,
2023; September 28,
2023; October 02,
2023; October 04,
2023; and |
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● |
the description of our securities registered under Section 12 of the Exchange Act contained in the Form 8-A12B, as filed with the SEC on September 24, 2020, including any amendment or report filed for the purpose of updating such description; and |
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● |
any future filings made with the SEC under Section 13(a), 13(c) or 15(d) of the Exchange Act. |
In addition, any reports on Form 6-K submitted
to the SEC by the registrant pursuant to the Exchange Act after the date of the initial registration statement and prior to effectiveness
of the registration statement that we specifically identify in such forms as being incorporated by reference into the registration statement
of which this prospectus forms a part and all subsequent Annual Reports on Form 20-F filed after the effective date of this registration
statement and prior to the termination of this offering and any reports on Form 6-K subsequently submitted to the SEC, or portions thereof
that we specifically identify in such forms as being incorporated by reference into the registration statement of which this prospectus
forms a part, shall be considered to be incorporated into this prospectus by reference and shall be considered a part of this prospectus
from the date of filing or submission of such documents.
You should rely only on the information contained
or incorporated by reference in this prospectus. We have not authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities
in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus as well
as the information we previously filed with the SEC and incorporated by reference, is accurate as of the dates on the front cover of those
documents only. Our business, financial condition and results of operations and prospects may have changed since those dates. Certain
statements in and portions of this prospectus update and replace information in the above listed documents incorporated by reference.
Likewise, statements in or portions of a future document incorporated by reference in this prospectus may update and replace statements
in and portions of this prospectus or the above listed documents.
We will provide you without charge, upon your
written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to such documents
which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to Siyata Mobile
Inc., Attn: Chief Financial Officer, 7404 King George Blvd., Suite 200, King’s Cross, Surrey, British Columbia V3W 1N6, Canada;
telephone: 514-500-1181. You may also obtain information about us by visiting our website at https://www.siyatamobile.com. The information
contained on or accessible through our website is not incorporated by reference and is not part of this prospectus.
Maximum of $5,000,000 of Common Shares
and/or
Pre-Funded Warrants to Purchase Common Shares
PROSPECTUS
Sole Placement Agent
Maxim Group LLC
[●], 2023
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 6. Indemnification of Directors and Officers
Section 160 of the Business Corporation Act authorizes
companies to indemnify past and present directors, officers and certain other individuals for the liabilities incurred in connection with
their services as such (including costs, expenses and settlement payments) unless such individual did not act honestly and in good faith
with a view to the best interests of the company and, in the case of a proceeding other than a civil proceeding, if such individual did
not have reasonable grounds for believing his or her conduct was lawful. In the case of a suit by or on behalf of the corporation, a court
must approve the indemnification.
Our articles provide that we shall indemnify directors
and officers to the extent required or permitted by law.
We have entered into agreements with our directors
and certain officers (each an “Indemnitee” under such agreements) to indemnify the Indemnitee, to the fullest extent permitted
by law and subject to certain limitations, against all liabilities, costs, charges and expenses reasonably incurred by an Indemnitee in
an action or proceeding to which the Indemnitee was made a party by reason of the Indemnitee being an officer or director of (i) our company
or (ii) an organization of which our company is a shareholder or creditor if the Indemnitee serves such organization at our request.
We maintain insurance policies relating to certain
liabilities that our directors and officers may incur in such capacity.
Item 7. Recent Sales of Unregistered Securities
During the past three years, we have issued the
following securities. We believe that each of the following issuances was exempt from registration under the Securities Act pursuant to
Section 4(a)(2) of the Securities Act regarding transactions not involving a public offering or in reliance on Regulation S under the
Securities Act regarding sales by an issuer in offshore transactions. No underwriters were involved in these issuances of securities.
|
● |
On January 18, 2023, we entered into Warrant Exercise Agreements with fourteen existing accredited investors who exercised certain outstanding warrants (the “Existing Warrants”) to purchase up to an aggregate of 18,042,857 (180,429, after reverse split) of the Company’s previously registered Common Shares (the “Exercise”). In consideration for the immediate exercise of the Existing Warrants for cash at an exercise price reduced from $0.23 ($23, after reverse split) to $0.20 ($20, after reverse split) per Common Share, the exercising holders received new unregistered warrants to purchase up to an aggregate of 18,042,857 Common Shares (180,429, after reverse split). |
|
● |
On October 12, 2022, the Company issued 15,810,000 (158,100, after reverse split) common shares at $0.23 ($23, after reverse split) and 1,590,000 pre-funded warrants at $0.23 ($23, after reverse split) for total gross proceeds $3,987,100 before offering expenses. |
|
● |
On October 13, 2022, 1,590,000 pre-funded warrants were exercised for gross proceeds of $15,900. |
|
● |
On January 11, 2022, the Company issued 7,215,652 (72,157, after reverse split) common shares at $2.30 ($230, after reverse split) and 1,480,000 pre-funded warrants at $2.29 ($229, after reverse split) for total gross proceeds $19,999,999.96 before offering expenses. |
|
● |
On January 12, 2022, 1,480,000 pre-funded warrants were exercised for gross proceeds of $14,800. |
|
● |
On October 28, 2021 received gross cash of $1,027,500 USD from the exercise of 150,000 warrants at $6.85 USD ($685, after reverse split), and on October 29, 2021 received gross cash of $380,202 USD from the exercise of 55,504 warrants at $6.85 USD ($685, after reverse split). |
|
● |
On July 29, 2022, a consultant exercised 30,000 (300, after reverse split) restricted share units to acquire 30,000 (300, after reverse split) shares of the Company. |
|
● |
On July 14, 2022 the Company issued 60,000 (600, after reverse split) shares to a supplier as part of their contractual agreement. |
|
● |
From May 3, 2022 through November 14, 2022, the Company issued a total of 13,112,25 (13,113, after reverse split) shares as compensation for the repayment of the principal balance of the outstanding promissory note. |
|
● |
On April 11, 2022, the Company issued 155,000 (1,550, after reverse split) shares to consultants of the Company as part of their contractual agreements. |
|
● |
On March 30, 2022, the Company issued 138,958 (1,380, after reverse split) shares as partial compensation of the future purchase consideration owed to the former holders of the units of Clear RF, LLC. |
|
● |
On July 21, 2021, the Company issued 5,000 (50, after reverse split) Common Shares as part of the contractual obligations owed to one of its suppliers. This transaction was recorded to share capital in the amount of $36,050 (based on the market value on the date of issuance of $7.21 per share ($721, after reverse split)). |
|
● |
Upon the Acquisition of Clear Rf on March 31 2021, the Company issued 23,949 (235, after reverse split) Common Shares to the vendors of ClearRF equal to $194,985. |
|
● |
During the month of February 2021, the Company received multiple tradeable warrant exercises for total proceeds of $609,041 on the redemption of a total of 88,911 (880, after reverse split) tradeable warrants at an exercise price of $6.85 ($685, after reverse split) for each Common Share. |
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● |
The Company issued in February 2021, the 40,000 (400, after reverse split) shares to be issued for services rendered at a value of $560,000. |
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● |
On December 31, 2020, the Company completed a private placement financing (the “December 2020 Offering”) with certain Israeli and Canadian investors, to purchase 129,450 (1,295, after reverse split) December 2020 Units at a purchase price of US$100.00 ($10,000, after reverse split) per December 2020 Unit, for aggregate gross proceeds of US$12,945,000. Each December 2020 Unit consisted of ten Common Shares and ten December 2020 Warrants. Each December 2020 Warrant entitles the holder to acquire one Common Share at an exercise price of US$11.50 ($1,150, after reverse split) per Common Share for a period of 42 months. The Company retained Orion Underwriting and Issuances Ltd. to serve as its placement agent with respect to the Israeli investors participating in the December 2020 Offering. Commissions were issued totaling US$652,250 and 64,752 (648, after reverse split) broker warrants on the same terms as the December 2020 Warrants. |
|
● |
On December 14, 2020, the Company issued 85,659 (857, after reverse split) Common Shares to various suppliers as required under contractual obligations valued at $710,970. |
|
● |
During the month of November 2020, the Company issued 170,000 (1,700, after reverse split) Common Shares at $5.99 ($599, after reverse split) per share to the underwriter of the initial public offering as a result of the underwriter exercising its over-allotment option, for gross proceeds of $1,018,300 less share issuance costs of $81,464 for net proceeds of $936,836. |
|
● |
On September 29, 2020, the Company completed a private placement financing (the “IPO up-listing Offering”) with certain investors, to purchase 2,100,000 Units (21,000, after reverse split) at a purchase price of US$6.00 per Unit ($600, after reverse split), for aggregate gross proceeds of US$12,600,000. Each Unit consisted of one Common Shares and one Warrant. Each Warrant entitles the holder to acquire one Common Share at an exercise price of US$6.85 ($685, after reverse split) per Common Share for a period of 60 months. These warrants are tradeable under the symbol SYTAW. The Company retained Maxim Group LLC to serve as its placement agent in this Offering. |
Item 8. Exhibits.
(a) Exhibits.
Exhibit
No. |
|
Description |
1.1# |
|
Form of Placement Agency Agreement |
3.1 |
|
Articles
of Association of the Company (incorporated by reference to Exhibit 3.1 of Amendment No. 1 to the Company’s Registration on
Form F-1 filed on December 1, 2021). |
4.1# |
|
Form of Pre-Funded Warrant |
4.2# |
|
Form of Placement Agent Warrant |
4.3# |
|
Form of Warrant Agency Agreement |
4.4 |
|
Form
of Purchase Warrant (incorporated by reference to Exhibit 4.3 of the Company’s Form 6-K filed on October 12, 2022) |
4.5 |
|
Form
of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Form 6-K filed on October 12, 2022) |
4.6 |
|
Form
of the Warrant Issued to Lind Global Partners (incorporated by reference to Exhibit 4.1 of Amendment No. 1 to the Company’s
Registration on Form F-1 filed on December 1, 2021) |
4.7 |
|
Form
of New Warrant (incorporated by reference to Exhibit 4.1 to the Form 6-K filed on January 19, 2023) |
4.8 |
|
Form
of Lind Waiver Warrant (incorporated by reference to Exhibit 4.5 of the Company’s Registration on Form F-1 (File No. 333-269814)
filed on February 15, 2023) |
5.1# |
|
Opinion of CC Corporate Counsel Professional Corporation |
5.2# |
|
Opinion of Sichenzia Ross Ference Carmel LLP |
10.1# |
|
Form of Securities Purchase Agreement |
10.2 |
|
Securities
Purchase Agreement, dated as of June 26, 2023 (incorporated by reference to Exhibit 99.1 of the Company’s Form 6-K filed on
June 28, 2023). |
10.3 |
|
Securities Purchase Agreement, dated as of July 11, 2023 (incorporated by reference to Exhibit 10.1 of the Company’s Form 6-K filed on July 13, 2023). |
10.4 |
|
Consulting
Agreement, dated July 1, 2018, by and between the Company, BSD, Ltd. and Marc Seelenfreund (incorporated by reference to Exhibit
10.1 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.5 |
|
License
Agreement dated December 1, 2012, by and between Uniden America Corporation, Inc. & affiliates and Signifi Mobile. (incorporated
by reference to Exhibit 10.2 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.6 |
|
Parent
License Agreement, dated November 30, 2017, by and between Wilson Electronics, LLC and Signifi Mobile Inc. (incorporated by reference
to Exhibit 10.3 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.7 |
|
2016
Siyata Mobile Inc. Stock Option Plan (incorporated by reference to Exhibit 10.4 of the Company’s Registration on Form F-1 filed
on November 18, 2021). |
10.8 |
|
Demand
Operating Facility Agreement, dated March 3, 2020, by and between The Toronto-Dominion Bank and Signifi Mobile Inc./Mobile Signifi
Inc. (incorporated by reference to Exhibit 10.5 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.9 |
|
Amended
and Restated Employment Agreement, dated July 1, 2018, by and between the Company and Gerald Bernstein (incorporated by reference
to Exhibit 10.6 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.10 |
|
Consulting
Agreement, dated November 26, 2018, by and between the Company, Glenn Kennedy Sales Agency and Glenn Kennedy (incorporated by reference
to Exhibit 10.7 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.11 |
|
LTE
Standard Patent Licensing Agreement, dated June 5, 2018, by and between the Company and Via Licensing Corporation (incorporated by
reference to Exhibit 10.8 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.12 |
|
AAC Standard Patent Licensing Agreement, dated June 5, 2018, by and between the Company and Via Licensing Corporation (incorporated by reference to Exhibit 10.9 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.13 |
|
Loan Agreement, dated April 1, 2019, by and between the Company and BSD Capital, LTD. (incorporated by reference to Exhibit 10.10 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.14 |
|
Assignment and Amending Agreement, dated January 1, 2020, by and between the Company, BSD Capital, LTD. and Basad Partners LTD. (incorporated by reference to Exhibit 10.11 of the Company’s Registration on Form F-1 filed on November 18, 2021). |
10.15 |
|
Securities Purchase Agreement, dated as of October 27, 2021, by and between the Company and Lind Partners (incorporated by reference to Exhibit 10.12 of the Company’s Amendment No. 1 to the Registration Statement on Form F-1 filed on December 27, 2021). |
10.16 |
|
Secured Convertible Promissory Note issued to Lind Global Fund II LP (incorporated by reference to Exhibit 10.2 to the Report on Form 6-K filed on October 27, 2021) |
10.17 |
|
Form of Warrant Exercise Agreement by and between Siyata Mobile Inc. and the Holders dated January 18, 2023 (incorporated by reference to Exhibit 10.1 of the Company’s Form 6-K filed on January 19, 2023) |
10.18 |
|
Senior Secured Convertible Promissory Note issued to Lind Global Fund II LP (incorporated by reference to Exhibit 10.1 to the Report on Form 6-K filed on November 15, 2021). |
10.19 |
|
Annual Information Form for the year ended December 31, 2022 (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 20-F filed on May 15, 2023) |
10.20† |
|
Amended Agreement by and between Siyata Mobile Inc. and Peter Goldstein dated March 9, 2022 (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 20-F filed on May 15, 2023) |
21.1 |
|
List of Subsidiaries (incorporated by reference to Exhibit 21.1 of the Company’s Amendment No. 1 to the Registration Statement on Form F-1/A filed on March 27, 2023) |
23.1# |
|
Consent of Barzily and Co., CPA’s |
23.2# |
|
Consent of CC Corporate Counsel Professional Corporation (included in Exhibit 5.1) |
23.3# |
|
Consent of Sichenzia Ross Ference Carmel LLP (included in Exhibit 5.2) |
24.1# |
|
Power of Attorney (included on the signature page of this registration statement) |
101.INS |
|
XBRL Instance Document |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
107# |
|
Exhibit Filing Fees |
* |
To be filed by amendment |
† |
Executive compensation plan or arrangement |
(b) Financial Statement Schedules.
All financial statement schedules are omitted
because the information called for is not required or is shown either in the financial statements or in the notes thereto.
Item 9. Undertakings
The undersigned registrant hereby undertakes to
provide to the placement agent at the closing specified in the placement agent agreement, certificates in such denominations and registered
in such names as required by the placement agent to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions
described in Item 6, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers
or sells are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus
required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement.
(iii) To include material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to
such information in the registration statement; provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if
the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 and Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) To file a post-effective amendment to
the registration statement to include any financial statements required by “Item 8.A.of Form 20-F (17 CFR 249.220f)”
at the start of any delayed offering or throughout a continuous offering.
(5) For determining liability of the undersigned
Registrant under the Securities Act to any purchaser in the initial distribution of the securities, that in a primary offering of securities
of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned
Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(a) Any preliminary prospectus
or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
(b) Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;
(c) The portion of any other
free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided
by or on behalf of the undersigned Registrant; and
(d) Any other communication
that is an offer in the offering made by the undersigned Registrant to the purchaser.
(6) That, for the purpose of determining liability
under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall
be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however,
that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated
or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as
to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first
use.
(7) That, insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability
under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form
F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City
of Surrey, British Columbia, Canada, on this 10th day of October, 2023.
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SIYATA MOBILE INC. |
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By: |
/s/ Marc Seelenfreund |
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Marc Seelenfreund
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Chief Executive Officer and Director |
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints Marc Seelenfreund or Gerald Bernstein as his true and lawful attorney-in-fact and
agent, with the full power of substitution, for him and in his name, place or stead, in any and all capacities, to sign any and all amendments
to this registration statement (including post-effective amendments), and to sign any registration statement for the same offering covered
by this registration statement that is to be effective upon filing pursuant to Rule 462 promulgated under the Securities Act, and all
post-effective amendments thereto, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agents or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE |
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TITLE |
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DATE |
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/s/ Marc Seelenfreund |
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Chief Executive Officer and Director (principal executive officer) |
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October 10, 2023 |
Marc Seelenfreund |
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/s/ Gerald Bernstein |
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Chief Financial Officer (principal financial and accounting officer) |
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October 10, 2023 |
Gerald Bernstein |
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/s/ Peter Goldstein |
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Chairman |
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October 10, 2023 |
Peter Goldstein |
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/s/ Gary Herman |
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Director |
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October 10, 2023 |
Gary Herman |
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/s/ Lourdes Felix |
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Director |
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October 10, 2023 |
Lourdes Felix |
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/s/ Stephen Ospalak |
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Director |
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October 10, 2023 |
Stephen Ospalak |
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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE
UNITED STATES
Pursuant to the Securities Act of 1933
as amended, the undersigned, the duly authorized representative in the United States of America of Siyata Mobile Inc., has signed
this registration statement on October 10th, 2023.
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Authorized U.S. Representative |
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/s/ Colleen A. De Vries |
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Name: |
Colleen A. De Vries |
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Title: |
Senior Vice-President on behalf of
Cogency Global Inc. |
II-8
false
0001649009
0001649009
2022-01-01
2022-12-31
0001649009
dei:BusinessContactMember
2022-01-01
2022-12-31
Exhibit 1.1
PLACEMENT AGENCY AGREEMENT
October __, 2023
VIA ELECTRONIC DELIVERY
Marc Seelenfreund
Chief Executive Officer
Siyata Mobile Inc.
7404 King George Blvd., Suite 200, King’s
Cross
Surrey, British Columbia V3W 1N6, Canada
Dear Mr. Seelenfreund :
This letter (the “Agreement”)
constitutes the agreement between Maxim Group LLC (“Maxim” or the “Placement Agent”) and
Siyata Mobile Inc., a corporation existing under the law of British Columbia (the “Company”), that Maxim shall serve
as the exclusive placement agent for the Company, on a “reasonable best efforts” basis, for the proposed placement of up to
an aggregate of US$_________ of common shares, no par value per share (the “Common Shares”) of the Company, consisting
of up to ______________ Common Shares and/or Pre-Funded Warrants to purchase Common Shares (“Pre-Funded Warrants”),
consisting of up to ______________Pre-Funded Warrants directly to various investors (“Investors” or “Purchasers”).
The Common Shares, the Pre-Funded Warrants and the Common Shares issuable upon the exercise of the Pre-Funded Warrants (the “Pre-Funded
Warrant Shares”) shall be collectively referred to herein as the “Securities”. The documents executed and
delivered by the Company and the Investors in connection with the Offering (as defined below), including, without limitation, a securities
purchase agreement to be entered into by the Company and each Investor (in a form reasonably acceptable to the Company and the Placement
Agent), shall be collectively referred to herein as the “Transaction Documents.” The purchase price to the Investors
for each Common Share is US$_______ and the purchase price for each Pre-Funded Warrant is US$_______. The Placement Agent may retain other
brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Offering.
Notwithstanding anything herein
to the contrary, in the event that the Placement Agent determines that any of the terms provided for hereunder do not comply with a rule
of the Financial Industry Regulatory Authority (“FINRA”), including but not limited to FINRA Rule 5110, then the Company
shall agree to amend this Agreement in writing upon the request of the Placement Agent to comply with any such rules; provided that any
such amendments shall not provide for terms that are less favorable to the Company than the terms of this Agreement.
Section 1. Agreement to
Act as Placement Agent.
(a) On
the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and conditions
of this Agreement, the Placement Agent shall be the exclusive placement agent in connection with the offering and sale by the Company
of the Securities pursuant to the Company’s registration statement on Form F-l (File No. 333-_________) (and including any registration
statement prepared and filed by the Company in accordance with Rule 462(b) pursuant to the Securities Act (as defined below)) (the “Registration
Statement”), with the terms of such offering (the “Offering”) to be subject to market conditions and negotiations
between the Company, the Placement Agent and the prospective Investors. The Placement Agent will act on a reasonable best efforts basis
and the Company agrees and acknowledges that there is no guarantee of the successful placement of the Common Shares and/or Pre-Funded
Warrants, or any portion thereof, in the prospective Offering. Under no circumstances will the Placement Agent or any of its “Affiliates”
(as defined below) be obligated to underwrite or purchase any of the Common Shares and/or Pre-Funded Warrants for its own account or otherwise
provide any financing. The Placement Agent shall act solely as the Company’s agent and not as principal. The Placement Agent shall
have no authority to bind the Company with respect to any prospective offer to purchase the Common Shares and/or Pre-Funded Warrants and
the Company shall have the sole right to accept offers to purchase the Common Shares and/or Pre-Funded Warrants and may reject any such
offer, in whole or in part. Subject to the terms and conditions hereof, payment of the purchase price for, and delivery of, the Securities
shall be made at one or more closings (each a “Closing” and the date on which each Closing occurs, a “Closing
Date”). The Closing shall occur via “Delivery Versus Payment”, i.e., on the Closing Date, the Company shall issue
the Securities directly to the account designated by the Placement Agent and, upon receipt of such Securities, the Placement Agent shall
electronically deliver such Securities to the applicable Investor and payment shall be made by the Placement Agent (or its clearing firm)
by wire transfer to the Company. As compensation for services rendered, the Company shall pay to the Placement Agent the fees and expenses
set forth below:
| (i) | a cash fee equal to 7.0% of the gross proceeds received by the Company from the sale of the Common Shares
and Pre-Funded Warrants at the applicable Closing; |
| (ii) | the Company shall, at each Closing, grant to Maxim Partners LLC (or such other recipient as designated
by Placement Agent) common shares purchase warrants (the “Placement Agent Warrants”) in an amount equal to five percent
(5.0%) of the total number of Common Shares and/or Pre-Funded Warrants being sold in the Placement. The form of the Placement Agent Warrants
is set forth as Addendum B hereto. The Placement Agent Warrants will be non-exercisable for six (6) months after the date of the Closing
and will be exercisable and expire five (5) years after the Closing. The Placement Agent Warrants will be exercisable at a price per share
equal to 110% of the price of each Common Share paid by the Purchasers in connection with the Offering. The Placement Agent Warrants shall
not be redeemable. The Placement Agent will be entitled to customary demand and “piggyback” rights pursuant to FINRA Rule
5110, which shall include one demand registration at the Company’s expense, an additional demand registration at the warrant holders’
expense and unlimited “piggyback” registration rights as set forth in the Placement Agent Warrants. The Placement Agent Warrants
(and the underlying Common Shares) may not be transferred, assigned or hypothecated for a period of six (6) months. following the Closing,
except that they may be assigned, in whole or in part, to any successor, officer or member of the Placement Agent (or to officers or partners
of any such successor or member) pursuant to FINRA Rule 5110(g)(2). The Placement Agent Warrants may be exercised in whole or in part,
shall provide for “cashless” exercise, and shall provide for customary antidilution and price protection; and |
| (iii) | reimbursement of the Placement Agent’s accountable expenses, including the Placement Agent’s
legal counsel’s legal fees, up to US$90,000. |
The Placement Agent reserves
the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be
made by FINRA to the effect that the Placement Agent’s aggregate compensation is in excess of FINRA Rules or that the terms thereof
require adjustment.
(b) The
Placement Agent’s engagement hereunder shall become effective on the date hereof and shall continue until the earlier of (i) the
final Closing Date of the Placement and (ii) the date a party terminates the engagement according to the terms of the next sentence (such
date, the “Termination Date”) and the period of time during which this Agreement remains in effect is referred to herein
as the “Term”). After an initial period of 180 days from the date hereof, the engagement may be terminated at any time
by either party upon ten (10) days’ written notice to the other party, effective upon receipt of written notice to that effect by
the other party. The Agreement may not be earlier terminated other than for Cause (defined hereinafter). If there is a Closing of the
Offering, or if the Termination Date occurs prior to Closing of the Offering (other than for Cause), then if within twelve (12) months
following such time, the Company completes any financing of equity, equity-linked, convertible or debt or other capital raising activity
with, or receives any proceeds from, any of the Investors contacted or introduced to the Company by the Placement Agent during the term
of this Agreement, then the Company will pay the Placement Agent upon the closing of such financing or receipt of such proceeds the compensation
set forth in Section 1 herein. “Cause,” for the purpose of this Agreement, shall mean, as determined by a court of
competent jurisdiction, Placement Agent’s gross negligence, willful misconduct, or a material breach of this Agreement, after being
notified in writing of such conduct, and not curing such alleged conduct within ten (10) business days of notification of such alleged
wrongful conduct. Notwithstanding anything to the contrary contained herein, the provisions concerning confidentiality, indemnification,
contribution, future rights and the Company’s obligations to pay fees and reimburse expenses pursuant to Section 1 herein and the
Company’s obligations contained in the Indemnification Provisions will survive any expiration or termination of this Agreement.
If this Agreement is terminated prior to the completion of the Offering, all fees due to the Placement Agent shall be paid by the Company
to the Placement Agent on or before the Termination Date (in the event such fees are earned or owed as of the Termination Date pursuant
to the terms of Section 1 hereof). The Placement Agent agrees not to use any confidential information concerning the Company provided
to the Placement Agent by the Company for any purposes other than those contemplated under this Agreement.
(c) Nothing
in this Agreement shall be construed to limit the ability of the Placement Agent or its Affiliates to pursue, investigate, analyze, invest
in, or engage in investment banking, financial advisory or any other business relationship with Persons (as defined below) other than
the Company. As used herein (i) “Persons” 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, and (ii) “Affiliate” means any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the
Securities Act of 1933, as amended (the “Securities Act”).
Section 2. Representations,
Warranties and Covenants of the Company. The Company hereby represents, warrants and covenants to the Placement Agent as of the date
hereof, and as of each Closing Date, unless such representation, warranty or agreement specifies a different date or time, as follows:
(a) Securities
Law Filings. The Company has filed with the Securities and Exchange Commission (the “Commission”) the Registration
Statement under the Securities Act, which was filed on October __, 2023 and declared effective on October __, 2023 for the registration
of the Securities, the Placement Agent Warrants and the shares of Common Stock underlying the Placement Agent Warrants under the Securities
Act. Following the determination of pricing among the Company and the prospective Investors introduced to the Company by Placement Agent,
the Company will file with the Commission pursuant to Rules 430A and 424(b) under the Securities Act, and the rules and regulations (the
“Rules and Regulations”) of the Commission promulgated thereunder, a final prospectus relating to the placement of
the Securities, and the plan of distribution thereof and will advise the Placement Agent of all further information (financial and other)
with respect to the Company required to be set forth therein. Such prospectus in the form in which it appears in the Registration Statement
at the time of effectiveness, is hereinafter called the “Preliminary Prospectus” and the final prospectus, in the form
in which it will be filed with the Commission pursuant to Rules 430A and/or 424(b) (including the Preliminary Prospectus as it may be
amended or supplemented) is hereinafter called the “Final Prospectus.” The Registration Statement at the time it originally
became effective is hereinafter called the “Original Registration Statement.” Any reference in this Agreement
to the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Final Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein (the “Incorporated Documents”), if any, which
were or are filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at any given time,
as the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, the Original Registration Statement, the Preliminary Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the date of the
Preliminary Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. All references in
this Agreement to financial statements and schedules and other information which is “contained,” “included,” “described,”
“referenced,” “set forth” or “stated” in the Registration Statement, the Preliminary Prospectus or
the Final Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules
and other information which is or is deemed to be incorporated by reference in the Registration Statement, the Preliminary Prospectus
or the Final Prospectus, as the case may be. As used in this paragraph and elsewhere in this Agreement, “Time of Sale Disclosure
Package” means the Preliminary Prospectus, the Transaction Documents, the final terms of the Offering provided to the Investors
in writing, and any issuer free writing prospectus as defined in Rule 433 of the Act (each, an “Issuer Free Writing Prospectus”),
if any, that the parties hereto shall hereafter expressly agree in writing to treat as part of the Time of Sale Disclosure Package. The
term “any Prospectus” shall mean, as the context requires, the Preliminary Prospectus, the Final Prospectus and any
supplement to either thereof. The Company has not received any notice that the Commission has issued or intends to issue a stop order
suspending the effectiveness of the Registration Statement or the use of the Preliminary Prospectus or the Final Prospectus or intends
to commence a proceeding for any such purpose.
(b) Each
of the representations and warranties (together with any related disclosure schedules thereto) made to the Purchasers in that certain
Securities Purchase Agreement dated as of October __, 2023, between the Company and each Purchaser, is hereby incorporated herein by reference
(as though fully restated herein) and is hereby made to, and in favor of, Maxim.
Section 3. Delivery and
Payment. Each Closing shall occur at the offices of Loeb & Loeb LLP, 345 Park Avenue, New York, New York 10583 (“Placement
Agent Counsel”) (or at such other place as shall be agreed upon by the Placement Agent and the Company). Subject to the terms
and conditions hereof, at each Closing, payment of the purchase price for the Securities sold on such Closing Date shall be made by Federal
Funds wire transfer, against delivery of such Securities, and such Securities shall be registered in such name or names and shall be in
such denominations, as the Placement Agent may request at least one business day before the Closing Date. Deliveries of the documents
with respect to the purchase of the Securities, if any, shall be made at the offices of Placement Agent Counsel. All actions taken at
a Closing shall be deemed to have occurred simultaneously.
Section 4. Covenants and
Agreements of the Company. The Company further covenants and agrees with the Placement Agent as follows:
(a) Registration
Statement Matters. The Company will advise the Placement Agent promptly after it receives notice thereof of the time when any amendment
to the Registration Statement has been filed or becomes effective or any supplement to the Final Prospectus has been filed and will furnish
the Placement Agent with copies thereof or advise where such filings may be obtained on EDGAR. The Company will file promptly all reports
and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a),
14 or 15(d) of the Exchange Act subsequent to the date of any Prospectus and for so long as the delivery of a prospectus is required in
connection with the Offering. The Company will advise the Placement Agent, promptly after it receives notice thereof (i) of any request
by the Commission to amend the Registration Statement or to amend or supplement any Prospectus or for additional information, and (ii)
of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment
thereto or any order directed at any Incorporated Document, if any, or any amendment or supplement thereto or any order preventing or
suspending the use of the Preliminary Prospectus or the Final Prospectus or any prospectus supplement or any amendment or supplement thereto
or any post-effective amendment to the Registration Statement, of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the institution or threatened institution of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or a Prospectus or for additional information. The Company
shall use its best efforts to prevent the issuance of any such stop order or prevention or suspension of such use. If the Commission shall
enter any such stop order or order or notice of prevention or suspension at any time, the Company will use its best efforts to obtain
the lifting of such order at the earliest possible moment, or will file a new registration statement and use its best efforts to have
such new registration statement declared effective as soon as practicable. Additionally, the Company agrees that it shall comply with
the provisions of Rules 424(b), 430A, 430B and 430C, as applicable, under the Securities Act, including with respect to the timely filing
of documents thereunder, and will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) are
received in a timely manner by the Commission.
(b) [Intentionally
Omitted].
(c) Amendments
and Supplements to a Prospectus and Other Matters. The Company will comply with the Securities Act and the Exchange Act, and the Rules
and Regulations of the Commission thereunder, so as to permit the completion of the distribution of the Securities as contemplated in
this Agreement, the Incorporated Documents and any Prospectus. If during the period in which a prospectus is required by law to be delivered
in connection with the distribution of Securities contemplated by the Incorporated Documents or any Prospectus (the “Prospectus
Delivery Period”), any event shall occur as a result of which, in the judgment of the Company or in the opinion of the Placement
Agent or counsel for the Placement Agent, it becomes necessary to amend or supplement the Incorporated Documents or any Prospectus in
order to make the statements therein, in light of the circumstances under which they were made, as the case may be, not misleading, or
if it is necessary at any time to amend or supplement the Incorporated Documents or any Prospectus or to file under the Exchange Act any
Incorporated Document to comply with any law, the Company will promptly prepare and file with the Commission, and furnish at its own expense
to the Placement Agent and to dealers, an appropriate amendment to the Registration Statement or supplement to the Registration Statement,
the Incorporated Documents or any Prospectus that is necessary in order to make the statements in the Incorporated Documents and any Prospectus
as so amended or supplemented, in light of the circumstances under which they were made, as the case may be, not misleading, or so that
the Registration Statement, the Incorporated Documents or any Prospectus, as so amended or supplemented, will comply with law. Before
amending the Registration Statement or supplementing the Incorporated Documents or any Prospectus in connection with the Offering, the
Company will furnish the Placement Agent with a copy of such proposed amendment or supplement and will not file any such amendment or
supplement to which the Placement Agent reasonably objects.
(d) Copies of
any Amendments and Supplements to a Prospectus. The Company will furnish the Placement Agent, without charge, during the period beginning
on the date hereof and ending on the later of the last Closing Date of the Offering, as many copies of any Prospectus or prospectus supplement
and any amendments and supplements thereto, as the Placement Agent may reasonably request.
(e) Free
Writing Prospectus. The Company covenants that it will not, unless it obtains the prior written consent of the Placement Agent,
make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a
“free writing prospectus” (as defined in Rule 405 of the Securities Act) required to be filed by the Company
with the Commission or retained by the Company under Rule 433 of the Securities Act. In the event that the Placement Agent expressly consents
in writing to any such free writing prospectus (a “Permitted Free Writing Prospectus”), the Company covenants
that it shall (i) treat each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) comply with the requirements
of Rule 164 and 433 of the Securities Act applicable to such Permitted Free Writing Prospectus, including in respect of timely filing
with the Commission, legending and record keeping.
(f) Transfer
Agent. The Company will maintain, at its expense, a registrar and transfer agent for the Common Shares for at least three years
after the final Closing Date.
(g) Earnings
Statement. As soon as practicable and in accordance with applicable requirements under the Securities Act, but in any event not later
than 18 months after the last Closing Date, the Company will make generally available to its security holders and to the Placement Agent
an earnings statement, covering a period of at least 12 consecutive months beginning after the last Closing Date, that satisfies the provisions
of Section 11(a) and Rule 158 under the Securities Act.
(h) Periodic
Reporting Obligations. During the Prospectus Delivery Period, the Company will duly file, on a timely basis, with the Commission
and the market or exchange on which the Common Shares are listed or quoted for trading (the “Trading Market”)
all reports and documents required to be filed under the Exchange Act within the time periods and in the manner required by the Exchange
Act.
(i) Additional
Documents. The Company will enter into any subscription, purchase or other customary agreements as the Placement Agent or the Investors
deem reasonably necessary or appropriate to consummate the Offering, all of which will be in form and substance reasonably acceptable
to the Company, the Placement Agent and the Investors. The Company agrees that the Placement Agent may rely upon, and is a third party
beneficiary of, the representations and warranties, and applicable covenants, set forth in any such purchase, subscription or other agreement
with Investors in the Offering.
(j) No
Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities of the Company.
(k) Acknowledgment.
The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit and use of the Board of
Directors of the Company and may not be used, reproduced, disseminated, quoted or referred to, without the Placement Agent’s prior
written consent.
(l) Publicity.
The Company acknowledges and agrees that the Placement Agent may, subsequent to the Closing, make public its involvement with the Offering.
The Company agrees that, until 45 days after the final Closing Date, it will not issue press releases or engage in any other publicity,
without Placement Agent’s prior written consent (not to be unreasonably withheld), other than normal and customary releases issued
in the ordinary course of the Company’s business. Notwithstanding the foregoing, in no event shall the Company be prohibited from
issuing any press releases or engaging in any other publicity required by law, the Rules and Regulations or the rules of the trading markets
upon which the Common Shares trade (“Trading Market”), except that including the name of the Placement Agent therein
shall require the prior written consent of the Placement Agent which shall not be unreasonably withheld, conditioned or delayed.
(m) Reliance
on Others. The Company confirms that it will rely on its own counsel and accountants for legal and accounting advice.
(n) Research
Matters. By entering into this Agreement, the Placement Agent does not provide any promise, either explicitly or implicitly, of favorable
or continued research coverage of the Company and the Company hereby acknowledges and agrees that the Placement Agent’s selection
as a placement agent for the Offering was in no way conditioned, explicitly or implicitly, on the Placement Agent providing favorable
or any research coverage of the Company. In accordance with the FINRA Rules, the parties acknowledge and agree that the Placement Agent
has not directly or indirectly offered favorable research, a specific rating or a specific price target, or threatened to change research,
a rating or a price target, to the Company or inducement for the receipt of business or compensation.
(o) Trading
Market. The Company will meet the criteria necessary for inclusion of the Common Shares on the Trading Market and use its best efforts
to maintain such listing for a period of at least three years after the final Closing Date.
(p) Engagement
of Professionals. The Company will retain a PCAOB registered firm of independent certified public accountants reasonably acceptable
to Maxim for a period of at least three years after the final Closing Date. The Placement Agent agrees that Barzily and Co, CPAs is acceptable.
The Company will retain a financial public relations firm reasonably acceptable to Maxim for a period of two years after the final Closing
Date. The Placement Agent agrees that Hayden IR is acceptable. The Company will retain a financial printer reasonably acceptable to Maxim
to handle the printing and related aspects of the Offering.
Section 5. Conditions
of the Obligations of the Placement Agent. The obligations of the Placement Agent hereunder shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 2 hereof, in each case as of the date hereof and as of
each Closing Date as though then made, to the timely performance by each of the Company of its covenants and other obligations hereunder
on and as of such dates, and to each of the following additional conditions:
(a) Accountants’
Comfort Letter. At the first closing (the “Initial Closing”), the Placement Agent shall have received, and the
Company shall have caused to be delivered to the Placement Agent, a letter from Barzily and Co., addressed to the Placement Agent, dated
as of the Initial Closing, in form and substance satisfactory to the Placement Agent. The letter shall not disclose any change in the
condition (financial or other), earnings, operations, business or prospects of the Company from that set forth in the Incorporated Documents
or the applicable Prospectus or prospectus supplement, which, in the Placement Agent’s sole judgment, is material and adverse and
that makes it, in the Placement Agent’s sole judgment, impracticable or inadvisable to proceed with the Offering of the Securities
as contemplated by such Prospectus.
(b) Compliance
with Registration Requirements: No Stop Order; No Objection from the FINRA. Each Prospectus shall have been duly filed with the Commission,
as appropriate; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by the Commission; no order preventing or suspending the use of
any Prospectus shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no
order having the effect of ceasing or suspending the distribution of the Securities or any other securities of the Company shall have
been issued by any securities commission, securities regulatory authority or stock exchange and no proceedings for that purpose shall
have been instituted or shall be pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory
authority or stock exchange; all requests for additional information on the part of the Commission shall have been complied with; and,
prior to the Initial Closing, FINRA shall have raised no objection to the fairness and reasonableness of the placement terms and arrangements.
(c) Corporate
Proceedings. All corporate proceedings and other legal matters in connection with this Agreement, the Registration Statement and each
Prospectus, and the registration, sale and delivery of the Securities, the Placement Agent Warrant and the Common Shares underlying the
Placement Agent Warrant, shall have been completed or resolved in a manner reasonably satisfactory to the Placement Agent Counsel, and
such counsel shall have been furnished with such papers and information as it may reasonably have requested to enable such counsel to
pass upon the matters referred to in this Section 5.
(d) No
Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to each Closing Date, in the Placement
Agent’s sole judgment after consultation with the Company, there shall not have occurred any material adverse change or development
involving a prospective material adverse change in the condition or the business activities, financial or otherwise, of the Company from
the latest dates as of which such condition is set forth in the Registration Statement and Prospectus (“Material Adverse Change”).
(e) Opinions
of Counsel for the Company. The Placement Agent shall have received on each Closing Date the opinion of: (i) Sichenzia Ross Ference
Carmel LLP, U.S. legal counsel to the Company and (ii) CC Corporate Counsel Professional Corporation, Canadian legal counsel to the Company,
dated as of such Closing Date, including, without limitation, a negative assurance letter addressed to the Placement Agent and in form
and substance satisfactory to the Placement Agent.
(f) Officers’
Certificate. The Placement Agent shall have received on each Closing Date a certificate of the Company, dated as of such Closing Date,
signed by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect that, and the Placement Agent shall be
satisfied that, the signers of such certificate have reviewed the Registration Statement, the Incorporated Documents, the Final Prospectus,
the Transaction Documents and this Agreement and to the further effect that:
(i) The
representations and warranties of the Company in this Agreement are true and correct, as if made on and as of such Closing Date, and the
Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to
such Closing Date;
(ii) No
stop order suspending the effectiveness of the Registration Statement or the use of the Final Prospectus has been issued and no proceedings
for that purpose have been instituted or are pending or, to the Company’s knowledge, threatened under the Securities Act; no order
having the effect of ceasing or suspending the distribution of the Securities or any other securities of the Company has been issued by
any securities commission, securities regulatory authority or stock exchange in the United States and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory
authority or stock exchange in the United States;
(iii) When
the Registration Statement became effective, at the time of sale, and at all times subsequent thereto up to the delivery of such certificate,
the Registration Statement and the Incorporated Documents, if any, when such documents became effective or were filed with the Commission,
and any Prospectus, contained all material information required to be included therein by the Securities Act and the Exchange Act and
the applicable Rules and Regulations of the Commission thereunder, as the case may be, and in all material respects conformed to the requirements
of the Securities Act and the Exchange Act and the applicable Rules and Regulations of the Commission thereunder, as the case may be,
and the Registration Statement and the Incorporated Documents, if any, and any Prospectus, did not and do not include any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading (provided, however, that the preceding representations and warranties
contained in this paragraph (iii) shall not apply to any statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Placement Agent expressly for use therein) and, since the effective date of the Registration
Statement, there has occurred no event required by the Securities Act and the Rules and Regulations of the Commission thereunder to be
set forth in the Incorporated Documents which has not been so set forth; and
(iv) Subsequent
to the respective dates as of which information is given in the Registration Statement, the Incorporated Documents and the Final Prospectus,
there has not been: (a) any Material Adverse Change; (b) any transaction that is material to the Company taken as a whole, except transactions
entered into in the ordinary course of business; (c) any obligation, direct or contingent, that is material to the Company taken as a
whole, incurred by the Company, except obligations incurred in the ordinary course of business; (d) any material change in the capital
stock (except changes thereto resulting from the exercise of outstanding stock options or warrants) or outstanding indebtedness of the
Company; (e) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company; or (f) any loss or damage
(whether or not insured) to the property of the Company which has been sustained or will have been sustained which would be deemed a Material
Adverse Change.
(g) Bring-down
Comfort Letter. On each Closing Date after the Initial Closing, the Placement Agent shall have received from Barzily and Co., the
independent registered public accounting firm of the Company, a letter dated as of such Closing Date, in form and substance satisfactory
to the Placement Agent, to the effect that they reaffirm the statements made in the applicable letter furnished pursuant to subsection
(a) of this Section 5, except that the specified date referred to therein for the carrying out of procedures shall be no more than two
business days prior to such Closing Date.
(h) Stock
Exchange Listing. The Common Shares shall be registered under the Exchange Act and shall be listed on the Trading Market, and
the Company shall not have taken any action designed to terminate, or likely to have the effect of terminating, the registration of the
Common Shares under the Exchange Act or delisting or suspending from trading the Common Shares from the Trading Market, nor shall the
Company have received any information suggesting that the Commission or the Trading Market is contemplating terminating such registration
or listing except as disclosed in any Prospectus.
(i) Lock-Up
Agreements. At the Initial Closing, the Placement Agent shall have received the executed lock-up agreement, in the form attached hereto
as Exhibit A. from each of the directors, officers, and the holders of 5% or more of the Company’s outstanding Common Shares.
(j) Additional
Documents. On or before each Closing Date, the Placement Agent and Placement Agent Counsel shall have received such information and
documents, as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated
herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions
or agreements, herein contained.
If any condition specified in this Section 5 is
not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement Agent by notice to the Company at
any time on or prior to a Closing Date, which termination shall be without liability on the part of any party to any other party, except
that Sections 1(a), 7 and 8 shall at all times be effective and shall survive such termination.
Section 6. Further Agreements.
(a) Other
Activities. The Company acknowledges that the Placement Agent has been, and may in the future be, engaged to provide services as an
underwriter, placement agent, finder, advisor or investment banker to other companies in the industry in which the Company is involved.
The Company acknowledges and agrees that nothing contained in this Agreement shall limit or restrict the right of the Placement Agent
or of any member, manager, officer, employee, agent or representative of the Placement Agent, to be a member, manager, partner, officer,
director, employee, agent or representative of, investor in, or to engage in, any other business, whether or not of a similar nature to
the Company’s business, nor to limit or restrict the right of the Placement Agent to render services of any kind to any other corporation,
firm, individual or association; provided that the Placement Agent and any of its members, managers, officers, employees, agents or representatives
shall not use the Information to the detriment of the Company.
(b) Right
of First Refusal. For a period of 12 months from the final Closing Date, the Company grants Maxim the right of first refusal to act
as sole managing underwriter and sole book runner, sole placement agent, or sole sales agent, for any and all future public or private
equity, equity-linked or debt (excluding commercial bank debt) offerings for which the Company retains the service of an underwriter,
agent, advisor, finder or other person or entity in connection with such offering during such twelve (12) month period of the Company,
or any successor to or any subsidiary of the Company. The Company shall not offer to retain any entity or person in connection with any
such offering on terms more favorable than terms on which it offers to retain Maxim. Such offer shall be made in writing in order to be
effective. Maxim shall notify the Company within ten (10) business days of its receipt of the written offer contemplated above as to whether
or not it agrees to accept such retention. If Maxim should decline such retention, the Company shall have no further obligations to Maxim
with respect to the offering for which it has offered to retain Maxim, except as otherwise provided for herein.
(c) [Intentionally
Omitted].
(d) Subsequent
Equity Sales. From the final Closing Date until ninety (90) days after the Closing Date, neither the Company nor any Subsidiary shall
(i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Shares or Common Share Equivalents
or (ii) file any registration statement or amendment or supplement thereto, other than the Prospectus or filing a registration statement
on Form S-8 in connection with any employee benefit plan. From the date hereof until ninety (90) days after the Closing Date, the Company
shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common
Shares or Common Shares Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive additional Common Shares either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Shares
at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market for the Common Shares or (ii) enters
into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit or an “at-the-market
offering”, whereby the Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Notwithstanding
the foregoing, this Section 6(d) shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an
Exempt Issuance.
Section 7. Indemnification
and Contribution.
(a) The
Company agrees to indemnify and hold harmless the Placement Agent, its affiliates and each person controlling the Placement Agent (within
the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of the Placement Agent, its affiliates
and each such controlling person (the Placement Agent, and each such entity or person, an “Indemnified Person”) from
and against any losses, 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 one counsel for all
Indemnified Persons, except as otherwise expressly provided herein) (collectively, the “Expenses”) as they are incurred
by an Indemnified Person in investigating, preparing, pursuing or defending any Action, whether or not any Indemnified Person is a party
thereto, (i) caused by, or arising out of or in connection with, any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, any Incorporated Document, or any Prospectus or by any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (other
than untrue statements or alleged untrue statements in, or omissions or alleged omissions from, information relating to an Indemnified
Person furnished in writing by or on behalf of such Indemnified Person expressly for use in the Registration Statement, any Prospectus
or any Incorporated Documents) or (ii) otherwise arising out of or in connection with advice or services rendered or to be rendered by
any Indemnified Person pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person’s actions or
inactions in connection with any such advice, services or transactions; provided, however, that, in the case of clause (ii)
only, the Company shall not be responsible for any Liabilities or Expenses of any Indemnified Person that are finally judicially determined
to have resulted solely from such Indemnified Person’s (x) gross negligence or willful misconduct in connection with any of the
advice, actions, inactions or services referred to above or (y) use of any offering materials or information concerning the Company in
connection with the offer or sale of the Securities in the Offering which were not authorized for such use by the Company and which use
constitutes gross negligence or willful misconduct. The Company also agrees to reimburse each Indemnified Person for all Expenses as they
are incurred in connection with enforcing such Indemnified Person’s rights under this Agreement.
(b) Upon
receipt by an Indemnified Person of actual notice of an Action against such Indemnified Person with respect to which indemnity may 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 liability which the Company may have on account of this indemnity
or otherwise to such Indemnified Person, except to the extent the Company shall have been prejudiced by such failure. The Company shall,
if requested by the Placement Agent, assume the defense of any such Action including the employment of counsel reasonably satisfactory
to the Placement Agent, which counsel may also be counsel to the Company. 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 or (ii) the named parties
to any such Action (including any impeded parties) include such Indemnified Person and the Company, and such Indemnified Person shall
have been advised in the reasonable opinion of counsel that there is an actual conflict of interest that prevents the counsel selected
by the Company from representing both the Company (or another client of such counsel) and any Indemnified Person; provided that the Company
shall not in such event be responsible hereunder for the fees and expenses of more than one firm of separate counsel for all Indemnified
Persons in connection with any Action or related Actions, in addition to any local counsel. 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 Placement Agent (which shall not be unreasonably withheld), 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 indemnification or contribution
may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Person from all Liabilities arising out of such Action for which indemnification
or contribution may be sought hereunder. The indemnification required hereby shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.
(c) In
the event that the foregoing indemnity is unavailable to an Indemnified Person other than in accordance with this Agreement, the Company
shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion as is appropriate to reflect
(i) the relative benefits to the Company, on the one hand, and to the Placement Agent and any other Indemnified Person, on the other hand,
of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding clause is not permitted
by applicable law, not only such relative benefits but also the relative fault of the Company, on the one hand, and the Placement Agent
and any other Indemnified Person, 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; provided that in no event shall the Company contribute less than the amount necessary
to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities and Expenses in excess of the amount of fees
actually received by the Placement Agent pursuant to this Agreement. For purposes of this paragraph, the relative benefits to the Company,
on the one hand, and to the Placement Agent on the other hand, of the matters contemplated by this Agreement shall be deemed to be in
the same proportion as (a) the total value paid or contemplated to be paid to or received or contemplated to be received by the Company
in the transaction or transactions that are within the scope of this Agreement, whether or not any such transaction is consummated, bears
to (b) the fees paid to the Placement Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act, as amended, shall be entitled to contribution from a party who was not guilty
of fraudulent misrepresentation.
(d) The
Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise)
to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement,
the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services
or transactions except for Liabilities (and related Expenses) of the Company that are finally judicially determined to have resulted solely
from such Indemnified Person’s gross negligence or willful misconduct in connection with any such advice, actions, inactions or
services.
(e) The
reimbursement, indemnity and contribution obligations of the Company set forth herein shall apply to any modification of this Agreement
and 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.
Section 8. Representations
and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the
Company or any person controlling the Company, of its officers, and of the Placement Agent set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or on behalf of the Placement Agent, the Company, or any
of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment
for the Common Shares and/or Pre-Funded Warrants sold hereunder and any termination of this Agreement. A successor to a Placement Agent,
or to the Company, its directors or officers or any person controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Agreement.
Section 9. Notices. All
communications hereunder shall be in writing and shall be mailed, hand delivered, e-mailed or telecopied and confirmed to the parties
hereto as follows:
If to the Placement Agent:
Maxim Group LLC
300 Park Avenue
New York, NY 10022
Attention: James Siegel, General Counsel
Email: jsiegel@maximgrp.com
With a copy to:
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Attention: Mitchell S. Nussbaum, Esq.
Email: mnussbaun@loeb.com
If to the Company:
Siyata Mobile Inc.
Chief Executive Officer
7404 King George Blvd., Suite 200, King’s Cross
Surrey, British Columbia V3W 1N6, Canada
Attention: Marc Seelenfreund
Email: marc@siyata.net
With a copy to:
Sichenzia Ross Ference Carmel LLP
1185 Avenue of the Americas, 31st floor
New York, NY 10036
Attention: Ross Carmel, Esq.
Email: rcarmel@srfc.law
Any party hereto may change
the address for receipt of communications by giving written notice to the others.
Section 10. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers
and directors and controlling persons referred to in Section 7 hereof, and to their respective successors, and personal representative,
and no other person will have any right or obligation hereunder.
Section 11. Partial Unenforceability.
The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability
of any other section, paragraph or provision hereof. If any section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
Section 12. Governing
Law Provisions. This Agreement shall be deemed to have been made and delivered in New York City and both this Agreement and the transactions
contemplated hereby shall be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws
of the State of New York, without regard to the conflict of laws principles thereof. Each of the Placement Agent and the Company: (i)
agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby
shall be instituted exclusively in the New York Supreme Court, County of New York, or in the United States District Court for the Southern
District of New York, (ii) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and
(iii) irrevocably consents to the jurisdiction of the New York Supreme Court, County of New York, or in the United States District Court
for the Southern District of New York in any such suit, action or proceeding. Each of the Placement Agent and the Company further agrees
to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding 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 agrees that service of process
upon the Company mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process
upon the Company, in any such suit, action or proceeding, and service of process upon the Placement Agent mailed by certified mail to
the Placement Agent’s address shall be deemed in every respect effective service process upon the Placement Agent, in any such suit,
action or proceeding. Notwithstanding any provision of this Agreement to the contrary, the Company agrees that neither the Placement Agent
nor its affiliates, and the respective officers, directors, employees, agents and representatives of the Placement Agent, its affiliates
and each other person, if any, controlling the Placement Agent or any of its affiliates, shall have any liability (whether direct or indirect,
in contract or tort or otherwise) to the Company for or in connection with the engagement and transaction described herein except for
any such liability for losses, claims, damages or liabilities incurred by the Placement Agent that are finally judicially determined to
have resulted from the willful misconduct or gross negligence of such individuals or entities. If either party shall commence an action
or proceeding to enforce any provision of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
Section 13. General Provisions.
(a) This
Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject matter hereof. Notwithstanding anything herein to the contrary,
the Engagement Agreement, dated May 11, 2023 (the “Engagement Agreement”), between the Company and Maxim Group,
LLC shall continue to be effective and the terms therein shall continue to survive and be enforceable by the Placement Agent in accordance
with its terms, provided that, in the event of a conflict between the terms of the Engagement Agreement and this Agreement, the terms
of this Agreement shall prevail. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless
in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party
whom the condition is meant to benefit. Section headings herein are for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.
(b) The
Company acknowledges that in connection with the offering of the Securities: (i) the Placement Agent has acted at arm’s length,
owe no fiduciary duties to the Company or any other person, (ii) the Placement Agent owes the Company only those duties and obligations
set forth in this Agreement and (iii) the Placement Agent may have interests that differ from those of the Company. The Company waives
to the full extent permitted by applicable law any claims it may have against the Placement Agent arising from an alleged breach of fiduciary
duty in connection with the offering of the Securities.
Section 14. Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section:
“Action” means
any action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, provincial, county, local or foreign), including any proceeding before any governmental
authority in Canada.
“business day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to
remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar
orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic
funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally open for use by customers
on such day.
“Common Share Equivalents”
means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Shares, 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 Shares.
“Exempt Issuance”
means the issuance of (a) Common Shares, options, restricted stock units or other equity-based awards to employees, officers or directors
of the Company or its subsidiaries pursuant to any compensation plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for
services rendered to the Company, (b) Common Shares upon the exercise or conversion of securities exercisable for or convertible into
Common Shares that are issued and outstanding on the date of this Agreement and disclosed in the Registration Statement and the Prospectus,
provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price or conversion price of such securities or to extend the term of such securities, and (c) securities issued pursuant
to acquisitions or strategic transactions (including, without limitation, joint venture, co-marketing, co-development or other collaboration
agreements) approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement
in connection therewith during the period of 90 days after the Initial Closing date, and provided that any such issuance shall only be
to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an
asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising
capital or to an entity whose primary business is investing in securities.
“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports, and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
[The remainder of this page has been intentionally
left blank.]
If the foregoing is in accordance
with your understanding of our agreement, please sign below whereupon this instrument, along with all counterparts hereof, shall become
a binding agreement in accordance with its terms.
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Very truly yours, |
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MAXIM GROUP LLC |
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By: |
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Name: |
Clifford A. Teller |
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Title: |
Co-President |
The foregoing Agreement is hereby confirmed and
accepted as of the date first written above.
SIYATA MOBILE, INC. |
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By: |
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Name: |
Marc Seelenfreund |
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Title: |
Chief Executive Officer |
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[Signature Page to Placement Agency Agreement]
Exhibit A
LOCK-UP AGREEMENT
October [*], 2023
Siyata Mobile Inc.
7404 King George Blvd., Suite 200, King’s
Cross
Surrey, British Columbia V3W 1N6, Canada
Re: | Offering of Securities of Siyata Mobile, Inc. |
Ladies and Gentlemen:
The undersigned, as a holder
of common shares, no par value (“Common Shares”), or rights to acquire Common Shares, of Siyata Mobile Inc. (the “Company”),
or in the undersigned’s capacity as a director or officer of the Company, understands that the Company proposes to enter into
an agreement (the “Placement Agency Agreement”) with Maxim Group LLC (the “Placement Agent”), providing
for the public offering (the “Offering”) of registered Common Shares and/or Pre-Funded Warrants to purchase Common
Shares (collectively, the “Securities”). Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Placement Agency Agreement.
In recognition of the benefit
that the Offering of the Securities will confer upon the undersigned as a shareholder of the Company, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the undersigned hereby agrees for the benefit of the Company and the Placement
Agent that, without the prior written consent of the Placement Agent, the undersigned will not, for a period commencing on the date hereof
and ending 90 days from the Initial Closing date of the offering (as defined in the Placement Agency Agreement) (the “Lock-Up
Period”), directly or indirectly, unless otherwise provided herein, (a) offer, sell, agree to offer or sell, solicit offers
to purchase, grant any call option or purchase any put option with respect to, pledge, encumber, assign, borrow or otherwise dispose (each
a “Transfer”) of any Relevant Security (as defined below) or otherwise publicly disclose the intention to do so, or
(b) establish or increase any “put equivalent position” or liquidate or decrease any “call equivalent position”
with respect to any Relevant Security (in each case within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (the “Exchange Act”)), or otherwise enter into any swap, derivative
or other transaction or arrangement that Transfers to another, in whole or in part, any economic consequence of ownership of a Relevant
Security, whether or not such transaction is to be settled by delivery of Relevant Securities, other securities, cash or other consideration,
or otherwise publicly disclose the intention to do so. As used herein, the term “Relevant Security” means any Common
Shares, warrant to purchase Common Shares or other security of the Company or any other entity that is convertible into, or exercisable
or exchangeable for Common Shares or equity securities of the Company, in each case that are owned by the undersigned on the date of the
Initial Closing or acquired by the undersigned during the Lock-Up Period.
In addition, the undersigned
further agrees that, except for the registration statement filed or to be filed in connection with the Offering, during the Lock-Up Period
the undersigned will not, without the prior written consent of the Placement Agent: (a) file or participate in the filing with the Commission
of any registration statement or circulate or participate in the circulation of any preliminary or final prospectus or other disclosure
document, in each case with respect to any proposed offering or sale of a Relevant Security, or (b) exercise any rights the undersigned
may have to require registration with the Commission of any proposed offering or sale of a Relevant Security. The restrictions in this
paragraph shall not apply to any exercise (including (x) a cashless exercise or (y) any broker-assisted exercise and payment of tax obligations
occurring during the Lock Up Period) of options or warrants to purchase Common Shares; provided that any Common Shares received
upon such exercise, conversion or exchange will be subject to this Lock-Up Agreement.
In furtherance of the undersigned’s
obligations hereunder, the undersigned hereby authorizes the Company during the Lock-Up Period to cause any transfer agent for the Relevant
Securities to decline to transfer, and to note stop transfer restrictions on the share register and other records relating to, the Relevant
Securities for which the undersigned is the record owner and the transfer of which would be a violation of this Lock-Up Agreement and,
in the case of Relevant Securities for which the undersigned is the beneficial but not the record owner, agrees that during the Lock-Up
Period it will cause the record owner to cause the relevant transfer agent to decline to transfer, and to note stop transfer restrictions
on the share register and other records relating to, such Relevant Securities to the extent such transfer would be a violation of this
Lock-Up Agreement.
Notwithstanding the foregoing,
the undersigned may transfer the undersigned’s Relevant Securities:
| (i) | as a bona fide gift or gifts, |
| (ii) | to any trust, partnership, limited liability company or other legal entity commonly used for estate planning
purposes which is established for the direct or indirect benefit of the undersigned or a member of members of the immediate family of
the undersigned, |
| (iii) | if the undersigned is a corporation, partnership, limited liability company, trust or other business entity
(1) to another corporation, partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate
(as defined in Rule 405 under the Securities Act of 1933, as amended) of the undersigned, (2) to limited partners, limited liability company
members or stockholders of the undersigned, or (3) in connection with a sale, merger or transfer of all or substantially all of the assets
of the undersigned or any other change of control of the undersigned, not undertaken for the purpose of avoiding the restrictions imposed
by this Lock-Up Agreement, |
| (iv) | if the undersigned is a trust, to the beneficiary of such trust, |
| (v) | by testate or intestate succession, |
| (vi) | by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, |
| (vii) | pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that
is approved by our board of directors, |
| (viii) | acquired in open market transactions during Lock-Up Period, and |
| (ix) | pursuant to the Placement Agency Agreement, |
provided, in the case of clauses (i)-(vii),
that (A) such transfer shall not involve a disposition for value, (B) the transferee agrees in writing with the Company to be bound by
the terms of this Lock-Up Agreement, and (C) such transfer would not require any filing under Section 16(a) of the Exchange Act and no
such filing is voluntarily made and provided further, that, in the case of clause (viii), no such transfer shall occur until after
the expiration of the Lock-Up Period. For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship
by blood, marriage or adoption, not more remote than first cousin.
Furthermore, the undersigned
may establish a trading plan under Rule 10b5-l under the Exchange Act during the Lock-Up Period provided that such plan does not provide
for the transfer of Common Stock during the Lock-Up Period.
The undersigned hereby represents
and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement and that this Lock-Up Agreement has
been duly authorized (if the undersigned is not a natural person) and constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will execute any additional documents reasonably necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall be binding upon the successors and assigns of the undersigned
from the date of this Lock-Up Agreement.
The undersigned understands
that the undersigned shall be released from all obligations under this Lock-Up Agreement if (i) the Company notifies the Placement Agent
that it does not intend to proceed with the Offering or (ii) the Placement Agency Agreement does not become effective, or if the Placement
Agency Agreement shall terminate or be terminated prior to payment for and delivery of the Common Shares to be sold thereunder.
In the event that the undersigned’s
signature to this Lock-Up Agreement is delivered by electronic transmission or by e-mail delivery of a “.pdf’ format data
file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or “.pdf’ signature page were an original thereof.
This Lock-Up Agreement shall
be governed by, and construed in accordance with, the laws of the State of New York without regard to its conflicts of laws principles
that would result in the application of any law other than the law of the State of New York.
[Signature page follows]
|
Very truly yours, |
|
|
|
|
[NAME OF HOLDER] |
|
|
|
|
By: |
|
|
Name: |
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|
Title |
|
[Signature page to Lock-Up Agreement]
A-4
Exhibit 4.1
PRE-FUNDED COMMON SHARES PURCHASE WARRANT
SIYATA
MOBILE INC.
Warrant Shares: [_______] |
Initial Exercise Date: October [●], 2023 |
THIS PRE-FUNDED COMMON SHARES
PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the 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 Siyata Mobile Inc., a corporation incorporated under the laws
of British Columbia (the “Company”), up to ______ Common Shares (as subject to adjustment hereunder, the “Warrant
Shares”). The purchase price of one Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated October [__], 2023, among the Company and the purchasers signatory thereto. .In
addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed
or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on the Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Share so reported,
or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith
by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
“Warrants”
means this Warrant and other Pre-Funded Warrants issued by the Company pursuant to the Registration Statement and the Purchase Agreement
on or around the date hereof.
Section 2. Exercise.
a)
Exercise of Warrant. Subject to the provisions of Section 2(e) herein, exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination
Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the
form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number
of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid,
the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer in
United States dollars unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of
Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has
been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading
Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases
of a portion of the total number of Warrant Shares available hereunder shall lower the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b)
Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.01 per Warrant Share,
was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the
nominal exercise price of $0.01 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 Warrant Share under this Warrant shall be $0.01, subject to adjustment hereunder (the “Exercise
Price”).
c)
Cashless Exercise. If at the time of exercise hereof, there is no effective registration statement registering the Warrant
Shares or the prospectus contained therein is not available for issuance of the Warrant Shares to the Holder, then this Warrant may be
exercised, in whole or in part 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)(68) 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 Shares 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.
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act,
the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position
contrary to this Section 2(c).
d)
Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, 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 Share on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Share 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 Underwriting 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.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new
Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than as a result of failure of the Holder to timely deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means of a cashless exercise), 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, Common Shares 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 Common Shares 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 Common Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of this Warrant to purchase Common Shares 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 Common Shares 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 shareholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have
the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of
the foregoing sentence, the number of Common Shares that are beneficially owned by the Holder and its Affiliates and Attribution Parties
shall include the number of Common Shares that are issuable upon exercise of this Warrant with respect to which such determination is
being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, unexercised 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 non-converted portion of any other securities of the Company (including, without limitation, any other Common Share 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. 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, and a submission of a Notice of Exercise shall be deemed a representation and warranty
by the Holder of the foregoing 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 Common Shares, a Holder may rely on the number of outstanding Common Shares 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 Common
Shares 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 Common Shares then outstanding. In any case, the number of outstanding Common Shares 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 Common Shares was reported. The “Beneficial
Ownership Limitation” shall be 4.99% (or, upon election by the Holder prior to the issuance of any Warrants, 9.99%) of the number
of the Common Shares outstanding immediately after giving effect to the issuance of Common Shares issuable upon exercise of this Warrant.
The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e),
provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of the Common Shares outstanding immediately
after giving effect to the issuance of Common Shares upon exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day
after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e); provided that the Beneficial Ownership Limitation in no event exceeds 9.99%
of the number of the Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this
Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply 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 its Common Shares or any other equity or equity equivalent securities payable in Common
Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii)
subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding
Common Shares into a smaller number of shares, or (iv) issues by reclassification of the Common Shares 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 Common
Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number
of Common Shares 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 shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Common Shares (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 Common Shares 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 Common Shares 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 Common Shares as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, 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) except to the extent an adjustment was
already made pursuant to Section 3(a) (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 Common Shares 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 Common Shares 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 Common Shares as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever,
as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and
all of its Subsidiaries, taken as a whole), 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
Shares 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 Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common
Shares are 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 more than 50% of the outstanding Common Shares (not including any Common Shares held by the other
Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (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 Common Shares 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 Common Shares 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 Common Share 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 Shares 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. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance
with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and
approved by the Holders holding Warrants to purchase at least a majority of the Common Shares underlying the then outstanding Warrants
(without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent
to the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this
Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the Common Shares pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holders holding Warrants to purchase at least a majority of the Common Shares underlying the then outstanding
Warrants. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that
from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the
Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date
shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.
f)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by 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 Distribution on the Common Shares, (B) the Company
shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall authorize the granting
to all holders of the Common Shares 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 shareholders of the Company shall be required in connection with any reclassification of the Common Shares,
any consolidation or merger to which the Company (and its Subsidiaries, taken as a whole) is a party, any sale or transfer of all or substantially
all of the assets of the Company, or any compulsory share exchange whereby the Common Shares are 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 10 Trading 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 Shares
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 Shares of record shall be entitled to exchange their Common Shares 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 6-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.
Section 4. Transfer
of Warrant.
a)
Transferability. This Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant
shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant
to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this
Warrant in full. This Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.
b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of
this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes.
Section 5. Miscellaneous.
a)
No Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a shareholder 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 an affidavit
of loss reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating
to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the
case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.
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 Trading Day, then, such action may be taken or such right may be exercised on the next succeeding
Trading Day.
d)
Authorized Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Shares 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 Shares 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 articles
of association 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; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this
Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard
to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors,
officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting
in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is
an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that, such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of
this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
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 7404 King George Blvd., Suite 200, King’s Cross, Surrey, British Columbia V3W 1N6, Canada Attention: Gerald Bernstein, Chief Financial Officer email address: gerry@siyata.net , 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 time 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 a Trading Day, (ii) the next Trading Day after the time 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 Report on Form 6-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 Share or as a shareholder 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;
Waiver. 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, on the other hand.
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.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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SIYATA MOBILE INC. |
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By: |
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Name: Marc Seelenfreund |
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Title: Chief Executive Officer |
NOTICE OF EXERCISE
To: SIYATA MOBILE 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):
☐ wire transfer
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: |
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Signature of Authorized Signatory of Investing Entity: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Date: |
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ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
Name: |
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Address: |
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(Please Print) |
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Phone Number: |
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Email Address: |
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Dated: _______________ __, ______ |
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Holder’s Signature: |
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Holder’s Address: |
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Exhibit 4.2
PLACEMENT AGENT COMMON SHARES PURCHASE WARRANT
SIYATA MOBILE INC.
Warrant Shares: |
Issue Date: October __, 2023 |
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Initial Exercise Date: April __, 2024 |
THIS PLACEMENT AGENT COMMON
SHARES PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Maxim Partners LLC 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 Initial Exercise Date and on or prior to 5:00 p.m. (New York City time) on October __, 2028 (the “Termination
Date”) but not thereafter, to subscribe for and purchase from Siyata Mobile Inc., a corporation incorporated under the laws
of British Columbia (the “Company”), up to _________ Common Shares (as subject to adjustment hereunder, the “Warrant
Shares”). The purchase price of one Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Placement Agency Agreement (the
“Placement Agency Agreement”), dated as of October __, 2023, between the Company and Maxim Group LLC.
Section 2. Exercise.
(a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted
by email (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within
the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section
2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified
in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise
procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise
is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal
to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business
Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be less than the amount stated on the face hereof.
(b) Exercise
Price. The exercise price per Common Share under this Warrant shall be $________, 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)(68) 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 Shares on the principal Trading Market as reported
by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise
if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours
thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section
2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day
and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours”
on such Trading Day;
(B) = the Exercise Price of this Warrant,
as adjusted hereunder; and
(X) = the number of Warrant Shares that
would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash
exercise rather than a cashless exercise.
“VWAP” means,
for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted
on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the
Trading Market on which the Common Shares are 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 Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on the Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per Common Share so reported, or (d)
in all other cases, the fair market value of a Common Share 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.
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 Warrant being exercised. The Company agrees not to take any position contrary
to this Section 2(c).
(d) Mechanics
of Exercise.
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by the 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, provided that
payment of the aggregate Exercise Price ( other than in the instance of a cashless exercise) is received by the Company one (1) Trading
Day prior to such second Trading Day after the delivery of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate
Exercise Price to the Company and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the
Company of the Notice of Exercise, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise)
is received by the Company one (1) Trading Day prior to such number of Trading Days comprising the Standard Settlement Period after the
delivery, (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 (other than
failure of the Holder to timely deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means of a cashless
exercise) to deliver or cause the delivery 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 Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing
to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer
agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Shares as in effect on the date of delivery of the Notice of Exercise.
(ii) Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
(iii) Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv) Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than as a result of failure of the Holder to
timely deliver the aggregate Exercise Price, unless the Warrant is validly exercised by means of a cashless exercise), 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, Common Shares 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 Common Shares 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 Common Shares that would have
been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases
Common Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of this Warrant to purchase
Common Shares 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 Common Shares
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 shareholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
(e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Common
Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of
Common Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the
Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other Common Share 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.
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,
and a submission of a Notice of Exercise shall be deemed a representation and warranty by the Holder of the foregoing 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
Common Shares, a Holder may rely on the number of outstanding Common Shares 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 Common Shares 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 Common Shares then outstanding.
In any case, the number of outstanding Common Shares 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 Common Shares was reported. The ‘‘Beneficial Ownership Limitation” shall be 4.99% (or, upon election
by the Holder prior to the issuance of any Warrants, 9.99%) of the number of the Common Shares outstanding immediately after giving effect
to the issuance of Common Shares issuable upon exercise of this Warrant. The Holder may, upon notice to the Company, 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 the Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of
this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership
Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of this Warrant.
Section 3. Certain Adjustments.
(a) Share
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes
a distribution or distributions on its Common Shares or any other equity or equity equivalent securities payable in Common Shares (which,
for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant or other Warrants), (ii)
subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse share split) outstanding
Common Shares into a smaller number of shares or (iv) issues by reclassification of the Common Shares any capital shares 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 Common Shares (excluding
treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares 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 shareholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or re-classification.
(b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to all of the record holders
of any class of Common Shares (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 Common Shares 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 Common Shares 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 Common Shares as a result of such
Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever,
as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
(c) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to all holders of record of its Common Shares, by way of return of capital or otherwise,
other than cash (including, without limitation, any distribution of 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 except to the extent an adjustment was already made pursuant to
Section 3(a), 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 Common Shares 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 Common Shares 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 Common Shares as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever,
as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
(d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as
a whole), 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 Shares 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 Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are 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 more than
50% of the outstanding Common Shares (not including any Common Shares held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination)
(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 Common Shares 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
Common Shares 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 Common Share 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
Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.
Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below)
shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental
Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction ), purchase this Warrant from
the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised
portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, if the Fundamental
Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, the Holder shall
only be entitled to receive from the Company or any Successor Entity, as of the date of consummation of such Fundamental Transaction,
the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant,
that is being offered and paid to the holders of Common Shares of the Company in connection with the Fundamental Transaction, whether
that consideration be in the form of cash, shares or any combination thereof, or whether the holders of Common Shares are given the choice
to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further,
that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders
of Common Stock will be deemed to have received common stock of the Successor Entity (which Entity may be the Company following such Fundamental
Transaction). “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction
for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time
between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization
factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying
price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus
the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period
beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the consummation of
the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section
3(d), (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately
available funds within five Business Days of the Holder’s election (or, if later, on the date of consummation of the Fundamental
Transaction). The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the
“Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with
the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved
by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the
Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or
its parent entity) equivalent to the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations
on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (but taking into account the relative value of the Common Shares pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of
protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the
Company herein.
(e) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of
Common Shares (excluding treasury shares, if any) issued and outstanding.
(f) Notice
to Holder.
(i) Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by 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 Distribution on the Common Shares, (B) the Company shall declare a
special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall authorize the granting to all holders
of the Common Shares rights or warrants to subscribe for or purchase any capital shares of any class or of any rights, (D) the approval
of any shareholders of the Company shall be required in connection with any reclassification of the Common Shares, any consolidation or
merger to which the Company (and its Subsidiaries, taken as a whole) is a party, any sale or transfer of all or substantially all of the
assets of the Company, or any compulsory share exchange whereby the Common Shares are 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 10 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 Shares 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 Shares of record shall be entitled to exchange their Common Shares 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 Report on Form
6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective
date of the event triggering such notice except as may otherwise be expressly set forth herein.
(g) Voluntary
Adjustment by Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term
of this Warrant, subject to the prior written consent of the Holder reduce the then current Exercise Price to any amount and for any period
of time deemed appropriate by the Board of Directors of the Company.
Section 4. Transfer
of Warrant.
(a) Transferability.
Pursuant to FINRA Rule 5110(e)(1), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be sold, transferred,
assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result
in the effective economic disposition of the securities by any person for a period of 180 days immediately following the commencement
of sales of the offering pursuant to which this Warrant is being issued, except as permitted under FINRA Rule 5110(e)(2). Subject to the
foregoing restriction, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at
the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly
be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to
the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company
within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full.
The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.
(b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by or on behalf of the Company for that purpose
(the “Warrant Register’)), in the name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Registration
Rights.
(a) To
the extent the Company does not maintain an effective registration statement for the Warrant Shares and in the further event that the
Company files a registration statement with the Securities and Exchange Commission covering the sale of its shares of Common Stock (other
than a registration statement on Form S-4 or S-8, or on another form, or in another context, in which such “piggyback” registration
would be inappropriate), then, for a period of five (5) years from the commencement of sales of the Offering, the Company shall give written
notice of such proposed filing to the Holder as soon as practicable but in no event less than ten (10) days before the anticipated filing
date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution,
and the name of the proposed managing underwriter or underwriters, if any, of the offering, and offer to the Holder in such notice the
opportunity to register the sale of such number of shares of Warrant Shares as such Holder may request in writing within five (5) days
following receipt of such notice (a “Piggyback Registration”). The Company shall cause such Warrant Shares to be included
in such registration and shall use its commercially reasonable efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Warrant Shares requested to be included in a Piggyback Registration on the same terms and conditions
as any similar securities of the Company and to permit the sale or other disposition of such Warrant Shares in accordance with the intended
method(s) of distribution thereof. All Holders proposing to distribute their securities through a Piggyback Registration that involves
an underwriter or underwriters shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected
for such Piggyback Registration. Furthermore, each Holder must provide such information as reasonably requested by the Company (which
information shall be limited to that which is required for disclosure under the Securities Act and the forms, rules and regulations promulgated
thereunder) to be included in the registration statement timely or the Company may elect to exclude such Holder from the registration
statement.
(b) In
addition, to the extent the Company does not maintain an effective registration statement for the Warrant Shares, for a period of five
(5) years from the commencement of sales of the Offering, the Holder shall be entitled to one (1) demand right for the registration of
the Warrant Shares at the Company’s expense (other than any underwriting discounts, selling commissions, share transfer taxes applicable
to the sale of the Warrant Shares, and fees and disbursements of counsel for the Holder) and one (1) additional demand right for the registration
of the Warrant Shares at the Holder’s expense (the “Demand Registration”). In the event of a Demand Registration,
the Company shall use its commercially reasonable efforts to register the applicable Warrant Shares. All Holders of Warrant Shares proposing
to distribute their securities through a Demand Registration that involves an underwriter or underwriters shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for such Demand Registration. Furthermore, each Holder must
provide such information as reasonably requested by the Company (which information shall be limited to that which is required for disclosure
under the Securities Act and the forms, rules and regulations promulgated thereunder) to be included in the registration statement timely
or the Company may elect to exclude such Holder from the registration statement.
(c) Notwithstanding
the foregoing, the registration rights described in this Section 5 shall be subject to limitations imposed by the Commission’s rules
or comments of the Commission staff in connection with its review of the registration statement for any such resale registration. Moreover,
notwithstanding the foregoing registration obligations of the Company, if the Company furnishes to the Holders requesting a Demand Registration
a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board
of Directors it would be materially detrimental to the Company and its stockholders for a registration statement to either become effective
or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would
(i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company;
(ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential;
or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the
right to defer taking action with respect to such Demand Registration or withdraw a related registration statement for a period of not
more than forty-five (45) calendar days; provided, however, that the Company may not invoke this right more than twice in any twelve (12)
month period or during the twelve (12) month period prior to the Termination Date.
Section 6. Miscellaneous.
(a) No
Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a shareholder 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 an affidavit of loss reasonably
satisfactory to the Company evidencing the loss, theft, destruction or mutilation of this Warrant or any share certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case
of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or share certificate,
if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or share 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 Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.
(d) Authorized
Shares.
The Company covenants that,
during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Shares 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 Shares 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 holders of a majority of the then outstanding Warrants (based on the number of Warrant Shares underlying
such Warrants), the Company shall not by any action, including, without limitation, amending its articles 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 regard to the principles of conflicts of
law thereof.
(f) Jurisdiction;
Agent for Process. 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, subject to applicable law, 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. In addition to
and without limiting the foregoing, the Company hereby confirms that it has appointed Cogency Global Inc., 122 East 42nd Street, 18th
Floor , New York, New York 10168 , as its authorized agent (the “Authorized Agent”) upon whom process may be
served in any suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated herein which may be
instituted in any New York federal or state court, by a Holder, the directors, officers, partners, employees and agents of such Holder
and each affiliate of such Holder, and expressly accept the non-exclusive jurisdiction of any such court in respect of any such suit,
action or proceeding. The Company hereby represents and warrants that the Authorized Agent has accepted such appointment and has agreed
to act as said agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents
that may be necessary to continue such appointment in full force and effect as aforesaid. The Company hereby authorizes and directs the
Authorized Agent to accept such service. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service
of process upon the Company. If the Authorized Agent shall cease to act as agent for service of process, the Company shall appoint, without
unreasonable delay, another such agent in the United States, and notify the Holders of such appointment. Notwithstanding the foregoing
and except as set forth herein, any action arising out of or based upon this Warrant may be instituted by a Holder, the directors, officers,
partners, employees and agents of the Holder (if applicable) and each respective affiliate of the Holder, in any court of competent jurisdiction
in the Province of British Columbia, Canada. Notwithstanding the foregoing, nothing in this paragraph shall limit or restrict the federal
district court in which a Holder may bring a claim under the federal securities laws. This paragraph shall survive any termination of
this Warrant, in whole or in part.
(g) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
(h) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this
Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages
to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts
due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(i) Notices.
Any and all notices or other communications or deliveries to be provided hereunder shall be made in accordance with Section 9 of the Placement
Agency Agreement.
(j) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Share or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
(k) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
(l) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
(m) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder of this Warrant, on the other hand.
(n) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
(o) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
*********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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SIYATA MOBILE INC. |
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Name: |
Marc Seelenfreund |
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Title: |
Chief Executive Officer |
NOTICE OF EXERCISE
TO: SIYATA MOBILE INC.
(1) The undersigned hereby
elects to purchase Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
required 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:
DTC number: |
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Account name: |
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Account number: |
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[SIGNATURE OF HOLDER]
Name of Investing Entity: |
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Signature of Authorized Signatory of
Investing Entity: |
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Name of Authorized Signatory: |
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Title of Authorized Signatory: |
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Date: |
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this
form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to:
Name: |
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(Please Print) |
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Address: |
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(Please Print) |
Phone Number:
Email Address:
Dated: _____________, ____.
Holder’s Signature: |
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Holder’s Address: |
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Exhibit 4.3
Siyata Mobile Inc.
and
Computershare Inc. and
Computershare Trust Company, N.A., jointly as
Warrant Agent
Warrant Agency Agreement
Dated as of ________, 2023
WARRANT AGENCY AGREEMENT
WARRANT AGENCY AGREEMENT,
dated as of October __, 2023(“Agreement”), between Siyata Mobile Inc., a corporation organized under the laws of British
Columbia (the “Company”), and Computershare Inc., a Delaware corporation (“Computershare”), and
its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company (collectively, the “Warrant
Agent”).
W I T N E S S E T H
WHEREAS, pursuant to a registered
offering by the Company (the “Offering”) of ___the Company’s common shares, without par value (the “Common
Shares”) and pre- funded warrants, (the “Warrants”) to purchase ___ Common Shares (the “Warrant
Shares”) at a price of $[___ per share (or [__]% of the price of each Common Share sold in the Offering); and
WHEREAS, upon the terms and
subject to the conditions hereinafter set forth and pursuant to an effective registration statement on Form F-1, as amended (File No.
333-[ ]) (the “Registration Statement”), and the terms and
conditions of the Warrant Certificate, the Company wishes to issue the Warrants in book entry form entitling the respective holders of
the Warrants (the “Holders,” which term shall include a Holder’s transferees, successors and assigns and “Holder”
shall include, if the Warrants are held in “street name,” a Participant (as defined below) or a designee appointed by such
Participant); 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 Warrants.
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, all capitalized terms not herein defined shall have the meanings hereby indicated:
(a) “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.
(b) “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 State of New York are authorized or required by law or other governmental action to close.
(c) “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.
(d) “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.
(e) “Warrant
Certificate” means a certificate in substantially the form attached as Exhibit 1 hereto, 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 a Definitive Certificate or a Global Warrant (each as defined below).
All other capitalized terms used but not otherwise
defined herein shall have the meaning ascribed to such terms in the Warrant Certificate.
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 hereof, and the Warrant Agent hereby accepts such appointment.
Section 3. Global Warrants.
(a) The
Warrants shall be registered securities and shall be evidenced by a global warrant (the “Global Warrants”), in the
form of the Warrant Certificate, which shall be 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 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 Warrant in its account, a “Participant”).
(b) If
the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant
Agent regarding other arrangements for book-entry settlement. In the event that the 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 Company and the Warrant Agent for the exchange of some or all
of such Holder’s Global Warrants for a separate certificate substantially in the form attached hereto as Exhibit 1 (such
separate certificate, a “Definitive Certificate”) evidencing the same number of Warrants, which request shall be in
the form attached hereto as Exhibit 2 properly completed and duly executed (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 surrender by the Holder to the Warrant Agent of a number of Global Warrants for the same number of Warrants evidenced by a Warrant
Certificate, a “Warrant Exchange”), the Company and the Warrant Agent shall promptly effect the Warrant Exchange and
the Company shall promptly issue and deliver to the Holder a Definitive Certificate for such number of Warrants in the name set forth
in the Warrant Certificate Request Notice. Such Definitive Certificate shall be dated the original issue date of the Warrants, shall be
executed manually or by facsimile signature by an authorized signatory of the Company, shall be substantially in the form attached hereto
as Exhibit 1 and shall be reasonably acceptable in all respects to such Holder. In connection with a Warrant Exchange, the Company
agrees to deliver, or to direct the Warrant Agent to deliver, the Definitive Certificate to the Holder within ten (10) Business Days of
the Warrant Certificate Request Notice 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 Definitive 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 Definitive Certificate (based on the VWAP (as defined
in the Warrants) of the Common Shares on the Warrant Certificate Request Notice Date), $10 per Business Day for each Business Day after
such Warrant Certificate Delivery Date until such Definitive Certificate is delivered or, prior to delivery of such Warrant Certificate,
the Holder rescinds such Warrant Exchange. The Warrant Agent shall have no liability for the Company’s failure to deliver to the
Holders the Definitive Certificate as set forth in this Section 3(c) 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 Definitive Certificate and, notwithstanding
anything to the contrary set forth herein, the Definitive Certificate shall be deemed for all purposes to contain all of the terms and
conditions of the Warrants evidenced by such Warrant Certificate and the terms of this Agreement, other than Section 3(c), shall not apply
to the Warrants evidenced by the Definitive Certificate. Notwithstanding anything herein to the contrary, the Company shall act as warrant
agent with respect to any Definitive Certificate requested and issued pursuant to this section and the Warrant Agent shall have no duty
or obligations with respect to any Definitive Certificate or the Warrants and Warrant Shares represented thereby. 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 Definitive Certificate, as it may from time to time be amended, the terms of such Definitive Certificate shall control.
(d) A
Holder of a Definitive Certificate (pursuant to a Warrant Exchange or otherwise) has the right to elect at any time or from time to time
a Global Warrants Exchange (as defined below) pursuant to a Global Warrants Request Notice (as defined below). Upon written notice by
a Holder to the Company for the exchange of some or all of such Holder’s Warrants evidenced by a Definitive Certificate for a beneficial
interest in Global Warrants held in book-entry form through the Depositary evidencing the same number of Warrants, which request shall
be in the form attached hereto as Exhibit 3 properly completed and duly executed (a “Global Warrants Request Notice”
and the date of delivery of such Global Warrants Request Notice by the Holder, the “Global Warrants Request Notice Date”
and the surrender upon delivery by the Holder of the Warrants evidenced by Definitive Certificates for the same number of Warrants evidenced
by a beneficial interest in Global Warrants held in book-entry form through the Depositary, a “Global Warrants Exchange”),
the Company shall promptly effect the Global Warrants Exchange and shall promptly direct the Warrant Agent to issue and deliver to the
Holder Global Warrants for such number of Warrants in the Global Warrants Request Notice, which beneficial interest in such Global Warrants
shall be delivered by the Depositary’s Deposit or Withdrawal at Custodian system to the Holder pursuant to the instructions in the
Global Warrants Request Notice. In connection with a Global Warrants Exchange, the Company shall direct the Warrant Agent to deliver the
beneficial interest in such Global Warrants to the Holder within ten (10) Business Days of the Global Warrants Request Notice pursuant
to the delivery instructions in the Global Warrant Request Notice (“Global Warrants Delivery Date”). If the Company
fails for any reason to deliver to the Holder Global Warrants subject to the Global Warrants Request Notice by the Global Warrants 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 Global Warrants (based on the VWAP (as defined in the Warrants) of the Common Shares on the Global Warrants Request Notice Date),
$10 per Business Day for each Business Day after such Global Warrants Delivery Date until such Global Warrants are delivered or, prior
to delivery of such Global Warrants, the Holder rescinds such Global Warrants Exchange. The Company covenants and agrees that, upon the
date of delivery of the Global Warrants Request Notice, the Holder shall be deemed to be the beneficial holder of such Global Warrants.
(e) The
Company shall provide to the Warrant Agent an opinion of counsel on or prior to the issuance of Warrants to set up a reserve of Warrant
Shares for the outstanding Warrants. The opinion shall state that all Warrants or Warrant Shares, as applicable, are, (i) registered under
the Securities Act of 1933, as amended, or are exempt from such registration, and all appropriate state securities law filings have been
made with respect to the Warrants or Warrant Shares, and (ii) validly issued, fully paid and non-assessable.
Section 4. Form of Warrant
Certificates. The Warrant Certificate, together with the form of election to purchase Common Shares (“Notice of Exercise”)
and the form of assignment to be printed on the reverse thereof, shall be substantially in the form of Exhibit 1 hereto.
Section 5. Countersignature
and Registration. The Global Warrant shall be executed on behalf of the Company by its Chief Executive Officer, Chief Financial Officer
or Vice President, 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, by facsimile signature. The Global Warrant shall be countersigned by the Warrant
Agent by facsimile signature and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Global Warrant shall cease to be such officer of the Company before countersignature by the Warrant Agent and issuance
and delivery by the Company, such Global 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 Global Warrant had not ceased to be such officer of the Company; and any Global
Warrant may be signed on behalf of the Company by any person who, at the actual date of the execution of such Global Warrant, shall be
a proper officer of the Company to sign such Global Warrant, although at the date of the execution of this Warrant Agreement any such
person was not such an officer.
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 Global Warrants
issued hereunder. Such books shall show the names and addresses of the respective Holders of the Global Warrant, the number of warrants
evidenced on the face of each of such Global Warrant and the date of each of such Global Warrant. The Warrant Agent will create a special
account for the issuance of Global Warrants. The Company will keep or cause to be kept at one of its offices, books for the registration
and transfer of any Definitive Certificates issued hereunder and the Warrant Agent shall not have any obligation to keep books and records
with respect to any Definitive Warrants. Such Company books shall show the names and addresses of the respective Holders of the Definitive
Certificates, the number of warrants evidenced on the face of each such Definitive Certificate and the date of each such Definitive Certificate.
The Warrant Agent will create a special account for the issuance of Common Shares upon the exercise of Warrants.
Section 6. Transfer,
Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. With respect
to the Global Warrant, subject to the provisions of the Warrant Certificate 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 (as such term
is defined in the Warrant Certificate), any Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for
another Global Warrant or Global Warrants, entitling the Holder to purchase a like number of Common Shares as the Global Warrant or Global
Warrants surrendered then entitled such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Global
Warrant shall make such request in writing delivered to the Warrant Agent, and shall surrender the Global Warrant 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
in book-entry form or certificate form, shall be accompanied by reasonable evidence of authority of the party making such request 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 a Global Warrant or Global Warrants, 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 Global Warrants and 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. The Company shall compensate the Warrant Agent per the fee schedule mutually agreed upon by the
parties hereto and provided separately on the date hereof.
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 in customary form and amount (but, with respect to any Definitive Certificates, shall not
include the posting of any bond by the Holder) satisfactory to the Warrant Agent and the Company, and satisfaction of any other reasonable
requirements established by Section 8-405 of the Uniform Commercial Code as in effect in the State of New York, 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, 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.
Section 7. Exercise
of Warrants; Exercise Price; Termination Date.
(a) The
Warrants shall be exercisable commencing on the Initial Exercise Date. The Warrants shall cease to be exercisable on the Termination Date..
Subject to the foregoing and to Section 7(b) below, the Holder of a Warrant may exercise the Warrant in whole or in part upon surrender
of the Warrant Certificate, if required, with the executed Notice of Exercise and payment of the Exercise Price, which may be made, at
the option of the Holder, by wire transfer or by certified or official bank check in United States dollars, to the Warrant Agent at the
office of the Warrant Agent designated for such purpose 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 Notice of Exercise and the payment
of the Exercise Price as described herein and Section 2(a) of the 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). 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. The Company hereby
acknowledges and agrees that, with respect to 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), upon delivery
of irrevocable instructions to such holder’s Participant to exercise such warrants, that solely for purposes of Regulation SHO that
such holder shall be deemed to have exercised such warrants.
(b) Upon
receipt of a Notice of Exercise for a cashless exercise pursuant to Section 2(c) of the Warrant (a “Cashless Exercise”) the
Company will promptly calculate and transmit to the Warrant Agent the number of Warrant Shares issuable in connection with such Cashless
Exercise and deliver a copy of the Notice of Exercise 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 Warrant Shares to be issued on such exercise is accurate or correct.
(c) Upon
the exercise of the Warrant Certificate pursuant to the terms of Section 2 of the Warrant Certificate, the Warrant Agent shall cause the
Warrant Shares underlying such Warrant Certificate or Global Warrant to be delivered to or upon the order of the Holder of such Warrant
Certificate or Global Warrant, registered in such name or names as may be designated by such Holder, no later than the Warrant Share Delivery
Date (as such term is defined in the Warrant Certificate). 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 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)(i) or 2(d)(iv) of
the Warrant Certificate, 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
Warrant as set forth in Section 7(a) hereof by the Warrant Share Delivery Date, the Warrant Agent will not obligated to deliver 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) The
Warrant Agent shall deposit all funds received by it in payment of the Exercise Price for all Warrants as described in Section 7(e) and
shall advise the Company via email at the end of each day on which notices of exercise are received or funds for the exercise of any Warrant
are received of the amount so deposited to its account. 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.
(e) All
funds received by Computershare under this Agreement that are to be distributed or applied by Computershare in the performance of services
hereunder (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 the terms of this Agreement, Computershare
will hold the Funds through such accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an
average rating above investment grade 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.). Computershare shall have no responsibility or liability
for any diminution of the Funds that may result from any deposit made by Computershare in accordance with this Section 7(e), 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. Computershare shall not be obligated to pay such interest,
dividends or earnings to the Company, any holder or any other party.
(f) In
the event of a cash exercise of the Warrants, the Company hereby instructs the Warrant Agent to record cost basis for newly issued Warrant
Shares [in a manner subsequently communicated in writing to the Warrant Agent]. In the event of a Cashless Exercise, the Company shall
provide cost basis for Warrant 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(b) 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 Certificate 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. 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 Common Shares 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 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) As
of the date hereof, the authorized capital stock of the Company consists of (i) ____________ Common Shares, of which approximately [ ]
Common Shares are issued and outstanding as of October __, 2023, and ___________ Common Shares are reserved for issuance upon exercise
of the Warrants, and (ii) ________ preferred shares without par value, of which no shares are issued and outstanding. Except as disclosed
in the Registration Statement, there are no other outstanding obligations, warrants, options or other rights to subscribe for or purchase
from the Company any class of capital stock of the Company.
(c) The
Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Common Shares or
its authorized and issued Common Shares held in its treasury, free from preemptive rights, the number of Common Shares that will be sufficient
to permit the exercise in full of all outstanding 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 Shares upon
exercise of the Warrants. Neither the Company nor the Warrant Agent shall, 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 Shares in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for
exercise or to issue or deliver any certificate for Common Shares upon the exercise of any 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 and the Warrant Agent’s reasonable satisfaction that no such
tax or governmental charge is due.
Section 10. Common Share
Record Date. Each Person in whose name any certificate for Common Shares is issued (or to whose broker’s account is credited
Common Shares through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed to have become the holder of record
for the Common Shares represented thereby on, and such certificate shall be dated, the date on which submission of the Notice of Exercise
was made, provided that the Warrant Certificate evidencing such Warrant is duly surrendered (but only if required herein) and payment
of the Exercise Price (and any applicable transfer taxes) is received on or prior to the Warrant Share Delivery Date; provided,
however, that if the date of submission of the Notice of Exercise is a date upon which the Common Shares transfer books of the
Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated,
the next succeeding day on which the Common Shares transfer books of the Company are open.
Section 11. Adjustment
of Exercise Price, Number of Common Shares or Number of the Company Warrants. The Exercise Price, the number of shares covered by
each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of the Warrant
Certificate. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant Certificate, the Holder
of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Common Shares,
thereafter the number of such other shares so receivable upon exercise of any 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
Warrant Certificate and the provisions of Sections 7, 11 and 12 of this Agreement with respect to the Common Shares shall apply on like
terms to any such other shares. All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise Price
pursuant to the Warrant Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.
Section 12. Certification
of Adjusted Exercise Price or Number of Common Shares. Whenever the Exercise Price or the number of Common Shares issuable upon the
exercise of each 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 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 Shares a copy of such certificate and (c) instruct the Warrant Agent
to send a brief summary thereof to each Holder of a Warrant Certificate. The Warrant Agent shall be fully protected in relying on any
such certificate and on any adjustment or statement therein contained 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.
Section 13. Fractional
Common Shares.
(a) The
Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any fractional
Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such
fraction to the nearest whole Warrant (rounded down).
(b) The
Company shall not issue fractions of Common Shares upon exercise of Warrants or distribute stock certificates which evidence fractional
Common Shares. Whenever any fraction of a Common Share 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 Warrant Certificate.
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 Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation detailed on Exhibit 4 hereto for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred without gross negligence or willful misconduct finally determined by a non-appealable judgment of a court of competent jurisdiction to have been directly caused by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence, or willful misconduct on the part of the Warrant Agent (in each case, as determined by a final, non-appealable judgment of a court of competent jurisdiction) to have been directly caused by Warrant Agent hereunder, including the reasonable costs and expenses of defending against any claim of such liability. The Warrant Agent shall be under no obligation to institute or defend any action, suit, or legal proceeding in connection herewith or to take any other action likely to involve the Warrant Agent in expense, unless first indemnified to the Warrant Agent’s satisfaction. The Warrant Agent’s indemnities, immunities and protections provided by this Section 14 and Section 16 hereof shall survive the resignation or discharge of the Warrant Agent or the termination of this Agreement. Anything in this Agreement to the contrary notwithstanding, in no event shall the Warrant Agent be liable under or in connection with this Agreement for indirect, special, incidental, punitive or consequential losses or damages of any kind whatsoever, including but not limited to lost profits, whether or not foreseeable, even if the Warrant Agent has been advised of the possibility thereof and regardless of the form of action in which such damages are sought, and the Warrant Agent’s aggregate liability to the Company, or any of the Company’s representatives or agents, under this Section 14(a) or under any other term or provision of this Agreement, whether in contract, tort, or otherwise, is expressly limited to, and shall not exceed in any circumstances, one (1) year’s fees received by the Warrant Agent as fees and charges under this Agreement, but not including reimbursable expenses previously reimbursed to the Warrant Agent by the Company hereunder.
(b) Agent for the Company. In acting under this Warrant 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 Warrants.
(c) Counsel. The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the written advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in the absence of bad faith and in accordance with the advice or opinion of such counsel.
(d) 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.
(e) Certain Transactions. The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of Holders of Warrant Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as trustee under any indenture to which the Company is a party.
(f) 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.
(g) No Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon).
(h) No Responsibility for Representations. The Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant Certificate (except as to the Warrant Agent’s countersignature thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrant Certificates specifically set forth 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 authenticated 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 Certificate. 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.
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 shareholder services or 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 Person 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 Warrant Certificates shall have been countersigned but not delivered, any such successor Warrant
Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so countersigned; and in case
at that time any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases
such Warrant Certificates shall have the full force provided in the Warrant Certificates 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 Warrant Certificates shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under its prior name and deliver such Warrant Certificates so countersigned; and in case
at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates
either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in
the Warrant Certificates 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, 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 good 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, Chief Financial Officer or Vice President of the Company; and such certificate shall be full authentication
to the Warrant Agent for any action taken or suffered by it under the provisions of this Agreement in reliance upon such certificate3.
3 | If Warrant Agent is being directed by the Company as to any
fact or matter in a certificate, Warrant Agent should be protected for actions taken in reliance of such certificate without having to
second guess whether such actions would constitute good faith or not. |
(c) Subject
to the limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence or willful misconduct
(each as determined by a final, non-appealable judgment of a court of competent jurisdiction).
(d) The
Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the
Warrant Certificate (except its countersignature thereof) by the Company or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) 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 Warrant Certificate (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 Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in the
number of Common Shares 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 Warrants evidenced by the 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 Common Shares to be issued pursuant
to this Agreement or any Warrant Certificate or as to whether any Common Shares will, when issued, be duly authorized, validly issued,
fully paid and nonassessable.
(f) 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.
(g) The
Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief Executive
Officer, Chief Financial Officer or Vice President of the Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered to be taken by
it in accordance with such instructions.
(h) The
Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the 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.
(i) 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 accountable for any act, default, neglect or misconduct
of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, absent gross
negligence or willful misconduct (each as determined by a final, non-appealable judgment of a court of competent jurisdiction) in the
selection and continued employment thereof.
Section 17. Change of
Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing
sent to the Company and to each transfer agent of the Common Shares, and to the Holders of the Warrant Certificates. 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 Shares, 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 purposes 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 Person (other than a natural person) 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 shareholder services or 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 Company or the successor Warrant
Agent, as the case may be, any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such appointment, or assumption of the Warrant Agent’s
role by the Company, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the
Common Shares, 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 Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company
may, at its option, issue new Warrant Certificates evidencing 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 several Warrant Certificates 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 first Business Day following the deposit thereof with Federal Express or another recognized
overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth Business Day following 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 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 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:
Siyata Mobile Inc.
7404 King George Blvd., Suite 200
King’s Cross, Surrey, British Columbia V3W 1N6, Canada
Attn:
Facsimile:
(b) If
to the Warrant Agent, to:
Computershare Trust Company, N.A.
Computershare Inc.
150 Royall Street
Canton, MA 02021
Attn: Client Services
Facsimile: 781-575-2549
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 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, 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 Global Warrants
in order to add to the covenants and agreements of the Company for the benefit of the Holders of the Global Warrants or to surrender any
rights or power reserved to or conferred upon the Company in this Agreement, provided that such addition or surrender shall not adversely
affect the interests of the Holders of the Global Warrants or Warrant Certificates in any material respect.
(b) In
addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority
of the Common Shares issuable thereunder, 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 Warrant Agreement or modifying in any manner the rights of the
Holders of the Global Warrants; provided, however, that no modification of the terms (including but not limited to the adjustments
described in Section 11) upon which the Warrants are exercisable or the rights of holders of Warrants to receive 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; provided further, however, that
no amendment hereunder shall affect any terms of any Warrant Certificate issued in a Warrant Exchange. 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. Notwithstanding anything in
this Agreement to the contrary, the Warrant Agreement shall not be required to execute any supplement or amendment to this Agreement that
it has determined would adversely affect its own rights, duties, obligations or immunities under this Agreement. No supplement or amendment
to this Agreement shall be effective unless duly executed by the Warrant Agent and the Company.
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. This Agreement shall be for the
sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates. Notwithstanding anything to
the contrary contained herein, to the extent any provision of a Warrant Certificate conflicts with any provision of this Agreement, the
provisions of this Agreement shall govern and be controlling with respect to the rights, duties, obligations and immunities of the Warrant
Agent.
Section 23. Governing
Law. This Agreement and each Warrant Certificate and Global Warrant issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof.
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.
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.
Section 26. Information.
The Company agrees to promptly provide to the Holders of the Warrants any information it provides to the holders of the Common Shares,
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 or in any Warrant Certificate, the 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 malfunctions of any utilities, communications,
or 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.
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 4 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).
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the day and year first above written.
| SIYATA MOBILE INC. |
| | |
| By: | |
| | Name: |
|
| | Title: |
|
| COMPUTERSHARE INC. and |
| COMPUTERSHARE TRUST COMPANY, N.A. |
| | |
| By: | |
| | Name: |
|
| | Title: |
|
Exhibit 1
Form of Warrant Certificate
Exhibit 2
Form of Warrant Certificate Request Notice
WARRANT CERTIFICATE REQUEST NOTICE
To: Computershare Inc. and Computershare Trust
Company, N.A., jointly, as Warrant Agent for Siyata Mobile Inc. (the “Company”)
The undersigned Holder of Common Shares 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: ___________________________________________________________________
Exhibit 3
Form of Global Warrant Request Notice
GLOBAL WARRANT REQUEST NOTICE
To: Computershare Inc. and Computershare Trust
Company, N.A., jointly, as Warrant Agent, as Warrant Agent for Siyata Mobile Inc. (the “Company”)
The undersigned Holder of Common Share Purchase
Warrants (“Warrants”) in the form of Warrants Certificates issued by the Company hereby elects to receive a Global
Warrant evidencing the Warrants held by the Holder as specified below:
| 1. | Name of Holder of Warrants in form of Warrant Certificates: _____________________________ |
| 2. | Name of Holder in Global Warrant (if different from name of Holder of Warrants in form of Warrant Certificates): ________________________________ |
| 3. | Number of Warrants in name of Holder in form of Warrant Certificates: ___________________ |
| 4. | Number of Warrants for which Global Warrant shall be issued: __________________ |
| 5. | Number of Warrants in name of Holder in form of Warrant Certificates after issuance of Global Warrant, if any: ___________ |
| 6. | Global Warrant shall be delivered to the following address: |
______________________________
______________________________
______________________________
______________________________
The undersigned hereby acknowledges and agrees
that, in connection with this Global Warrant Exchange and the issuance of the Global Warrant, the Holder is deemed to have surrendered
the number of Warrants in form of Warrant Certificates in the name of the Holder equal to the number of Warrants evidenced by the Global
Warrant.
[SIGNATURE OF HOLDER]
Name of Investing Entity: ____________________________________________________
Signature of Authorized Signatory of Investing
Entity: ______________________________
Name of Authorized Signatory: ________________________________________________
Title of Authorized Signatory: _________________________________________________
Date: ___________________________________________________________________
Exhibit 4
Warrant Agent Fee Schedule
Computershare
Warrant Agent
Fee Schedule & Services
Siyata Mobile Inc.
Warrants to Purchase Common Stock
Appointment Fee (includes 1st Year Annual Maintenance Fee)** | |
$ | |
|
Annual Maintenance Fee | |
$ | |
|
Recordkeeping up to 1,000 accounts per additional accounts (per year) | |
$ | |
|
Warrant Issuance, each | |
$ | |
|
Warrant Exercises, each (Standard 4 to 10 day turnaround) | |
$ | |
|
Expedited charges are in addition to exercise charge: | |
| |
|
1-day turnaround | |
$ | |
|
2-day turnaround | |
$ | |
|
3-day turnaround | |
$ | |
|
DWAC , each (if applicable) | |
$ | |
|
Wire Transfers, each (if applicable) | |
$ | |
|
Cashless Warrant Exercise, each (if applicable) | |
$ | |
|
Additional Handling, each (if applicable) | |
$ | |
|
By Appraisal | |
| Special Services
(legal fees, etc.) |
|
** | Fees must be paid to Computershare prior to closing) |
The above fees exclude expenses and any final
Warrant Agreement includes Computershare’s Warrant Agreement Terms and use of Computershare’s Warrant Transactional documents.
We agree that if your services are begun but not completed for any reason, the above Appointment Fee will be charged, plus the expense
associated with work performed up to the point Computershare is notified. This fee schedule is based upon information provided to date
and may be subject to change.
WARRANT AGENT SERVICES
| > | Designating an operational team to establish Warrant Agent procedures and duties, including review of
draft agreements, offer document, execution of legal agreement, project management, and on-going project updates and reporting |
| > | Establish Warrant Issues under Client’s COY on Computershare’s record keeping system |
| > | Coordinate Warrant transfer and conversion procedures with DTC |
| > | Process transfer and/or conversion requests by issuing certificates |
| > | Tracking and reporting the number of warrants issued, transferred, outstanding and exercised, as required |
| > | Processing Warrants received and converted |
| > | Deposit Warrant conversion checks and incoming wire transfers daily and forward all participant funds
to Client |
| > | Providing receipt summation of checks and wire transfers received |
| > | Issuing and mailing stock certificates, DRS share statements and warrants |
| > | Affixing legends to appropriate stock certificates, where applicable |
| > | Replace lost, stolen or destroyed securities in accordance with UCC guidelines and Computershare policy
(subject to shareholder-paid fee and bond premium) |
| > | Process and post address changes plus mail confirmations if required |
| > | Obtain W-9 and W8-BEN certifications |
| > | Comply with SEC mandated annual lost shareholder search |
| > | Perform OFAC (Office of Foreign Asset Control) and Patriot Act reporting |
| > | Produce daily transfer reports and post them for online viewing |
| > | Payment to DTCC of their Corporate Actions Eligibility Fee for the establishment of the new CUSIP number,
as incurred; The Depository Trust Company (“DTC”) submitted a proposed rule change (File No. SR-DTC-2015-012) to the Securities
and Exchange Commission pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934 to implement a fee called the Corporate
Actions Eligibility Fee (“New Fee”) that would be charged to the transfer agent of any DTC-eligible security when DTC is requested
to make a new CUSIP eligible for DTC services in connection with a corporate action event relating to the security. |
| > | The amount of the New Fee is $1,000 per new CUSIP for any security that is made eligible at DTC in connection
with a Corporate Action. The proposed rule change was implemented on January 1, 2016. |
| > | The full text of the proposed rule change may be obtained by visiting DTCC’s website at http://www.dtcc.com/en/legal/sec-rule-filings.aspx. |
ITEMS NOT COVERED
| > | Items not specified in the “Services Covered” section set forth in this Agreement, including
any services associated with new duties, legislation or regulatory fiat which become effective after the date of this Agreement (these
will be provided on an appraisal basis) |
| > | All expenses such as telephone line charges, certificates, checks, postage, stationery, wire transfers,
etc. (these will be billed as incurred) |
| > | Warrant Agreement subject to review by Computershare’s outside counsel. Applicable fees charged
as incurred. |
ASSUMPTIONS
| > | Fee schedule based upon information known at this time about the transaction |
| > | Significant changes made in the terms or requirements of this transaction could require modifications
to this fee schedule |
Siyata Mobile Inc.
Accepted By:
Exhibit 5.1
Michael Bluestein
Direct: 888.476.5291
ext. 2
E-mail: mbluestein@corpcounsel.ca
October 10, 2023
Siyata Mobile Inc.
7404 King George Blvd. Suite 200, King’s Cross
Surrey British Columbia
V3W 1N6, Canada
Re: | Siyata Mobile Inc. – Form F-1 Registration Statement |
We have acted as Canadian legal
counsel to Siyata Mobile Inc., a British Columbia corporation (the “Company”), in connection with the Company’s
Registration Statement on Form F-1 (the “Registration Statement”) with the United States Securities and Exchange Commission
(the “Commission”) including a related preliminary prospectus filed with the Registration Statement (the “Prospectus”),
covering the offering (the “Offering”) to certain purchasers (each, a “Purchaser”), of an aggregate
of up to US$5,000,000 of common shares without par value in the capital of the Company (each, a “Common Share”) and
pre-funded warrants (each, a “Pre- Funded Warrant”). The Pre-Funded Warrants will be offered in lieu of Common Shares
to certain Purchasers whose purchase of Common Shares in the Offering would otherwise result in the Purchaser, together with its affiliates
and certain related parties, beneficially owning more than 4.99% (or, at the election of the Purchaser 9.99%) of the outstanding Common
Shares following the completion of the Offering. The purchase price of each Pre-Funded Warrant will be the price per Common Share to be
sold in the Offering minus $0.01, being the exercise price per Common Share of each Pre-Funded Warrant. The Pre-Funded Warrants will be
immediately exercisable for one Common Share (each, a “Warrant Share”) and may be exercised at any time until all of
the Pre-Funded Warrants are exercised in full. For each Pre-Funded Warrant sold in the Offering, the number of Common Shares offered will
be decreased on a one-for-one basis.
In connection with this opinion, we have
reviewed and relied upon the Registration Statement, the Prospectus, the form of certificate relating to then Pre-Funded Warrants
(the “Warrant Certificate”), the Company’s Notice of Articles, the Company’s Articles, records of the
Company’s corporate proceedings in connection with the Offering, and such other documents, records, certificates, memoranda
and other instruments as we deem necessary as a basis for this opinion. With respect to the foregoing documents, we have assumed:
(i) the authenticity of all records, documents, and instruments submitted to us as originals; (ii) the genuineness of all signatures
on all agreements, instruments and other documents submitted to us; (iii) the legal capacity and authority of all persons or
entities (other than the Company) executing all agreements, instruments or other documents submitted to us; (iv) the authenticity
and the conformity to the originals of all records, documents, and instruments submitted to us as copies; (v) that the statements
contained in the certificates and comparable documents of public officials, officers and representatives of the Company and other
persons on which we have relied for purposes of this opinion are true and correct; and (vi) the due authorization, execution and
delivery of all agreements, instruments and other documents by all parties thereto (other than the due authorization, execution and
delivery of each such agreement, instrument and document by the Company). We have also obtained from officers of the Company
certificates as to certain factual matters and, insofar as this opinion is based on matters of fact, we have relied on such
certificates without independent investigation.
888.476.5291
www.corpcounsel.ca
CC Corporate Counsel Professional Corporation
20 Great Gulf Dr., Suite 14, Vaughan, Ontario, L4K 0K7
Our opinion is limited to law of
the Province of British Columbia, including all applicable provisions of the British Columbia Business Corporations Act. We have
not considered, and have not expressed any opinion with regard to, or as to the effect of, any other law, rule, or regulation, state or
federal, applicable to the Company. In particular, we express no opinion as to United States federal securities laws.
Based upon the foregoing and in
reliance thereon, and subject to the qualifications and limitations set forth herein, we are of the opinion that: (i) the Common Shares
have been duly authorized, validly issued, fully paid, and non-assessable; and (ii) when the Warrant Shares are issued and sold in the
manner and under the terms described in the Warrant Certificate, such Warrant Shares will be validly issued, fully paid, and non-assessable.
We hereby consent to the filing
of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are within the category of
persons whose consent is required under Section 7 of the United States Securities Act of 1933, as amended, or the rules and regulations
of the Commission.
This opinion is furnished in accordance
with the requirements of Regulation S-K, Item 601(b)(5), and is not to be used, circulated, quoted or otherwise relied upon for any other
purpose. This opinion is rendered solely in connection with the registration of the Common Shares and Warrant Shares under the Registration
Statement. This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly
stated herein. We disclaim any obligation to advise you of facts, circumstances, events or developments that hereafter may be brought
to our attention and that may alter, affect or modify the opinion expressed herein after the date hereof.
Yours very truly,
/signed/ CC Corporate Counsel
Professional Corporation
Exhibit 5.2
October 10, 2023
Siyata Mobile Inc.
7404 King George Blvd., Suite 200, King’s Cross
Surrey, British Columbia V3W 1N6, Canada
Re: Siyata Mobile Inc. - Registration Statement on Form F-1
Ladies and Gentlemen:
We have acted as United
States counsel to Siyata Mobile Inc., a company incorporated under the laws of the Province of British Columbia, Canada (the “Company”),
in connection with the filing of a registration statement on Form F-1, as amended (the “Registration Statement”) (File
No. 333-_______), under the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement relates
to the registration and proposed maximum aggregate offering price by the Company of up to an aggregate of (A) $5,000,000 of (i) common
shares, no par value per share, of the Company (the “Common Shares”), and (ii) pre-funded warrants (the “Pre-Funded
Warrants”) to purchase Common Shares, and (B) $275,000 of warrants to purchase Common Shares issuable to the Placement Agent
(as defined below) (the “Placement Agent Warrants”, and, together with the Pre-Funded Warrants, the Common Shares,
the Common Shares underlying the Pre-Funded Warrants and the Placement Agent Warrants, the “Securities”). The Securities
are being registered by the Company, which has engaged Maxim Group LLC (the “Placement Agent”) to act as the placement
agent in connection with a public offering of the Company’s Securities (the “Offering”).
In rendering the opinions set forth below, we
have assumed that: (i) all information contained in all documents reviewed by us is true and correct; (ii) all signatures on all documents
examined by us are genuine; (iii) all documents submitted to us as originals are authentic and all documents submitted to us as copies
conform to the authentic originals of such documents; (iv) each natural person signing any document reviewed by us had the legal capacity
to do so; and (v) the certificates representing the Common Shares will be duly executed and delivered.
We have also assumed that: (i) the Company
has been duly incorporated, and is validly existing and in good standing; (ii) the Company has requisite legal status and legal
capacity under the laws of the jurisdiction of its incorporation; (iii) the Company has complied and will comply with all aspects of
the laws of the jurisdiction of its incorporation, in connection with the transactions contemplated by, and the performance of its
obligations under the Pre-Funded Warrants and the Placement Agent’s Warrants; (iv) the Company has the corporate power and
authority to execute, deliver and perform all its respective obligations under the Pre-Funded Warrants and the Placement
Agent’s Warrants; (v) the Pre-Funded Warrants and the Placement Agent’s Warrants have been duly authorized by all
requisite corporate action on the part of the Company; (vi) all questions concerning the construction, validity, enforcement and
interpretation of the Pre-Funded Warrants and the Placement Agent’s Warrants shall be governed by the internal laws of the
State of New York, without regard to the principles of conflicts of law thereof; (vii) service of process will be effected in the
manner and pursuant to the methods set forth in the said warrants; (viii) that the said agreements noted above are enforceable under
the laws of the Company’s jurisdiction of incorporation; and (ix) at the time of exercise of the Pre-Funded Warrants and the
Placement Agent’s Warrants, a sufficient number of Common Shares that have been reserved by the Company’s board of
directors or a duly authorized committee thereof will be authorized and available for issuance and that the consideration for the
issuance and sale of the Common Shares in connection with such exercise is in an amount that is valid under the laws of the
Company’s jurisdiction of incorporation.
1185 AVENUE OF THE AMERICAS
| 31ST FLOOR | NEW YORK, NY | 10036
T (212) 930-9700 | F (212) 930-9725 | WWW.SRFC.LAW
In connection with this matter, we have examined the Registration Statement, including the exhibits thereto, and such other documents,
corporate records, and instruments and have examined such laws and regulations as we have deemed necessary for purposes of rendering the
opinions set forth herein.
We are members of the Bar of the State of New
York. We do not hold ourselves out as being conversant with, or expressing any opinion with respect to, the laws of any jurisdiction other
than the federal laws of the United States of America and the laws of the State of New York. Accordingly, the opinions expressed herein
are expressly limited to the federal laws of the United States of America and the laws of the State of New York. In particular, we do
not purport to pass on any matter governed by the laws of Canada. Because the Purchase Warrants contain provisions stating that they are
to be governed by the laws of the State of New York, we are rendering this opinion as to New York law.
Based upon and subject to the foregoing, we are
of the opinion that: (i) when the Pre-Funded Warrants have been duly executed and delivered by the Company against payment of the consideration,
such Pre-Funded Warrants will constitute binding obligations of the Company, enforceable against the Company in accordance with their
terms; and (ii) when the Placement Agent Warrants have been duly executed and delivered by the Company against receipt of the consideration
therefor, such Placement Agent Warrants will constitute binding obligations of the Company, enforceable against the Company in accordance
with their terms.
Our opinion set forth above with respect to the
validity or binding effect of any security or obligation may be limited by: (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
marshaling, moratorium or other similar laws affecting the enforcement generally of the rights and remedies of creditors and secured parties
or the obligations of debtors; (ii) general principles of equity (whether considered in a proceeding in equity or at law), including but
not limited to principles limiting the availability of specific performance or injunctive relief, and concepts of materiality, reasonableness,
good faith and fair dealing; (iii) the possible unenforceability under certain circumstances of provisions providing for indemnification,
contribution, exculpation, release or waiver that may be contrary to public policy or violative of federal or state securities laws, rules
or regulations; and (iv) the effect of course of dealing, course of performance, oral agreements or the like that would modify the terms
of an agreement or the respective rights or obligations of the parties under an agreement.
This opinion letter speaks only as of the date
hereof and we assume no obligation to update or supplement this opinion letter if any applicable laws change after the date of this opinion
letter or if we become aware after the date of this opinion letter of any facts, whether existing before or arising after the date hereof,
that might change the opinions expressed above.
This opinion letter is furnished in connection
with the filing by the Company of the Registration Statement on Form F-1 and may not be relied upon for any other purpose without our
prior written consent in each instance. Further, no portion of this letter may be quoted, circulated or referred to in any other document
for any other purpose without our prior written consent.
We hereby consent to the filing of this opinion
as Exhibit 5.2 to the Registration Statement and to the use of our name as it appears under the caption “Legal Matters” in
the Prospectus. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder. This opinion is expressed
as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent changes in the
facts stated or assumed herein or of any subsequent changes in applicable laws.
|
Very truly yours, |
|
|
|
/s/ Sichenzia Ross Ference Carmel LLP |
|
Sichenzia Ross Ference Carmel LLP |
1185 AVENUE OF THE AMERICAS | 31ST FLOOR | NEW YORK, NY | 10036
T (212)
930-9700 | F (212) 930-9725 | WWW.SRFC.LAW
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of October __, 2023, between Siyata Mobile Inc., a corporation existing under the law
of British Columbia (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act (as defined below),
the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration (the receipt and adequacy of which
are hereby acknowledged) the Company and each Purchaser agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:
“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Board of Directors”
means the board of directors of the Company.
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
“Canadian Counsel”
means CC Corporate Counsel Professional Corporation.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date”
means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and
all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations
to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading Day following
the date hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common Stock”
means the common shares of the Company, no par value, 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.
“Company Counsel”
means Sichenzia Ross Ference Carmel LLP.
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure Time”
means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight
(New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless
otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City
time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise
instructed as to an earlier time by the Placement Agent.
“Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock, options, restricted stock units or other equity-based awards to employees, officers
or directors of the Company or its subsidiaries pursuant to any compensation plan duly adopted for such purpose, by a majority of the
non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such
purpose for services rendered to the Company, (b) shares of Common Stock upon the exercise or conversion of securities exercisable for
or convertible into shares of Common Stock that are issued and outstanding on the date of this Agreement and disclosed in the Registration
Statement and the Prospectus, provided that such securities have not been amended since the date of this Agreement to increase the number
of such securities or to decrease the exercise price or conversion price of such securities or to extend the term of such securities,
(c) shares of Common Stock upon the exercise of the Pre-Funded Warrants and the Placement Agent Warrants and (d) securities issued pursuant
to acquisitions or strategic transactions (including, without limitation, joint venture, co-marketing, co-development or other collaboration
agreements) approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement
in connection therewith during the prohibition period in Section 4.11(a) herein, and provided that any such issuance shall only be to
a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset
in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment
of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital
or to an entity whose primary business is investing in securities.
“FCPA” means
the Foreign Corrupt Practices Act of 1977, as amended.
“IFRS” shall
have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual Property
Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up Agreement”
means the Lock-Up Agreement, dated on or prior to the date hereof, by and among the Company and the directors and officers of the Company,
in the form of Exhibit A attached to the Placement Agency Agreement.
“Loeb” means
Loeb & Loeb LLP
“Material Adverse
Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Per Share Purchase
Price” shall mean $______ per share of Common Stock, provided that the purchase price per Pre-Funded Warrant shall be the Per
Share Purchase Price minus $0.01.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement Agent”
means Maxim Group LLC.
“Placement Agency
Agreement” means that certain placement agency agreement, dated as of October __, 2023, by and between the Company and
the Placement Agent.
“Placement Agent Warrants”
means the common stock purchase warrants to be issued to the Placement Agent at the Closing in accordance with the terms of the Placement
Agency Agreement.
“Placement Agent Warrant
Shares” means the shares of Common Stock issuable upon the exercise of the Placement Agent Warrants.
“Pre-Funded Warrants”
means, collectively, the Pre-Funded Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Pre-Funded Warrants shall be issued pursuant to the Registration Statement, exercisable immediately and shall expire
when exercised in full, the form of Exhibit __ attached hereto.
“Pre-Funded Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants.
“Preliminary Prospectus”
means any preliminary prospectus included in the Registration Statement, as originally filed or as part of any amendment thereto, or filed
with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities Act.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or, to the Company’s knowledge, threatened.
“Prospectus”
means the final pricing prospectus filed for the Registration Statement.
“Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.
“Registration Statement”
means the effective registration statement on Form F-1 with the Commission (File No. 333-________) which registers the sale of the Securities
to the Purchasers, and includes any Rule 462(b) Registration Statement.
“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 462(b) Registration
Statement” means any registration statement prepared by the Company registering additional Shares, which was filed with the
Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by the Commission pursuant
to the Securities Act, if applicable.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“Short Sales”
means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include
locating and/or borrowing shares of Common Stock).
“Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares and/or Pre-Funded Warrants purchased hereunder as specified below
such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United
States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports, and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
“Trading Day”
means a day on which the principal Trading Market is open for trading.
“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or
any successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Pre-Funded Warrants, [the Warrant Agency Agreement]. the Lock-Up Agreements the Placement Agency Agreement,
the Placement Agent Warrants, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
“Transfer Agent”
means Computershare, Inc., the current transfer of the Company, with a mailing address of 510 Burrard Street, 2nd Floor, Vancouver, British
Columbia V6C 3B9, Canada, and any successor transfer agent of the Company.
“Variable Rate Transaction”
shall have the meaning ascribed to such term in Section 4.11(b).
“Warrant Agency Agreement”
means that certain warrant agency agreement, dated on or about the Issuance Date, between the Company and the Warrant Agent.
“Warrant Agent”
means the Transfer Agent and any successor warrant agent of the Company.
ARTICLE II
PURCHASE AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase,
an aggregate of $_________ of Shares; provided, however, that, to the extent a Purchaser determines, in its sole discretion, that
such Purchaser (together with such Purchaser’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation,
or as such Purchaser may otherwise choose, in lieu of purchasing Shares such Purchaser may elect to purchase Pre-Funded Warrants in lieu
of Shares in such manner to result in the same aggregate purchase price being paid by such Purchaser to the Company. The “Beneficial
Ownership Limitation” shall be 4.99% (or, at the election of the Purchaser at the Closing, 9.99%) of the number of shares of
the Common Stock outstanding immediately after giving effect to the issuance of the Securities on the Closing Date. Each Purchaser’s
Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available for “Delivery Versus
Payment” settlement with the Company or its designee. The Company shall deliver to each Purchaser its respective Shares (or Pre-Funded
Warrants) as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section
2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of Loeb or such other location as the parties shall mutually agree. Unless otherwise directed by the Placement Agent,
settlement of the Shares shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date,
the Company shall issue the Shares registered in the Purchasers’ names and addresses and released by the Transfer Agent directly
to the accounts) at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly
electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be made by the Placement Agent (or its clearing
firm) by wire transfer to the Company. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise (as defined in the Pre-Funded
Warrants) delivered on or prior to 4:00 p.m. (New York City time) on the Trading Day prior to the Closing Date, which may be delivered
at any time after the time of execution of this Agreement, the Company agrees to deliver the applicable Pre-Funded Warrant Shares subject
to such notice(s) by 4:00 p.m. (New York City time) on the Closing Date and the Closing Date shall be the Warrant Share Delivery Date
(as defined in the Pre-Funded Warrants) for purposes hereunder Notwithstanding anything to the contrary herein and a Purchaser’s
Subscription Amount set forth on the signature pages attached hereto, the number of Shares purchased by a Purchaser (and its Affiliates)
hereunder shall not, when aggregated with all other shares of Common Stock owned by such Purchaser (and its Affiliates) at such time,
result in such Purchaser beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act) in excess of 9.9% of
the then issued and outstanding Common Stock outstanding at the Closing (the “Beneficial Ownership Maximum”), and such Purchaser’s
Subscription Amount, to the extent it would otherwise exceed the Beneficial Ownership Maximum immediately prior to the Closing, shall
be conditioned upon the issuance of Shares at the Closing to the other Purchasers signatory hereto. To the extent that a Purchaser’s
beneficial ownership of the Shares would otherwise be deemed to exceed the Beneficial Ownership Maximum, such Purchaser’s Subscription
Amount shall automatically be reduced as necessary in order to comply with this paragraph.
2.2 Deliveries.
(a) On
or prior to the Closing Date (except as indicated below), the Company shall deliver or cause to be delivered to each Purchaser and the
Placement Agent the following:
(i) this
Agreement duly executed by the Company;
(ii) legal
opinions of (w) Company Counsel with respect to U.S. laws and securities matters (including, without limitation, a negative assurance
letter or statement) and (x) Canadian Counsel with respect to Canadian laws, each in form and substance reasonably acceptable to Loeb,
the Placement Agent and each Purchaser;
(iii) a
cold comfort letter, addressed to the Placement Agent, in form and substance reasonably acceptable to the Placement Agent and the Purchasers,
from the Company’s independent registered public accounting firm;
(iv) for
each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, a Pre-Funded Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to the Pre-Funded
Warrant divided by the Per Share Purchase Price minus $0.01, with an exercise price equal to $0.01, subject to adjustment therein;
(v) for
each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, a Pre-Funded Warrant registered in the name of such Purchaser to purchase
up to a number of shares of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to the Pre-Funded
Warrant divided by the Per Share Purchase Price minus $0.01, with an exercise price equal to $0.01, subject to adjustment therein;
(vi) duly
executed Officers’ Certificate and Secretary’s Certificate, in customary form reasonably acceptable to the Placement Agent;
(vii) the
Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief
Executive Officer or Chief Financial Officer;
(viii) a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository
Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal to such Purchaser’s Subscription Amount
divided by the Per Share Purchase Price, registered in the name of such Purchaser;
(ix) the
duly executed Lock-Up Agreements; and
(x) the
Preliminary Prospectus and the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act).
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) such
Purchaser’s Subscription Amount, which shall be made available for “Delivery Versus Payment” settlement with the Company
or its designee.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v) from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude
in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser,
makes it impracticable or inadvisable to purchase the Shares at the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part
hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section
of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights
to subscribe for or purchase securities.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to
own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in
violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational
or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected
to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and, to the
Company’s knowledge, no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke,
limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents to which the Company is a party and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part
of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders in connection
herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which
the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding obligations of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, liquidation, possessory liens,
rights of set off, merger, consolidation, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the statutory limitation of the time within which proceedings may be brought or
availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it
is a party, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby and thereby do not
and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s articles of association, certificate
or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, provincial, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings
required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Registration Statement and the Prospectus,
(iii) notice to each applicable Trading Market for the listing of the Shares, the Pre-Funded Warrant Shares and the Placement Agent Warrant
Shares for trading thereon in the time and manner required thereby, and (iv) such filings as are required to be made under applicable
state securities laws and/or Canadian securities laws (collectively, the “Required Approvals”).
(f) Issuance
of the Securities: Registration. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.
The Pre-Funded Warrant Shares and the Placement Agent Warrant Shares, when issued in accordance with the terms of the Pre-Funded Warrants
and the Placement Agent Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.
The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this
Agreement, the Warrant Agency Agreement, the Pre-Funded Warrants and the Placement Agent Warrants.. The Company has prepared and filed
the Registration Statement in conformity with the requirements of the Securities Act, which became effective on October __, 2023 (the
“Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required
to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending
the effectiveness of the Registration Statement or suspending or preventing the use of the Preliminary Prospectus or the Prospectus has
been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened
by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus with the Commission
pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement
and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to
the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein not misleading; and the Preliminary Prospectus and the
Prospectus and any amendments or supplements thereto, at the time the Preliminary Prospectus or the Prospectus, as applicable, or any
amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements
of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall
also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof.
As of the date hereof, the Company has not issued any capital stock since the filing of its most recently filed periodic report under
the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans or equity
incentive plans outstanding as of the date of the most recently filed periodic report under the Exchange Act, the issuance of shares of
Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise
of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has
any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents. Except as set forth on Schedule 3.1(g) and as a result of the purchase and sale of the Shares, as
of the date hereof, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock
Equivalents or the capital stock of any Subsidiary. The issuance and sale of the Shares will not obligate the Company or any Subsidiary
to issue shares of Common Stock or other securities to any Person (other than the Purchasers). As of the date hereof, there are no outstanding
securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset
price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. As of the date hereof, there are
no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem
a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans
or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Shares. There are no
shareholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the
Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.
(h) SEC
Reports: Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by reference therein, together with the Preliminary Prospectus and
the Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applied on a consistent
basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes required by IFRS, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows
for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements
and documents described in the Registration Statement, the Prospectus and the SEC Reports conform in all material aspects to the descriptions
thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations
thereunder to be described in the Registration Statement, the Prospectus or the SEC Reports 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 Prospectus or the SEC Reports, or (ii) is material to the Company’s business (each, a “Material Agreement”),
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 (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 therefore may be brought. No Material Agreement has been assigned by the Company,
and neither the Company nor, to the best of the Company’s knowledge, any other party is in default thereunder and, to the best of
the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a
default thereunder that has had or that could reasonably be expected to result in a Material Adverse Effect. To the best of the Company’s
knowledge, performance by the Company of the material provisions of the Material Agreements 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, including, without limitation, those relating to environmental laws and regulations.
The other financial and statistical information included in the SEC Reports present fairly, in all material respects, the information
included therein and have been prepared on a basis consistent with that of the financial statements that are included in the SEC Reports
and the books and records of the respective entities presented therein.
(i) Material
Changes: Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result
in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to IFRS or disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive
plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance
of the Shares contemplated by this Agreement, no material event, liability, fact, circumstance, occurrence or development has occurred
or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses,
prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior
to the date that this representation is made.
(j) Litigation.
Except as disclosed on Schedule 3.1(j), there has not been, and to the knowledge of the Company, there is not pending or contemplated,
any action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, provincial, county, local or foreign), including any proceeding before any governmental
authority in Canada (collectively, an “Action”). None of the Actions described on Schedule 3.1(j) (i) adversely
affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares or (ii) could, if there
were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary,
nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal
or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed
by the Company or any Subsidiary under the Exchange Act or the Securities Act.
(k) Labor
Relations. The Company and each of its Subsidiaries is, and has been, in material compliance with all applicable laws respecting labor,
employment and employment practices, terms and conditions of employment, wages and hours, including the classification of independent
contractors and has not received any notice from any governmental authority in Canada or any other country disputing such classification.
No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could
reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member
of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of
its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable Canadian and U.S. federal, state, provincial,
local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived); (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority;
or (iii) is or has been in violation of any applicable federal, provincial, territorial, state, municipal, local and foreign laws, regulations,
orders and decrees governing its business, except in each case where noncompliance would not, singularly or in the aggregate could not
have or reasonably be expected to result in a Material Adverse Effect.
(m) Environmental
Laws. The Company and its Subsidiaries (i) are in material compliance with all federal, state, provincial, local and foreign laws
relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface
or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants,
or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”):
(ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),
(ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. Each of the Company and its Subsidiaries has all requisite power, capacity and authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses, filings and permits of, with and from all judicial, regulatory and other
legal or governmental agencies and bodies and all third parties, Canadian, U.S. or foreign, (collectively, the “Consents”),
to own, lease and operate its properties and conduct its business as it is now being conducted or, except as disclosed in the Registration
Statement and the Prospectus, proposed to be conducted, in each case as disclosed in the Registration Statement and the Prospectus, and
each such Consent is valid, existing, in good standing and in full force and effect, except in each case as would not have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received notice of any investigation or proceedings which, if decided adversely
to the Company or any such Subsidiary, as the case may be, would have a Material Adverse Effect. The Company and each Subsidiary are in
compliance with the terms and conditions of all such Consents, except where the failure to so comply would not, individually or in the
aggregate, have a Material Adverse Effect. The disclosures in the Registration Statement concerning the effects of federal, state, provincial,
local and all foreign regulation on the Company’s business as currently contemplated are correct in all material respects.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights to
lease or otherwise use, all real property and all personal property owned or used by them that is material to the business of the Company
and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii)
Liens for the payment of federal, provincial, state or other taxes, for which appropriate reserves have been made therefor in accordance
with IFRS and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries
are in compliance except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(p) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to
do so could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Schedule 3.1(p) sets
forth all of the Intellectual Property Rights that the Company and its Subsidiaries own or have the rights to use. Neither the Company
nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated
or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither
the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports,
a written notice of a claim or otherwise has any knowledge that the operation of their respective businesses violate or infringe upon
the intellectual property rights of any Person, except as could not have or reasonably be expected to have a Material Adverse Effect.
To the knowledge of the Company, all such Intellectual Property Rights are enforceable and, to the Company’s knowledge, there is
no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do
so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited
to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(r) Transactions
with Affiliates and Employees. None of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company,
none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending
of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder,
member or partner, in each case in excess of US$120,000 other than for (i) payment of salary, bonus or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements
under any stock option plan or equity incentive plans of the Company.
(s) Sarbanes-Oxley:
Internal Accounting Controls. The Company and the Subsidiaries are in compliance in all material respects with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002, as amended (“SOX”), that are effective as of the date hereof, and any
and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the
Closing Date. The Company and each of its Subsidiaries maintains internal control over financial reporting (as such term is defined in
Rule 13a-l5(f) under the Exchange Act) that is effective to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with IFRS, including 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 IFRS and to maintain asset and liability accountability, (iii) access to assets or incurrence
of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability
for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken
with respect to any difference. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under
the Exchange Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and
forms of the Commission, including, without limitation, controls and procedures designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely
decisions regarding required disclosure. Except as disclosed in the SEC Reports, neither the Company nor any of its Subsidiaries has received
any notice or correspondence from any accountant, Governmental Entity or other Person relating to any potential material weakness or significant
deficiency in any part of the internal controls over financial reporting of the Company or any of its Subsidiaries. The Company’s
certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as
of the end of the period covered by the most recently filed Annual Report on Form 20-F under the Exchange Act (such date, the “Evaluation
Date”). The Company presented in its most recently filed Annual Report on Form 20-F under the Exchange Act the conclusions of
the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation
Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined
in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect,
the internal control over financial reporting of the Company and its Subsidiaries.
(t) Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents, other than the compensation payable to the Placement Agent pursuant to the terms of the Placement Agency
Agreement. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction
Documents.
(u) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be or be
an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(v) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act
of any securities of the Company or any Subsidiary.
(w) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
Except as disclosed in the Registration Statement and the Prospectus, the Company has not, in the 12 months preceding the date hereof,
received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not
in compliance with the listing or maintenance requirements of such Trading Market. Except as disclosed in the Registration Statement and
the Prospectus, the Company has no reason to believe that it will not in the foreseeable future continue to be in compliance with all
such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust
Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.
(x) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s articles of association or bylaws (or similar charter documents) or the laws of its
jurisdiction of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling
their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s
issuance of the Shares and the Purchasers’ ownership of the Shares.
(y) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, nonpublic information which is not otherwise disclosed in the Preliminary Prospectus
or the Prospectus. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions
in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and
its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement,
is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements made therein, in light of the circumstances under which they were made, not misleading. There are no documents
required to be filed with the Commission in connection with the transaction contemplated hereby that (a) have not been filed as required
pursuant to the Securities Act or (b) will not be filed within the requisite time period. There are no contracts or other documents required
to be described in the Prospectus, or to be filed as exhibits or schedules to the Registration Statement, which have not been described
or filed as required. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken
as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The statistical
and market-related data included in the Prospectus, if any, 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. The Company has obtained all consents required for the inclusion of such statistical and market-related data in the
Prospectus. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. The
Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(z) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither
the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated
with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions of any Trading
Market on which any of the securities of the Company are listed or designated.
(aa) Solvency. Based
on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Shares hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will
be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities)
as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted
by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the
Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from
the Closing Date. For the avoidance of doubt, such reorganization does not include the Company’s mergers, acquisitions or other
strategic transactions which are not for the primary purpose of avoiding bankruptcy. Schedule 3.1(aa) sets forth as of the date
hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary
has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or
amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties,
endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected
in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess
of $50,000 due under leases required to be capitalized in accordance with IFRS. As of the date hereof, neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.
(bb) Tax Status.
Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect,
the Company and its Subsidiaries each (i) has made or filed, or secured all extensions for the filing of, all applicable United States
federal, state and local income and all Canadian and other foreign income and franchise tax returns, reports and declarations required
by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably
adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company or of any Subsidiary know of no basis for any such claim.
(cc) Foreign Corrupt
Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person
acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment
or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which
is in violation of law, or (iv) violated in any material respect any provision of FCPA.
(dd) Illegal or
Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor any of the officers, directors,
employees, agents or other representatives of the Company or any of its Subsidiaries has, directly or indirectly, made or authorized any
payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or
bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office
except for personal political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.
(ee) Accountants.
The Company’s independent registered public accounting firm is Barzily and Co., CPA’s. To the knowledge and belief of the
Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the Company’s Annual Report on Form 20-F for the fiscal year ended December
31, 2023.
(ff) Acknowledgment Regarding
Purchasers’ Purchase of Shares. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity
of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect
to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental
to the Purchasers’ purchase of the Shares. The Company further represents to each Purchaser that the Company’s decision to
enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(gg) Acknowledgment Regarding
Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Section
3.2(f)), it is understood and acknowledged by the Company that: (i) in this Agreement, none of the Purchasers has been asked by the Company
to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Shares for any specified term; (ii) past or future open market or
other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions,
before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser
is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv) each Purchaser shall
not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.
The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during
the period that the Securities are outstanding including, without limitation, during the periods that the value of the Pre-Funded Warrant
Shares deliverable with respect to Pre-Funded Warrants are being determined,, and (z) such hedging activities (if any) could reduce the
value of the existing shareholders’ equity interests in the Company at and after the time that the hedging activities are being
conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(hh) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Shares,
or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company,
other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Shares.
(ii) Regulatory
Authorities. As to each product subject to the jurisdiction of the Federal Trade Commission, the Consumer Product Safety Commission
and the Environmental Protection Agency, as well as various state, provincial, local and international laws and agencies (the “Regulatory
Authorities”), that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of
its Subsidiaries (each such product, a “Product”), such Product is being manufactured, packaged, labeled, tested, distributed,
sold and/or marketed by the Company in compliance with all applicable requirements of the Regulatory Authorities and their governing laws,
rules and regulations, except where the failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed
or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory
proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its
Subsidiaries has received any notice, warning letter or other written communication from the Regulatory Authorities or any other governmental
entity, which alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually
or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being
conducted in all material respects in accordance with all applicable laws, rules and regulations of the Regulatory Authorities.
(jj) Cybersecurity.
The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software,
websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all
material respects as required in connection with the operation of the business of the Company and its subsidiaries as currently conducted,
free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants that would reasonably be
expected to have a Material Adverse Effect on the Company’s business. The Company and its Subsidiaries have implemented and maintained
commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and protect
their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data, including
“Personal Data.” used in connection with their businesses (including the data of their respective customers, employees,
suppliers, vendors and any third party data maintained by or on behalf of the Company). “Personal Data” means (i) a natural
person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification number,
driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any information
which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal
data” as defined by the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679); (iv) any information
which would qualify as “protected health information” under the Health Insurance Portability and Accountability Act of 1996,
as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”); (v) personal
information under the Personal Information Protection and Electronic Documents Act (“PIPEDA”); and (vi) any other piece
of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any
data related to an identified person’s health or sexual orientation. There have been no breaches, violations, outages or unauthorized
uses of or access to the IT Systems or Personal Data in use or possession of the Company. The Company and its Subsidiaries are presently
in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental
or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal
Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification, except
where the failure to be in compliance would not have a Material Adverse Effect.
(kk) Compliance with
Data Privacy Laws. The Company and its Subsidiaries are in compliance with all applicable state, federal, and international data privacy
and security laws and regulations, including HIPAA, PIPEDA and GDPR (collectively, the “Privacy Laws”), except where
the failure to be in compliance would not have a Material Adverse Effect. To ensure compliance with the Privacy Laws, the Company and
its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance in all material respects
with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis
of Personal Data (the “Policies”). The Company and its Subsidiaries have at all times made all disclosures to users
or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures made or contained in any Policy
have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory rules or requirements in
any material respect. Neither the Company nor any Subsidiary: (i) has received notice of any actual or potential liability under or relating
to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably
be expected to result in any such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation,
or other corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes any obligation
or liability under any Privacy Law.
(ll) Stock Option Plans
or Equity Incentive Plans. Each stock option granted by the Company under the Company’s stock option plan or equity incentive
plan was granted (i) in accordance with the terms of the Company’s stock option plan or equity incentive plan and (ii) with an exercise
price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under IFRS
and applicable law. No stock option granted under the Company’s stock option plan or equity incentive plan has been backdated. The
Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior
to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information
regarding the Company or its Subsidiaries or their financial results or prospects.
(mm) Office of Foreign
Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).
(nn) U.S. Real Property
Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section
897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(oo) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”). and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a
bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(pp) Shell Company Status.
The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).
(qq) Money Laundering.
The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), and the U.S. Currency and
Foreign Transactions Reporting Act of 1970, as amended, applicable 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
agency (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company or any Subsidiary, threatened.
(rr) D&O Questionnaires.
To the Company’s knowledge, all information contained in the questionnaires most recently completed by each of the Company’s
directors and officers and beneficial owner of 5% or more of the Common Stock or Common Stock Equivalents is true and correct in all respects
and the Company has not become aware of any information which would cause the information disclosed in such questionnaires become inaccurate
and incorrect.
(ss) FINRA Affiliation.
No officer, director or any beneficial owner of 10% or more of the Company’s Common Stock or Common Stock Equivalents has any direct
or indirect affiliation or association with any member of the Financial Industry Regulatory Authority (“FINRA”) (as
determined in accordance with the rules and regulations of FINRA) that is participating in this offering. Except for securities purchased
on the open market, no Company Affiliate is an owner of stock or other securities of any member of FINRA. No Company Affiliate has made
a subordinated loan to any member of FINRA. No proceeds from the sale of the Shares (excluding compensation as disclosed in the Prospectus
to the Placement Agent) will be paid to any FINRA member, any persons associated with a FINRA member or an affiliate of a FINRA member.
Except as disclosed in the Registration Statement and Prospectus, no person to whom securities of the Company have been privately issued
within the 180-day period prior to the initial filing date of the Prospectus is a FINRA member, is a person associated with a FINRA member
or is an affiliate of a FINRA member. No FINRA member participating in this offering has a conflict of interest with the Company. For
this purpose, a “conflict of interest” exists when a FINRA member, the parent or affiliate of a FINRA member or any person
associated with a FINRA member in the aggregate beneficially own 5% or more of the Company’s outstanding subordinated debt or common
equity, or 5% or more of the Company’s preferred equity. “FINRA member participating in the offering” includes any associated
person of a FINRA member that is participating in the offering, any member of such associated person’s immediate family and any
affiliate of a FINRA member that is participating in the offering. “Any person associated with a FINRA member” means (1) a
natural person who is registered or has applied for registration under the rules of FINRA and (2) a sole proprietor, partner, officer,
director, or branch manager of a FINRA member, or other natural person occupying a similar status or performing similar functions, or
a natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by a
FINRA member. When used in this Section 3.1(ss) the term “affiliate of a FINRA member” or “affiliated with a FINRA member”
means an entity that controls, is controlled by or is under common control with a FINRA member. The Company will advise the Placement
Agent and Loeb if it learns that any officer, director or owner of 5% or more of the Company’s outstanding Common Stock or Common
Stock Equivalents is or becomes an affiliate or associated person of a FINRA member firm.
(tt) Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Purchasers shall be deemed
a representation and warranty by the Company to the Purchasers as to the matters covered thereby.
(uu) Board of Directors.
The qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with SOX and the
rules promulgated thereunder applicable to the Company and the rules of the Trading Market. At least one member of the Board of Directors
qualifies as a “financial expert” as such term is defined under SOX and the rules promulgated thereunder and the rules of
the Trading Market. In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent”
as defined under the rules of the Trading Market.
(vv) Employee Plans.
The SEC Reports disclose, to the extent required by applicable securities laws, each plan for retirement, bonus, stock purchase, profit
sharing, stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick
leave, disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive or otherwise contributed to, or required
to be contributed to, by the Company for the benefit of any current or former director, officer, employee or consultant of the Company
(the “Employee Plans”), each of which has been maintained in all material respects with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations that are applicable to such Employee Plans.
(ww) Foreign Private
Issuer The Company is a “foreign private issuer” within the meaning of Rule 405 under the Securities Act.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate
as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company
or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
(b) Understandings
or Arrangements. Such Purchaser is acquiring the Shares as principal for its own account and has no direct or indirect arrangement
or understandings with any other Persons to distribute or regarding the distribution of such Shares (this representation and warranty
not limiting such Purchaser’s right to sell the Shares pursuant to the Registration Statement or otherwise in compliance with applicable
federal and state securities laws). Such Purchaser is acquiring the Shares hereunder in the ordinary course of its business.
(c) [Reserved].
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Shares and, at the present time, is able to afford a complete loss of such investment.
(e) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and
the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity
to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement
Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Shares nor
is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation
as to the Company or the quality of the Shares and the Placement Agent and any Affiliate may have acquired non-public information with
respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance of the Shares to such Purchaser,
neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.
(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received
a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material pricing terms
of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions
of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement. Other than to other Persons
party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners,
legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for
the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect
to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
The Company acknowledges and
agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any
other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation
of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute
a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or
similar transactions in the future.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 No
Legends The Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares shall be issued free of legends
4.2 Furnishing
of Information. Until the time that no Purchaser owns any Shares, Pre-Funded Warrants or Pre-Funded Warrant Shares, the Company covenants
to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed
by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements
of the Exchange Act.
4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any
Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval
is obtained before the closing of such subsequent transaction.
4.4 Securities
Laws Disclosure: Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the
transactions contemplated hereby, and (b) file a Report on Form 6-K, including (i) the Transaction Documents as exhibits thereto, and
(ii) the Disclosure Schedules as an appendix to this Agreement, with the Commission within the time required by the Exchange Act. From
and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material,
non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers,
directors, employees, Affiliates or agents, including, without limitation, the Placement Agent, in connection with the transactions contemplated
by the Transaction Documents, other than in the case of the Placement Agent only, certain financial projections previously provided to
the Placement Agent.. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and
all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees, Affiliates or agents, including, without limitation, the Placement
Agent, on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate and be of no further force
or effect. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company. The Company and the Placement Agent shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise
make any such public statement without the prior consent of (i) the Placement Agent and (ii) the Company, with respect to any press release
of any Purchaser, or the Purchasers, with respect to any press release of the Company, which consent shall not unreasonably be withheld,
conditioned or delayed, except if such disclosure is required by law or regulation or Trading Market rule in which case the disclosing
party shall use its reasonable efforts to promptly provide the other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser
in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except
(a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b) to
the extent such disclosure is required by law or Trading Market regulations or requested by the staff of the Commission or the Trading
Market, in which case the Company shall use its reasonable efforts to provide the Purchasers with prior notice of such disclosure permitted
under this clause (b) and reasonably cooperate with such Purchaser regarding such disclosure. Purchasers shall promptly comply with all
reporting requirements of the Exchange Act.
In addition to, and independent
of the foregoing, the Purchaser acknowledges that this Agreement requires the Purchaser to provide certain personal information to the
Company, which is being collected by the Company for, in addition to the purposes described above and elsewhere in this Agreement, the
purposes of complying with applicable Canadian securities laws and completing filings required by Canadian securities commissions and/or
other Canadian regulatory authorities. The Purchaser acknowledges that the Purchaser’s personal information may be disclosed by
the Company to Canadian securities commissions and/or other Canadian regulatory authorities (including, the Canada Revenue Agency or other
applicable taxing authorities). By executing this Agreement, the Purchaser hereby consents to the foregoing collection, use and disclosure
of the Purchaser’s personal information. The Purchaser hereby also consents to the filing of copies or originals of any of the Purchaser’s
documents described herein as may be required to be filed with any Canadian securities commission in connection with the transactions
contemplated hereby. Specifically, the information identifying the name, address, telephone number and email address of the Purchaser,
the number of securities being purchased hereunder, the subscription amount, the closing date, the exemption that the Purchaser is relying
on in purchasing the securities hereunder and the Purchaser’s registrant or insider status, if applicable, will be disclosed to
the Canadian securities regulatory authority or regulator in the provinces of British Columbia and/or Alberta, and such information is
being collected by such Canadian securities regulatory authorities and regulators under the authority granted to each of them under applicable
Canadian securities legislation. This information is being collected for the purposes of the administration and enforcement of the securities
legislation of such provinces of Canada. The Purchaser hereby authorizes the indirect collection of such information by such Canadian
securities regulatory authorities and regulators. In the event the Purchaser has any questions with respect to the indirect collection
of such information by such securities regulatory authorities and regulators, the Purchaser should contact the applicable securities regulatory
authority or regulator using the contact information set out below.
Alberta Securities Commission
Suite 600, 250 – 5th Street SW
Calgary, Alberta T2P 0R4
Telephone: (403) 297-6454
Toll free in Canada: 1-877-355-0585
Facsimile: (403) 297-2082
Public official contact: FOIP Coordinator
|
British Columbia Securities Commission
P.O. Box 10142, Pacific Centre
701 West Georgia Street
Vancouver, British Columbia V7Y 1L2
Inquiries: (604) 899-6854
Toll free in Canada: 1-800-373-6393
Facsimile: (604) 899-6581
Email: FOI-privacy@bcsc.bc.ca
Public official contact: FOI Inquiries |
4.5 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any
Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Shares under the
Transaction Documents or under any other agreement between the Company and the Purchasers.
4.6 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes,
material non-public information. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company. To the extent that the Company, any of its Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates delivers any material, non-public information to a Purchaser without such Purchaser’s
consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of
its Subsidiaries, or any of their respective officers, directors, employees, Affiliates or agents, including, without limitation, the
Placement Agent, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, Affiliates
or agents, including, without limitation, the Placement Agent, not to trade on the basis of, such material, non-public information, provided
that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously
with the delivery of such notice file such notice with the Commission pursuant to a Report on Form 6-K. The Company understands and confirms
that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
4.7 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Shares hereunder for general corporate purposes and shall
not use such proceeds: (a) for the redemption of any Common Stock or Common Stock Equivalents, (b) for the settlement of any outstanding
litigation, or (c) in violation of FCPA or OFAC regulations.
4.8 Indemnification.
(a) Subject to the provisions of this Section 4.8, the Company will indemnify (to the fullest extent permitted by applicable law) and
hold each Purchaser and its directors, officers, shareholders, members, managers, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person
who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including
all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any material breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser
Parties in any capacity, or any of them or their respective Affiliates, by any shareholder of the Company who is not a Purchaser Party
or an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such
action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such shareholder or any violations by such Purchaser
Party of state or federal securities laws, or any conduct by such Purchaser Party which is finally judicially determined to constitute
fraud, gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party in respect of which indemnity
may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have
the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of Purchaser Party’s counsel provided to the Company, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company
shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to
any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage
or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements
made by such Purchaser Party in this Agreement or in the other Transaction Documents, violations by such Purchaser Party of state or federal
securities laws, or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or
willful misconduct. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall
be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company
may be subject to pursuant to law.
4.9 Reservation
of Common Stock.. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at
all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue the
Shares pursuant to this Agreement, Pre-Funded Warrant Shares pursuant to any exercise of the Pre-Funded Warrants and Placement Agent Warrant
Shares pursuant to any exercise of the Placement Agent Warrants.
4.10 Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the
Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall have provided appropriate notice
to list or quote all of the Shares, the Pre-Funded Warrant Shares and the Placement Agent Warrant Shares on such Trading Market. The Company
further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application
all of the Shares, the Pre-Funded Warrant Shares and the Placement Agent Warrant Shares and will take such other action as is necessary
to cause all of the Shares, the Pre-Funded Warrant Shares and the Placement Agent Warrant Shares to be listed or quoted on such other
Trading Market as promptly as possible. The Company will then take all reasonable action necessary to continue the listing and trading
of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market. The Company agrees to take all reasonable action to maintain the eligibility of the Common
Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic
transfer.
4.11 Subsequent
Equity Sales.
(a) From
the date hereof until ninety (90) days after the Closing Date, neither the Company nor any Subsidiary shall (i) issue, enter into any
agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or (ii) file
any registration statement or amendment or supplement thereto, other than the Prospectus or filing a registration statement on Form S-8
in connection with any employee benefit plan.
(b) From
the date hereof until ninety (90) days after the Closing Date, the Company shall be prohibited from effecting or entering into an agreement
to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units
thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company
(i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such
debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after
the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement,
including, but not limited to, an equity line of credit or an “at-the-market offering”, whereby the Company may issue securities
at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance,
which remedy shall be in addition to any right to collect damages.
(c) Notwithstanding
the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an
Exempt Issuance.
4.12 Equal
Treatment of Purchasers. No consideration (including any modification of this Agreement) shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of
the parties to this Agreement. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not
in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Shares
or otherwise.
4.13 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor
any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser
will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules
(other than as disclosed to its legal and other representatives). Notwithstanding the foregoing and notwithstanding anything contained
in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty
or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no
Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable
securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to
the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade
in the securities of the Company to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates,
or agent, including, without limitation, the Placement Agent, after the issuance of the initial press release as described in Section
4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers
manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply
with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered
by this Agreement.
4.14 Exercise
Procedures. The form of Notice of Exercise included in the Pre-Funded Warrants set forth the totality of the procedures required of
the Purchasers in order to exercise the Pre-Funded Warrants. No additional legal opinion, other information or instructions shall be required
of the Purchasers to exercise their Pre-Funded Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required
in order to exercise the Pre-Funded Warrants. The Company shall honor exercises of the Pre-Funded Warrants and shall deliver Pre-Funded
Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
4.15 Lock-Up
Agreements. Subject to the discretion of the Placement Agent, the Company shall not amend, modify, waive or terminate any provision
of any of the Lock-Up Agreements except to extend the term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement
in accordance with its terms. If any party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly
use its reasonable efforts to seek specific performance of the terms of such Lock-Up Agreement.
4.16 Restrictions
on Offers and Sales of the Shares in Canada. Each of the Company and each of the Purchasers acknowledge and agree that none of the
Shares that may be issued to such Purchaser under this Agreement have been or will be qualified for distribution in any Province or Territory
of Canada. The Purchaser covenants and agrees that it shall: (i) offer or sell any Shares that may be issued to the Purchaser pursuant
to this Agreement only (A) in transactions executed on a Trading Market through a U.S. registered broker-dealer that is located in the
United States or (B) directly to third Persons, none of whom, to the Purchaser’s knowledge following reasonable inquiry, is either
(1) a Person resident in Canada or (2) a Person acquiring such Shares for the benefit of another Person resident in Canada; and (ii) not
offer or sell any Shares that may be issued to the Purchaser pursuant to this Agreement on any “marketplace” (as such term
is defined in National Instrument 21-101 - Marketplace Operation) in Canada.
ARTICLE V
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated
on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination will affect
the right of any party to sue for any breach by any other party (or parties).
5.2 Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter delivered by the Company), stamp taxes and other taxes
and duties levied in connection with the delivery of any Shares to the Purchasers.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email
attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via email attachment
at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any
Transaction Document constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries, the
Company shall promptly file such notice with the Commission pursuant to a Report on Form 6-K.
5.5 Amendments:
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares based on the initial
Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and
adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers)
shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser
relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected
Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Shares and the
Company.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors, heirs, estates, personal
representatives, and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior
written consent of each Purchaser (other than by merger, consolidation or amalgamation). Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing
to be bound, with respect to the transferred Shares, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No
Third-Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person, except as otherwise set forth in Section 4.8, this Section 5.8, and the Placement Agency Agreement, as
applicable.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section
4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf’
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such “.pdf’ signature page were an original thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights; provided, however, that in the case of a rescission of an exercise of a Pre-Funded
Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise notice
concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration
of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Pre-Funded Warrant (including, issuance of a
replacement warrant certificate evidencing such restored right).
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs
(including customary indemnity) associated with the issuance of such replacement Shares.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would
be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
5.17 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.
Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For
reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through
Loeb. Loeb does not represent any of the Purchasers and only represents the Placement Agent. The Company has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so
by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and
among the Purchasers.
5.18 [RESERVED].
5.19 Saturdays,
Sundays. Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.20 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.21 WAIVER
OF JURY TRIAL. IN ANY ACTION. SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY. TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW. HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
SIYATA MOBILE INC. |
|
Address for Notice: |
|
|
|
7404 King George Blvd., Suite 200, King’s
Cross
Surrey, British Columbia V3W 1N6, Canada |
|
|
|
|
|
By: |
|
|
Attn: |
Marc Seelenfreund |
Name: |
Marc Seelenfreund |
|
E-Mail: |
marc@siyata.net |
Title: |
Chief Executive Officer |
|
|
|
With a copy to (which shall not constitute notice):
Sichenzia Ross Ference Carmel LLP
1185 Avenue of the Americas, 31st floor
New York, NY 10036
Attn: Ross Carmel, Esq.
Email: rcarmel@srfc.law
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO SIYATA SECURITIES
PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by then- respective authorized signatories as of the date first indicated
above.
Signature of Authorized Signatory of Purchaser: |
|
Name of Authorized Signatory: |
|
Title of Authorized Signatory: |
|
Email Address of Authorized Signatory: |
|
Address for Notice to Purchaser: |
|
Address for Delivery of Securities to Purchaser
(if not same as address for notice): |
|
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the use in this Registration
Statement on Form F-1 of our report dated May 15, 2023, relating to the consolidated financial statements of Siyata Mobile Inc., which
is part of this Registration Statement.
We also consent to the
reference to us under the caption “Experts” in the Registration Statement.
/s/ Barzily
and Co. |
|
Barzily and Co. |
|
Certified Public Accountants
(Isr) |
|
Jerusalem, Israel |
|
October 10, 2023 |
|
Exhibit 107
Calculation of Filing Fee Tables
Form F-1
Siyata Mobile Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward
Securities
| |
| |
| |
| | |
| | |
Proposed Maximum | | |
| | |
| | |
| |
| |
Security Type | |
Security Class Title(1) | |
Fee Calculation Rule | | |
Amount Registered (1)(2) | | |
Offering Price Per Share and/or Pre-funded Warrant | | |
Maximum Aggregate Offering(1)(2) | | |
Fee Rate | | |
Amount of Registration Fee | |
Fees to Be Paid | |
Equity | |
Common Share, no par value per share | |
| 457(o) | | |
| — | (4) | |
| — | | |
$ | 5,000,000 | | |
| 0.0001476 | | |
$ | 738.00 | |
Fees to Be Paid | |
Equity | |
Pre-funded Warrants(3)(4) | |
| 457(g) | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees to Be Paid | |
Equity | |
Common Share, no par value per share, underlying the Pre-funded Warrants(3) | |
| 457(o) | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees to Be Paid | |
Equity | |
Placement Agent Warrants to purchase Common Shares(4) | |
| 457(g) | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Fees to Be Paid | |
Equity | |
Shares of Common Shares underlying Placement Agent Warrants to purchase Common Shares(5) | |
| 457(o) | | |
| — | | |
| — | | |
$ | 275,000 | | |
| — | | |
$ | 40.59 | |
| |
| |
Total Offering Amounts | |
| | | |
| | | |
| | | |
$ | 5,275,000 | | |
| 0.0001476 | | |
$ | 778.59 | |
| |
| |
Total Fees Previously Paid | |
| | | |
| | | |
| | | |
| | | |
| | | |
| — | |
| |
| |
Total Fee Offsets | |
| | | |
| | | |
| | | |
| | | |
| | | |
| — | |
| |
| |
Net Fee Due | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | 778.59 | |
|
(1) |
Pursuant to Rule 416 under the Securities Act of 1933, as amended, or the Securities Act, the common shares, no par value per share, registered hereby also include an indeterminate number of additional common shares as may from time to time become issuable by reason of stock splits, stock dividends, recapitalizations or other similar transactions. |
(2) |
Estimated solely for purposes of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act. |
(3) |
The registrant may issue pre-funded warrants to purchase common shares in the offering. The purchase price of each pre-funded warrant will equal the price per share at which common shares are being sold to the public in this offering, minus $0.01, which constitutes the pre-funded portion of the exercise price, and the remaining unpaid exercise price of the pre-funded warrant will equal $0.01 per common share (subject to adjustment as provided for therein). The proposed maximum aggregate offering price of the common shares will be reduced on a dollar-for-dollar basis based on the offering price of any pre-funded warrants issued in the offering, and the proposed maximum aggregate offering price of the pre-funded warrants to be issued in the offering will be reduced on a dollar-for-dollar basis based on the offering price of any common shares issued in the offering. Accordingly, the proposed maximum aggregate offering price of the common shares and pre-funded warrants (including the common shares issuable upon exercise of the pre-funded warrants), if any, is $5,000,000. |
(4) |
No additional registration fee is payable pursuant to Rule 457(g) under the Securities Act. |
|
|
(5) |
As estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act, the proposed maximum aggregate offering price of the placement agent’s warrants is $562,500, which is equal to 5.0% of the aggregate value of the securities to be sold in the offering at an exercise price equal to 110% of the public offering price per share. |
v3.23.3
Document And Entity Information
|
12 Months Ended |
Dec. 31, 2022 |
Document Information Line Items |
|
Entity Registrant Name |
SIYATA MOBILE INC.
|
Document Type |
F-1
|
Amendment Flag |
false
|
Entity Central Index Key |
0001649009
|
Entity Emerging Growth Company |
true
|
Entity Ex Transition Period |
false
|
Entity Address, Address Line One |
7404 King George Blvd
|
Entity Address, Address Line Two |
Suite 200
|
Entity Address, Address Line Three |
King’s
CrossSurrey
|
Entity Address, State or Province |
BC
|
Entity Address, Postal Zip Code |
V3W 1N6
|
Entity Address, Country |
CA
|
City Area Code |
514
|
Local Phone Number |
514-500-1181
|
Business Contact |
|
Document Information Line Items |
|
Entity Address, Address Line One |
122 East 42nd Street
|
Entity Address, Address Line Two |
18th Floor
|
Entity Address, State or Province |
NY
|
Entity Address, Postal Zip Code |
10168
|
City Area Code |
(800)
|
Local Phone Number |
221-0102
|
Contact Personnel Name |
Cogency Global Inc.
|
Entity Address, City or Town |
New York
|
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Grafico Azioni Siyata Mobile (NASDAQ:SYTA)
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