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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June
13, 2024
AB International
Group Corp.
(Exact name of registrant as specified in its charter)
Nevada |
000-55979 |
37-1740351 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
144
Main Street,
Mt. Kisco, NY |
10549 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (914) 202-3108
______________________
(Former name or former address, if changed since last
report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions:
[ ] |
Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425) |
|
|
[ ] |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
[ ] |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
[ ] |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. [ ]
Item 1.01 Entry into a Material Definitive Agreement.
On June 13, 2024, we entered
into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Alumni Capital LP, a Delaware limited partnership.
Pursuant to the Purchase Agreement, the Company has the right, but not the obligation to cause Alumni Capital to purchase up to $5 million
of our common stock at the Investment Amount (defined below) during the period beginning on the execution date of the Purchase Agreement
and ending on the earlier of (i) the date on which Alumni Capital has purchased $5 million of our common stock shares pursuant to the
Purchase Agreement or (ii) June 30, 2025.
Pursuant to the Purchase
Agreement, the “Investment Amount” means seventy percent (70%) of the lowest daily VWAP of the Common Stock five business
days prior to the Closing of a Purchase Notice. No Purchase Notice will be made without an effective registration statement and no Purchase
Notice will be in an amount greater than (i) $250,000 or (ii) three hundred percent (300%) of the Average Daily Trading Volume during
the five business days prior to a Purchase Notice.
The
Purchase Agreement provides that the number of our common stock shares to be sold to Alumni Capital will not exceed the number of shares
that, when aggregated together with all other shares of our common stock which the investor is deemed to beneficially own, would result
in the investor owning more than 4.99% of our outstanding common stock. The percentage may be increased to no more than 9.99% upon notice
under the Purchase Agreement.
In consideration for Alumni Capital’s execution
and performance under the Purchase Agreement, the Company issued to Alumni Capital a Common Stock Purchase Warrant dated June 13, 2024
to purchase 1,953,125,000 shares of Common Stock, representing (50%) of the commitment amount of $5 million, at an exercise price of $0.00128
per share, subject to adjustments. The exercise price per was calculated by dividing $3,000,000 by the total number of issued and outstanding
shares of common stock as of June 13, 2024.
The Purchase Agreement contains certain representations,
warranties, covenants and events of default. The Closing occurred following the satisfaction of customary closing conditions.
The foregoing description
of the Purchase Agreement and Common Stock Purchase Warrant does not purport to be complete and is qualified in its entirety by the full
text of the Purchase Agreement and Common Stock Purchase Warrant, which are filed as Exhibits 10.1 and 4.1 hereto, respectively, and incorporated
by reference herein.
Item 8.01 Other Events
On May 18, 2023, our board of directors and majority
shareholder approved giving the board of directors discretionary authority for a period of one year to file a certificate of change to
our articles of incorporation to conduct a reverse split of our issued and outstanding shares of our common stock by a ratio of not less
than 1-for-2,000 and not more than 1-for-20,000.
On April 22, 2024, our board of directors
approved a reverse split of our common stock at the ratio of 1-for-2,000. We have submitted an application with FINRA for the
reverse split and it is currently under review. We have not yet received a market effective date for the reverse split. Our board of
directors has the authority to abandon the reverse split at any time before the market effective date.
Item 9.01 Financial Statements and Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AB International Group Corp.
/s/ Chiyuan Deng
Chiyuan Deng
President
Date: June 13, 2024
COMMON STOCK PURCHASE AGREEMENT
This Common
Stock Purchase Agreement (this “Agreement”), dated as of the Execution Date, by and between AB International
Group Corp., a Nevada corporation (the “Company”), and Alumni Capital LP, a Delaware limited partnership
(the “Investor”).
RECITALS
WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Investor, and the Investor wishes to
buy from the Company, up to $5,000,000 of shares (the “Shares”) of common stock, $0.001 par value per share,
of the Company (the “Common Stock”); and
WHEREAS,
such sales of Common Stock by the Company to the Investor will be made in reliance upon the provisions of Section 4(a)(2) of the Securities
Act and/or Rule 506(b) of Regulation D, and upon such other exemption from the registration requirements of the Securities Act as may
be available with respect to any or all of the issuances and sales of Common Stock by the Company to the Investor to be made hereunder.
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 the Investor hereby agree as follows:
ARTICLE
I
CERTAIN DEFINITIONS
Section
1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings specified or indicated
(such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Affiliate”
shall mean, with respect to a Party, any individual, a corporation or any other legal entity, directly or indirectly, controlling, controlled
by or under common control with such Party. For purpose of this definition, the term “control,” as used with respect
to any corporation or other entity, means
(a) direct or indirect ownership
of fifty percent (50%) or more of the securities or other ownership interests representing the equity voting stock or general partnership
or membership interest of such corporation or other entity or (b) the power to direct or cause the direction of the management or policies
of such corporation or other entity, whether through the ownership of voting securities, by contract or otherwise.
“Agreement” shall
have the meaning specified in the preamble hereof.
“Average
Daily Trading Volume” shall mean the average daily trading volume of the Common Stock on the Principal Market over the most
recent five (5) Business Days prior to the respective Purchase Notice Date, as reported by Bloomberg.
“Bankruptcy
Law” shall mean Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.
“Beneficial Ownership Limitation”
shall have the meaning specified in Section 8.2(f).
“Bloomberg” shall mean Bloomberg,
L.P.
“Brokerage
Account of Investor” shall mean the brokerage account (and related information) provided by the Investor for the delivery
of the shares of Common Stock issued pursuant to this Agreement.
“Business Day”
shall mean a day on which the Principal Market shall be open for business.
“Common Stock”
shall have the meaning set forth in the Recitals.
“Clearing
Costs” shall mean all of the Investor’s broker and Transfer Agent costs with respect to the deposit of the Purchase
Notice Securities.
“Closing”
shall mean any one of the closings of a purchase and sale of Purchase Notice Securities pursuant to Section 2.3(c).
“Closing Date”
shall mean the date on which a Closing occurs, which shall occur no later than five
(5) Business
Days after delivery of a Purchase Notice and the corresponding Purchase Notice Securities. “Commitment Amount”
shall mean $5,000,000.
“Commitment
Period” shall mean the period commencing on the Execution Date and ending on the earlier of (i) June 30, 2025, or (ii) the
date on which the Investor shall have purchased Purchase Notice Securities pursuant to this Agreement for an aggregate purchase price
of the Commitment Amount.
“Company” shall
have the meaning specified in the preamble to this Agreement.
“Current Report” has the meaning
set forth in Section 6.2.
“Custodian”
shall mean any receiver, trustee, assignee, liquidator, or similar official under any Bankruptcy Law.
“Damages”
shall mean any loss, claim, damage, liability, cost, and expense (including, without limitation, reasonable attorneys’ fees and
disbursements and costs and expenses of expert witnesses and investigation).
“Dispute Submission Deadline” shall
have the meaning set forth in Section 10.16(a).
“DRS” shall
mean the DTC’s Direct Registration System.
“DRS
Eligible” shall mean that (a) the Shares are eligible at DTC for full services pursuant to DTC’s operational arrangements,
including, without limitation, transfer through DTC’s DRS system, (b) the Company has been approved (without revocation) by the
DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Purchase Notice Securities
and Warrant Shares are otherwise eligible for delivery via DRS, and (e) the Transfer Agent does not have a policy prohibiting or limiting
delivery of the Purchase Notice Securities and Warrant Shares, as applicable, via DRS.
“DRS
Shares” shall mean Shares that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction
on resale, and (iii) timely credited by the Company to the Investor’s or its designee’s specified DRS account with DTC under
the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the same function.
“DTC”
shall mean The Depository Trust Company, or any successor performing substantially the same function for the Company.
“DTC/FAST Program”
shall mean the DTC’s Fast Automated Securities Transfer Program.
“DWAC” shall
mean Deposit Withdrawal at Custodian as defined by the DTC.
“DWAC
Eligible” shall mean that (a) the Shares are eligible at DTC for full services pursuant to DTC’s operational arrangements,
including, without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the
DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Purchase Notice Securities
and Warrant Shares are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting
delivery of the Purchase Notice Securities and Warrant Shares, as applicable, via DWAC.
“DWAC
Shares” shall mean Shares that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction
on resale, and (iii) timely credited by the Company to the Investor’s or its designee’s specified DWAC account with DTC under
the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the same function.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Cap”
shall have the meaning set forth in Section 8.2(g).
“Execution
Date” shall mean the date of the last signature of this Agreement, having been signed by the Company and the Investor.
“FINRA” shall
mean the Financial Industry Regulatory Authority, Inc.
“Future SEC Documents” shall have
the meaning set forth in Section 8.2(k).
“Floor
Price” means $0.01, which shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock
split or other similar transaction and, effective upon the consummation of any such reorganization, recapitalization, non-cash dividend,
stock split or other similar transaction, the “Floor Price” shall mean the lower of (i) such adjusted price
and (ii) $0.01.
“Indemnified Party” shall have
the meaning set forth in Section 7.4.
“Indemnifying Party” shall have
the meaning set forth in Section 7.4.
“Initial Registration Statement”
shall have the meaning set forth in Section 7.1.
“Investor” shall
have the meaning specified in the preamble to this Agreement.
“Lien”
shall mean a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right, or other restriction.
“Material
Adverse Effect” shall mean any effect on the business, operations, properties, or financial condition of the Company that
is material and adverse to the Company and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Company to enter into and perform its obligations under any Transaction Document.
“New Registration Statement” shall
have the meaning set forth in Section 7.1.
“Party” shall
mean a party to this Agreement.
“Person”
shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
“Principal
Market” shall mean any of the national securities exchanges (i.e. NYSE, NYSE American, Nasdaq), or principal quotation systems
(i.e. OTCQX, OTCQB, OTC Pink), or other principal exchange or recognized quotation system which is at the time the principal trading platform
or market for the Common Stock.
“Purchase
Notice Amount” shall mean the product of the number of Purchase Notice Securities referenced in the Purchase Notice multiplied
by the applicable Purchase Price in accordance with Section 2.1.
“Purchase
Notice” shall mean a written notice from Company, substantially in the form of Exhibit A hereto, to the Investor
setting forth the Purchase Notice Securities which the Company requires the Investor to purchase pursuant to the terms of this Agreement.
“Purchase Notice Date” shall have
the meaning specified in Section 2.3(a).
“Purchase
Notice Limitation” shall mean the lesser of (i) $250,000 or (ii) three hundred percent (300%) of the Average Daily Trading
Volume during the five Business Days prior to a Purchase Notice.
“Purchase
Notice Securities” shall mean all Common Stock that the Company shall be entitled to issue as set forth in all Purchase
Notices in accordance with the terms and conditions of this Agreement.
“Purchase
Price” shall mean the lowest daily VWAP of the Common Stock on the Principal Market during the five (5) Business Days prior
to the Closing Date with respect to a Purchase Notice, as reported by Bloomberg, multiplied by seventy percent (70%).
“Registration
Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification and filing fees (including fees with respect to filings required to be made with FINRA, and
any fees of the securities exchange or automated quotation system on which the Shares are then listed or quoted), printing expenses, escrow
fees, fees and disbursements of counsel for the Company, counsel for the Investor, blue sky fees and expenses (including reasonable fees
and disbursements of counsel for the Investor in connection with blue sky compliance), and any fees and disbursements of accountants retained
by the Company incident to or required by any such registration.
“Registration Statement” shall
have the meaning specified in Section 7.1.
“Registrable
Securities” shall mean (i) the Purchase Notice Securities, (ii) the Warrant Shares, and (iii) any other equity security
of the Company issued or issuable with respect to any such Securities by way of a stock dividend or stock split or in connection with
a combination of shares, capitalization, merger, consolidation or reorganization; provided, however, that, as to any particular
Registrable Security, such securities shall cease to be Registrable Securities when: (1) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed
of, or exchanged in accordance with such registration statement; (2) such securities shall have ceased to be outstanding; (3) such securities
have been sold pursuant to Rule 144 promulgated under the Securities Act; or (4) such securities have been sold to, or through, a broker,
dealer or underwriter in a public distribution or other public securities transaction.
“Regulation D”
shall mean Regulation D promulgated under the Securities Act.
“Rule
144” shall mean Rule 144 under the Securities Act or any similar provision then in force under the Securities Act.
“Required Dispute Documentation”
shall have the meaning set forth in Section 10.16(a).
“SEC” shall mean
the United States Securities and Exchange Commission.
“SEC Documents” shall have the
meaning specified in Section 4.5.
“Securities”
shall mean the Purchase Notice Securities, the Warrants and any other securities to be issued to the Investor pursuant to the terms of
this Agreement.
“Securities
Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Equivalents” shall mean any securities of the Company entitling 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.
“Subsidiary”
shall mean any Person that the Company wholly owns or controls, or in which the Company, directly or indirectly, owns a majority of the
voting stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated
under the Securities Act.
“Transaction Documents” shall
mean this Agreement, the Warrant and all exhibits hereto and
thereto.
“Transfer
Agent” shall mean the current transfer agent of the Company, and any successor transfer agent of the Company.
“VWAP”
shall mean, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if
the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market
on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time,
as determined by the Investor or, if the foregoing does not apply, the dollar volume-weighted average price of such security in any principal
quotation system operated by OTC Markets Group Inc. or other principal exchange or recognized quotation system which is at the time the
principal trading platform or market for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m.,
New York time, as determined by the Investor, or, if no dollar volume-weighted average price is reported, the average of the highest closing
bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such
security on such date shall be the fair market value as mutually determined by the Company and the Investor. If the Company and the Investor
are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures
in Section 10.16. All such determinations shall be appropriately adjusted for any share dividend, share split, share combination,
recapitalization, or other similar transaction during such period.
ARTICLE II
PURCHASE AND SALE OF SECURITIES
Section
2.1 Purchase Notices. Subject to the conditions set forth herein, at any time during the Commitment Period, the Company shall
have the right, but not the obligation, to direct the Investor, by its delivery to the Investor of a Purchase Notice from time to time,
to purchase, and the Investor shall have the obligation to purchase from the Company, the number of Purchase Notice Securities set forth
on the Purchase Notice at the Purchase Price up to the Commitment Amount, provided that (i) the amount of Purchase Notice Securities
shall not exceed the Purchase Notice Limitation or the Beneficial Ownership Limitation set forth in Section 8.2(f), (ii) the Company
may not deliver a Purchase Notice if the VWAP of the Common Stock during the 5 Business Days immediately preceding the Purchase Notice
Date is less than the Floor Price unless waived upon mutual agreement between Investor and Company, and (iii) the Company may not deliver
a subsequent Purchase Notice until the successful Closing of an active Purchase Notice, except if waived by the Investor in writing.
Section 2.2 [Reserved]
Section 2.3 Deliveries;
Closing.
(a)
Purchase Notice Delivery. In accordance with Section 2.1 and subject to the satisfaction of the conditions set forth
in Section 8.2, the Company shall deliver the Purchase Notice Securities as DWAC Shares or DRS Shares to the Investor pursuant
to Section 2.3(b) alongside the delivery of each Purchase Notice by email at the Investor’s email address set forth in Section
10.17 and by overnight courier at the Investor’s address set forth in Section 10.17. A Purchase Notice shall be deemed
delivered on (i) the Business Day that both the Purchase Notice Securities are received and the Purchase Notice has been received by email
by the Investor if both conditions are met on or prior to 8:00 a.m. New York time or (ii) the next Business Day if the conditions are
met after 8:00 a.m. New York time on a Business Day or at any time on a day which is not a Business Day (the “Purchase Notice
Date”).
(b)
Delivery of Purchase Notice Securities. No later than 8:00 a.m. New York time on the Purchase Notice Date, the Company shall
deliver the Purchase Notice Securities as DWAC Shares or DRS Shares to the Investor. Notwithstanding any other term of this Agreement,
in the event that the Investor is unable to deposit any Purchase Notice Securities or other securities issued pursuant to this Agreement
into the Brokerage Account of investor on the same day of receipt thereof, the related Purchase Notice and securities shall be void ab
initio (a “Deposit Failure”). The Investor will promptly provide written notice to the Company of the Deposit Failure, and
the Company will immediately take all necessary and required actions under applicable laws to rescind the issuance of such Securities
and return any and all funds received by the Investor in consideration thereof, as it is expressly understood by the parties that unless
the Investor is able to successfully deposit the Securities into the Brokerage Account of Investor the Company’s obligation to deliver
the Securities on the Purchase Notice Date has not been satisfied.
(c)
Closing. The Investor shall pay to the Company the Purchase Notice Amount with respect to the applicable Purchase Notice
as full payment for such Purchase Notice Securities purchased by the Investor under the applicable Purchase Notice via wire transfer of
immediately available funds as set forth below on the Closing Date. The Company shall not issue any fraction of a share of Common Stock
pursuant to any Purchase Notice. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall
round such fraction of a share of Common Stock up or down to the nearest whole Share. All payments made under this Agreement shall be
made in lawful money of the United States of America by wire transfer of immediately available funds to such account as the Company may
from time to time designate by written notice in accordance with the provisions of this Agreement. Whenever any amount or issuance of
Common Stock expressed to be due by the terms of this
Agreement is due on any day that is not
a Business Day, the same shall instead be due on the next succeeding day that is a Business Day.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF INVESTOR
The Investor represents and warrants the
following to the Company:
Section
3.1 Intent. The Investor is entering into this Agreement and purchasing the Securities for its own account, and not as nominee
or agent, for investment purposes and not with a view towards, or for a sale in connection with, a “distribution” (as such
term is defined in the Securities Act), and the Investor has no present arrangement (whether or not legally binding) at any time to sell
the Securities to or through any Person in violation of the Securities Act or any applicable state securities laws; provided, however,
that the Investor reserves the right to dispose of the Securities at any time in accordance with federal and state securities laws applicable
to such disposition.
Section
3.2 No Legal Advices From The Company. The Investor acknowledges that it has had the opportunity to review this Agreement and
the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely
on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal,
tax, or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any
jurisdiction.
Section
3.3 Accredited Investor. The Investor is an “accredited investor” (as such term is defined in Rule 501(a)(3) of
Regulation D), and the Investor has such experience in business and financial matters that it is capable of evaluating the merits and
risks of an investment in the Securities. The Investor acknowledges that an investment in the Securities is speculative and involves a
high degree of risk.
Section
3.4 Authority. The Investor has the requisite power and authority to enter into and perform its obligations under the Transaction
Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of the Transaction Documents
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no
further consent or authorization of the Investor is required. The Transaction Documents to which it is a party has been duly executed
by the Investor, and when delivered by the Investor in accordance with the terms hereof, will constitute the valid and binding obligation
of the Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating
to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
Section
3.5 Not An Affiliate. The Investor is not an officer, director, or “affiliate” (as that term is defined in Rule
405 of the Securities Act) of the Company.
Section
3.6 Organization and Standing. The Investor is an entity duly formed, validly existing, and in good standing under the laws
of the State of Delaware with full right and limited partnership or similar power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents.
Section
3.7 Absence of Conflicts. The execution and delivery of the Transaction Documents and the consummation of the transactions
contemplated hereby and thereby and compliance with the requirements hereof and thereof, will not (a) violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Investor, (b) violate any provision of any indenture, instrument
or agreement to which the Investor
is a party or is subject, or by which the Investor or any of its assets is bound, or conflict with or constitute a material default thereunder,
(c) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute
a breach of any fiduciary duty owed by the Investor to any third party, or (d) require the approval of any third-party (that has not been
obtained) pursuant to any material contract, instrument, agreement, relationship or legal obligation to which the Investor is subject
or to which any of its assets, operations or management may be subject.
Section 3.8
Disclosure; Access to Information. The Investor has had an opportunity to review copies of the SEC Documents filed on behalf
of the Company and has had access to all publicly available information with respect to the Company. The Investor understands that its
investment in the Securities involves a high degree of risk. The Investor is able to bear the economic risk of an investment in the Securities
including a total loss. The Investor has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Securities. The Investor understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering
of the Securities.
Section
3.9 Manner of Sale. At no time was the Investor presented with or solicited by or through any leaflet, public promotional meeting,
television advertisement or any other form of general solicitation or advertising.
Section
3.10 No Prior Short Selling. At no time prior to the Execution Date has any of the Investor, its agents, representatives or
affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is
defined in Section 242.200 of Regulation SHO of the Exchange Act) of the Securities or (ii) hedging transaction, which establishes a net
short position with respect to the Securities or any other Company’s securities.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as
set forth in the SEC Documents, the Company represents and warrants the following to the Investor, as of the Execution Date and as of
the date of each Closing:
Section
4.1 Organization of the Company. The Company is an entity duly organized, validly existing and in good standing under the laws
of the State of Nevada, with the requisite power and authority to own and use its properties and assets and to carry on its business as
currently conducted. The Company is not in violation or default of any of the provisions of its organizational or charter documents. The
Company is duly qualified to conduct business and is in good standing as a foreign company 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 a Material Adverse Effect and no proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or
qualification. The Company has Subsidiaries as disclosed in the SEC Documents.
Section 4.2
Authority. The Company has the requisite corporate power and authority to enter into and perform its obligations under the
Transaction Documents. The execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of
the Company or its Board of Directors or stockholders is required. The Transaction
Documents have been duly executed
and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting
generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
Section 4.3
Capitalization. As of the Execution Date, the Company is authorized to issue 10,000,000,000 of shares of Common Stock, of which
2,332,226,432 shares are issued and outstanding. The Company has not issued any securities since its most recently filed periodic report
under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the
issuance of securities to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or
exercise of Share 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 in the SEC Documents and this Agreement, 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 securities, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to issue additional securities or Share Equivalents. The issuance
and sale of the Securities will not obligate the Company to issue other securities to any Person (other than the Investor) and will not
result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.
There are no stockholders 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 stockholders.
Section 4.4 [Reserved].
Section
4.5 SEC Documents; Disclosure. 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) thereof, for the one (1)
year 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, being collectively referred to herein as the
“SEC Documents”) on a timely basis or has received a valid extension of such time of filing and has filed any
such SEC Documents prior to the expiration of any such extension. As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules, and regulations
applicable to such SEC Documents, and none of the SEC Documents 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 light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form and
substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other
applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated in such financial
statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes or may
be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of 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). 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
the Investor or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information.
The Company understands and confirms that the Investor will rely on the foregoing representation in effecting transactions in securities
of the Company.
Section
4.6 Valid Issuances. 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 non-assessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents. Assuming the accuracy of the representations of the Investor in Article
III of this Agreement and subject to the filings described in Section 4.7 of this Agreement, the Securities will be issued
in compliance with all applicable federal and state securities laws.
Section
4.7 No Conflicts. The execution, delivery, and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Purchase Notice
Securities, the Warrant and Warrant Shares, do not and will not (a) result in a violation of the Company’s certificate or articles
of incorporation, by-laws or other organizational or charter documents, (b) conflict with, or constitute a material default (or an event
that with notice or lapse of time or both would become a material default) under, result in the creation of any Lien upon any of the properties
or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture,
instrument or any “lock-up” or similar provision of any underwriting or similar agreement to which the Company is a party,
or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected (except
for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect) nor is the Company otherwise in violation of, conflict with or in default under any of the
foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity,
except for possible violations that either singly or in the aggregate do not and will not have a Material Adverse Effect. The Company
is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under the
Transaction Documents (other than (i) any SEC or state securities filings that may be required to be made by the Company in connection
with the execution of this Agreement or the issuance of Securities pursuant hereto, or (ii) the filing of a Listing of Additional Shares
Notification Form with the Principal Market, which, in each case, have been made or will be made in a timely manner); provided that, for
purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations
and agreements of the Investor herein.
Section
4.8 No Material Adverse Effect. No event has occurred that would have a Material Adverse Effect on the Company that has not
been disclosed in the SEC Documents.
Section
4.9 Litigation and Other Proceedings. Except as disclosed in the SEC Documents, there are no material actions, suits, investigations,
SEC inquiries, FINRA inquiries, NASDAQ inquiries, or similar proceedings (however any governmental agency may name them) pending or, to
the actual knowledge of the Company, threatened against or affecting the Company or its properties, nor has the Company received any written
or oral notice of any such action, suit, proceeding, SEC inquiry, FINRA inquiry, NASDAQ inquiry or investigation, which would have a Material
Adverse Effect. No judgment, order, writ, injunction or decree or award against the Company has been issued by or, to the actual knowledge
of the Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect. There has not been,
and to the actual knowledge of the Company, there is no pending investigation by the SEC involving the Company or any current officer
or director of the Company.
Section
4.10 Acknowledgment Regarding Investor’s Purchase of Securities. Based solely on the Investor’s representations
and warranties, the Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser
with respect to this Agreement and the transactions contemplated hereby and thereby and that the Investor is not (i) an officer or director
of the Company, or (ii) an “affiliate” (as defined in Rule 144) of the Company. The Company further acknowledges that the
Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement
and the transactions contemplated hereby and thereby, and any advice given by the Investor or any of its representatives or agents in
connection with this Agreement and the transactions contemplated hereby and thereby is merely incidental to the Investor’s purchase
of the Purchase Notice Securities. The Company further represents to the Investor that the Company’s decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and its representatives.
Section
4.11 No General Solicitation. Neither the Company, nor any Person acting on its behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale
of the Securities.
Section
4.12 No Integrated Offering. None of the Company, its Affiliates, and any Person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings for purposes of any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company
are listed or designated, but excluding stockholder consents required to authorize and issue the Securities or waive any anti-dilution
provisions in connection therewith.
Section
4.13 Placement Agent; Other Covered Persons. The Company has not engaged any Person to act as a placement agent, underwriter,
broker, dealer, or finder in connection with the sale of the Securities hereunder. The Company is not aware of any Person that has been
or will be paid (directly or indirectly) remuneration for solicitation of the Investor in connection with the sale of any Securities.
Section
4.14 Registration Statement. At the time of the filing of the Registration Statement, New Registration Statement, or any amendment
thereto, the Company shall have no knowledge of any untrue statement (or alleged untrue statement) of a material fact in the Registration
Statement or New Registration Statement, as the case may be, or omission (or alleged omission) of 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, and there
shall be no such untrue statement of material fact or omission in any effective registration statement filed or any post-effective amendment
or prospectus which is a part of the foregoing.
Section
4.15 Exemption from Registration. Subject to, and in reliance on, the representations, warranties and covenants made herein
by the Investor, the offer and sale of the Shares and Warrant in accordance with the terms and conditions of this Agreement is exempt
from the registration requirements of the Securities Act pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D. No “bad
actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) promulgated by the SEC under the Securities Act (a “Disqualification
Event”) is applicable to the Company or, to the Company’s knowledge, any Company Covered Person (as defined below),
except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3) is applicable. “Company Covered Person”
means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated by the SEC under the Securities Act,
any person or entity listed in the first paragraph of Rule 506(d)(1).
Section 4.16 Manipulation
of Price. Neither the Company nor any of its officers, directors or
Affiliates has, and, to the knowledge
of the Company, no Person acting on their behalf has, (i) taken, directly or indirectly, any action designed or intended to cause or to
result in the stabilization or manipulation of the price of any security of the Company, or which caused or resulted in, or which would
in the future reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company,
in each case 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. Neither the Company nor any of its officers, directors or Affiliates will during the term of this Agreement,
and, to the knowledge of the Company, no Person acting on their behalf will during the term of this Agreement, take any of the actions
referred to in the immediately preceding sentence
Section 4.17
Dilutive Effect. The Company is aware and acknowledges that issuance of the Shares could
cause dilution to existing stockholders and could significantly increase the outstanding number of shares of Common Stock. The
Company further acknowledges that its obligation to issue the Shares to be purchased by the Investor pursuant to a Purchase is, upon the
Company’s delivery to the Investor of a Purchase Notice for a Purchase in accordance with this Agreement, absolute and unconditional
following the delivery of such Purchase Notice to the Investor, regardless of the dilutive effect that such issuance may have on the ownership
interests of other stockholders of the Company
Section
4.18 OFAC. Neither the Company nor any of its Subsidiaries, nor to the Company’s knowledge, any director, officer,
employee, agent, Affiliate or representative of the Company, is a Person that is, or is owned or controlled by a Person that is (i)
the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control,
the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority
(collectively, “Sanctions”), nor (ii) located, organized or resident in a country or territory that is the
subject of Sanctions (including, without limitation, Crimea, Cuba, Iran, North Korea, Sudan and Syria). Neither the Company nor any
of its Subsidiaries will knowingly, directly or indirectly, use the proceeds from the sale of Shares under this Agreement, or lend,
contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person (a) to fund or
facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions, or (b) in any other manner that will result in a violation of Sanctions by any Person
(including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise). For the past five
years, neither the Company nor any of its Subsidiaries have knowingly engaged in, or are now knowingly engaged in, any dealings or
transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject
of Sanctions.
ARTICLE
V
COVENANTS OF INVESTOR
Section
5.1 Short Sales and Confidentiality. During the period from the Execution Date to the end of the Commitment Period, neither
the Investor, nor any Affiliate of the Investor acting on its behalf or pursuant to any understanding with it, shall execute (i) any “short
sale” (as such term is defined in Section 242.200 of Regulation SHO of the Exchange Act) of the Securities or (ii) hedging transaction
which establishes a net short position with respect to the Securities or any other Company’s securities. For the purposes hereof,
and in accordance with Regulation SHO, the sale after delivery of the Purchase Notice of such number of Securities reasonably expected
to be purchased under the Purchase Notice shall not be deemed a short sale. The Investor shall, until such time as the transactions contemplated
by the Transaction Documents are publicly disclosed by the Company in accordance with the terms of the Transaction Documents, maintain
the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents.
Section
5.2 Compliance with Law; Trading in Securities. The Investor’s trading activities with respect to the Securities shall
be in compliance with all applicable state and federal securities laws and regulations and the rules and regulations of the Principal
Market.
ARTICLE
VI
COVENANTS OF THE COMPANY
Section
6.1 Listing of Shares. The Company shall use its commercially reasonable efforts to continue the listing or quotation and trading
of the Securities on the Principal Market (including, without limitation, maintaining sufficient net tangible assets, if required) and
will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Principal
Market.
Section
6.2 Filing of Current Report. The Company agrees that it shall file a Current Report on Form 8-K, including the Transaction
Documents as exhibits thereto, with the SEC within the time required by the Exchange Act, relating to the execution of the transactions
contemplated by, and describing the material terms and conditions of, the Transaction Documents (the “Current Report”).
The Company shall permit the Investor to review and comment upon the final pre-filing draft version of the Current Report at least two
(2) Business Days prior to its filing with the SEC, and the Company shall give reasonable consideration to all such comments. The Investor
shall use its reasonable best efforts to comment upon the final pre-filing draft version of the Current Report within one (1) Business
Day from the date the Investor receives it from the Company.
Section
6.3 Issuance of Warrant. In consideration for the Investor’s execution and delivery of, and performance under, this Agreement,
the Company shall, on the Execution Date, issue and deliver to the Investor a warrant, valid for a term of five (5) years, entitling the
Investor to purchase shares of Common Stock with a value equal to fifty percent (50%) of the Commitment Amount divided by the Exercise
Price (as defined in the Warrant), which is based on a Company valuation of three million dollars ($3,000,000) in the from attached hereto
as Exhibit B (the “Warrant”). The shares of Common Stock underlying the Warrant which the Warrant are
exercisable for are referred to herein as “Warrant Shares.”
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1 Registration.
(a)
The Company shall, not later than thirty (30) days after the Execution Date, prepare and file with the SEC a registration statement,
on Form S-1, and take all such other actions as are necessary to ensure that there is an effective registration statement containing a
prospectus that remains current covering (and to qualify under required U.S. state securities laws, if any) the resales of all Registrable
Securities by the Investor on a continuous basis pursuant to Rule 415 (the “Initial Registration Statement”).
The Company shall use best efforts to cause the SEC to declare the Initial Registration Statement effective as soon as possible thereafter
but in any event within 90 days after the Execution Date, and to remain effective and the prospectus contained therein current until the
Investor ceases to hold Registrable Securities. The Initial Registration Statement shall provide for any method or combination of methods
of resale of Registrable Securities legally available to, and requested by, the Investor, and shall comply with the relevant provisions
of the Securities Act and Exchange Act. .
(b)
Notwithstanding the registration obligations set forth in Section 7.1(a), if the SEC informs the Company that all of the
Registrable Securities cannot, as a result of the application of Rule 415,
be registered for resale as a secondary
offering on a single registration statement, the Company agrees to promptly inform the Investor and use its commercially reasonable efforts
to file amendments to the Initial Registration Statement or a new registration statement (a “New Registration Statement”)
as required by the SEC, covering the maximum number of Registrable Securities permitted to be registered by the SEC, on Form S-1 or such
other form available to register for resale the Registrable Securities as a secondary offering, subject to the provisions of Section
7.1(a); provided, however, that prior to filing such amendment, the Company shall be obligated to use diligent efforts
to advocate with the SEC for the registration of all of the Registrable Securities in accordance with the Securities Act, the rules and
regulations promulgated thereunder, publicly-available written or oral guidance of the SEC staff, and any comments, requirements, or requests
of the SEC staff.
(c)
If the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, in accordance
with Section 7.1(b) above the foregoing, the Company will use its best efforts to file with the SEC, as promptly as possible, one
or more registration statements on Form S-1 or such other form available to register for resale those Registrable Securities that were
not registered for resale on the initial Registration Statement, as amended. The Initial Registration Statement, a New Registration Statement,
and any other registration statements pursuant to which the Company seeks to register for resale any Registrable Securities shall each
be referred to herein as a “Registration Statement” and collectively as the “Registration Statements.”
(d)
In no event shall the Company include any securities other than Registrable Securities on any Registration Statement without consulting
the Investor and receiving the written consent of the Investor, prior to filing such Registration Statement with the SEC.
Section 7.2 Expenses
of Registration. All Registration Expenses incurred in connection with registration pursuant to this Article VII shall
be borne by the Company.
Section
7.3 Registration Procedures. In the case of each registration of Registrable Securities effected by the Company pursuant to
this Article VII, the Company will keep the Investor advised in writing as to the initiation of each registration and as to the
completion thereof. At its sole expense, the Company will do the following:
(a)
Prepare each Registration Statement, including all exhibits and financial statements required under the Securities Act to be filed
therewith, and before filing such Registration Statement, any prospectus or any amendments or supplements thereto, furnish to the Investor
copies of all documents prepared to be filed, which documents shall be subject to the review of the Investor and its counsel;
(b)
As soon as reasonably practicable, file with the SEC the Registration Statement relating to the Registrable Securities, including
all exhibits and financial statements required by the SEC to be filed therewith, and use its best efforts to cause such Registration Statement(s)
to become effective under the Securities Act as soon as practicable;
(c)
Prepare and file with the SEC such amendments, post-effective amendments, and supplements to such Registration Statement and the
prospectus used in connection with such Registration Statement as may be requested by the Investor or as may be necessary to keep such
Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable
Securities covered by such Registration Statement;
(d)
Notify the Investor, and confirm such notice in writing and provide copies of the relevant documents, as soon as reasonably practicable
after notice thereof is received by the Company
(i) when the applicable Registration
Statement or any amendment thereto has been filed or becomes effective, and when the applicable prospectus or any amendment or supplement
to such prospectus has been filed, (ii) of any written comments by the SEC or any request by the SEC or any other federal or state governmental
authority for amendments or supplements to such Registration Statement, prospectus or for additional information (whether before or after
the effective date of the Registration Statement), (iii) of the issuance by the SEC of any stop order suspending the effectiveness of
such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary
or final prospectus or the initiation or threatening of any proceedings for such purposes, and (iv) of the receipt by the Company of any
notification with respect to the suspension of any Registrable Securities for offering or sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(e)
Furnish such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any
amendment of or supplement to the prospectus, as the Investor (or its counsel) from time to time may reasonably request;
(f)
Register and qualify the securities covered by such Registration Statement under such other securities or blue sky laws of such
jurisdictions as shall be reasonably requested by the Investor; provided, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or
jurisdictions where it would not otherwise be required to qualify or when it is not then otherwise subject to service of process;
(g)
Notify each seller of Registrable Securities covered by such Registration Statement at any time when a prospectus relating thereto
is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances under
which they were made, and following such notification promptly prepare and file a post-effective amendment to such Registration Statement
or a supplement to the related prospectus or any document incorporated therein by reference, and file any other required document that
would be incorporated by reference into such Registration Statement and prospectus, so that such Registration Statement does 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 that such prospectus does not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading, and, in the case of a post-effective amendment to a Registration Statement, use best efforts to cause it to be declared
effective as promptly as is reasonably practicable, and give to the Investor a written notice of such amendment or supplement, and, upon
receipt of such notice, the Investor agrees not to sell any Registrable Securities pursuant to such Registration Statement until the Investor’s
receipt of copies of the supplemented or amended prospectus or until it receives further written notice from the Company that such sales
may re-commence;
(h)
Use its best efforts to prevent, or obtain the withdrawal of, any order suspending the effectiveness of any Registration Statement
(and promptly notify in writing the Investor covered by such Registration Statement of the withdrawal of any such order);
(i)
Provide a transfer agent or warrant agent, as applicable, and registrar for all Registrable Securities registered pursuant to such
Registration Statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such
registration;
(j)
If requested, cooperate with the Investor to facilitate the timely preparation and delivery of certificates or establishment of
book entry notations representing Registrable Securities to be
sold and not bearing any restrictive
legends, including without limitation, procuring and delivering any opinions of counsel, certificates, or agreements as may be necessary
to cause such Registrable Securities to be so delivered;
(k)
Cause all such Registrable Securities registered hereunder to be listed on each securities exchange or automated quotation system
on which similar securities issued by the Company are then listed;
(l)
Promptly identify to the Investor any underwriter(s) participating in any disposition pursuant to such Registration Statement and
any attorney or accountant or other agent retained by any such underwriter or selected by the Investor, make available for inspection
by the Investor all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s
officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter,
attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such Registration
Statement and to conduct appropriate due diligence in connection therewith;
(m)
Reasonably cooperate, and cause each of its principal executive officer, principal financial officer, principal accounting officer,
and all other officers and members of the management to fully cooperate in any offering of Registrable
Securities hereunder, which cooperation shall include, without limitation, assisting with the preparation of any Registration Statement
or amendment thereto with respect to such offering and all other offering materials and related documents, and participation in meetings
with underwriters, attorneys, accountants and potential stockholders;
(n)
Otherwise use its best efforts to comply with all applicable rules and regulations of the SEC and make available to its stockholders
an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities
Act or any successor rule thereto) no later than thirty (30) days after the end of the 12-month period beginning with the first day of
the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall
cover said 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information
on Forms 10-K, 10-Q and 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act or any successor rule
thereto;
(o)
Reasonably cooperate with the Investor and each underwriter or agent, if any, participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required to be made with FINRA, and use its best efforts to make
or cause to be made any filings required to be made by an issuer with FINRA in connection with the filing of any Registration Statement;
(p)
If requested by the Investor, the Company shall as soon as practicable (i) incorporate in a prospectus supplement or post-effective
amendment such information as the Investor reasonably requests to be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the
purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii)
make all required filings of such prospectus supplement or post- effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably
requested by the Investor;
(q)
Take all reasonable action to ensure that any “free writing prospectus” (as defined in the Securities Act) utilized
in connection with any registration covered by Article VII complies in all
material respects with the Securities
Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act
to the extent required thereby and, when taken together with the related prospectus, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading; and
(r)
Take all such other reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such
Registrable Securities.
Section 7.4 Indemnification.
(a)
To the extent permitted by law, the Company will indemnify and hold harmless the Investor, and each stockholder, member, limited
or general partner thereof, each stockholder, member, limited or general partner of each such stockholder, member, limited or general
partner, each of their respective Affiliates, officers, directors, stockholders, employees, lawyers, advisors, and agents and each person
who controls (within the meaning of Section 15 of the Securities Act) such persons and each of their respective representatives, and each
underwriter, if any, and each person or entity who controls within the meaning of Section 15 of the Securities Act any underwriter, against
all expenses, claims, judgments, suits, costs, penalties, losses, Damages, and liabilities (or actions, proceedings, or settlements in
respect thereof) arising out of or based on any of the following: (i) any misrepresentation, breach of warranty or nonfulfillment of or
failure to perform any covenant or agreement on the part of the Company contained in this Agreement; (ii) any untrue statement (or alleged
untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular or other document (including
any related Registration Statement, notification, or the like) incident to any such registration, qualification or compliance, (iii) any
omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, or (iv) any violation (or alleged violation) by the Company of the Securities Act, any state securities laws, or any rule
or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any offering
covered by such registration, qualification or compliance, and the Company will reimburse the Investor, and each stockholder, member,
limited or general partner thereof, each stockholder, member, limited or general partner of each such stockholder, member, limited or
general partner, each of their respective Affiliates, officers, directors, stockholders, employees, lawyers, advisors, and agents and
each person who controls such persons and each of their respective Representatives, and each underwriter, if any, and each person or entity
who controls any underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending
or settling any such claim, judgment, suit, penalty, loss, damage, liability or action; provided that the Company will not be liable
in any such case to the extent that any such claim, judgment, suit, penalty loss, damage, liability, or action arises out of or is based
on any untrue statement or omission based upon written information furnished to the Company by the Investor, any of the Investor’s
Representatives, any person or entity controlling the Investor, such underwriter or any person or entity who controls any such underwriter,
and stated to be specifically for use therein; provided, further, that, the indemnity agreement contained in this Section
7.4(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably withheld). This indemnity shall be in addition to any liability
the Company may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf
of the Investor or any indemnified party and shall survive the transfer of such securities by the Investor.
(b)
To the extent permitted by law, the Investor will, if Registrable Securities held by the Investor are included in the securities
as to which such registration, qualification, or compliance is being effected, indemnify and hold harmless the Company, each of its directors,
officers, employees, partners, legal counsel and accountants and each underwriter, if any, of the Company’s securities covered by
such a
Registration Statement, each
person or entity who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, against all
claims, judgments, penalties losses, damages and liabilities (or actions in respect thereof) arising out of or based on any of the
following: (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the
part of the Investor contained in this Agreement; (ii) any untrue statement (or alleged untrue statement) of a material fact
contained or incorporated by reference in any prospectus, offering circular or other document (including any related Registration
Statement, notification, or the like) incident to any such registration, qualification or compliance made in reliance upon and in
conformity with information furnished in writing by or on behalf of the Investor expressly for use in connection with such
registration, (iii) any omission to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case made in reliance upon and in conformity with information furnished in writing by or on behalf
of the Investor expressly for use in connection with such registration, or (iv) any violation (or alleged violation) by the Company
of the Securities Act, any state securities laws, or any rule or regulation thereunder applicable to the Investor and relating to
action or inaction required of the Investor in connection with any offering covered by such registration, qualification, or
compliance, and will reimburse the Company and the Investor, directors, officers, partners, legal counsel and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue
statement or omission (i) is made in such Registration Statement, prospectus, offering circular or other document in reliance upon
and in conformity with written information furnished to the Company by the Investor and stated to be specifically for use therein
and (ii) has not been corrected in a subsequent writing prior to or concurrently with the sale of the Registrable Securities to the
person asserting the claim; provided, however, that the obligations of the Investor hereunder shall not apply to
amounts paid in settlement of any such claims, losses, damages or liabilities (or actions in respect thereof) if such settlement is
effected without the consent of the Investor (which consent shall not be unreasonably withheld); and provided that in no
event shall any indemnity under this Error! Reference source not found. exceed the aggregate Purchase Price paid by
the Investor under this A greement, except in the case of gross negligence, fraud or willful misconduct by the Investor.
(c) Each
party entitled to indemnification under this Section 7.4 (the “Indemnified Party”) shall (i) give
notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be sought (provided, that any delay or failure
to so notify the indemnifying party shall relieve the Indemnifying Party of its obligations hereunder only to the extent, if at all,
that it is actually and materially prejudiced by reason of such delay or failure), and (ii) permit the Indemnifying Party to assume
the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval
shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense unless
(w) the Indemnifying Party has agreed in writing to pay such fees or expenses, (x) the Indemnifying Party shall have failed to
assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Indemnified Party hereunder
and employ counsel reasonably satisfactory to the Indemnified Party, (y) the Indemnified Party has reasonably concluded (based upon
advice of its counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in
addition to those available to the Indemnifying Party, or (z) in the reasonable judgment of any such person (based upon advice of
its counsel) a conflict of interest may exist between such person and the Indemnifying Party with respect to such claims (in which
case, if the person notifies the Indemnifying Party in writing that such person elects to employ separate counsel at the expense of
the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of such claim on behalf of such
person). No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the
giving by the claimant
or plaintiff to such Indemnified
Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d)
If the indemnification provided for in this Section 7.4 is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party
and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of
a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or
omission. The Investor will not be required under this Section 7.4(d) to contribute any amount in excess of the aggregate Purchase
Price paid by the Investor under this Agreement, except in the case of fraud or willful misconduct by the Investor. No person or entity
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation.
(e)
The obligations of the Company and the Investor under this Section 7.4 shall survive the completion of any offering of Registrable
Securities in a registration under this Section 7.4 and otherwise shall survive the termination of this Agreement until the expiration
of the applicable period of the statute of limitations.
Section
7.5 Information by the Investor. The Investor shall furnish to the Company such information regarding the Investor and the
distribution proposed by the Investor as the Company may reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification, or compliance referred to in this Article VII.
Section
7.6 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC that may permit
the sale of the Registrable Securities to the public without registration, the Company agrees to do the following:
(a)
Make and keep adequate current public information with respect to the Company available in accordance with Rule 144 under the Securities
Act;
(b)
File with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange
Act; and
(c)
So long as the Investor owns any Registrable Securities, furnish to the Investor forthwith upon written request a written statement
by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act, or that
it qualifies as registrant whose securities may be resold pursuant to Form F-3 (at any time after the Company so qualifies), a copy of
the most recent annual or quarterly report of the Company, and such other reports and documents so filed as the Investor may reasonably
request in availing itself of any rule or regulation of the SEC allowing the Investor to sell any such securities without registration.
The Company further covenants that it shall take such further action as the Investor may reasonably request to enable the Investor to
sell from time to time
Securities held by the Investor without
registration under the Securities Act within the limitation of the exemptions provided by Rule 144, including providing any legal opinions.
Section 7.7
No Inconsistent Agreements. The Company has not entered, as of the date hereof, nor shall the Company, on or after the date
of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted
to the Investor or otherwise conflict with the provisions hereof. Unless the Company receives the consent of the Investor, the Company
shall not file any other registration statements (other than registration statements on Form S-4 or Form S-8 or any successor forms thereto)
until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the SEC.
ARTICLE
VIII
CONDITIONS TO DELIVERY
OF
PURCHASE NOTICE AND CONDITIONS TO CLOSING
Section
8.1 Conditions Precedent to the Obligation of the Company to Issue and Sell Purchase Notice Securities. The obligation of the
Company hereunder to issue and sell the Purchase Notice Securities to the Investor is subject to the satisfaction of each of the conditions
set forth below:
(a)
Accuracy of the Investor’s Representations and Warranties. The representations and warranties of the Investor shall
be true and correct in all material respects as of the Execution Date and as of the date of each Closing as though made at each such time.
(b)
Performance by the Investor. The Investor shall have performed, satisfied, and complied in all respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied, or complied with by the Investor at or prior to each
Closing.
(c)
Principal Market Regulation. The Company shall have no obligation to issue any Purchase Notice Securities, and the Investor
shall have no right to receive any Purchase Notice Securities, if the issuance of such Purchase Notice Securities would exceed the aggregate
number of Securities which the Company may issue without breaching the Company’s obligations under the rules or regulations of the
Principal Market.
Section 8.2
Conditions Precedent to the Obligation of the Investor to Purchase the Purchase Notice Securities. The obligation of the Investor
hereunder to purchase the Purchase Notice Securities is subject to the satisfaction of each of the following conditions:
(a)
Effective Registration Statement. The Registration Statement, and any amendment or supplement thereto, shall have been declared
effective and shall remain effective for the resale of the Registrable Securities at all times until the Closing with respect to the subject
Purchase Notice, the Company shall not have received notice that the SEC has issued or intends to issue a stop order with respect to such
Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily
or permanently, or intends or has threatened to do so, and no other suspension of the use of, or withdrawal of the effectiveness of, such
Registration Statement, the Prospectus, or the Prospectus Supplement shall exist. The Investor shall not have received any notice from
the Company that the Prospectus, Prospectus Supplement, and/or any prospectus supplement or amendment thereto fails to meet the requirements
of Section 5(b) or Section 10 of the Securities Act.
(b)
Accuracy of the Company’s Representations and Warranties. The representations and warranties of the Company shall
be true and correct in all material respects as of the Execution Date and as of the date of each Closing (except for representations and
warranties specifically made as of a particular date).
(c)
Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied, or complied with by the Company at or prior to such Closing.
(d)
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely
affects any of the transactions contemplated by the Transaction Documents, and no proceeding shall have been commenced that may have the
effect of prohibiting or materially adversely affecting any of the transactions contemplated by the Transaction Documents.
(e)
No Suspension of Trading in or Delisting of Shares. The trading of the Securities shall not have been suspended by the SEC
or the Principal Market, or otherwise halted for any reason, and the Securities shall have been approved for listing or quotation on and
shall not have been delisted from or no longer quoted on the Principal Market. In the event of a suspension, delisting, or halting for
any reason, of the trading of the Securities, as contemplated by this Section 8.2(e), the Investor shall have the right to return
to the Company any amount of Purchase Notice Securities associated with such Purchase Notice, and the Commitment Amount with respect to
such Purchase Notice shall be refunded accordingly.
(f)
Beneficial Ownership Limitation. The number of Purchase Notice Securities then to be purchased by the Investor shall not
exceed the number of such shares that, when aggregated with all other Securities then owned by the Investor beneficially owned (as such
term is defined under the Exchange Act) by the Investor, would result in the Investor beneficially owning more than the Beneficial Ownership
Limitation (as defined below), as determined in accordance with Section 13 of the Exchange Act. For purposes of this Section 8.2(f),
if the amount of Securities outstanding is greater or lesser on a Closing Date than on the date on which the Purchase Notice associated
with such Closing Date is given, the amount of Securities outstanding on such date of issuance of a Purchase Notice shall govern for purposes
of determining whether the Investor, when aggregating all purchases of Securities made pursuant to this Agreement, would beneficially
own more than the Beneficial Ownership Limitation following a purchase on any such Closing Date. If the Investor claims that compliance
with a Purchase Notice would result in the Investor owning more than the Beneficial Ownership Limitation, upon request of the Company,
the Investor will provide the Company with evidence of the Investor’s then existing Securities beneficially owned. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of Securities outstanding immediately prior to the issuance of Securities
issuable pursuant to a Purchase Notice, provided that, the Investor may increase the Beneficial Ownership Limitation up to 9.99% at its
sole discretion upon sixty- one (61) days prior written notice to the Company. To the extent that the Beneficial Ownership Limitation
would be exceeded in connection with a Closing, the number of Securities issuable to the Investor shall be reduced so it does not exceed
the Beneficial Ownership Limitation.
| (g) | Principal Market Regulation. [Reserved]. |
(h)
No Knowledge. The Company shall have no knowledge of any event more likely than not to have the effect of causing the effectiveness
of the Registration Statement to be suspended or the Prospectus or Prospectus Supplement failing to meet the requirement of Sections 5(b)
or 10 of the Securities Act (which event is more likely than not to occur within the fifteen (15) Business Days following the Business
Day on which such Purchase Notice is deemed delivered).
(i)
No Violation of Stockholder Approval Requirement. The issuance of the Securities shall not violate the stockholder approval
requirements of the Principal Market.
| (j) | DWAC Eligible. The Securities must be DWAC Eligible and not subject to a “DTC chill.” |
(k)
SEC Documents. All reports, schedules, registrations, forms, statements, information and other documents required to have
been filed by the Company with the SEC pursuant to the reporting requirements of the Securities Act and the Exchange Act after the Execution
Date (the “Future SEC Documents”) (1) shall have been filed with the SEC within the applicable time periods
prescribed for such filings under the Exchange Act, and (2) as of their respective dates, such Future SEC Documents complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules and regulations
applicable to such Future SEC Documents, and none of such Future SEC Documents 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, not misleading.
ARTICLE IX
LEGENDS
Section 9.1
No Restrictive Legend. No restrictive stock legend shall be placed on the share certificates representing the Purchase Notice
Securities.
Section 9.2
Investor’s Compliance. Nothing in this Article IX shall affect in any way the Investor’s obligations hereunder
to comply with all applicable securities laws upon the sale of the Securities.
ARTICLE
X
MISCELLANEOUS
Section
10.1 Force Majeure. No Party shall be liable for any failure to fulfill its obligations hereunder due to causes beyond its
reasonable control, including but not limited to acts of God, epidemic or pandemic, natural disaster, labor disturbances, terrorist attack,
riots, or wars, and any action taken, or restrictions or limitations imposed, by government or public authorities.
Section
10.2 Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware
without regard to the principles of conflicts of law.
Section
10.3 Assignment. The Transaction Documents shall be binding upon and inure to the benefit of the Company and the Investor and
their respective successors. Neither any of the Transaction Documents nor any rights of the Investor or the Company hereunder may be assigned
by either Party to any other Person.
Section
10.4 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the Company and the Investor and their respective
successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as contemplated in Section
7.4.
Section
10.5 Termination. This Agreement shall automatically terminate on the earlier of (i) the end of the Commitment Period, or (ii)
the date that, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences
a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property or the Company
makes a general assignment for the benefit of its creditors.
Section
10.6 Entire Agreement. The Transaction Documents, together with the exhibits thereto, contain the entire understanding of the
Company and the Investor with respect to the matters covered herein and therein and supersede all prior agreements and understandings,
oral or written, with respect to such matters.
Section
10.7 Fees and Expenses. Except as expressly set forth in the Transaction Documents or any other writing 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 incidental to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. Notwithstanding
the foregoing, the Parties agree that the amount of fifteen thousand dollars ($15,000), representing legal fees of the Investor for this
Agreement and the transactions related hereto, shall be deducted from the applicable Purchase Price to be paid by the Investor to the
Company for the Purchase Notice Securities, pursuant to the first Purchase Notice delivered pursuant to this Agreement.
Section 10.8
Clearing Costs. The Company shall pay the Clearing Costs associated with each Closing, and any Transfer Agent fees (including
any fees required for same-day processing of any instruction letter delivered by the Company), stamp taxes and other taxes and duties
levied on the Company in connection with the delivery of any Securities to the Investor.
Section 10.9
Counterparts and Execution. The Transaction Documents may be executed in multiple counterparts, each of which may be executed
by less than all of the Parties, all of which together will constitute one instrument, will be deemed to be an original, and will be enforceable
against the Parties. The Transaction Documents may be delivered to the other Party hereto by email of a copy of the Transaction Documents
bearing the signature of the Party so delivering the Transaction Documents. The Parties agree that this Agreement shall be considered
signed when the signature of a Party is delivered by .PDF, DocuSign or other generally accepted electronic signature. Such .PDF, DocuSign,
or other generally accepted electronic signature shall be treated in all respects as having the same effect as an original signature.
The signatories to this Agreement each represent and warrant that they are duly authorized by the Parties with the power and authority
to bind the Parties to the terms and conditions thereof.
Section
10.10 Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability
shall be ineffective if it materially changes the economic benefit of this Agreement to any Party.
Section
10.11 Further Assurances. Each Party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other Party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section
10.12 Agreement Not to be Construed Against Drafter. The Parties acknowledge that they have had an adequate opportunity to
review each and every provision contained in this Agreement and to submit the same to legal counsel for review and comment. The Parties
agree with each and every provision contained in this Agreement and agree that the rule of construction that a contract be construed against
the drafter, if any, shall not be applied in the interpretation and construction of this Agreement.
Section
10.13 Titles and Subtitles. The titles and subtitles used in this Agreement are used for the convenience of reference and
are not to be considered in construing or interpreting this Agreement.
Section
10.14 Amendments; Waivers. No provision of this Agreement may be amended other
than by a written instrument signed by both Parties hereto and no provision of this Agreement may be waived other than in a written instrument
signed by the Party against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.
Section 10.15
Publicity. The Company and the Investor shall consult with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and no Party shall issue any such press release or otherwise make any
such public statement, other than as required by law or for legal compliance, without the prior written consent of the other Party, which
consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by
law, in which case the disclosing Party shall provide the other Party with prior notice of such public statement. The Investor acknowledges
that the Transaction Documents may be deemed to be “material contracts,” as that term is defined by Item 601(b)(10) of Regulation
S-K, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under
the Securities Act or the Exchange Act. The Investor further agrees that the status of such documents and materials as material contracts
shall be determined solely by the Company, in consultation with its counsel.
Section 10.16 Dispute
Resolution.
| (a) | Average Daily Trading Volume, Purchase Notice Limit, or VWAP. |
(i)
In the case of a dispute relating to the Average Daily Trading Volume, Purchase Notice Limitation, or VWAP (as the case may be)
(including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Investor (as the
case may be) shall submit the dispute to the other Party via facsimile or electronic mail within five (5) Business Days after the Party
learned of the circumstances giving rise to such dispute. If the Investor and the Company are unable to promptly resolve such dispute
relating to such Average Daily Trading Volume, Purchase Notice Limitation, or VWAP (as the case may be), at any time after the second
(2nd) Business Day following such initial notice by the Company or the Investor (as the case may be) of such dispute to the Company or
the Investor (as the case may be), then the Company and the Investor may select an independent, reputable investment bank as mutually
agreed upon to resolve such dispute. If the Parties cannot agree upon such an investment bank within ten (10) Business Days of the date
of the initial notice, the Parties shall submit the dispute to arbitration pursuant to Section 10.16(b).
(ii)
The Investor and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the above and (B) written documentation supporting its position with respect to such dispute, in each case, no later
than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which such investment bank was selected
(the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding clauses (A) and
(B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and agreed
that if either the Investor or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline,
then the Party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its
right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such investment
bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank prior to
the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Investor or otherwise requested by
such investment bank, neither the Company nor the Investor shall be entitled to deliver or submit any written documentation or other support
to such investment bank in connection with such dispute (other than the Required Dispute
Documentation).
(iii)
The Company and the Investor shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Investor of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees
and expenses of such investment bank shall be borne by the losing Party, and such investment bank’s resolution of such dispute shall
be final and binding upon all Parties. The terms of this Agreement, each other applicable Transaction Document, and the Required Dispute
Documentation shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment
bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank
determines are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute
such investment bank shall apply such findings, determinations and the like to the terms of this Agreement and any other applicable Transaction
Documents.
(iv)
Both the Company and the Investor expressly acknowledge and agree that (i) this Section 10.16(a) constitutes an agreement
to arbitrate between the Company and the Investor (and constitutes an arbitration agreement) under § 5701, et seq. of the Delaware
Code Title 10 with respect to the dispute described in Section 10.16(a)(i) and that both the Company and the Investor are authorized
to apply for an order to compel arbitration pursuant to Delaware Code Title 10 § 5703 in order to compel compliance with this Section
10.16(a).
(b)
Jurisdiction. Subject to Section 10.16(a), each party hereby irrevocably submits that any dispute, controversy or
claim arising out of or relating to this Agreement or any Transaction Document (including whether any such dispute is arbitrable), shall
be submitted to the exclusive jurisdiction of the Chancery Court of the State of Delaware and the United States District Court for the
District of Delaware. Each party hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. 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 to such party at the address for
such 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 manner permitted by law. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY. The Company and the Investor agree that all dispute resolution proceedings in accordance with this Section 10.16
may be conducted in a virtual setting.
Section
10.17 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (a) personally served, (b) delivered by reputable air courier service
with charges prepaid for next Business Day delivery, or (c) transmitted by hand delivery, or email as a PDF (with read receipt or a written
confirmation of delivery or receipt), addressed as set forth below or to such other address as such Party shall have specified most recently
by written notice given in accordance herewith. Any notice or other communication required or permitted to be given hereunder shall be
deemed effective upon hand delivery or delivery by email at the address designated below (if delivered on a Business Day during normal
business hours where such notice is to be received), or the first Business Day following such delivery (if delivered other than on a Business
Day during normal business hours where such notice is to be received).
The addresses for such communications
shall be:
If to the Company:
Address:
144 Main Street, Mt.Kisco, NY 10549,
Telephone:
914 202 3108
E-mail: corp@abqqs.com
If to the Investor:
Address: 801 Brickell Ave., FL 8, Miami FL,
33131
Telephone: (917) 793-1173
E-mail: operations@alumnicapital.com
Either Party hereto may from time to
time change its address or email for notices under this clause by giving prior written notice of such changed address to the other party
hereto.
** Signature Page Follows **
IN WITNESS WHEREOF,
the Parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the Execution
Date.
AB
INTERATIONAL GROUP CORP.
By: /s/ Chiyuan Deng
Name: Chiyuan
Deng
Title: Chief Executive Officer
Date:
June 13, 2024
ALUMNI CAPITAL LP
By: ALUMNI
CAPITAL GP LLC
By: /s/ Ashkan Mapar
Name: Ashkan Mapar
Title: Manager
Date: June 13,
2024
NEITHER THIS SECURITY NOR THE SECURITIES
FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
WARRANT
AB
INTERNATIONAL GROUP CORP.
Warrant No. 1
Initial
Exercise Date: June 13, 2024
THIS WARRANT (the
“Warrant”) certifies that, for value received, Alumni Capital LP 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 June 13, 2024 (the “Initial Exercise Date”) and
on or prior to the close of business on the five (5) year anniversary of the Initial Exercise Date (the “Termination
Date”) but not thereafter, to subscribe for and purchase from AB International Group Corp., a Nevada corporation (the
“Company”), the Company’s Common Stock , par value $0.001,
in the amounts and the price per share as set forth in Section 2.
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Common Stock Purchase Agreement
(the “Purchase Agreement”) dated June 13, 2024, by and between the Company and the Holder.
For purposes of this Warrant, the following terms shall have
the following meanings:
“Affiliate”
means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as applied to any Person, means possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise.
“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.
“Common Stock” means the Common Stock of
the Company.
“Exercise
Date” means each date on which the Holder elects to exercise this Warrant, in whole or in part.
“Exercise
Value” means the number of Common Stock received upon an exercise of this Warrant multiplied by the Exercise Price applicable
to such exercise.
“Market
Price” means the highest traded price of the Common Stock during the one hundred and fifty (150) Trading Days prior to the date
of the respective Exercise Notice.
“Trading
Day” means a day on which the shares of Common Stock are traded on the Trading Market; provided, however, that in the event
that the shares of Common Stock are not listed or quoted on the Trading Market, then Trading Day shall mean any day except Saturday, Sunday
and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or State of Delaware are authorized
or required by law or other government action to close.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, or the OTC Markets QB Tier (or any successors to any of the foregoing).
Section 2. Exercise.
a)
Exercise of Warrants. Exercise of the purchase rights for Warrant Shares 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 (or such other office or agency of the Company as it may designate by notice in writing to the registered
Holder at the address of the Holder appearing on the books of the Company) of a duly executed Notice of Exercise in the form annexed hereto
as Exhibit A (which may be delivered in a .PDF format via electronic mail pursuant to the notice provisions set forth in the Purchase
Agreement). Within two (2) Trading Days of the date said Notice of Exercise is delivered to the Company (or within three (3) Trading Days
of the date said Notice of Exercise is delivered to the Company if the Notice of Exercise is received after 12 p.m. EST on such day),
the Company shall have received payment of the aggregate Exercise Price of the Warrant Shares thereby purchased by wire transfer or cashier’s
check drawn on a United States bank, unless such exercise is made pursuant to the cashless exercise procedure specified in Section
2(c) below (if available). 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. The Company shall be entitled to conclusively assume the genuineness
of any signature on any Notice of Exercise delivered to the Company pursuant to this Section 2(a), the legal capacity and competency
of all natural persons signing any Notice of Exercise so delivered, the authenticity of any Notice of Exercise so delivered, the conformity
to an authentic original of any Notice of Exercise so delivered as certified, authenticated, conformed, photostatic, facsimile, or electronic
and the authenticity of the original of such Notice of Exercise. 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 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, and the Company shall be entitled to conclusively assume that its records of the number of Warrant Shares
purchased and the date of such purchases are accurate, absent actual notice to the contrary. The Company shall deliver any objection to
any Notice of Exercise within two (2) Business Days 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)
Number of Warrant Common Stock. Subject to the terms and conditions set forth herein, the
Holder shall have the right to purchase from the Company a number of Warrant Shares equal to (i) fifty percent (50%) of the Commitment
Amount, less the Exercise Value of all partial exercises of this Warrant in accordance with Section 2(a) prior to the Exercise Date, divided
by
(ii) the Exercise Price on the Exercise Date.
| c) | Exercise Price. The exercise price per Warrant
Share shall be calculated by dividing |
$3,000,000 (the “Valuation”)
by the total number of issued and outstanding shares of Common Stock as of the Exercise Date, subject to adjustment hereunder (the “Exercise
Price”).
d)
Cashless Exercise. If at any time after the six month anniversary of the date of the Purchase
Agreement, there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant
Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise”
in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by
(A), where:
(A) = the Market Price (at the date
of such calculation)
(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.
Assuming
(i) the Holder is not an Affiliate of the Company, and (ii) all of the applicable conditions of Rule 144 promulgated under the Securities
Act of 1933, as amended (the “Securities Act”) with respect to Holder and the Warrant Shares are met in the case of
such a cashless exercise, the Company agrees that the Company will use its best efforts to cause the removal of the legend from such Warrant
Shares (including by delivering an opinion of the Company’s counsel to the Company’s transfer agent at its own expense to
ensure the foregoing), and the Company agrees that the Holder is under no obligation to sell the Warrant Shares issuable upon the exercise
of the Warrant prior to removing the legend. The Company expressly acknowledges that Rule 144(d)(3)(ii), as currently in effect, provides
that Warrant Shares issued solely upon a cashless exercise shall be deemed to have been acquired at the same time as the Warrant. The
Company agrees not to take any position contrary to this Section
2(c).
i. Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the
Company’s transfer agent (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) the Warrant Shares are eligible for resale by the Holder pursuant to Rule 144, 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 two (2) Trading Days after the later of (A) the delivery to the Company of the Notice of Exercise provided that
such Notice of Exercise is received by 12 p.m. EST and three (3) Trading Days for any Notice of Exercise received after 12 p.m.
EST, and (B) the Company’s receipt of payment of the aggregate Exercise Price of the Warrant Shares thereby purchased by wire
transfer or cashier’s check drawn on a United States bank, unless such exercise is made pursuant to the cashless exercise
procedure specified in Section 2(c) (such date, the “Warrant Share Delivery Date”). The Warrant Shares
shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become
a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of
the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section
2(d)(vi) prior to the issuance of such Warrant Shares, having been paid. If the Company fails for any reason to deliver to the
Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP
of the Common Stock on the date of the applicable Notice of Exercise), $5 per Trading Day (increasing to $10 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.
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 Holder fails to make payment of the aggregate Exercise Price of
the Warrant Shares pursuant to a Notice of Exercise within two (2) Trading Days of the date said Notice of Exercise is delivered to the
Company (or within three (3) Trading Days of the date said Notice of Exercise is delivered to the Company if the Notice of Exercise is
received after 12 p.m. EST on such day) by wire transfer or cashier’s check drawn on a United States bank, then the Company will
have the right to rescind such exercise, unless such exercise is made pursuant to the cashless exercise procedure specified in Section
2(c). If the Company fails to cause
the Transfer Agent to transmit to the Holder the Warrant Shares
pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition
to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares
in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date,
and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder
the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation
was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant Shares for which such exercise was not
honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would
have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit
a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi.
Charges, Taxes, and Expenses. Issuance of Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in respect of the issuance of 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 fees charged by the Transfer Agent, including any fees assessed to the Transfer Agent by Depository
Trust Company (or another established clearing corporation performing similar functions) required for same-day processing of any Notice
of Exercise and for same-day electronic delivery of the Warrant Shares.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner
which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
f)
Holder’s Exercise Limitations. To the extent the exercise of any portion of this Warrant
requires the Company to receive the approval of the Company’s stockholders pursuant to OTC Markets Group Listing Rules, the Company
shall not effect such exercise of this Warrant, and a Holder shall not have the right to exercise any such portion of this Warrant, pursuant
to Section 2 or otherwise, until such approval has been received by the Company.
Section 3. Certain
Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued
by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii)
combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by
reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after
such event, and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective
immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b)
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to Section 3(a), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares
shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on
exercise contained herein).
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, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all
or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization,
or recapitalization of the Common
Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company,
directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or
group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock 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, the Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in
accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory
to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of
the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor
Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such
exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the
other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
f)
Calculations. All calculations under this Section 3 shall be made to the nearest cent
or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed
to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if
any) issued and outstanding.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail or deliver via electronic mail to the Holder a notice setting forth the Exercise
Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts
requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company 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 Stock is converted into
other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights, or warrants, or if a record is not to be taken, the date as of which the holders of the
Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y)
the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale,
transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing 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, the Company shall simultaneously file such
notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant
during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may
otherwise be expressly set forth herein.
Section 4. Transfer of Warrant.
a)
Transferability. Subject to compliance with any applicable securities laws and the conditions
set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights)
are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date 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 Exercise 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
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.
d)
Transfer Restrictions. Subject to any limitations imposed by applicable law, this Warrant
may be offered for sale, sold, transferred, or assigned without the consent of the Company.
e)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants
that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its
own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities
Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
a)
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting
rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).
b)
Loss, Theft, Destruction, or Mutilation of Warrant. The Company covenants that upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (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 Business Day, then, such action may be taken or such right may
be exercised on the next succeeding Business Day.
d)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding,
it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant (the “Required Reserve Amount”). The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid, and nonassessable
and free from all taxes, liens, and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
f)
Transfer Agent Instructions. The Company covenants and agrees that it will, at all times
during the period the Warrant is outstanding, maintain a duly qualified independent Transfer Agent. The Company represents and
covenants that, within one (1) day from the Initial Exercise Date, it will either (i) issue irrevocable instructions to its current Transfer
Agent (and each Transfer Agent appointed thereafter) to issue certificates, registered in the name
of the Holder or its nominee, for the Warrant Shares in such amounts as specified from time to time by the Holder to the Company upon
exercise of this Warrant in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”), or
(ii) appoint a new Transfer Agent, at which time the Company (a) shall provide a copy of its agreement
with the new Transfer Agent to the Holder, and (b) issue Irrevocable Transfer Agent Instructions to the new Transfer Agent. Such
Irrevocable Transfer Agent Instructions shall be in a form acceptable to the Holder and shall include a provision to irrevocably reserve
the Required Reserve Amount. The Irrevocable Transfer Agent Instructions shall be signed by the Company’s Transfer Agent as of
the date of the Initial Exercise Date or by the New Transfer Agent, as applicable, and by the Company. The Company warrants that, (i)
no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(e), and stop transfer instructions
to give effect to Section 5(g) (prior to registration of the Warrant Shares under the Securities Act or the date on which the Warrant
Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then
be immediately sold), will be given by the Company to its Transfer Agent and that the Warrant Shares shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this Warrant and the Purchase Agreement, (ii) it will not direct
its Transfer Agent not to transfer or delay, impair, and/or hinder its Transfer Agent in transferring (or issuing)(electronically or
in certificated form) any certificate for Warrant Shares to be issued to the Holder upon exercise of or otherwise pursuant to this Warrant
as and when required by this Warrant and the Purchase Agreement, and (iii) it will not fail to remove (or direct its Transfer Agent not
to remove or impair,
delay, and/or
hinder its Transfer Agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on
any certificate for any Warrant Shares issued to the Holder upon exercise of or otherwise pursuant to this Warrant as and when required
by this Warrant and the Purchase Agreement. Nothing in this Section shall affect in any way the Holder’s obligations to comply
with all applicable prospectus delivery requirements, if any, upon resale of the Warrant Shares. If a Holder provides the Company, at
the cost of the Holder, with an opinion of counsel in form, substance, and scope customary for opinions in comparable transactions, to
the effect that a public sale or transfer of such Warrant Shares may be made without registration under the Securities Act and such sale
or transfer is effected, the Company shall permit the transfer, and, in the case of the Warrant Shares, promptly instruct its Transfer
Agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Holder.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the
intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Section 5(e) may be inadequate and agrees, in the event of a breach or threatened breach by the Company
of the provisions of this Section, that the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining
any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being
required.
g)
Jurisdiction. All questions concerning the construction, validity, enforcement, and interpretation
of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.
h) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
i)
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,
notwithstanding the fact that all rights hereunder terminate on the Termination Date. 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.
j)
Notices. Any notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.
k)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by
the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.
l)
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 may 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.
m)
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.
n)
Amendment. This Warrant (other than Section 2(e)) may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder. No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party.
o) Severability.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise
be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or
unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited,
invalid or unenforceable provision(s).
p)
Headings. This Warrant shall be deemed to be jointly drafted by the Company and the Holder
and shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and
shall not form part of, or affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction
Documents shall have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented
to in writing by the Holder.
q)
Governing Law. This Warrant shall be governed by and construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation, and performance of this Warrant shall be governed by, the
internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
Delaware. The Company 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 to the Company at the address set forth in the Purchase Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
r) Jurisdiction
and Venue. Each party hereby irrevocably submits that any dispute, controversy or claim arising out of or relating to this
Warrant, shall be submitted to the exclusive jurisdiction of the Chancery Court of the State of Delaware and the United States
District Court for the District of Delaware. Each party hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. 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 to such party at the address for such notices to it under the Purchase 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 manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
WARRANT. The parties agree that all dispute resolution proceedings in accordance with this Section 5(o) may be conducted in a
virtual setting.
********************
(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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AB INTERNATIONAL GROUP CORP. |
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By: /s/ Chiyuan Deng |
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Name: Chiyuan Deng |
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Title: Chief Executive Officer |
[Signature Page to Warrant]
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