Exhibit 10.1

 

Representative’s Warrant

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “Securities ACT”) OR ANY STATE
SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES
UNDER THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION THEREFROM.

 

This Warrant is subject to restrictions on transfer and may not be sold,
transferred, assigned, pledged, or hypothecated, or be the subject of any
hedging, short sale, derivative, put, or call transaction that would result in
the effective economic disposition of this Warrant or the Shares acquirable upon
exercise hereof, other than in compliance with Rule 5110(g) of the Financial
Industry Regulatory Authority, Inc. and Section 7 hereof.

 

WARRANT

 

To Subscribe for and Purchase
Shares of Common Stock of

 

CELCUITY Inc.

 

Date: September 22, 2017

 

THIS CERTIFIES THAT, for value received, Craig-Hallum Capital Group LLC, or its
registered assigns (herein referred to as the “Purchaser” or “holder”), is
entitled to subscribe for and purchase from Celcuity Inc., a Delaware
corporation (herein called the “Company”), one-hundred thirty-eight thousand
(138,000) shares (the “Shares”) of common stock, par value $0.001 per share (the
“Common Stock”), of the Company (subject to adjustment as noted below) at the
exercise price of $10.45 per Share (the “Warrant Purchase Price”) (subject to
adjustment as noted below). This Warrant may only be exercised during the
Exercise Period specified herein. This Warrant has been issued pursuant to the
Underwriting Agreement, dated September 19, 2017, between the Company and the
Purchaser as representative of the several underwriters listed in Schedule I
thereto, in connection with a public offering (the “Offering”) of 2,760,000
shares of Common Stock.

 

This Warrant is subject to the following provisions, terms and conditions:

 

1.       The Warrant exercise period (the “Exercise Period”) for this Warrant
shall begin the effective date of the Offering and shall end on the fifth (5th)
anniversary of the effective date of the Offering. As used herein, the
“effective date of the Offering” means September 19, 2017.

 

1 

 

 

2.       The rights represented by this Warrant may be exercised, in whole or in
part, by the holder hereof as follows:

 

(a)                  The holder hereof shall deliver to the Company written
notice of exercise of this Warrant and in connection therewith shall surrender
this Warrant (properly endorsed if required) at the principal office of the
Company and pay the Warrant Purchase Price for such Shares as provided for
herein.

 

(b)                  The holder hereof shall pay the Warrant Purchase Price (i)
in immediately available funds or (ii) by “cashless exercise”, in which event
the Company shall issue to the holder hereof a number of Shares determined as
follows:

 

X = Y * [(A-B)/A]

 

where:

 

X = the number of Shares to be issued to the holder.

 

Y = the total number of Shares with respect to which this Warrant is being
exercised.

 

A = the fair market value of one Share at the time the “cashless exercise”
election is made.

 

B = the Warrant Purchase Price then in effect for the Shares at the “cashless
exercise” election is made.

 

For purposes of this Warrant, the fair market value of one Share as of a
particular date shall be determined as follows: (i) if the Common Stock is
traded on a U.S. national securities exchange, the value shall be deemed to be
the average of the closing prices of the Common Stock on such exchange over the
10-Trading Day period ending on the Trading Day prior to the net exercise
election; (ii) if clause (i) is not applicable, the value shall be deemed to be
the average of the closing bid or sale prices (whichever is applicable) of the
Common Stock on the principal securities exchange or securities market on which
the Common Stock trades over the 10-Trading Day period ending on the Trading Day
prior to the net exercise election; and (iii) if none of the foregoing is
applicable, the value shall be the fair market value of one share of Common
Stock mutually agreed upon by the holder and the Company; provided, that if the
Company and the holder are unable to agree upon the fair market value of a
Share, then the board of directors of the Company shall use its good faith
judgment to determine the fair market value, and such determination shall be
binding upon all parties absent demonstrable error.

 

For purposes of this Warrant, “Trading Day” means any day on which the Common
Stock is traded on a U.S. stock exchange or, if inapplicable, the principal
securities exchange or securities market on which the Common Stock is then
traded.

 

2 

 

 

(c)                  Upon exercise of this Warrant, the Company shall promptly
(but in no event later than three Trading Days after the date this Warrant is
exercised in accordance with its terms) issue or cause to be issued and cause to
be delivered to or upon the written order of the holder and in such name or
names as the holder may designate (provided that, if the holder directs the
Company to deliver a certificate for the Shares in a name other than that of the
holder or an affiliate (as defined in Rule 405 under the Securities Act of 1933,
as amended (the “Securities Act”)) of the holder, it shall deliver to the
Company on the date of exercise an opinion of counsel reasonably satisfactory to
the Company to the effect that the issuance of such Shares in such other name
may be made pursuant to an available exemption from the registration
requirements of the Securities Act and all applicable state securities or blue
sky laws), a certificate for the Shares issuable upon such exercise or credit
for such Shares through the facilities of The Depository Trust Company (“DTC”)
to the account designated by the holder (with any restrictive legends required
by applicable securities laws). The form of delivery of the Shares acquired upon
exercise will be at the election of the holder, subject to the other terms of
this Warrant. The holder, or any person permissibly so designated by the holder
to receive the Shares acquired upon exercise hereof, shall be deemed to have
become the holder of record of such Shares as of the date notice of exercise of
payment of the applicable Warrant Purchase Price is made in accordance with the
terms hereof.

 

(d)                  If by the fifth Trading Day after the date this Warrant is
exercised in accordance with this Section 2 the Company fails to deliver the
required number of Shares in the manner required pursuant to Section 2(c), then,
in addition to any other remedy the holder may have at law or in equity
(including a decree of specific performance or injunctive relief), the holder
hereof will have the right to rescind such exercise.

 

(e)                  In the event that this Warrant has not been exercised prior
to the end of the Exercise Period and the fair market value of one Share as
determined in accordance with the provisions hereof exceeds the Warrant Purchase
Price on the last day of the Exercise Period, on such date this Warrant will be
automatically exercised pursuant to the cashless exercise provisions set forth
in Section 2(b); provided, that the holder hereof, upon the request of the
Company, must surrender to the Company of this Warrant within 30 days of a
request for delivery of thereof by the Company. If the holder hereof does not
surrender this Warrant within such time period, this Warrant will be deemed to
not have been exercised under this Section 2(e) and will terminate and no longer
be exercisable.

 

3.       The Company represents and warrants that this Warrant has been duly
authorized by all necessary corporate action, has been duly executed and
delivered and is a legal and binding obligation of the Company, enforceable
against the Company in accordance with the terms of this Warrant, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity. The Company covenants and agrees that all Shares which may
be issued upon the exercise of the rights represented by this Warrant according
to the terms hereof have been duly authorized and will, upon issuance and
payment therefor, be validly issued and fully paid. The Company further
covenants and agrees that during the period within which the rights represented
by this Warrant may be exercised, the Company will at all times have authorized,
and reserved for the purpose of issue upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of its shares of Common Stock to
provide for the exercise of the rights represented by this Warrant, free from
preemptive rights or other actual contingent purchase rights other than those
held by a holder of this Warrant (as a result of holding this Warrant).

 

3 

 

 

4.       The Company will pay any documentary stamp taxes attributable to the
issuance of Shares upon the exercise of this Warrant; provided, however, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the registration of any certificates for Warrants,
or Shares issued upon exercise of this Warrant, in a name other than that of the
Purchaser. The Purchaser shall be responsible for all other tax liability that
may arise as a result of holding or transferring this Warrant or receiving
Shares upon exercise hereof.

 

5.       The above provisions are, however, subject to the following:

 

(a)                  The Warrant Purchase Price shall, from and after the date
of issuance of this Warrant, be subject to adjustment from time to time as
hereinafter provided. Upon each adjustment of the Warrant Purchase Price, the
holder of this Warrant shall thereafter be entitled to purchase, at the Warrant
Purchase Price resulting from such adjustment, the number of Shares obtained by
multiplying the Warrant Purchase Price in effect immediately prior to such
adjustment by the number of Shares purchasable pursuant hereto immediately prior
to such adjustment and dividing the product thereof by the Warrant Purchase
Price resulting from such adjustment.

 

(b)                  In case the Company shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the Warrant
Purchase Price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller number of shares, the Warrant
Purchase Price in effect immediately prior to such combination shall be
proportionately increased.

 

(c)                  If any capital reorganization or reclassification of the
capital stock of the Company, shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock or securities with respect to or
in exchange for Common Stock, then, as a condition of such reorganization,
reclassification or consolidation, lawful and adequate provision shall be made
whereby the holder hereof shall thereafter have the right to purchase and
receive, upon the basis and upon the terms and conditions specified in this
Warrant and in lieu of the Shares immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby, such shares of
stock or securities as may be issued or payable with respect to or in exchange
for a number of Shares equal to the number of Shares immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby
had such reorganization, reclassification or consolidation not taken place, and
in any such case appropriate provision shall be made with respect to the rights
and interests of the holder of this Warrant to the end that the provisions
hereof (including without limitation provisions for adjustments of the warrant
purchase price and of the number of shares purchasable upon the exercise of this
Warrant) shall thereafter be applicable, as nearly as may be, in relation to any
shares of stock or securities thereafter deliverable upon the exercise hereof.

 

4 

 

 

(d)                  Upon any adjustment of the Warrant Purchase Price or any
adjustment of any material terms hereof, then and in each such case an officer
of the Company shall, as soon as practicable after the occurrence of any event
that requires an adjustment or readjustment, give signed written notice thereof,
by first–class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company,
which notice shall state the Warrant Purchase Price resulting from such
adjustment, any material change in the terms of the Warrant, and the increase or
decrease, if any, in the number of Shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

 

(e)                  If at any time during the Exercise Period:

 

(i)       there shall be any capital reorganization, or reclassification of the
capital stock of the Company; or

 

(ii)      there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;

 

then, in any one or more of said cases, the Company shall give written notice,
by first–class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company, of
the date on which (A) the books of the Company shall close or a record shall be
taken for such distribution or subscription rights, or (B) such reorganization,
reclassification or consolidation, dissolution, liquidation or winding up, or
conversion or redemption shall take place, as the case may be. Such notice shall
also specify the date as of which the holders of capital stock of record shall
participate in such distribution or subscription rights, or shall be entitled to
exchange their capital stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, dissolution, liquidation
or winding up, or conversion or redemption, as the case may be. Such written
notice shall be given at least 20 days prior to the action in question and not
less than 20 days prior to the record date or the date on which the Company’s
transfer books are closed in respect thereto.

 

(f)                  If any event occurs as to which in the opinion of the Board
of Directors of the Company the other provisions of this Section 5 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the holder of this Warrant or of the Common Stock in
accordance with the essential intent and principles of such provisions, then the
Board of Directors shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such purchase rights as aforesaid.

 

6.       This Warrant shall not entitle the holder hereof to any voting rights
or other rights as a shareholder of the Company.

 

5 

 

 

7.       This Warrant is exchangeable, upon the surrender hereof by the holder
hereof at the principal office of the Company, for new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares which may be subscribed for and purchased hereunder, each of such new
Warrants to represent the right to subscribe for and purchase such number of
shares as shall be designated by said holder hereof at the time of such
surrender. Subject to compliance with applicable securities laws and the other
terms of this Warrant, this Warrant may be assigned or transferred by the holder
and this Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective transferees, successors and assigns. Notwithstanding
the foregoing, pursuant to Rule 5110(g) of the Financial Industry Regulatory
Authority, Inc. (“FINRA”), this Warrant shall not be sold during the Offering,
or sold, transferred, assigned, pledged, or hypothecated, or be the subject of
any hedging, short sale, derivative, put, or call transaction that would result
in the effective economic disposition of this Warrant or the Shares acquirable
upon exercise hereof, by any person for a period of 180 days immediately
following the effective date of the Offering, except as provided in paragraph
(g)(2) of Rule 5110(g) of the FINRA.

 

8.       Each certificate for the securities purchased under this Warrant shall
bear a legend as follows unless such securities have been registered under the
Securities Act of 1933, as amended (the “Act”):

 

“The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the “Act”), or applicable state law.
Neither the securities nor any interest therein may be offered for sale, sold or
otherwise transferred except pursuant to an effective registration statement
under the Act, or pursuant to an exemption from registration under the Act and
applicable state law which, in the opinion of counsel to the Company, is
available.”

 

The securities evidenced by this Warrant shall not be transferred unless and
until: (i) the Company has received the opinion of counsel for the Holder that
the securities may be transferred pursuant to an exemption from registration
under the Act and applicable state securities laws, the availability of which is
established to the reasonable satisfaction of the counsel of the Company, or
(ii) a registration statement relating to the offer and sale of such securities
has been filed by the Company and declared effective by the U.S. Securities and
Exchange Commission and compliance with applicable state securities law has been
established.

 

9.       The Company will not be required upon the exercise of this Warrant to
issue fractions of Shares, but may, at its option, either (a) purchase such
fraction for an amount in cash equal to the current value of such fraction
computed on the basis of the closing market price of the Common Stock as quoted
on the principal exchange or trading facility on which the Common Stock is
traded on the Trading Day immediately preceding the day upon which this Warrant
was surrendered for exercise in accordance with Section 2 hereof, or (b) issue
the required Share. By accepting this Warrant, the holder hereof expressly
waives any right to receive any fractional share upon exercise of a Warrant,
except as expressly provided in this Section 9.

 

10.     If this Warrant is exercised for less than all of the then-current
number of Shares purchasable hereunder, then the Company shall, concurrently
with the issue of the Shares purchased by the holder hereof upon such exercise
in accordance with Section 2, issue a new warrant exercisable for the remaining
number of Shares purchasable under this Warrant.

 

6 

 

 

11.     Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant and security
reasonably satisfactory to it, the Company shall execute and deliver a new
warrant of like tenor as the Warrant so lost, stolen, destroyed or mutilated.

 

12.     This Warrant shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to
conflict of laws principles thereof. The Company and the holder agree that the
prevailing party(ies) in any action or proceeding arising out of or relating to
this Warrant shall be entitled to recover from the other party(ies) all of its
reasonable attorneys’ fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.

 

13.     All modifications or amendments of this Warrant shall require the
written consent of and be signed by the party against whom enforcement of the
modification or amendment is sought.

 

14.     This Warrant (together with the other agreements and documents being
delivered pursuant to or in connection with this Warrant) constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.

 

15.     This Warrant shall inure solely to the benefit of and shall be binding
upon, the holder and the Company and their permitted assignees, respective
successors, legal representative and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Warrant or any provisions herein contained.

 

[Signature Page Follows]

 

7 

 

 

IN WITNESS WHEREOF, Celcuity Inc. has caused this Warrant to be signed by its
duly authorized officer and this Warrant to be dated as of the date set forth
above.

  

 

  CELCUITY Inc.                             By: /s/ Brian F. Sullivan     Name:
Brian F. Sullivan     Title: Chief Executive Officer  

 

 

 

 

 

Acknowledged and agreed:         CRAIG-HALLUM CAPITAL GROUP LLC              
By: /s/ Kevin Harris   Name:  Kevin Harris   Title: Managing Partner  

 

[Signature Page to Representative’s Warrant]

 

 

SUBSCRIPTION FORM

 

To be Executed by the Holder of this Warrant if such Holder
Desires to Exercise this Warrant in Whole or in Part

 

To: Celcuity Inc. (the “Company”)

 

The undersigned ___________________________________

 

 

Please insert Social Security or other
identifying number of Subscriber:

 

_______________________________

 

hereby irrevocably elects to exercise the right of purchase represented by this
Warrant for, and to purchase thereunder, ___________ shares of Common Stock (the
“Shares”) provided for therein.

 

Payment of the Warrant Purchase Price for the Shares shall take the form of
[Check the applicable box below]:

 

¨Immediately available U.S. funds; or

 

¨the cancellation of such number of Shares as is necessary to satisfy the
Warrant Purchase Price with respect to the exercise of the number of Shares set
forth above in accordance with the formula set forth in Section 2(b) of the
Warrant.

 

The undersigned requests that such Shares be registered in the name of the
undersigned or in such other name specified below:

 

Name: _______________________________________________________________________

 

The Shares shall be delivered as follows:

 

       

 

 

 

and, if such number of Shares does not constitute all shares purchasable under
the Warrant, that a new Warrant for the balance remaining of such shares be
registered in the name of, and delivered to, the undersigned at the address
stated above.

 

Unless the undersigned has selected the “cashless exercise” option provided for
in Section 2(b) of the Warrant, the undersigned hereby represents and warrants
that the undersigned is acquiring the Shares for its own account for investment
purposes only, and not for resale or with a view to distribution of such shares
or any part thereof.

 

[Signature Page Follows]

 

 

 

 

Dated:       

 

Name of Holder: 

   

 

Signature 

   

 

Title