Exhibit
4.1


 


DESCRIPTION
OF REGISTRANT’S SECURITIES REGISTERED UNDER SECTION 12

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED


 


The
following description sets forth certain material terms and provisions of the common stock and Series A Warrants of ToughBuilt
Industries, Inc., a Nevada corporation which are registered under Section 12(b) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). This description also summarizes relevant provisions of the Nevada Revised Statutes (“NRS”).
The following description is a summary and does not purport to be complete. It is subject to, and qualified in its entirety by
reference to, the relevant provisions of the NRS, and to our Articles of Incorporation, as amended (collectively, the “Articles
of Incorporation”), and our Amended and Restated Bylaws dated July 6, 2016 (the “Bylaws”), which
are filed as exhibits to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, of which
this Exhibit is a part, and are incorporated by reference herein. We encourage you to read the Company’s Articles
of Incorporation and the Bylaws, and the relevant provisions of the NRS for additional information. Unless the context requires
otherwise, all references to “we,” “us,” “our” and the “Company”
in this Exhibit 4.1 refer solely to ToughBuilt Industries, Inc.


 


Authorized
and Outstanding Capital Stock


 


Our
authorized capital stock presently consists of 200,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000
shares of “blank check” preferred stock, par value $0.0001 per share. As of March 22, 2021, we had 81,008,101 shares
of common stock outstanding and no shares of our preferred stock issued and outstanding.


 


Common
Stock


 


Voting


 


Holders
of shares of the common stock are entitled to one vote for each share held of record on matters properly submitted to a vote of
our stockholders. Stockholders are not entitled to vote cumulatively for the election of directors.


 


Dividends


 


Subject
to the dividend rights of the holders of any outstanding series of preferred stock, holders of shares of common stock will be
entitled to receive ratably such dividends, if any, when, as, and if declared by our Board of Directors out of the Company’s
assets or funds legally available for such dividends or distributions.


 


Liquidation
and Distribution


 


In
the event of any liquidation, dissolution, or winding up of the Company’s affairs, holders of the common stock would be
entitled to share ratably in the Company’s assets that are legally available for distribution to its stockholders. If the
Company has any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution preferences,
liquidation preferences, or both. In such case, the Company must pay the applicable distributions to the holders of its preferred
stock before it may pay distributions to the holders of common stock.


 


Conversion,
Redemption, and Preemptive Rights


 


Holders
of the common stock have no preemptive, subscription, redemption or conversion rights.


 


Sinking
Fund Provisions


 


There
are no sinking fund provisions applicable to the common stock.


 




    	 



    	 



    

 


Series
A Warrants


 


In
our November 2018 initial public offering and concurrent private placement, we issued units which included a total of 637,957
of Series A Warrants.


 


Exercisability


 


The
warrants are exercisable at any time after their original issuance and at any time up to the date that is five years after their
original issuance for the Series A Warrants The warrants will be exercisable, at the option of each holder, in whole or in part
by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the
shares of common stock underlying the warrants under the Securities Act is effective and available for the issuance of such shares,
or an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full in
immediately available funds for the number of shares of common stock purchased upon such exercise. If a registration statement
registering the issuance of the shares of common stock underlying the warrants under the Securities Act is not effective or available
and an exemption from registration under the Securities Act is not available for the issuance of such shares, the holder may,
in its sole discretion, elect to exercise the warrant through a cashless exercise, in which case the holder would receive upon
such exercise the net number of shares of common stock determined according to the formula set forth in the warrant. No fractional
shares of common stock will be issued in connection with the exercise of a warrant. In lieu of fractional shares, we will pay
the holder an amount in cash equal to the fractional amount multiplied by the exercise price


 


Exercise
Limitation


 


A
holder will not have the right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially
own in excess of 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise,
as such percentage ownership is determined in accordance with the terms of the warrants.


 


Exercise
Price


 


The
exercise price per whole share of common stock purchasable upon exercise of the warrants is $55.00 per share for the Series A
Warrants. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock
splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions of
assets, including cash, stock or other property to our stockholders.


 


Transferability


 


Subject
to applicable laws, the warrants may be offered for sale, sold, transferred or assigned without our consent.


 


Fundamental
Transactions


 


In
the event of a fundamental transaction, as described in the warrants and generally including any reorganization, recapitalization
or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties
or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common
stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock,
the holders of the warrants are entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other
property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction.


 


Rights
as a Stockholder


 


Except
as otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our common stock, the holder
of a warrant does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder
exercises the warrant.


 




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Governing
Law


 


The
warrants and the warrant agency agreement are governed by New York law.


 


Stock
Exchange Listing


 


Our
common stock and Series A Warrants are listed on the Nasdaq Capital Market under the symbol “TBLT” and “TBLTW,”
respectively.


 


Transfer
Agent and Registrar


 


Our
transfer agent and registrar for all securities registered under Section 12 of the Exchange Act is VStock Transfer Company, Inc.
located at 18 Lafayette Pl, Woodmere, New York 11598. Their telephone number is (212) 828-8436.


 


Anti-Takeover
Effects of Nevada Law and the Articles of Incorporation and Bylaws


 


Certain
provisions of the Articles of Incorporation and Bylaws, and certain provisions of the NRS could make our acquisition by a third
party, a change in our incumbent management, or a similar change of control more difficult. These provisions, which are summarized
below, are likely to reduce our vulnerability to an unsolicited proposal for the restructuring or sale of all or substantially
all of our assets or an unsolicited takeover attempt. The summary of the provisions set forth below does not purport to be complete
and is qualified in its entirety by reference to the Articles of Incorporation and the Bylaws and the relevant provisions of the
NRS


 


Authorized
but Unissued Shares


 


Our
authorized but unissued shares of common stock and preferred stock are available for future issuance, subject to any limitations
imposed by the listing standards of the Nasdaq Capital Market. These additional shares may be used for a variety of corporate
finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common
stock and preferred stock could make it more difficult or discourage an attempt to obtain control of us by means of a proxy contest,
tender offer, merger or otherwise.


 


Our
authorized capital includes “blank check”. Our Board has the authority to issue preferred stock in one or more
class or series and determine the price, designation, rights, preferences, privileges, restrictions and conditions, including
voting and dividend rights, of those shares without any further vote or action by stockholders. The rights of the holders of common
stock will be subject to, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in
the future. The issuance of additional preferred stock, while providing desirable flexibility in connection with possible financings
and acquisitions and other corporate purposes, could make it more difficult for a third party to acquire a majority of the voting
power of our outstanding voting securities, which could deprive our holders of common stock of a premium that they might otherwise
realize in connection with a proposed acquisition of our Company.


 


Action
by Written Consent


 


Our
Bylaws provide that any action required or permitted by law, the Articles of Incorporation, or Bylaws to be taken at a meeting
of the stockholders of the Company may be taken without a meeting if a consent or consents in writing, setting forth the action
so taken, shall be signed by stockholders holding at least a majority of the voting power; provided that if a different proportion
of voting power is required for such an action at a meeting, then that proportion of written consents is required.


 


Advance
Notice Requirements


 


Stockholders
wishing to nominate persons for election to our Board of Directors at a meeting or to propose any business to be considered by
our stockholders at a meeting must comply with certain advance notice and other requirements set forth in our Bylaws and Rule
14a-8 of the Exchange Act.


 




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Special
Meetings


 


Our
Bylaws provide that special meetings of stockholders may only be called by the President or Chief Executive Officer. Business
transacted at all special meetings shall be confined to the purposes stated in the notice of the meeting unless all stockholders
entitled to vote are present and consent.


 


Board
Vacancies


 


Our
Bylaws provide that any vacancy on our Board of Directors, howsoever resulting, may be filled by a majority vote of the remaining
directors.


 


Removal
of Directors


 


Our
Bylaws provide that any director may be removed either for or without cause at any special meeting of stockholders by the affirmative
vote of at least two-thirds of the voting power of the issued and outstanding stock entitled to vote; provided, however, that
notice of intention to act upon such matter shall have been given in the notice calling such meeting.


 


Right
to Alter, Amend or Repeal Bylaws


 


Our
Bylaws provide that they may be altered, amended or repealed at any meeting of the Board of Directors at which a quorum is present,
by the affirmative vote of a majority of the Directors present at such meeting.


 


Indemnification
of Officers and Directors and Insurance


 


Our
Bylaws provide for limitation of liability of our directors and for indemnification of our directors and officers to the fullest
extent permitted under Nevada law. Our directors and officers may be liable for a breach or failure to perform their duties in
accordance with Nevada law only if their breach or failure to perform constitutes gross negligence, willful misconduct or intentional
harm on our Company or our stockholders. Our directors may not be personally liable for monetary damages for action taken or failure
to take action as a director except in specific instances established by Nevada law.


 


In
accordance with Nevada law, we may generally indemnify a director or officer against liability incurred in a proceeding if he
or she acted in good faith, and believed that his or her conduct was in our best interest and that he or she had no reason to
believe his or her conduct was unlawful. We may not indemnify a director or officer if the person was adjudged liable to us or
in the event it is adjudicated that the director or officer received an improper personal benefit.


 


Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the U.S. Securities and
Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.


 


Nevada
Anti-Takeover Statutes


 


The
NRS contains provisions restricting the ability of a Nevada corporation to engage in business combinations with an interested
stockholder. Under the NRS, except under certain circumstances, business combinations with interested stockholders are not permitted
for a period of two years following the date such stockholder becomes an interested stockholder. The NRS defines an interested
stockholder, generally, as a person who is the beneficial owner, directly or indirectly, of 10% of the outstanding shares of a
Nevada corporation. In addition, the NRS generally disallows the exercise of voting rights with respect to “control shares”
of an “issuing corporation” held by an “acquiring person,” unless such voting rights are conferred by
a majority vote of the disinterested stockholders. “Control shares” are those outstanding voting shares of an issuing
corporation which an acquiring person and those persons acting in association with an acquiring person (i) acquire or offer to
acquire in an acquisition of a controlling interest and (ii) acquire within 90 days immediately preceding the date when
the acquiring person became an acquiring person. An “issuing corporation” is a corporation organized in Nevada which
has two hundred or more stockholders, at least one hundred of whom are stockholders of record and residents of Nevada, and which
does business in Nevada directly or through an affiliated corporation. The NRS also permits directors to resist a change or potential
change in control of the corporation if the directors determine that the change or potential change is opposed to or not in the
best interest of the corporation.


 




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