Exhibit 4.1


 


 


NEITHER THIS SECURITY NOR THE SECURITIES
issuable upon exercise hereof HAS BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.


 


Void after 5:00 p.m.
Eastern Time on

May 23, 2027 (the “Expiration Date”)


 


BASANITE, INC.


WARRANT TO PURCHASE SHARES OF COMMON STOCK


This Warrant is issued to
Key Honey Contracting, LLC (the “Holder”) by Basanite, Inc., a Nevada corporation (the “Company”),
pursuant to the terms of that certain Consulting Agreement, dated May 23, 2022, by and between the Company
and the Holder (the “Consulting Agreement”).


1.
Purchase of Shares; Vesting. Subject to the terms and conditions hereinafter set forth, the Holder of
this Warrant is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company
shall notify the Holder hereof in writing), to purchase from the Company up to TWO MILLION (2,000,000) shares (the “Warrant
Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”)
at the Exercise Price. The Holder’s right to acquire Warrant Shares hereunder shall vest in equal as follows: (i) the right to acquire
333,333 Warrant Shares vested upon execution of the Consulting Agreement and (ii) thereafter the right to acquire the remaining Warrant
Shares shall vest in equal monthly installments of 166,667 Warrant Shares on the 23rd day of each of the remaining ten (10)
months of the Consulting Agreement, subject to continuing effectiveness of the Consulting Agreement. Should the Consulting Agreement at
any time expire or be terminated, the vesting of this Warrant shall cease (with vesting in the month of expiration or termination being
pro rated based on the date of termination or expiration).


2.
Exercise Period. This Warrant is exercisable as provided for in Section 1 and shall expire
on the Expiration Date. This Warrant and all rights and options hereunder shall expire on the Expiration Date, and shall be wholly null
and void and of no value to the extent this Warrant is not exercised before it expires.


3.
Exercise Price. The initial Exercise Price of this Warrant shall be $0.33 per share of Common
Stock, as adjusted as provided for in Section 8 hereof.


4.
Method of Exercise. While this Warrant remains outstanding and is exercisable in accordance
with Section 2 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:


(a)
the surrender of the Warrant, together with a notice of exercise to the Secretary of the Company
at its principal offices during normal business hours on any business day prior to the Expiration Date; and


 




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(b)
the payment to the Company of an amount equal to the aggregate Exercise Price for the number of shares
of Common Stock being purchased in the form of certified check payable to the order of the Company or wire transfer of immediately available
funds to an account designated by the Company.


 


The Company agrees that the shares of Common Stock
issuable upon exercise of the Warrants shall be deemed to be issued to the Holder as the record holder of such shares as of the close
of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. Notwithstanding
the foregoing, no such surrender shall be effective to constitute the person or entity entitled to receive such shares as the record holder
thereof while the transfer books of the Company for the Common Stock are closed for any purpose (but not for any period in excess of five
(5) days); but any such surrender of this Warrant for exercise during any period while such books are so closed shall become effective
for exercise immediately upon the reopening of such books, as if the exercise had been made on the date this Warrant was surrendered and
for the number of shares of Common Stock and at the Exercise Price in effect at the date of such surrender.


 


5.
Cashless Exercise. In lieu of exercising this Warrant in cash as described in Section 4, this
Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder, upon
exercise, shall be entitled to receive a number of shares of Common Stock equal to the quotient obtained by dividing [(A-B)*(X)] by (A),
where:


 


		(A) =	the thirty (30) day VWAP on the trading day immediately preceding the date on which Holder elects to exercise
this Warrant by means of a “cashless exercise,” as set forth in the notice of exercise;



 


		(B) =	the Exercise Price of this Warrant, as adjusted hereunder; and



 


		(X) =	the number of shares of Common Stock 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.



 


Upon a cashless exercise, the Holder shall receive
shares in accordance with the terms of Section 4 above, provided that no cash payment will be required with the surrendered Warrant and
notice of exercise. For purposes of this Section 5, “VWAP” means, for any date, the price determined by the
first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a “national securities exchange,”
the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the trading market on which
the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m. (New York City time) to
4:02 p.m. (New York City time)), (b)  if the Common Stock is then quoted on the OTCQB or OTCQX, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published
by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined
by the Company’s Board of Directors in good faith.


 




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6.
Certificates for Common Stock. Upon the exercise of the purchase rights evidenced by this
Warrant, one or more certificates for the number of shares of Common Stock so purchased shall be issued as soon as practicable thereafter.
Notwithstanding the foregoing, the Company, at its sole discretion, may elect to issue the shares of Common Stock so exercised in uncertificated,
book entry form on the books and records of the Company. 


7.
Issuance of Common Stock. The Company covenants that the shares of Common Stock, when issued
pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issuance thereof; provided, however, that the Holder shall be required to pay any and all taxes that may
be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the then Holder
as reflected upon the books of the Company.


8.
Adjustment of Exercise Price and Number of Shares of Common Stock. The number of and kind
of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:


(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 (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 outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that
the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 8(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)
Reclassification, Reorganization and Consolidation. In case of any reclassification, capital
reorganization or change in the capital stock of the Company (other than as a result of a subdivision, combination or stock dividend provided
for in Section 8(a) above), then the Company shall make appropriate provision so that the Holder of this Warrant shall have the right
at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant,
the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization
or change by a Holder of the same number of shares of Common Stock as were purchasable by the Holder of this Warrant immediately prior
to such reclassification, reorganization or change. In any such case appropriate provisions shall be made with respect to the rights and
interest of the Holder of this Warrant so that the provisions hereof shall thereafter be applicable with respect to any shares of stock
or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per
share payable hereunder, provided the aggregate purchase price shall remain the same.




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(c)
Notice of Adjustment. When any adjustment is required to be made in the number or kind of
shares purchasable upon exercise of the Warrant the Company shall promptly notify the Holder of such event and of the number of shares
of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant.


(d)
No Fractional Shares or Scrip. If as a result of any adjustment pursuant to this Section 8,
the Holder would be entitled to receive a fractional interest in a share of Common Stock, the Company will, upon exercise, round down
to the nearest whole number of shares of Common Stock issuable to the Holder. 


9.
Restrictive Legend. The shares of Common Stock received upon exercise of this Warrant (unless
registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:


“The
shares represented by this Certificate have not been registered under the Securities Act of 1933, as amended (the “SECURITIES Act”),
and have been acquired for investment and not with a view to, or in connection with, the sale or distribution thereof. No transfer of
these shares or any interest therein may be made except: (i) pursuant to an effective registration statement under the SECURITIES Act;
(ii) pursuant to and in accordance with the terms and conditions of Rule 144; or (iii) pursuant to an opinion of counsel satisfactory
to the issuer that such transfer does not require registration under the SECURITIES Act.”


10.
Transfer of Warrant. 


(a)
Limitation on Transfer. The Holder shall not, directly or indirectly, sell, give, assign,
hypothecate, pledge, encumber, grant a security interest in or otherwise dispose of (whether by operation of law or otherwise) (each a
“Transfer”) this Warrant or any right, title or interest herein or hereto, without the prior written consent of the
Company; provided that no such consent shall be required for any Transfers to the Holders’ family members or trusts or other entities
established for estate planning purposes. Any attempt to Transfer this Warrant, in whole or in part, or any rights hereunder in violation
of the preceding sentence shall be null and void ab initio and the Company shall not register any such Transfer. 


(b)
Transfer Procedures. If the Holder wishes to Transfer this Warrant to a transferee (a “Transferee”)
under this Section 10, the Holder shall give notice to the Company through the use of the assignment form attached hereto as Exhibit B
of its intention to make any Transfer permitted under this Section 10 not less than five (5) days prior to effecting such Transfer, which
notice shall state the name and address of each Transferee to whom such Transfer is proposed. This Warrant may, in accordance with the
terms hereof, be transferred in whole or in part. If this Warrant is transferred in whole, the assignee shall receive a new Warrant (registered
in the name of such assignee or its nominee) which new Warrant shall cover the number of shares assigned. If this Warrant is transferred
in part, the assignor and assignee shall each receive a new Warrant (which, in the case of the assignee, shall be registered in the name
of the assignee or its nominee), each of which new Warrant shall cover the number of shares not so assigned and in respect of which no
such exercise has been made in the case of the assignor and the number of shares so assigned, in the case of the assignee.




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(c)
Transfers in Compliance with Law: Substitution of Transferee. Notwithstanding any other provision
of this Warrant, no Transfer may be made pursuant to this Section 10 unless (a) the Transferee has agreed in writing to be bound by the
terms and conditions hereto, (b) the Transfer complies in all respects with the applicable provisions of this Warrant, and (c) the Transfer
complies in all respects with applicable federal and state securities laws, including, without limitation, the Securities Act. If requested
by the Company in its reasonable judgment, the transferring Holder shall supply to the Company (x) an opinion of counsel, at such transferring
Holder's expense, to the effect that such Transfer complies with the applicable federal and state securities laws; and (y) a written statement
to the Company, in such form as it may reasonably request, certifying that the Transferee is an "accredited investor" as defined
in Rule 501(a) under the Securities Act.


11.
Rights of Stockholders. No holder of this Warrant shall be entitled, as a Warrant holder,
to vote or receive dividends or be deemed the holder of shares of Common Stock or any other securities of the Company which may at any
time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of
this Warrant, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice
of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the shares of
Common Stock purchasable upon the exercise hereof shall have become deliverable, as provided herein.


12.
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 shares of Common Stock issuable upon exercise of this Warrant, 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.


13.
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 all of the
shares issuable upon the exercise of any purchase rights under this Warrant. 


14.
Entire Agreement. This Warrant and the Consulting Agreement constitute the entire agreement
between the Company and the Holder with respect to the Warrant.


15.
Notices. All notices and other communications required or permitted hereunder shall be in
writing and shall be effective when given in accordance with the terms of Section 13 of the Consulting Agreement. 


16.
Governing Law; Dispute Resolution. This Warrant and all actions arising out of or in connection
with this Warrant shall be governed by and construed in accordance with the internal laws of State of Nevada, without regard to conflict
of law principles that would result in the application of any law other than the law of the State of Nevada. Any dispute, controversy,
or claim between arising directly or indirectly out of or connected with this Warrant shall be resolved by binding arbitration on the
terms provided for in Section 16 of the Consulting Agreement.




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17.
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights
evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company. The provisions
of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant.


18.
Amendment and Waiver. No provision of this Warrant shall be waived or modified without the
written consent of the Company and the Holder.


19.
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Warrant.


 


Issued this 26th day of May, 2022


 


	 	BASANITE, INC.
	 	 	 
	 	 	 
	 	By:	/s/ Simon R. Kay
	 	Name:	Simon R. Kay
	 	Title: 	Chief Executive Officer & President and Acting Interim Chief Financial
Officer