# EDGAR Filing Document

**Accession Number:** 0001994624
**File Stem:** 0001104659-25-098541
**Filing Date:** 2025-10
**Character Count:** 218793
**Document Hash:** 627168c9695c456f7ab15e3be7c045bf
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-25-098541.hdr.sgml**: 20251010

**ACCESSION NUMBER**: 0001104659-25-098541

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20251008

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Unregistered Sales of Equity Securities

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20251010

**DATE AS OF CHANGE**: 20251010

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ScanTech AI Systems Inc.
- **CENTRAL INDEX KEY:** 0001994624
- **STANDARD INDUSTRIAL CLASSIFICATION:** INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 933502562
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42463
- **FILM NUMBER:** 251386315

**BUSINESS ADDRESS:**
- **STREET 1:** 1177 AVENUE OF THE AMERICA, SUITE 5100
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10036
- **BUSINESS PHONE:** 8886221218

**MAIL ADDRESS:**
- **STREET 1:** 1177 AVENUE OF THE AMERICA, SUITE 5100
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10036

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): October 8, 2025

**<u>ScanTech AI Systems Inc.</u>**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-42463** | **93-3502562** |
| (State or other jurisdiction<br> of incorporation) | (Commission<br> File Number) | (I.R.S. Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| **1735 Enterprise Drive**<br> **Buford, Georgia** | **30518** |
| (Address of principal executive offices) | (Zip Code) |

---

**<u>+1 (470) 655-0886</u>**

(Registrant's telephone number, including area code)

**<u>Not Applicable</u>**

(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 to the registrant under any of the following provisions:

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 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))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading <br> Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, par value $0.0001 per share | STAI | The Nasdaq Stock Market LLC |

---

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 October 8, 2025, ScanTech AI Systems Inc. (the "Company") entered into a Purchase Agreement, dated as of October 8, 2025 (the "ELOC Purchase Agreement"), with ARC Group International Ltd. (the "Investor"), for an equity line of credit. Under the ELOC Purchase Agreement, the Company has the right, but not the obligation, to direct the Investor to purchase up to $50 million (the "Commitment Amount") in shares of the Company's common stock, par value $0.0001 per share, subject to the terms and conditions contained in the ELOC Purchase Agreement (such shares to be purchased, the "Purchase Shares"). In addition, pursuant to the ELOC Purchase Agreement, the Investor agreed to purchase 1,403,863 shares (the "Subscription Shares") of the Company's common stock from the Company for a purchase price equal to $500,000 in the aggregate at a purchase price per share of $0.35616 per share.

Pursuant to the ELOC Purchase Agreement, the Company is required to file a registration statement with the U.S. Securities and Exchange Commission (the "SEC") registering the resale of the Company's common stock issued under the ELOC Purchase Agreement (the "Registrable Securities") within 60 calendar days of the date of the ELOC Purchase Agreement, and the Company must use its best efforts to have such registration statement be declared effective by the SEC as soon as possible following the filing thereof but in no event later than 90 calendar days following the initial filing of the initial registration statement. The Company cannot deliver an Advance Notice until there is an effective registration statement for the resale of the Registrable Securities.

During the term of the ELOC Purchase Agreement, the Company may direct the Investor to purchase a certain portion of the Commitment Amount (an "Advance") by delivering a notice ("Advance Notice") to the Investor, subject to the terms and conditions in the ELOC Purchase Agreement. The Company shall, in its sole discretion, select the amount of the Advance requested by the Company in each Advance Notice. However, each requested Advance may not exceed the lesser of (i) 75% of the average of the Daily Value Traded (as defined in the ELOC Purchase Agreement) of the Company's common stock over the 10 trading days immediately preceding an Advance Notice, or (ii) $5,000,000, subject to modification by the parties' mutual prior written consent.

If no Advance is ongoing pursuant to a valid Advance Notice at the time the Company delivers an Advance Notice to the Investor, then the purchase price to be paid by the Investor for the Purchase Shares will be 96% of the average daily VWAP of the Company's common stock during the three trading days commencing on the date of the Investor's receipt of the Purchase Shares relating to such Advance Notice. If the Company delivers an Advance Notice to the Investor on or prior to the settlement date of an ongoing Advance, then the purchase price to be paid by the Investor for the Purchase Shares will be 100% of the average intraday sale price of the Company's common stock on the same Trading Day the Advance Notice is received after 8:30 a.m. Eastern Time.

Each Advance is subject to the following limitations: (i) the Company may not conduct a sale under the ELOC Purchase Agreement to the extent that it would cause the aggregate number of shares of common stock beneficially owned (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") by the Investor and its affiliates as a result of previous issuances and sales of shares to the Investor under the ELOC Purchase Agreement to exceed 4.99% of the then issued and outstanding shares of the Company's common stock (the "Ownership Limitation"); and (ii) no Advance may be in excess of the Registrable Securities covered by an effective registration statement then in effect.

Notwithstanding anything to the contrary in the ELOC Purchase Agreement, the Company may not effect any sales under the ELOC Purchase Agreement and the Investor will not have the obligation to purchase common stock thereunder to the extent (but only to the extent) that after giving effect to such purchase and sale the aggregate number of the Company's common stock issued under the ELOC Purchase Agreement (including all of the Registrable Securities) would exceed 19.99% of the issued and outstanding shares of the Company's common stock as of the date of the ELOC Purchase Agreement (the "Exchange Cap") unless the Company obtains the requisite stockholder approval for issuances in excess of the Exchange Cap.

In consideration for the Investor's execution and delivery of the ELOC Purchase Agreement, the Company agreed to issue 3,869,969 shares of the Company's common stock to the Investor (the "Commitment Fee Shares"), having an aggregate value of $1,750,000. The Commitment Fee Shares were deemed fully earned on the date of the ELOC Purchase Agreement. Pursuant to the terms of the ELOC Purchase Agreement, the Company agreed to issue to the Investor in satisfaction of its obligations for the Commitment Fee Shares and Subscription Shares, 3,365,934 shares of common stock and 1,907,898 pre-funded warrants to purchase shares of common stock (the "Pre-Funded Warrants"). Each Pre-Funded Warrant has a nominal exercise price of $0.0001 per share, was pre-funded at issuance, and is exercisable at any time after issuance subject to a 4.99%/9.99% beneficial ownership limitation. The Investor generally may, upon delivery of a written notice to the Company, increase or decrease such beneficial ownership limitation to any other percentage not in excess of 9.99% as specified in such notice effective on the 61st day after such notice is delivered to the Company.

The Company agreed to be responsible for all of Investor's legal fees in connection with the ELOC Purchase Agreement, but not exceeding $30,000 in the aggregate, and Investor acknowledged and agreed that the Company had already paid $10,000 of such aggregate amount.

The ELOC Purchase Agreement terminates automatically on the earliest of (i) the day that is the 36-month anniversary of the date of the ELOC Purchase Agreement, or (ii) the date on which the Investor shall have made payment for Advances equal to the Commitment Amount. The Company may terminate the ELOC Purchase Agreement upon five trading days' prior written notice to the Investor, provided that there are no outstanding Advance Notices and the Company has paid all amounts owed to the Investor pursuant to the ELOC Purchase Agreement, including the Commitment Fee Shares and the Subscription Shares. The parties may also terminate the ELOC Purchase Agreement at any time by mutual written consent.

The ELOC Purchase Agreement contains customary representations, warranties, conditions, and indemnification obligations of the parties. The representations, warranties, and covenants contained in such the ELOC Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.

The Company intends to use the net proceeds from sale of the Subscription Shares and any subsequent sales under the ELOC Purchase Agreement for working capital, advancement of its AI-driven security technologies, and general corporate purposes .

The foregoing description of the ELOC Purchase Agreement and Pre-Funded Warrants does not purport to be complete and is qualified in its entirety by reference to the full texts of the ELOC Purchase Agreement and form of Pre-Funded Warrants, copies of which are filed as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

---

| | |
|:---|:---|
| **Item 3.02.** | **Unregistered Sales of Equity Securities.** |

---

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

The securities issued or that may be issued by the Company to the Investor under the ELOC Purchase Agreement are being offered and sold by the Company to the Investor in a transaction that is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D thereunder. In the ELOC Purchase Agreement, the Investor represented to the Company, among other things, that it is an "accredited investor" (as such term is defined in Rule 501(a) of Regulation D under the Securities Act). Accordingly, the offer and sale by the Company of the securities issued or that may be issued and sold to the Investor under the ELOC Purchase Agreement have not been registered under the Securities Act or any applicable state securities or "blue sky" laws and, therefore, such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities or "blue sky" laws.

This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company, nor shall there be any sale of any securities of the Company in any state or other jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

---

| | |
|:---|:---|
| **Item 7.01.** | **Regulation FD Disclosure.** |

---

On October 9, 2025, the Company issued a press release announcing its entry into the ELOC Purchase Agreement and the initial investment described therein. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information in this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

---

| | |
|:---|:---|
| **Item 9.01.** | **Financial Statements and Exhibits.** |

---

(d) Exhibits.

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| [4.1](tm2528379d1_ex4-1.htm) | [Form of Pre-Funded Warrant.](tm2528379d1_ex4-1.htm) |
| [10.1](tm2528379d1_ex10-1.htm) | [Purchase Agreement, dated as of October 8, 2025, between the Company and ARC Group International Ltd.](tm2528379d1_ex10-1.htm) |
| [99.1](tm2528379d1_ex99-1.htm) | [Press Release, dated October 10, 2025](tm2528379d1_ex99-1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

**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.

---

| | | |
|:---|:---|:---|
| Date: October 10, 2025 | **SCANTECH AI SYSTEMS INC.** | **SCANTECH AI SYSTEMS INC.** |
|  | By: | */s/ Dolan Falconer* |
|  | Name: | Dolan Falconer |
|  | Title: | Chief Executive Officer |

---

## Exhibit 4.1

**Exhibit 4.1**

**FORM OF PRE-FUNDED WARRANT**

**SCANTECH AI SYSTEMS INC.**

**PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK**

Warrant No: PFW-1

Number of Underlying Shares of Common Stock: 1,907,898

Date of Issuance: October 8, 2025 ("**Issuance Date**")

ScanTech AI Systems Inc., a company organized under the laws of Delaware (the "**Company**"), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ARC Group International Ltd., the registered holder hereof or its permitted assigns (the "**Holder**"), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after October 8, 2025 (the "**Initial Exercisability Date**"), until exercised in full (the "**Termination Date**"), 1,907,898 fully paid non-assessable shares of Common Stock (as defined below), subject to adjustment as provided herein (the "**Warrant Shares**"). Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Pre-Funded Warrants to Purchase Common Stock, par value $0.0001 per share, issued in exchange, transfer or replacement hereof, this "**Warrant**"), shall have the meanings set forth in Section 16.

This Pre-Funded Warrants to Purchase Common Stock (the "**Warrant**") issued pursuant to Section 13.04(b) of that certain Purchase Agreement, dated as of October 8, 2025 (the "**Issuance Date**") by and between the Company and the Holder (the "**Purchase Agreement**").

1. <u>EXERCISE OF WARRANT.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Mechanics of Exercise</u>. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto as <u>Annex A</u> (the "**Exercise Notice**"), of the Holder's election to exercise this Warrant. Within one (1) Trading Day following the delivery of the Exercise Notice, the Holder shall make payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the "**Aggregate Exercise Price**") in cash by wire transfer of immediately available funds or, if the provisions of Section 1(d) are applicable, by notifying the Company in writing and specified in the attached Exercise Notice, that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Company shall have no obligation to inquire with respect to or otherwise confirm the authenticity of the signature(s) contained on any Exercise Notice nor the authority of the person executing such Exercise Notice. The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder, nor shall any ink-original signature or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice be required. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares and the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Exercise Notice is delivered to the Company. On or before the first (1st) Trading Day following the date on which the Holder has delivered the applicable Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise Notice, to the Holder and the Company's transfer agent (the "**Transfer Agent**"). So long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise, if applicable) on or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the earlier of (i) the second (2nd) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case following the date on which the Exercise Notice has been delivered to the Company, or, if the Holder does not deliver the Aggregate Exercise Price (or notice of a Cashless Exercise, if applicable) on or prior to the first (1st) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the first (1st) Trading Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered (such earlier date, or if later, the earliest day on which the Company is required to deliver Warrant Shares pursuant to this Section 1(a), the "**Share Delivery Date**"), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company ("**DTC**") Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program ("**FAST**"), issue and dispatch by overnight courier to the physical address or email address as specified in the Exercise Notice, a certificate or evidence of a credit of book-entry shares, registered 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. The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including without limitation for same day processing. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record and beneficial owner of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be. If this Warrant is physically delivered to the Company in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded down to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company's obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination; <u>provided</u>, <u>however</u>, that the Company shall not be required to deliver Warrant Shares with respect to an exercise prior to the Holder's delivery of the Aggregate Exercise Price (or notice of a Cashless Exercise) with respect to such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Exercise Price</u>. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded to the Company on or prior to the Initial Exercisability Date and, consequently, no additional consideration (other than the nominal exercise price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to affect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate Exercise Price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The exercise price per share of Common Stock under this Warrant shall be $0.0001, subject to adjustment hereunder (the "**Exercise Price**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Company's Failure to Timely Deliver Securities</u>. If either (I) the Company shall fail for any reason or for no reason to issue to the Holder on or prior to the applicable Share Delivery Date, if (x) the Transfer Agent is not participating in FAST, a certificate or evidence of a book-entry credit for the number of shares of Common Stock to which the Holder is entitled and register such Common Stock on the Company's share register or (y) the Transfer Agent is participating in FAST, to credit the Holder's balance account with DTC, for such number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise of this Warrant or (II) a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares that are the subject of the Exercise Notice (the "**Exercise Notice Warrant Shares**") is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and (x) the Company fails to promptly, but in no event later than one (1) Business Day after such registration statement becomes unavailable, to so notify the Holder and (y) the Company is unable to deliver the Exercise Notice Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Exercise Notice Warrant Shares to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a "**Notice Failure**" and together with the event described in clause (I) above, an "**Exercise Failure**"), then, in addition to all other remedies available to the Holder, if on or prior to the applicable Share Delivery Date either (I) if the Transfer Agent is not participating in FAST, the Company shall fail to issue and deliver a certificate or evidence of a book-entry credit to the Holder and register such shares of Common Stock on the Company's share register or, if the Transfer Agent is participating in FAST, credit the Holder's balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise hereunder or pursuant to the Company's obligation pursuant to clause (ii) below or (II) if a Notice Failure occurs, 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 and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of 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. The Company's current transfer agent participates in FAST. In the event that the Company changes transfer agents while this Warrant is outstanding, the Company shall use commercially reasonable efforts to select a transfer agent that participates in FAST. While this Warrant is outstanding, the Company shall request its transfer agent to participate in FAST with respect to this Warrant. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect the Company's obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company's obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise. In addition to the foregoing, if the Company fails for any reason to deliver to the Holder the Warrant Shares subject to an Exercise Notice by the second Trading Day following the 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 Weighted Average Price of the Common Stock on the date of the applicable Exercise Notice), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after such liquidated damages begin to accrue) for each Trading Day after the second Trading Day following such Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Cashless Exercise</u>. Notwithstanding anything contained herein to the contrary, if a registration statement (which may be the Registration Statement) covering the issuance or resale of the Exercise Notice Warrant Shares is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula (a "**Cashless Exercise**"):

Net Number = <u>(A x B) - (A x C)</u> <br> B

For purposes of the foregoing formula:

A= the total number of shares with respect to which this Warrant is then being exercised.

B= as applicable: (i) the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of "regular trading hours" (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the Weighted Average Price on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the Bid Price of the Common Stock as of the time of the Holder's execution of the applicable Exercise Notice if such Exercise Notice is executed during "regular trading hours" on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of "regular trading hours" on a Trading Day) pursuant to Section 1(a) hereof or (iii) the Weighted Average Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of "regular trading hours" on such Trading Day.

C= $0.0001, as adjusted hereunder.

If Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section 1(d). Without limiting the rights of a Holder to receive Warrant Shares on a "cashless exercise," and to receive the cash payments contemplated pursuant to Sections 1(c) and 4(b), in no event will the Company be required to net cash settle a Warrant exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Disputes</u>. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 11.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Beneficial Ownership</u>. Notwithstanding anything to the contrary contained herein, the Company shall not affect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99/9.99% (the "**Maximum Percentage**") of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including the other Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"). For purposes of this Warrant, in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Reports on Form 8-K or other public filing with the Securities and Exchange Commission (the "**SEC**"), as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the "**Reported Outstanding Share Number**"). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder's beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the "**Reduction Shares**") and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares so issued by which the Holder's and the other Attribution Parties' aggregate beneficial ownership exceeds the Maximum Percentage (the "**Excess Shares**") shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Required Reserve Amount</u>. So long as this Warrant remains outstanding, the Company shall at all times, in their best efforts, keep reserved for issuance under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall be necessary to satisfy the Company's obligation to issue shares of Common Stock under the Warrants then outstanding (without regard to any limitations on exercise) (the "**Required Reserve Amount**"); <u>provided</u> that at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(g) be reduced other than in connection with any exercise of Warrants or such other event covered by Section 2(c) below. The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Warrants based on the number of shares of Common Stock issuable upon exercise of Warrants held by each holder thereof on the Issuance Date (without regard to any limitations on exercise) (the "**Authorized Share Allocation**"). In the event that a holder shall sell or otherwise transfer any of such holder's Warrants, each transferee shall be allocated a pro rata portion of such holder's Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Warrants shall be allocated to the remaining holders of Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise of the Warrants then held by such holders thereof (without regard to any limitations on exercise).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Insufficient Authorized Shares</u>. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount (an "**Authorized Share Failure**"), then the Company shall promptly take all action reasonably necessary to increase the Company's authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than one-hundred twenty (120) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its reasonable best efforts to solicit its stockholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing, if at any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C.

2. <u>ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES</u>. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Intentionally omitted</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Intentionally omitted</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Adjustment Upon Subdivision or Combination of Common Stock</u>. If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the date the subdivision or combination becomes effective.

3. <u>RIGHTS UPON DISTRIBUTION OF ASSETS</u>. In addition to any adjustments pursuant to Section 2 above, if, on or after the Issuance Date and on or prior to the Termination Date, the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "**Distribution**"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (<u>provided</u>, <u>however</u>, that to the extent that the Holder's right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).

4. <u>PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Purchase Rights</u>. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Issuance Date and on or prior to the Termination Date the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the "**Purchase Rights**"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (<u>provided</u>, <u>however</u>, that to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Fundamental Transaction</u>. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b), including agreements to 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, including, without limitation, which is exercisable for a corresponding number of shares of capital stock 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 adjustments to the 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). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for the Company (so that from and after the date of the applicable 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 with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a "**Corporate Event**"), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Termination Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) (collectively, the "**Corporate Event Consideration**") which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). The provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events.

**Exclusions.** "Fundamental Transaction" shall **not** include any transaction primarily for capital raising purposes that does not result in a Change of Control.

5. <u>NONCIRCUMVENTION</u>. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).

6. <u>WARRANT HOLDER NOT DEEMED A STOCKHOLDER</u>. Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

7. <u>REISSUANCE OF WARRANTS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Transfer of Warrant</u>. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Lost, Stolen or Mutilated Warrant</u>. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Exchangeable for Multiple Warrants</u>. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Issuance of New Warrants</u>. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

8. <u>NOTICES</u>. Whenever notice is required to be given under this Warrant, including, without limitation, an Exercise Notice, unless otherwise provided herein, such notice shall be given in writing, (i) if delivered (a) from within the domestic United States, by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile or (b) from outside the United States, by International Federal Express, electronic mail or facsimile, and (ii) will be deemed given (A) if delivered by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally recognized overnight carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal Express, two (2) Business Days after so mailed and (D) at the time of transmission, if delivered by electronic mail to each of the email addresses specified in this Section 8 prior to 5:00 p.m. (New York time) on a Trading Day, (E) the next Trading Day after the date of transmission, if delivered by electronic mail to each of the email addresses specified in this Section 8 on a day that is not a Trading Day or later than 5:00 p.m. (New York time) on any Trading Day and (F) if delivered by facsimile, upon electronic confirmation of delivery of such facsimile, and will be delivered and addressed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if to the Company, to:

ScanTech AI Systems Inc.

1735 Enterprise Dr.

Buford, GA 30518

Attention: Dolan Falconer, Chief Executive Officer

Email: [\*\*\*]

with a copy (which shall not constitute notice) to:

Thompson Hine LLP

Two Alliance Center

3560 Lenox Road NE, Suite 1600

Atlanta, GA 30326-4266

Attention: Michael V. Coleman, Esq.

Email: [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if to the Holder, at such address or other contact information delivered by the Holder to the Company or as is on the books and records of the Company.

For initial notices to the Holder:

ARC Group International Ltd.

10 East 53rd Street, Suite 3001

New York, NY 10022

Attention: Mac McDonald

Email: [\*\*\*]

with a copy (which shall not constitute notice) to:

Lucosky Brookman LLP

101 Wood Avenue South, 5th Floor

Woodbridge, NJ 08830

Attention: Rodrigo Sanchez, Esq.

Email: [\*\*\*\*]

The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; <u>provided</u> in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

9. <u>AMENDMENT AND WAIVER</u>. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.

10. <u>GOVERNING LAW; JURISDICTION; JURY TRIAL</u>. 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 New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and of the United States of America sitting in The City and County of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. 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 Section 8(i) above or such other address as the Company subsequently delivers to the Holder 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. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. **THE COMPANY 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 WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.**

11. <u>DISPUTE RESOLUTION</u>. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company's independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

12. <u>REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF</u>. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

13. <u>TRANSFER</u>. This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company, subject to the below conditions.

**Transfer Conditions.** No transfer of this Warrant or any Warrant Shares shall be made to any Person that is (i) the subject of sanctions or otherwise restricted under applicable AML/sanctions laws, or (ii) a "bad actor" as defined in Rule 506(d), to the Company's knowledge after reasonable inquiry. Any transfer shall be subject to the Maximum Percentage limitation (including aggregation with any Attribution Parties of the transferee), and the Holder shall provide customary KYC information reasonably requested by the Company.

14. <u>SEVERABILITY; CONSTRUCTION; HEADINGS</u>. 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). 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.

15. <u>DISCLOSURE</u>. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information relating to the Company or its subsidiaries.

16. <u>CERTAIN DEFINITIONS</u>. For purposes of this Warrant, the following terms shall have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**Affiliate**" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that "control" of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "**Attribution Parties**" means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder's investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company's Common Stock would or could be aggregated with the Holder's and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "**Bid Price**" means, for any security as of the particular time of determination, the bid price for such security on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of the bid prices of any market makers for such security as reported in the OTC Link or "pink sheets" by OTC Markets Group Inc. as of such time of determination. If the Bid Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder 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 11. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "**Bloomberg**" means Bloomberg Financial Markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "**Business Day**" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "**Closing Bid Price**" means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link or "pink sheets" by OTC Markets Group Inc. If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 11. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "**Common Stock**" means (i) the Company's Common Stock, par value $0.0001 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "**Convertible Securities**" means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "**Eligible Market**" means The Nasdaq Capital Market, the NYSE American LLC, The Nasdaq Global Select Market, The Nasdaq Global Market or The New York Stock Exchange, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "**Fundamental Transaction**" means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its "significant subsidiaries" (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock not held by all such Subject Entities as of the Issuance Date calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "**Group**" means a "group" as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "**Options**" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "**Parent Entity**" of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "**Person**" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "**Principal Market**" means the national securities exchange or market on which the Common Stock is then listed or quoted for trading, which as of the Issuance Date is The Nasdaq Global Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "**Standard Settlement Period**" means the standard settlement period, expressed in a number of Trading Days, for the Company's primary trading market or quotation system with respect to the Common Stock that is in effect on the date of receipt of an applicable Exercise Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "**Subject Entity**" means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "**Successor Entity**" means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) "**Trading Day**" means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) "**Transaction Documents**" means any agreement entered into by and between the Company and the Holder, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) "**Weighted Average Price**" means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg through its "Volume at Price" function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, 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 OTC Link or "pink sheets" by OTC Markets Group Inc. If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 11 with the term "Weighted Average Price" being substituted for the term "Exercise Price." All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

**[Signature Page Follows]**

**IN WITNESS WHEREOF,** the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

---

| | |
|:---|:---|
| **ScanTech AI Systems Inc.** | **ScanTech AI Systems Inc.** |
| By: | /s/ Dolan Falconer |
| Name: | Dolan Falconer |
| Title: | Chief Executive Officer |

---

[Signature Page to Pre-Funded Warrant]

**Annex A**

**EXERCISE NOTICE**

**TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS**

**PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK**

**SCANTECH AI SYSTEMS INC.**

The undersigned holder hereby exercises the right to purchase [●] shares of Common Stock ("**Warrant Shares**") of ScanTech AI Systems Inc., a company organized under the law of Delaware (the "**Company**"), evidenced by the attached Pre-Funded Warrant to Purchase Common Stock (the "**Warrant**"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1. Form of Exercise Price. The holder intends that payment of the Exercise Price shall be made as:

____________ a "<u>Cash Exercise"</u> with respect to [●] Warrant Shares; and/or

____________ a <u>"Cashless Exercise"</u> with respect to _______________ Warrant Shares.

2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of [●] to the Company in accordance with the terms of the Warrant.

3. Delivery of Warrant Shares. The Company shall deliver to the holder [●] Warrant Shares in accordance with the terms of the Warrant.

Date:

Name of Registered Holder

**ARC GROUP INTERNATIONAL LTD.**

By:   <br> Name: <br> Title:

**ACKNOWLEDGMENT**

The Company hereby acknowledges this Exercise Notice and hereby directs Securities Transfer Corporation to issue the above indicated number of shares of Common Stock on or prior to the applicable Share Delivery Date.

---

| | |
|:---|:---|
| **SCANTECH AI SYSTEMS INC.** | **SCANTECH AI SYSTEMS INC.** |
| By: |  |
| Name: | Dolan Falconer |
| Title: | Chief Executive Officer |

---

## Exhibit 10.1

**Exhibit 10.1**

**PURCHASE AGREEMENT**

**THIS PURCHASE AGREEMENT** (this "<u>Agreement</u>"), dated as of October 8, 2025, is made by and between ARC Group International Ltd. (the "<u>Investor</u>"), and ScanTech AI Systems Inc., a Delaware corporation (the "<u>Company</u>").

**WHEREAS**, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company, up to Fifty Million Dollars ($50,000,000) of the Company's common stock, par value $0.0001 per share (the "<u>Common Stock</u>"); and

**WHEREAS**, the Common Stock is listed for trading on The Nasdaq Global Market under the symbol "STAI"; and

**WHEREAS**, the offer and sale of the Shares (as defined below) issuable hereunder will be made in reliance upon Section 4(a)(2) under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the "<u>Securities Act</u>"), or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the transactions to be made hereunder.

**NOW, THEREFORE**, the parties hereto agree as follows:

**Article I**<br> **CERTAIN DEFINITIONS**

"<u>Advance</u>" shall mean the portion of the Commitment Amount requested by the Company in an Advance Notice (Drawdown 1) or Advance Notice (Drawdown 2), as applicable.

"<u>Advance Date</u>" shall mean the 3rd Trading Day after expiration of the applicable Pricing Period for each Advance.

"<u>Advance Halt</u>" shall have the meaning set forth in Section 2.05(d).

"<u>Advance Notice</u>" shall mean, collectively, an Advance Notice (Drawdown 1) and Advance Notice (Drawdown 2).

"<u>Advance Notice (Drawdown 1)</u>" shall mean a written notice in the form of <u>Exhibit A</u> attached hereto to the Investor executed by an officer of the Company or other authorized representative of the Company identified on Schedule 1 hereto and setting forth the amount of an Advance that the Company desires to issue and sell to the Investor while no other Advance is ongoing pursuant to any Advance Notice.

"<u>Advance Notice (Drawdown 2)</u>" shall mean a written notice in the form of <u>Exhibit A</u> attached hereto to the Investor executed by an officer of the Company or other authorized representative of the Company identified on Schedule 1 hereto and setting forth the amount of an Advance that the Company desires to issue and sell to the Investor prior to the Settlement Date of any ongoing Advance pursuant to a valid Advance Notice.

"<u>Advance Notice Confirmation</u>" shall have the meaning set forth in Section 2.03(a).

"<u>Advance Notice Date</u>" shall mean each date the Company delivers (in accordance with Section 2.03 of this Agreement) to the Investor an Advance Notice, as applicable, subject to the terms of this Agreement.

"<u>Affiliate</u>" shall have the meaning set forth in Section 3.07.

"<u>Agreement</u>" shall have the meaning set forth in the preamble of this Agreement.

"<u>Applicable Laws</u>" shall mean all applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls, including the United States Foreign Corrupt Practices Act of 1977, and (iii) any Sanctions laws.

"<u>Bankruptcy Law</u>" means Title 11, U.S. Code, or any similar federal, state or similar laws for the relief of debtors.

"<u>Black Out Period</u>" shall have the meaning set forth in Section 6.02.

"<u>Board of Directors</u>" means the Board of Directors of the Company.

"<u>Buy-In</u>" shall have the meaning set forth in Section 2.06.

"<u>Buy-In Price</u>" shall have the meaning set forth in Section 2.06.

"<u>Closing</u>" shall have the meaning set forth in Section 2.05.

"<u>Closing Price</u>" means (i) if this Agreement is fully executed during market hours (before the close of the regular session at 4:00 P.M. Eastern Time) on a Trading Day, the previous Trading Day's closing price of a share Common Stock (as reflected on Nasdaq.com), (ii) if this Agreement is fully executed after market hours (on or after the close of the regular session at 4:00 P.M. Eastern Time) on a Trading Day, that Trading Day's closing price of a share of Common Stock (as reflected on Nasdaq.com), or (iii) if this Agreement is fully executed on a day that is not a Trading Day, the previous Trading Day's closing price of a share Common Stock (as reflected on Nasdaq.com).

"<u>Commitment Amount</u>" shall mean Fifty Million United States Dollars ($50,000,000) of Common Stock.

"<u>Commitment Fee Shares</u>" shall have the meaning set forth in Section 13.04.

"<u>Commitment Period</u>" shall mean the period commencing on the date hereof and expiring upon the date of termination of this Agreement in accordance with Section 11.02.

"<u>Common Stock</u>" shall have the meaning set forth in the recitals of this Agreement.

"<u>Common Stock Equivalents</u>" means any securities of the Company which entitle the holder thereof to acquire at any time shares of Common Stock, including, without limitation, any debt, preferred shares, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares of Common Stock.

"<u>Company</u>" shall have the meaning set forth in the preamble of this Agreement.

"<u>Company Indemnitees</u>" shall have the meaning set forth in Section 5.02.

"<u>Condition Satisfaction Date</u>" shall have the meaning set forth in Section 7.01

"<u>Confidential Information</u>" means all confidential, proprietary or non-public information, documentation or data (whether written, oral or electronic communications) regarding the Company or any of its affiliates received by a Purchaser or its Representatives, in each case, regardless of whether or not such information, documentation or data is marked or otherwise identified as "confidential". Confidential Information also includes information of third parties where the Company its affiliates have an obligation of confidentiality with respect to such information. Confidential Information will not, however, include information which (a) is or becomes publicly available other than as a result of a disclosure by a Purchaser or its Representatives in violation of this Agreement, (b) is or becomes available to a Purchaser or any of its Representatives on a non-confidential basis from a third-party or (c) is or has been independently developed by a Purchaser and/or its Representatives without use of or reference to any Confidential Information.

"<u>Custodian</u>" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

"<u>Daily Value Traded</u>" means the product obtained by multiplying the daily trading volume of the Common Stock on the Principal Market or Trading Market during regular trading hours as reported by Bloomberg L.P., by the VWAP for such Trading Day. For the avoidance of doubt, the daily trading volume shall include all trades on the Principal Market or Trading Market during regular trading hours.

"<u>DTC</u>" means the Depository Trust Company.

"<u>DWAC Shares</u>" means the Shares acquired or purchased by the Investor pursuant to this Agreement (a) that the Investor has resold in a manner described under the caption "Plan of Distribution" in the Registration Statement and otherwise in compliance with this Agreement before the delivery of the Transfer Agent Confirmation regarding the resale of such Shares in accordance with this Agreement, and (b) about which the Investor has (i) delivered to the Company and the transfer agent to the Company (A) the Transfer Agent Confirmation relating to such Shares and (B) a customary representation letter from the Investor, and, if requested by the transfer agent, its broker, confirming, among other things, the resale of such Shares in the manner described in clause (a) of this definition of DWAC Shares (including confirmation of compliance with any relevant prospectus delivery requirements), and (ii) delivered to the transfer agent instructions for the delivery of such Shares to the account with DTC of the Investor's designated broker-dealer as specified in the Transfer Agent Deliverables, which Shares will be in the hands of the persons who purchase such or Shares from the Investor in the manner described in clause (a) of this definition of DWAC Shares, freely tradable and transferable without restriction on resale and without stop transfer instructions maintained against the transfer thereof.

"<u>Effective Date</u>" means the date a Registration Statement is declared effective.

"<u>Effectiveness Deadline</u>" shall have the meaning set forth in Section 6.01(a).

"<u>Environmental Laws</u>" shall have the meaning set forth in Section 4.08.

"<u>Exchange Act</u>" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Filing Deadline</u>" shall have the meaning set forth in Section 6.01(a).

"<u>Exchange Cap</u>" has the meaning set forth in Section 2.09.

"<u>Indemnified Liabilities</u>" shall have the meaning set forth in Section 5.01.

"<u>Initial Registration Statement</u>" shall have the meaning set forth in Section 6.01(a).

"<u>Investor</u>" shall have the meaning set forth in the preamble of this Agreement.

"<u>Investor Indemnitees</u>" shall have the meaning set forth in Section 5.01.

"<u>Material Adverse Effect</u>" shall mean any event, occurrence or condition that has had or would reasonably be expected to have (i) a material adverse effect on the legality, validity or enforceability of this Agreement or the transactions contemplated herein, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under this Agreement.

"<u>Material Outside Event</u>" shall have the meaning set forth in Section 6.08.

"<u>Maximum Advance Amount</u>" shall be, an amount equal to lesser of (i) 75% of the average of the Daily Value Traded of the Common Stock over the 10 Trading Days immediately preceding the date an Advance Notice is delivered, or (ii) $5,000,000; provided, however, that the parties hereto may modify the aforementioned conditions by mutual prior written consent.

"<u>OFAC</u>" shall mean the U.S. Department of Treasury's Office of Foreign Asset Control.

"<u>Ownership Limitation</u>" shall have the meaning set forth in Section 2.04(a).

"<u>Person</u>" shall mean an individual, a corporation, a partnership, a limited liability company, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

"<u>Plan of Distribution</u>" shall mean the section of a Registration Statement disclosing the plan of distribution of the Common Stock.

"<u>Pricing Period</u>" shall mean, in respect of any Advance, the three (3) Trading Days commencing on the date of the Investor's receipt of the Shares relating to such Advance.

"<u>Principal Market</u>" shall mean either The Nasdaq Global Market or The Nasdaq Capital Market.

"<u>Purchase Price</u>" shall mean, collectively, the Purchase Price (Drawdown 1) and Purchase Price (Drawdown 2).

"<u>Purchase Price (Drawdown 1)</u>" shall mean 96% of the average daily VWAP of the Common Stock during the applicable Pricing Period related to an Advance Notice (Drawdown 1).

"<u>Purchase Price (Drawdown 2)</u>" shall mean 100% of the average intraday sale price of the Common Stock on the same Trading Day an Advance Notice (Drawdown 2) is received after 8:30 a.m. Eastern Time.

"<u>Registrable Securities</u>" shall mean (i) the Commitment Fee Shares, (ii) the Shares, (iii) the Subscription Shares, and (iv) any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise.

"<u>Registration Limitation</u>" shall have the meaning set forth in Section 2.04(b).

"<u>Registration Statement</u>" shall mean a registration statement on Form S-1 or Form S-3 or on such other form promulgated by the SEC for which the Company then qualifies and which counsel for the Company shall deem appropriate, and which form shall be available for the registration of the resale by the Investor of the Registrable Securities under the Securities Act.

"<u>Regulation D</u>" shall mean the provisions of Regulation D promulgated under the Securities Act.

"<u>Required Delivery Date</u>" means any date on which the Company or its transfer agent is required to deliver Common Stock to Investor hereunder.

"<u>Rule 144 Holding Period</u>" means six months from the date of issuance of any Common Stock issuable hereunder or such date as shall be required to comply with Rule 144 of the Securities Act.

"<u>Sanctions</u>" means any sanctions administered or enforced by OFAC, the U.S. State Department, the United Nations Security Council, the European Union, Her Majesty's Treasury, or other relevant sanctions authority.

"<u>Sanctions Programs</u>" means any OFAC economic sanction program (including, without limitation, programs related to Crimea, Cuba, Iran, North Korea, Sudan and Syria).

"<u>SEC</u>" shall mean the U.S. Securities and Exchange Commission.

"<u>SEC Documents</u>" shall have the meaning set forth in Section 4.04.

"<u>Securities Act</u>" shall have the meaning set forth in the recitals of this Agreement.

"<u>Settlement Date</u>" shall mean the 3rd Trading Day after expiration of the applicable Pricing Period for each Advance or if the Investor shall not have sold all of the shares of Common Stock in respect of such Advance the Trading Day following the date the Investor shall have sold all of the shares in respect of the such Advance.

"<u>Settlement Document</u>" shall have the meaning set forth in Section 2.05(a).

"<u>Shares</u>" shall mean the shares of Common Stock to be issued to the Investor from time to time hereunder pursuant to an Advance.

"<u>Trading Day</u>" shall mean any day during which the Principal Market or Trading Market shall be open for business.

"<u>Trading Market</u>" shall mean the New York Stock Exchange, the NYSE American LLC, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the Nasdaq Global Market Composite, the NYSE Euronext, OTCQX, OTCQB, OTCID, Pink Limited Market, whichever is at the time the principal trading exchange or market for the Common Stock.

"<u>Transaction Documents</u>" shall have the meaning set forth in Section 4.02.

"<u>Transfer Agent Confirmation</u>" means a written confirmation sent by the Investor to the transfer agent that sets forth the number of DWAC Shares that have been resold, and the date(s) of such resales.

"<u>Transfer Agent Deliverables</u>" shall have the meaning set forth in Section 2.03(b).

"<u>VWAP</u>" means, for any Trading Day, the daily volume weighted average price of the Common Stock for such Trading Day on the Principal Market or Trading Market from 9:30 a.m. Eastern Time through 4:00 p.m. Eastern Time, excluding the opening price and the closing price; provided, however, that upon the occurrence of an Advance Halt due to a Material Outside Event, the VWAP calculation shall terminate as of the effective time of the Material Outside Event.

**Article II**

**ADVANCES**

**Section 2.01 Advances; Mechanics.** Subject to the terms and conditions of this Agreement (including, without limitation, the provisions of Article VII hereof), the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase from the Company, Common Stock on the terms set forth herein.

**Section 2.02 Advance Notice.** At any time during the Commitment Period, the Company may require the Investor to purchase Common Stock by delivering an Advance Notice to the Investor, subject to the conditions set forth in Section 7.01, and in accordance with the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;a. The Company shall, in its sole discretion, select the amount of the Advance, not to exceed the Maximum Advance Amount, it desires
to issue and sell to the Investor in each Advance Notice and the time it desires to deliver each Advance Notice.

&nbsp;&nbsp;&nbsp;&nbsp;b. There shall be no mandatory minimum Advances and no non-usages fee for not utilizing the Commitment Amount or any part thereof.

&nbsp;&nbsp;&nbsp;&nbsp;c. The Advance Notice shall be valid upon delivery to Investor in accordance with <u>Exhibit C</u>.

&nbsp;&nbsp;&nbsp;&nbsp;d. Notwithstanding anything in this Agreement to the contrary:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. In the event no Advance is ongoing pursuant to a valid Advance Notice at the time the Company delivers
an Advance Notice to the Investor, (i) such Advance Notice shall be deemed and treated as an Advance Notice (Drawdown 1), and (ii) the
Purchase Price applicable to such Advance shall be the Purchase Price (Drawdown 1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. In the event the Company delivers an Advance Notice to the Investor on or prior to the Settlement Date
of an ongoing Advance, (i) such subsequent Advance Notice shall be deemed and treated as an Advance Notice (Drawdown 2), and (ii) the
Purchase Price applicable to such subsequent Advance shall be the Purchase Price (Drawdown 2).

**Section 2.03 Date of Delivery of Advance Notice; Issuance of Shares.** 

&nbsp;&nbsp;&nbsp;&nbsp;a. An Advance Notice shall be deemed delivered on the day it is received by the Investor if such notice is
received by email prior to 8:30 a.m. Eastern Time (or later if waived by the Investor in its sole discretion) in accordance with the instructions
set forth on <u>Exhibit C</u>. Following the receipt of such Advance Notice the Investor shall promptly provide the Company with a confirmation
of its receipt of such Advance Notice, which receipt may be in the form of an email (each, an " <u>Advance Notice Confirmation</u> ").

&nbsp;&nbsp;&nbsp;&nbsp;b. Promptly after receipt of the Advance Notice with respect to each Advance (and, in any event, not later
than 2 Trading Days after such receipt), the Company will, or will cause its transfer agent to, issue in the Investor's name in
a DRS account or accounts at the transfer agent all the Shares purchased by Investor pursuant to such Advance. Such Shares shall constitute
 "restricted securities" as such term is defined in Rule 144(a)(3) under the Securities Act and the certificate or book-entry
statement representing such Shares shall bear the restrictive legend under the Securities Act set forth in Section 9.1(iii). Notwithstanding
the foregoing, if the Investor is to resell the Shares in a manner described under the caption "Plan of Distribution" in the
Registration Statement and otherwise in compliance with this Agreement prior to the delivery by the Investor to the Company of the appliable
Advance Notice Confirmation, the Investor shall concurrently with the delivery by the Investor to the Company of such Advance Notice Confirmation
deliver to the transfer agent the items set forth in clause (b) of the definition of DWAC Shares with respect to such resold Shares and
such other items as the transfer agent may reasonably request (collectively, the " <u>Transfer Agent Deliverables</u> "). With
respect to Shares to be resold by the Investor as described in the preceding sentence and as to which the Investor has timely delivered
the Transfer Agent Deliverables with respect to such Shares, such securities shall be delivered and credited by the transfer agent using
the Fast Automated Securities Transfer (FAST) Program maintained by DTC (or any similar program hereafter adopted by DTC performing substantially
the same function) to the account with DTC of the Investor's designated Broker-Dealer as specified in the Transfer Agent Deliverables
with respect to such securities at the time such securities would otherwise have been required to be delivered to the Investor in accordance
with this Agreement, which securities (x) shall only be used by the Investor's Broker-Dealer to deliver such securities to DTC for
the purpose of settling the Investor's share delivery obligations with respect to the sale of such Shares, which may include delivery
to other accounts of such Broker-Dealer and inclusion in the number of Shares delivered by that Broker-Dealer in "net settling"
that Broker-Dealer's trading of Shares, including its positions with the Broker-Dealers of the respective persons who purchase such
securities from the Investor, and (y) shall remain "restricted securities" as such term is defined in Rule 144(a)(3) under
the Securities Act until so delivered. The Company and the Investor acknowledge that such Shares credited to the account with DTC of the
Investor's designated Broker-Dealer shall be eligible for transfer to the third-party purchasers of such Shares or their respective
Broker-Dealers as DWAC Shares. No fractional shares shall be issued, and any fractional amounts shall be rounded to the next higher whole
number of shares.

**Section 2.04 Advance Limitations**. Regardless of the amount of an Advance requested by the Company in the Advance Notice, the final amount of an Advance pursuant to an Advance Notice shall be reduced in accordance with each of the following limitations:

&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Ownership Limitation; Commitment Amount</u>. In no event shall the number of Shares issuable to the
Investor pursuant to an Advance cause the aggregate number of shares of Common Stock beneficially owned (as calculated pursuant to Section
13(d) of the Exchange Act) by the Investor and its affiliates as a result of previous issuances and sales of Shares to Investor under
this Agreement to exceed 4.99% of the then issued and outstanding shares of Common Stock (the " <u>Ownership Limitation</u> ").
In connection with each Advance Notice delivered by the Company, any portion of an Advance that would (i) cause the Investor to exceed
the Ownership Limitation, or (ii) cause the aggregate number of Shares issued and sold to the Investor hereunder to exceed the Commitment
Amount shall automatically be withdrawn with no further action required by the Company, and such Advance Notice shall be deemed automatically
modified to reduce the amount of the Advance requested by an amount equal to such withdrawn portion; provided that in the event of any
such automatic withdrawal and automatic modification, Investor will promptly notify the Company of such event.

&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Registration Limitation</u>. In no event shall an Advance exceed the amount registered under the Registration
Statement then in effect (the " <u>Registration Limitation</u> ") or the Exchange Cap to the extent applicable. In connection
with each Advance Notice, any portion of an Advance that would exceed the Registration Limitation or Exchange Cap shall automatically
be withdrawn with no further action required by the Company and such Advance Notice shall be deemed automatically modified to reduce the
aggregate amount of the requested Advance by an amount equal to such withdrawn portion in respect of each Advance Notice; provided that
in the event of any such automatic withdrawal and automatic modification, Investor will promptly notify the Company of such event.

&nbsp;&nbsp;&nbsp;&nbsp;c. Notwithstanding any other provision in this Agreement, the Company and the Investor acknowledge and agree
that upon the Investor's receipt of a valid Advance Notice the parties shall be deemed to have entered into an unconditional contract
binding on both parties for the purchase and sale of Common Stock pursuant to such Advance Notice in accordance with the terms of this
Agreement and, subject to Applicable Law and Section 3.08 (Trading Activities), the Investor may sell Common Stock during the Pricing
Period.

**Section 2.05 Closings**. The closing of each Advance and each sale and purchase of Shares related to each Advance (each, a "<u>Closing</u>") shall take place on the applicable Settlement Date in accordance with the procedures set forth below. The parties acknowledge that the Purchase Price is not known at the time the Advance Notice is delivered (at which time the Investor is irrevocably bound) but shall be determined on each Closing based on the daily prices of the Common Stock that are the inputs to the determination of the Purchase Price as set forth further below. In connection with each Closing, and subject to <u>Section 2.02.d</u> of this Agreement, the Company and the Investor shall fulfill each of its obligations as set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;a. On the Settlement Date in respect of an Advance, the Investor shall deliver to the Company a written document,
in the form attached hereto as <u>Exhibit B</u> (each a " <u>Settlement Document</u> "), setting forth the final number of Shares
to be purchased by the Investor (taking into account any adjustments pursuant to <u>Section 2.04</u>), the applicable Purchase Price,
the aggregate proceeds to be paid by the Investor to the Company, and a report by Bloomberg, L.P. indicating the VWAP of the Common Stock
for each of the Trading Days during the applicable Pricing Period (or, if not reported on Bloomberg, L.P., another reporting service reasonably
agreed to by the parties), in each case in accordance with the terms and conditions of this Agreement. The Investor shall pay to the Company
the aggregate Purchase Price of the Shares (as set forth in the Settlement Document) in cash in immediately available funds to an account
designated by the Company in writing, and transmit notification to the Company that such funds transfer has been requested.

&nbsp;&nbsp;&nbsp;&nbsp;b. Notwithstanding anything to the contrary in this Agreement, if on any day during the Pricing Period (i)
the Company notifies Investor that a Material Outside Event set forth in Section 6.08(i) through (v) has occurred or if the Material Outside
Event set forth in Sections 6.08(vi) or (vii) shall have occurred, or (ii) the Company notifies the Investor of a Black Out Period, the
parties agree that the pending Advance shall end (the " <u>Advance Halt</u> ") and the final number of Shares to be purchased
by the Investor at the Closing for such Advance shall be equal to the number of Shares sold by the Investor during the applicable Pricing
Period prior to the notification from the Company of a Material Outside Event or Black Out Period.

&nbsp;&nbsp;&nbsp;&nbsp;c. On or prior to the Settlement Date, each of the Company and the Investor shall deliver to the other all
documents, instruments and writings expressly required to be delivered by either of them pursuant to this Agreement in order to implement
and effect the transactions contemplated herein.

**Section 2.06 Failure to Timely Deliver**.

&nbsp;&nbsp;&nbsp;&nbsp;a. If on or prior to the Required Delivery Date either (I) if the transfer agent is not participating in
the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate to Investor and register
such Shares on the Company's share register or, if the transfer agent is participating in the DTC Fast Automated Securities Transfer
Program, credit the balance account of Investor or Investor's designee with DTC for the number of Shares to which Investor submitted
for legend removal by Investor pursuant to clause (ii) below or otherwise or (II) if the Company's transfer agent is participating
in the DTC Fast Automated Securities Transfer Program, the transfer agent fails to credit the balance account of Investor or Investor's
designee with DTC for any Shares submitted for legend removal by Investor, in each case, if and only if the Investor has delivered the
Transfer Agent Deliverables in accordance with the requirements of Section 2.03(b) above, and the Company fails to promptly, but in no
event later than 2 Trading Days (x) so notify Investor and (y) deliver the Shares electronically without any restrictive legend in accordance
with the requirements of Section 2.03(b) above, and if on or after such Trading Day Investor purchases (in an open market transaction
or otherwise) Shares to deliver in satisfaction of a sale by Investor of Shares submitted for legend removal by Investor that Investor
is entitled to receive from the Company (a " <u>Buy-In</u> "), then the Company shall, within one (1) Trading Day after Investor's
request and in Investor's discretion, either (i) pay cash to Investor in an amount equal to Investor's total purchase price
(including brokerage commissions, borrow fees and other out-of-pocket expenses, if any, for the Common Stock so purchased) (the " <u>Buy-In Price</u> "), at which point the Company's obligation to so deliver such certificate or credit Investor's balance account
shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to so deliver to Investor a certificate or certificates
or credit the balance account of Investor or Investor's designee with DTC representing such number of Shares that would have been
so delivered if the Company timely complied with its obligations hereunder and pay cash to Investor in an amount equal to the excess (if
any) of the Buy-In Price over the product of (A) such number of Shares that the Company was required to deliver to Investor by the Required
Delivery Date multiplied by (B) the price at which Investor sold such Shares in anticipation of the Company's timely compliance
with its delivery obligations hereunder. Nothing shall limit Investor'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 certificates representing Shares (or to electronically deliver such Shares) as required pursuant to the terms
hereof.

&nbsp;&nbsp;&nbsp;&nbsp;b. In the event the Investor sells Shares after receipt of an Advance Notice and the Company fails to perform
its obligations as mandated in Section 2.03, the Company agrees that in addition to and in no way limiting the rights and obligations
set forth in Article V hereto and in addition to any other remedy to which the Investor is entitled at law or in equity, including, without
limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense (including, without limitation,
all brokerage commissions, borrow fees, legal fees and expenses and all other related out-of-pocket expenses), as incurred, arising out
of or in connection with such default by the Company and acknowledges that irreparable damage may occur in the event of any such default.
It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement
and to specifically enforce (subject to the Securities Act and other rules of the Principal Market or Trading Market), without the posting
of a bond or other security, the terms and provisions of this Agreement.

**Section 2.07 Return of Surplus**. If the value of the Shares delivered to the Investor causes the Company to exceed the Commitment Amount, then the Investor shall return to the Company the surplus amount of Shares associated with such Advance.

**Section 2.08 Completion of Resale Pursuant to the Registration Statement**. After the Investor has purchased the full Commitment Amount and has completed the subsequent resale of the full Commitment Amount pursuant to the Registration Statement, the Investor will notify the Company that all subsequent resales are completed and the Company will be under no further obligation to maintain the effectiveness of the Registration Statement.

**Section 2.09 Exchange Cap**. Notwithstanding anything to the contrary in this Agreement, the Company shall not effect any sales under this Agreement and the Investor shall not have the obligation to purchase Common Stock under this Agreement to the extent (but only to the extent) that after giving effect to such purchase and sale the aggregate number of Common Stock issued under this Agreement (including all of the Registrable Securities) would exceed 19.99% of the issued and outstanding shares of Common Stock as of the date of this Agreement (the "<u>Exchange Cap</u>"); provided, however, that, the Exchange Cap will not apply (i) if the Company obtains the requisite stockholder approval for issuances in excess of the Exchange Cap or (ii) if, and only to the extent, that The Nasdaq Stock Market ("<u>Nasdaq</u>") grants an exception to permit shares of Common Stock to be sold in excess of the Exchange Cap pursuant to Nasdaq Listing Rule 5635(f) without stockholder approval.

**Article III<br>REPRESENTATIONS AND WARRANTIES OF INVESTOR**

Investor hereby represents and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof and as of each Advance Notice Date and each Advance Date:

**Section 3.01 Organization and Authorization**. The Investor is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite power and authority to execute, deliver and perform this Agreement, including all transactions contemplated hereby. The decision to invest and the execution and delivery of this Agreement by the Investor, the performance by the Investor of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby have been duly authorized and require no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver this Agreement and all other instruments on behalf of the Investor or its shareholders. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.

**Section 3.02 Evaluation of Risks**. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Common Stock of the Company and of protecting its interests in connection with the transactions contemplated hereby. The Investor acknowledges and agrees that its investment in the Company involves a high degree of risk, and that the Investor may lose all or a part of its investment.

**Section 3.03 No Legal, Investment or Tax Advice from the Company**. The Investor acknowledges that it 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 the Company's representatives or agents for legal, tax, investment or other advice with respect to the Investor's acquisition of Common Stock hereunder, the transactions contemplated by this Agreement or the laws of any jurisdiction, and the Investor acknowledges that the Investor may lose all or a part of its investment.

**Section 3.04 Investment Purpose**. The Investor is acquiring the Common Stock for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the registration requirements of the Securities Act; provided, however, that by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the Common Stock for any minimum or other specific term and reserves the right to dispose of the Common Stock at any time in accordance with, or pursuant to, a registration statement filed pursuant to this Agreement or an applicable exemption under the Securities Act. The Investor does not presently have any agreement or understanding, directly or indirectly, with any Person to sell or distribute any of the Shares. The Investor acknowledges that it will be disclosed as an "underwriter" and a "selling stockholder" in each Registration Statement and in any prospectus contained therein.

**Section 3.05. Accredited Investor**. The Investor is an "Accredited Investor" as that term is defined in Rule 501(a)(3) of Regulation D.

**Section 3.06 Information**. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information the Investor deemed material to making an informed investment decision. The Investor and its advisors (and its counsel), if any, have been afforded the opportunity to ask questions of the Company and its management and have received answers to such questions. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors (and its counsel), if any, or its representatives shall modify, amend or affect the Investor's right to rely on the Company's representations and warranties contained in this Agreement. The Investor acknowledges and agrees that the Company has not made to the Investor, and the Investor acknowledges and agrees it has not relied upon, any representations and warranties of the Company, its employees or any third party other than the representations and warranties of the Company contained in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect to the transactions contemplated hereby. The Investor acknowledges that it has reviewed or has access to the SEC Filings, including without limitation, the Form 10-K filed on May 14, 2025 and Form 10-Q filed on July 25, 2025, including without limitation the risk factors contained therein.

**Section 3.07 Not an Affiliate**. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any "affiliate" of the Company (as that term is defined in Rule 405 promulgated under the Securities Act).

**Section 3.08 Trading Activities**. The Investor's trading activities with respect to the Common Stock shall be in compliance with all applicable federal and state securities laws, rules and regulations and the rules and regulations of the Principal Market or Trading Market. Neither the Investor nor its affiliates has any open short position in the Common Stock, nor has the Investor entered into any hedging transaction that establishes a net short position with respect to the Common Stock, and the Investor agrees that it shall not, and that it will cause its affiliates not to, engage in any short sales or hedging transactions with respect to the Common Stock during the terms of this Agreement; provided that the Company acknowledges and agrees that upon receipt of an Advance Notice the Investor has the right to sell (a) the Shares to be issued to the Investor pursuant to the Advance Notice prior to receiving such Shares, or (b) other shares of Common Stock issued or sold by the Company to Investor pursuant to this Agreement and which the Company has continuously held as a long position.

**Section 3.09 General Solicitation**. Neither the Investor, nor any of its affiliates, nor any person acting on its or their behalf, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Common Stock by the Investor.

**Article IV**<br> **REPRESENTATIONS AND WARRANTIES OF THE COMPANY**

Except as set forth in the SEC Documents, or in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or warranty otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules or in another Section of the Disclosure Schedules, to the extent that it is reasonably apparent on the face of such disclosure that such disclosure is applicable to such Section, the Company represents and warrants to the Investor that, as of the date hereof and each Advance Notice Date (other than representations and warranties which address matters only as of a certain date, which shall be true and correct as written as of such certain date), that:

**Section 4.01 Organization and Qualification**. The Company is an entity duly organized and validly existing under the laws of its state of organization or incorporation, and has the requisite power and authority to own its properties and to carry on its business as now being conducted. The Company is duly qualified to do business and is in good standing (to the extent applicable) in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.

**Section 4.02 Authorization, Enforcement, Compliance with Other Instruments**. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Shares in accordance with the terms hereof and thereof. The execution and delivery by the Company of this Agreement and the other Transaction Documents, and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares) have been or (with respect to consummation) will be duly authorized by the Board of Directors and no further consent or authorization will be required by the Company, its Board of Directors or its stockholders (except as otherwise contemplated by this Agreement). This Agreement and the other Transaction Documents to which it is a party have been (or, when executed and delivered, will be) duly executed and delivered by the Company and, assuming the execution and delivery thereof and acceptance by the Investor, constitute (or, when duly executed and delivered, will be) the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. "<u>Transaction Documents</u>" means, collectively, this Agreement and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.

**Section 4.03 No Conflict**. 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 Shares) will not (i) result in a violation of the certificate of incorporation or other organizational documents of the Company (with respect to consummation, as the same may be amended from time to time prior to the date on which any of the transactions contemplated hereby are consummated), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or (iii) result in a violation of any 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, in the case of clause (ii) or (iii) above, to the extent such violations or conflicts would not reasonably be expected to have a Material Adverse Effect.

**Section 4.04 SEC Documents; Financial Statements**. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the Exchange Act for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (all of the foregoing filed within the past two years preceding the date hereof or amended after the date hereof, or filed after the date hereof, and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, and all registration statements filed by the Company under the Securities Act, being hereinafter referred to as the "<u>SEC Documents</u>"). The Company has made available to the Investor through the SEC's website at http://www.sec.gov, true and complete copies of the SEC Documents, and none of the SEC Documents, when viewed as a whole as of the date hereof, 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 the light of the circumstances under which they were made, not misleading. As of their respective dates (or, with respect to any filing that has been amended or superseded, the date of such amendment or superseding filing), the SEC Documents complied in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, except as may be otherwise noted in the SEC Documents. As of their respective dates (or, with respect to any financial statements that have been amended or superseded, the date of such amended or superseding financial statements), the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the respective dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

**Section 4.05 Equity Capitalization**. As of the date hereof, the authorized capital of the Company consists of (A) 500,000,000 shares of Common Stock, of which, 67,453,588 are issued and outstanding and 16,919,374 shares are reserved for issuance pursuant to Convertible Securities (as defined below) exercisable or exchangeable for, or convertible into, shares of Common Stock and (B) 10,000,000 shares of preferred stock, par value $0.0001 per share, of which none are issued and outstanding. No shares of Common Stock are held in the treasury of the Company. "<u>Convertible Securities</u>" means any capital stock or other security of the Company that is at any time and under any circumstances directly or indirectly convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security of the Company (including, without limitation, Common Stock).

**Section 4.06 Intellectual Property Rights**. The Company owns or possesses adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights, if any, necessary to conduct their respective businesses as now conducted, except as would not cause a Material Adverse Effect. The Company has not received written notice of any infringement by the Company of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, or trade secrets. To the knowledge of the Company, there is no claim, action or proceeding being made or brought against, or to the Company's knowledge, being threatened against the Company regarding any material trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement; and the Company is not aware of any facts or circumstances which might give rise to any of the foregoing.

**Section 4.07 Employee Relations**. The Company is not involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened, in each case which is reasonably likely to cause a Material Adverse Effect.

**Section 4.08 (Reserved**.)

**Section 4.09 (Reserved.)**

**Section 4.10 Insurance**. The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company is engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

**Section 4.11 Regulatory Permits**. Except as would not cause a Material Adverse Effect, the Company possesses all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to own their respective businesses, and the Company has not received any written notice of proceedings relating to the revocation or modification of any such certificate, authorization or permits.

**Section 4.12 Internal Accounting Controls**. Except as set forth in the SEC Documents, the Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, and management is not aware of any material weaknesses that are not disclosed in the SEC Documents as and when required.

**Section 4.13 Absence of Litigation**. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, or the Common Stock, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.

**Section 4.14 Subsidiaries**. Except as set forth in the SEC Documents, as of the date hereof, the Company does not own or control, directly or indirectly, any interest in any other corporation, partnership, association or other business entity.

**Section 4.15 Tax Status**. Except as would not have a Material Adverse Effect, or except as set forth in the SEC Documents, the Company (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith

and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. The Company has not received written notification of any unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim where failure to pay would cause a Material Adverse Effect.

**Section 4.16 Certain Transactions**. Except as (i) set forth in the SEC Documents or (ii) not required to be disclosed pursuant to Applicable Law (including, for the avoidance of doubt, not yet required to be disclosed at the relevant time), none of the officers or directors of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer or director, or to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer or director has a substantial interest or is an officer, director, trustee or partner.

**Section 4.17 (Reserved.)**

**Section 4.18 Dilution**. The Company is aware and acknowledges that the issuance of the Shares hereunder could cause dilution to existing stockholders and could significantly increase the outstanding number of shares of Common Stock.

**Section 4.19 Acknowledgment Regarding Investor's Purchase of Shares**. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm's length investor with respect to this Agreement and the transactions contemplated hereunder. 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 hereunder and any advice given by the Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to the Investor's purchase of the Shares hereunder. The Company is aware and acknowledges that it shall not be able to request Advances under this Agreement if the Registration Statement is not effective or if any issuances of Shares pursuant to any Advances would violate any rules of the Principal Market or Trading Market.

**Section 4.20 Sanctions Matters**. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company is a Person that is, or is owned or controlled by a Person that is on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC from time to time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. the subject of any Sanctions; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. has a place of business in, or is operating, organized, resident or doing business in a country or territory
that is, or whose government is, the subject of Sanctions Programs (including without limitation Crimea, Cuba, Iran, North Korea, Sudan
and Syria).

**Section 4.21 DTC Eligibility**. The Company, through the transfer agent, currently participates in the DTC Fast Automated Securities Transfer (FAST) Program and the Common Stock can be transferred electronically to third parties via the DTC Fast Automated Securities Transfer (FAST) Program.

**Article V**<br> **INDEMNIFICATION**

**Section 5.01 Indemnification by the Company**. In consideration of the Investor's execution and delivery of this Agreement, and in addition to all of the Company's other obligations under this Agreement, to the extent permitted by law, the Company shall defend, protect, indemnify and hold harmless the Investor, its investment manager, and each of their respective officers, directors, managers, members, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) and each person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the "<u>Investor Indemnitees</u>") from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable and documented expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys' fees and disbursements (the "<u>Indemnified Liabilities</u>"), incurred by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; <u>provided</u>, <u>however</u>, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for inclusion therein; (b) any material misrepresentation or breach of any material representation or material warranty made by the Company in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; or (c) any material breach of any material covenant, material agreement or material obligation of the Company contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability is the direct result of the fraud, gross negligence or intentional misconduct of the Investor (as determined by a final non-appealable judgment of court having jurisdiction over such matter). To the extent that the foregoing undertaking by the Company may be unenforceable under Applicable Law, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under Applicable Law.

**Section 5.02 Notice of Claim**. Promptly after receipt by an Investor Indemnitee or Company Indemnitee of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Investor Indemnitee or Company Indemnitee, as applicable, shall, if a claim for an Indemnified Liability in respect thereof is to be made against any indemnifying party under this Article V, deliver to the indemnifying party a written notice of the commencement thereof; but the failure to so notify the indemnifying party will not relieve it of liability under this Article V except to the extent the indemnifying party is prejudiced by such failure. The indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually reasonably satisfactory to the indemnifying party and the Investor Indemnitee or Company Indemnitee, as the case may be; provided, however, that an Investor Indemnitee or Company Indemnitee shall have the right to retain its own counsel with the actual and reasonable third party fees and expenses of not more than one counsel for such Investor Indemnitee or Company Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Investor Indemnitee or Company Indemnitee and the indemnifying party would be inappropriate due to actual or potential differing interests between such Investor Indemnitee or Company Indemnitee and any other party represented by such counsel in such proceeding. The Investor Indemnitee or Company Indemnitee shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Investor Indemnitee or Company Indemnitee which relates to such action or claim. The indemnifying party shall keep the Investor Indemnitee or Company Indemnitee reasonably apprised as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor Indemnitee or Company Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Investor Indemnitee or Company Indemnitee of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Investor Indemnitee or Company Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The indemnification required by this Article V shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received and payment therefor is due, subject to receipt by the indemnifying party of an undertaking to repay any amounts that such party is ultimately not entitled to receive as indemnification pursuant to this Agreement.

**Section 5.03 Remedies**. The remedies provided for in this Article V are not exclusive and shall not limit any right or remedy which may be available to any indemnified person at law or equity. The obligations of the parties to indemnify or make contribution under this Article V shall survive expiration or termination of this Agreement.

**Section 5.04 Limitation of Liability**. Notwithstanding the foregoing, no party shall be entitled to recover from the other party for punitive, indirect, incidental or consequential damages.

**Article VI**<br> **COVENANTS**

**Section 6.01 Registration Statement**.

&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Filing of a Registration Statement</u>. No later than the date that is 60 calendar days following date
hereof (the " <u>Filing Deadline</u> "), the Company shall have prepared and filed with the SEC, a Registration Statement for
the resale by the Investor of Registrable Securities (the " <u>Initial Registration Statement</u> ") and shall file one or more
additional Registration Statements for the resale by Investor of Registrable Securities if necessary. The Company shall use its best efforts
to have such Registration Statement declared effective as soon as possible following the filing thereof but in no event later than ninety
(90) calendar days following the initial filing of the Initial Registration Statement (the " <u>Effectiveness Deadline</u> ").
The Company acknowledges and agrees that it shall not have the ability to request any Advances until the effectiveness of a Registration
Statement registering the applicable Registrable Securities for resale by the Investor.

&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Maintaining a Registration Statement</u>. After the Effectiveness Date, the Company shall use commercially
reasonable efforts to maintain the effectiveness of any Registration Statement that has been declared effective at all times during the
Commitment Period, provided, however, that if the Company has received notification pursuant to Section 2.08 that the Investor has completed
resales pursuant to the Registration Statement for the full Commitment Amount, then the Company shall be under no further obligation to
maintain the effectiveness of the Registration Statement. Notwithstanding anything to the contrary contained in this Agreement, the Company
shall use commercially reasonable efforts to ensure that, when filed, each Registration Statement (including, without limitation, all amendments and
supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with
such Registration Statement shall not contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they
were made) not misleading. During the Commitment Period, the Company shall notify the Investor promptly if (i) the Registration Statement
shall cease to be effective under the Securities Act, (ii) the Common Stock shall cease to be authorized for listing on the Principal
Market or Trading Market, (iii) the Common Stock ceases to be registered under Section 12(b) or Section 12(g) of the Exchange Act or (iv)
the Company fails to file in a timely manner all reports and other documents required of it as a reporting company under the Exchange
Act.

&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Filing Procedures</u>. Not less than one Trading Day prior to the filing of a Registration Statement
and not less than one Trading Day prior to the filing of any related amendments and supplements to any Registration Statement (except
for any amendments or supplements caused by the filing of any annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, and any similar or successor reports), the Company shall furnish to the Investor copies of all such documents proposed to
be filed, which documents (other than those filed pursuant to Rule 424 promulgated under the Securities Act) will be subject to the reasonable
and prompt review of the Investor (in each of which cases, if such document contains material non-public information as consented to by
the Investor pursuant to Section 6.13, the information provided to Investor will be kept strictly confidential until filed and treated
as subject to Section 6.08). The Investor shall furnish comments on a Registration Statement and any related amendment and supplement
to a Registration Statement to the Company within 24 hours of the receipt thereof. If the Investor fails to provide comments to the Company
within such 24-hour period, then the Registration Statement, related amendment or related supplement, as applicable, shall be deemed accepted
by the Investor in the form originally delivered by the Company to the Investor.

&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Delivery of Final Documents</u>. The Company shall furnish to the Investor without charge, (i) at least
one copy of each Registration Statement as declared effective by the SEC and any amendment(s) thereto, including financial statements
and schedules, all documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) at the request of the
Investor, at least one copy of the final prospectus included in such Registration Statement and all amendments and supplements thereto
(or such other number of copies as the Investor may reasonably request) and (iii) such other documents as the Investor may reasonably
request from time to time in order to facilitate the disposition of the Common Stock owned by the Investor pursuant to a Registration
Statement. Filing of the foregoing with the SEC via its EDGAR system shall satisfy the requirements of this section.

&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Amendments and Other Filings</u>. The Company shall use commercially reasonable efforts to (i) prepare
and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the related
prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under
the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Commitment Period, and prepare
and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable
Securities; (ii) cause the related prospectus to be amended or supplemented by any required prospectus supplement (subject to the terms
of this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424 promulgated under the Securities Act; (iii) provide
the Investor copies of all correspondence from and to the SEC relating to a Registration Statement (provided that the Company may excise
any information contained therein which would constitute material non-public information), and (iv) comply
with the provisions of the Securities Act with respect to the disposition of all the Shares covered by such Registration Statement until
such time as all of such Shares shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required
to be filed pursuant to this Agreement (including pursuant to this Section 6.01(e)) by reason of the Company's filing a report on
Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company shall use commercially reasonable efforts
to file such report in a prospectus supplement filed pursuant to Rule 424 promulgated under the Securities Act to incorporate such filing
into the Registration Statement, if applicable, or shall file such amendments or supplements with the SEC either on the day on which the
Exchange Act report is filed which created the requirement for the Company to amend or supplement the Registration Statement, if feasible,
or otherwise promptly thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;f. <u>Blue-Sky</u>. The Company shall use its commercially reasonable efforts to, if required by Applicable
Law, (i) register and qualify the Shares covered by a Registration Statement under such other securities or "blue sky" laws
of such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness
thereof during the Commitment Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications
in effect at all times during the Commitment Period, and (iv) take all other actions reasonably necessary or advisable to qualify the
Shares for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition
thereto to (w) make any change to its certificate of incorporation or bylaws, (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 6.01(f), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor of the receipt
by the Company of any notification with respect to the suspension of the registration or qualification of any of the Shares for sale under
the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of actual notice of the initiation
or threat of any proceeding for such purpose.

&nbsp;&nbsp;&nbsp;&nbsp;g. <u>Filing and Effectiveness Failures</u>. If (i) the Initial Registration Statement is not filed on or
prior to its Filing Deadline (if the Company files the Initial Registration Statement without affording the Investors the opportunity
to review and comment on the same as required by Section 6.01(c) herein, the Company shall be deemed to have not satisfied this clause
(g)(i), or (ii) the Company fails to file with the SEC a request for acceleration of a Registration Statement in accordance with Rule
461 promulgated by the SEC pursuant to the Securities Act, within five (5) Trading Days of the date that the Company is notified (orally
or in writing, whichever is earlier) by the SEC that such Registration Statement shall not be "reviewed" or shall not be subject
to further review, or (iii) prior to the Effective Date of a Registration Statement, the Company fails to file a pre-effective amendment
and otherwise respond in writing to comments made by the SEC in respect of such Registration Statement within twenty (20) calendar days
after the receipt of comments by or notice from the SEC that such amendment is required in order for such Registration Statement to be
declared effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective
by the SEC by the Effectiveness Deadline of the Initial Registration Statement (provided, however, that this subsection (iv) shall not
be applicable if the failure to have the registration declared effective is not the result of action or inaction by the Company), or (v)
after the Effective Date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously effective
as to all Registrable Securities included in such Registration Statement, or the Investors are otherwise not permitted to utilize the
Prospectus therein to resell such Registrable Securities, for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15)
calendar days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred to as
an "Event," and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii)
the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such twenty (20) calendar
day period is exceeded, and for purpose of clause (v) the date on which such ten (10) or fifteen (15) calendar day period, as applicable,
is exceeded being referred to as " <u>Event Date</u> "), then, in addition to any other rights the Investors may have hereunder
or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall
not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Investor an amount in cash, as partial
liquidated damages and not as a penalty, $50,000.00. If the Company fails to pay any partial liquidated damages pursuant to this Section
in full within seven (7) days after the date payable, the Company will pay interest thereon at a rate of ten percent (10%) per annum (or
such lesser maximum amount that is permitted to be paid by applicable law) to the Investor, accruing daily from the date such partial
liquidated damages are due until such amounts, plus all such interest thereon, are paid in full.

**Section 6.02 Suspension of Registration Statement**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Establishment of a Black Out Period</u>. During the Commitment Period, the Company may from time to
time may suspend the use of the Registration Statement by written notice to the Investor in the event that the Company determines in its
sole discretion in good faith that such suspension is necessary to (A) delay the disclosure of material nonpublic information concerning
the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company
or (B) amend or supplement the Registration Statement or prospectus so that such Registration Statement or prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading (a " <u>Black Out Period</u> "). With respect
to any updated registration statement or post-effective amendment to the registration statement, such blackout period shall continue until
such time as the registration statement or post-effective amendment thereto has been filed and declared effective by the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>No Sales by Investor During the Black Out Period</u>. During such Black Out Period, the Investor agrees
not to sell any Common Stock of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Limitations on the Black Out Period</u>. The Company shall not impose any Black Out Period that is
longer than 60 days or in a manner that is more restrictive (including, without limitation, as to duration) than the comparable restrictions
that the Company may impose on transfers of the Company's equity securities by its directors and senior executive officers. In addition,
the Company shall not deliver any Advance Notice during any Black Out Period. If the public announcement of such material, nonpublic information
is made during a Black Out Period, the Black Out Period shall terminate immediately after such announcement, and the Company shall immediately
notify the Investor of the termination of the Black Out Period.

**Section 6.03 Listing of the Common Stock**. As of each Advance Date, the Shares to be sold by the Company from time to time hereunder will have been registered under Section 12(b) of the Exchange Act and approved for listing on the Principal Market or other Trading Market, subject to official notice of issuance.

**Section 6.04 Opinion of Counsel**. Prior to the date of the delivery by the Company of the first Advance Notice, the Investor shall have received an opinion from counsel to the Company in form and substance reasonably satisfactory to the Investor.

**Section 6.05 Exchange Act Registration**. The Company will use commercially reasonable efforts to file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act and will not take any action or file any document (whether or not permitted by Exchange Act or the rules thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act.

**Section 6.06 Transfer Agent Instructions**. So long as there is a Registration Statement in effect for this transaction, the Company shall (if required by the transfer agent for the Common Stock) cause legal counsel for the Company to deliver to the transfer agent for the Common Stock (with a copy to the Investor) instructions to issue Common Stock to the Investor free of restrictive legends upon each Advance if the delivery of such instructions are consistent with Applicable Law and the Investor has provided the Transfer Agent Deliverables with respect to such Common Stock required by this Agreement.

**Section 6.07 Corporate Existence**. The Company will use commercially reasonable efforts to preserve and continue the corporate existence of the Company during the Commitment Period.

**Section 6.08 Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance**. The Company will promptly notify the Investor, and confirm in writing, upon its becoming aware of the occurrence of any of the following events in respect of a Registration Statement or related prospectus relating to an offering of Common Stock (in each of which cases the information provided to Investor will be kept strictly confidential): (i) except for requests made in connection with SEC or other Federal or state governmental authority investigations disclosed in the SEC Documents, receipt of any request for additional information by the SEC or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement or any request for amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other Federal governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Common Stock for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or of the necessity to amend the Registration Statement or supplement a related prospectus to comply with the Securities Act or any other law; and (v) the Company's reasonable determination that a post-effective amendment to the Registration Statement would be appropriate; in which case the Company will prepare and promptly make available to the Investor any such supplement or amendment to the related prospectus. The Company shall not deliver to the Investor any Advance Notice, and the Company shall not sell any Shares pursuant to any Advance Notice (other than as required pursuant to Section 2.05(b)), during the continuation of any of the foregoing events in clauses (i) through (v) above, or in the event that (vi) there shall be no bid for the Common Stock on the Principal Market or Trading Market for a period of 15 consecutive minutes at any time during the applicable Pricing Period or (vii) there shall be a "trading halt" or circuit breaker" event with respect to the Common Stock on the Principal Market or Trading Market during the applicable Pricing Period (each of the events described in the immediately preceding clauses (i) through (vii), inclusive, a "<u>Material Outside Event</u>").

**Section 6.09 Consolidation**. If an Advance Notice has been delivered to the Investor, then the Company shall not effect any consolidation of the Company with or into, or a transfer of all or substantially all the assets of the Company to another entity before the transaction contemplated in such Advance Notice has been closed in accordance with Section 2.03 hereof, and all Shares issuable in connection with such Advance have been received by the Investor.

**Section 6.10 Issuance of Common Stock**. The issuance and sale of Common Stock hereunder shall be made in accordance with the provisions and requirements of Section 4(a)(2) of the Securities Act or Regulation D under the Securities Act and any applicable state securities law.

**Section 6.11 Market Activities**. The Company will not, directly or indirectly, take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company under Regulation M of the Exchange Act, with the exception of any open market purchases made within the safe harbor provided by Rule 10b-18 under the Exchange Act.

**Section 6.12 Expenses**. The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all expenses incident to the performance of its obligations hereunder, including but not limited to (i) the preparation, printing and filing of the Registration Statement and each amendment and supplement thereto, of each prospectus and of each amendment and supplement thereto; (ii) the preparation, issuance and delivery of any Shares issued pursuant to this Agreement, (iii) all reasonable fees and disbursements of the Company's counsel, accountants and other advisors, (iv) the qualification of the Shares under securities laws in accordance with the provisions of this Agreement, including filing fees in connection therewith, (v) the printing and delivery of copies of any prospectus and any amendments or supplements thereto, (vi) the fees and expenses incurred in connection with the listing or qualification of the Shares for trading on the Principal Market or Trading Market, or (vii) filing fees of the SEC and the Principal Market or Trading Market.

**Section 6.13 Material Non-Public Information**. The Company shall not, and the Company shall cause each of its and their respective officers, directors, employees and agents not to, provide the Investor with any material, non-public information regarding the Company without the express prior written consent of the Investor (which may be granted or withheld in the Investor's sole discretion and must include an agreement to keep such information confidential until publicly disclosed or 45 days have passed); it being understood that the mere notification of Investor required pursuant to Section 6.08(iv) hereof shall not in and of itself be deemed to be material non-public information. Notwithstanding anything contained in this Agreement to the contrary, the Company expressly agrees that it shall use its commercially reasonable efforts to publicly disclose, no later than 45 days following the date hereof, but in any event prior to delivering the first Advance Notice hereunder, any information communicated to the Investor by or, to the knowledge of the Company, on behalf of the Company in connection with the transactions contemplated herein, which, following the date hereof would, if not so disclosed, constitute material, non-public information regarding the Company.

**Section 6.14 Advance Notice Limitation**. The Company shall not deliver an Advance Notice if a stockholder meeting or corporate action date, or the record date for any stockholder meeting or any corporate action, would fall during the period beginning two Trading Days prior to the date of delivery of such Advance Notice and ending two Trading Days following the Closing of such Advance.

**Section 6.15 Use of Proceeds**. The Company will use the proceeds from the sale of the Common Stock hereunder for working capital and other general corporate purposes or, if different, in a manner consistent with the application thereof described in the Registration Statement; provided that certain of the proceeds received by the Company in respect of the Subscription Shares shall be used by the Company to pay any amounts owing to its auditors. Neither the Company will, directly or indirectly, use the proceeds of the transactions contemplated herein, or lend, contribute, facilitate or otherwise make available such proceeds to any Person (i) to fund, either directly or indirectly, any activities or business of or with any Person that is identified on the list of Specially Designated Nationals and Blocker Persons maintained by OFAC, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions or Sanctions Programs, or (ii) in any other manner that will result in a violation of Sanctions.

**Section 6.16 Compliance with Laws**. The Company shall comply in all material respects with all Applicable Laws.

**Section 6.17 Aggregation**. From and after the date of this Agreement, neither the Company, nor or any of its affiliates will, and the Company shall use its commercially reasonable efforts to ensure that no Person acting on their behalf will, directly or indirectly, make any offers or sales of any security or solicit any offers to buy any security, under circumstances that would cause this offering of the Common Stock by the Company to the Investor to be aggregated with other offerings by the Company in a manner that would require stockholder approval pursuant to the rules of the Principal Market or Trading Market on which any of the securities of the Company are listed or designated, unless stockholder approval is obtained before the closing of such subsequent transaction in accordance with the rules of such Principal Market or Trading Market.

**Section 6.18 Other Transactions**. The Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right of the Company to perform its obligations under the Transaction Documents, including, without limitation, the obligation of the Company to deliver the Shares to the Investor in accordance with the terms of the Transaction Documents. For the avoidance of doubt, nothing in this Section 6.18 shall restrict or impair the Company's ability to conduct any "at the market offering" (as defined in Rule 415 under the Securities Act).

**Section 6.19 Integration**. From and after the date of this Agreement, neither the Company, nor or any of its affiliates will, and the Company shall use its commercially reasonable efforts to ensure that no Person acting on their behalf will, directly or indirectly, make any offers or sales of any security or solicit any offers to buy any security, under circumstances that when combined with the offering of securities hereunder would require registration of the offer and sale of any of the securities under the Securities Act prior to the issuance of securities hereunder.

**Section 6.20 (Reserved.)**

**Section 6.21 DTC**. The Company shall take all commercially reasonable action required to ensure that its Common Stock can be transferred electronically as DWAC Shares if the Transfer Agent Deliverables with respect to such Common Stock have been provided by the Investor.

**Section 6.22 Confidential Information**. Each party hereto agrees not to disclose any Confidential Information of the other party to any third party and shall not use the Confidential Information for any purpose other than in connection with, or in furtherance of, the transactions contemplated hereby in full compliance with applicable securities laws; provided, however that a party may disclose Confidential Information that is required by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information from public disclosure. Each party hereto acknowledges that the Confidential Information shall remain the property of the disclosing party and agrees that it shall take all reasonable measures to protect the secrecy of any Confidential Information disclosed by the other party.

**Section 6.23 Prohibition of Short Sales and Hedging Transactions**. The Investor agrees that beginning on the date of this Agreement and ending on the date of termination of this Agreement as provided in Section 11, the Investor and its agents, representatives and affiliates shall not in any manner whatsoever enter into or effect, directly or indirectly, any (i) "short sale" (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock (excluding transactions properly marked "short exempt") or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.

**Section 6.24 Use of Name**. The Company shall not, directly or indirectly, use the names "Arc Group International", "Arc Group", or "Arc", or any derivations thereof, or logos associated with these names, as the case may be, in any manner or take any action that may imply any relationship with the Investor or any of its affiliates without the prior written consent of the Investor, provided, however, the Investor hereby consents to all lawful uses of these names in the prospectus, statement and other materials that are required by applicable laws or pursuant to the disclosure requirements of the SEC or any state securities authority.

**Article VII**<br> **CONDITIONS FOR DELIVERY OF ADVANCE NOTICE**

**Section 7.01 Conditions Precedent to the Right of the Company to Deliver an Advance Notice**. The right of the Company to deliver an Advance Notice and the obligations of the Investor hereunder with respect to an Advance is subject to the satisfaction by the Company, on each Advance Notice Date (a "<u>Condition Satisfaction Date</u>"), of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Accuracy of the Company's Representations and Warranties</u>. The representations and warranties
of the Company in this Agreement shall be true and correct in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Registration of the Common Stock with the SEC</u>. There is an effective Registration Statement pursuant
to which the Investor is permitted to utilize the prospectus thereunder to resell all of the Registrable Securities. The Company shall
have filed with the SEC all reports, notices and other documents required under the Exchange Act and applicable SEC regulations during
the twelve-month period immediately preceding the applicable Condition Satisfaction Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Authority</u>. The Company shall have obtained all permits and qualifications required by any applicable
state for the offer and sale of all the Shares issuable pursuant to such Advance Notice, or shall have the availability of exemptions
therefrom. The sale and issuance of such Common Stock shall be legally permitted by all laws and regulations to which the Company is subject.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>No Material Outside Event or Material Adverse Effect</u>. No Material Outside Event or Material Adverse
Effect shall have occurred and be continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Performance by the Company</u>. Unless waived in advance by the Investor, 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 the applicable Condition Satisfaction Date including, without limitation, the delivery
of all Common Stock issuable pursuant to all previously delivered Advance Notices and the issuance of all Commitment Fee Shares previously
required to be issued to Investor (for the avoidance of doubt, if the Company shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by this Agreement at the time of the applicable Condition Satisfaction
Date, but did not comply with any timing requirement set forth herein, then this condition shall be deemed satisfied unless the Investor
is materially prejudiced by the failure of the Company to comply with any such
timing requirement). When so requested, and following such Rule 144 Holding Period and delivery of any required documents from the Investor,
the Company will ensure that its legal counsel provides the Investor with a Rule 144 legal opinion regarding the Commitment Fee Shares
and Subscription Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. <u>No Injunction</u>. No statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or
directly, materially and adversely affects any of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. <u>No Suspension of Trading in or Delisting of the Common Stock</u>. The Common Stock is quoted for trading
on the Principal Market or a Trading Market and all of the Shares issuable pursuant to such Advance Notice will be listed or quoted for
trading on the Principal Market or a Trading Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. <u>Authorized</u>. There shall be a sufficient number of authorized but unissued and otherwise unreserved
shares of Common Stock for the issuance of all of the Shares issuable pursuant to such Advance Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Executed Advance Notice</u>. The representations contained in the applicable Advance Notice shall be
true and correct in all material respects as of the applicable Condition Satisfaction Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. <u>Consecutive Advance Notices</u>. Except with respect to the first Advance Notice, the Pricing Period
for all prior Advances has been completed.

Furthermore, the Company shall not have the right to deliver an Advance Notice to the Investor if any of the following shall occur:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. the Company breaches any representation or warranty in any material respect, or breaches any covenant
or other term or condition under any Transaction Document in any material respect, and except in the case of a breach of a covenant which
is reasonably curable, only if such breach continues for a period of at least three (3) consecutive Trading Days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. if any Person commences a proceeding against the Company pursuant to or within the meaning of any Bankruptcy
Law for so long as such proceeding is not dismissed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. if the Company is at any time insolvent, or, pursuant to or within the meaning of any Bankruptcy Law,
(i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to
the appointment of a Custodian of it or for all or substantially all of its property, (iv) makes a general assignment for the benefit
of its creditors or (v) the Company is generally unable to pay its debts as the same become due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n. a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief
against the Company in an involuntary case, (ii) appoints a Custodian of the Company or for all or substantially all of its property,
or (iii) orders the liquidation of the Company for so long as such order, decree or similar action remains in effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o. if at any time the Company is not eligible or is unable to transfer its Shares to Investor, including,
without limitation, electronically through DTC's Deposit/Withdrawal At Custodian system; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p. the Shares shall not have been approved by the Investor's prime broker or designated clearing firm
for deposit to its account with the Depository Trust Company system.

**Article VIII**<br> **NON-DISCLOSURE OF NON-PUBLIC INFORMATION**

The Company covenants and agrees that, other than as expressly required by Section 6.08 hereof or, with the Investor's consent pursuant to Section 6.01(c) and 6.13, it shall refrain from disclosing, and shall cause its officers, directors, employees and agents to refrain from disclosing, any material non-public information (as determined under the Securities Act, the Exchange Act, or the rules and regulations of the SEC) directly or indirectly to the Investor or its affiliates, without also disseminating such information to the public, unless prior to disclosure of such information the Company identifies such information as being material non-public information and provides the Investor with the opportunity to accept or refuse to accept such material non-public information for review. Unless specifically agreed to in writing, in no event shall the Investor have a duty of confidentiality, or be deemed to have agreed to maintain information in confidence, with respect to the delivery of any Advance Notices.

**Article IX**<br> **NON-EXCLUSIVE AGREEMENT**

Notwithstanding anything contained herein, this Agreement and the rights awarded to the Investor hereunder are non-exclusive, and the Company may, at any time throughout the term of this Agreement and thereafter, if permitted by the terms of the Agreement, issue and allot, or undertake to issue and allot, any shares and/or securities and/or convertible notes, bonds, debentures, options to acquire shares or other securities and/or other facilities which may be converted into or replaced by shares of Common Stock or other securities of the Company, and to extend, renew and/or recycle any bonds and/or debentures, and/or grant any rights with respect to its existing and/or future share capital.

**Article X**<br> **CHOICE OF LAW/JURISDICTION**

This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard in New York County, New York, and expressly consent to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County, New York and the United States District Court of the Southern District of New York, sitting in New York, New York, for the adjudication of any civil action asserted pursuant to this Agreement.

**Article XI**<br> **ASSIGNMENT; TERMINATION**

**Section 11.01 Assignment**. Neither this Agreement nor any rights or obligations of the parties hereto may be assigned to any other Person.

**Section 11.02 Termination**.

&nbsp;&nbsp;&nbsp;&nbsp;a. Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest
of (i) the day that is the 36-month anniversary of the date hereof or (ii) the date on which the Investor shall have made payment of Advances
pursuant to this Agreement for Common Stock equal to the Commitment Amount.

&nbsp;&nbsp;&nbsp;&nbsp;b. The Company may terminate this Agreement effective upon five (5) Trading Days' prior written notice
to the Investor; provided that (i) there are no outstanding Advance Notices, the Common Stock in respect of which has yet to be issued,
and (ii) the Company has paid all amounts owed to the Investor pursuant to this Agreement including, without limitation, all Commitment
Fee Shares and Subscription Shares. This Agreement may be terminated at any time by the mutual written consent of the parties, effective
as of the date of such mutual written consent unless otherwise provided in such written consent.

&nbsp;&nbsp;&nbsp;&nbsp;c. Nothing in this Section 11.02 shall be deemed to release the Company or the Investor from any liability
for any breach under this Agreement, or to impair the rights of the Company and the Investor to compel specific performance by the other
party of its obligations under this Agreement. The indemnification provisions contained in Article V shall survive termination hereunder.

**Article XII**<br> **NOTICES**

Other than with respect to Advance Notices, which must be in writing and will be deemed delivered on the day set forth in Section 2.03 in accordance with <u>Exhibit C</u>, any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or e-mail if sent on a Trading Day, or, if not sent on a Trading Day, on the immediately following Trading Day; (iii) five (5) days after being sent by U.S. certified mail, return receipt requested, (iv) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications (except for Advance Notices which shall be delivered in accordance with <u>Exhibit A</u> hereof) shall be:

---

| | |
|:---|:---|
| If to the Company, to: | ScanTech AI Systems Inc.<br> 1735 Enterprise Dr., Buford GA 30518<br> Attn: Dolan Falconer<br> Telephone: +1 (470) 655-0886 <br> E-mail: dfalconer@scantechibs.com |
| With a Copy (which shall not constitute notice or delivery of process) to:<br>| Thompson Hine LLP<br> Two Alliance Center<br> 3560 Lenox Road NE, Suite 1600<br> Atlanta, Georgia 30326-4266<br> Attention: Michael V. Coleman, Esq.<br> Telephone: (404) 541-2912<br> Email: Michael.Coleman@thompsonhine.com |
| If to the Investor(s): | ARC Group International Ltd.<br> 10 East 53<sup>rd</sup> St, Suite 3001<br> New York, NY 10022<br> Attention: Mac McDonald<br> Email: Mac.McDonald@arc-group.com |
| With a Copy (which shall not constitute notice or delivery of process) to: | Lucosky Brookman LLP<br> 101 Wood Avenue South<br> Fifth Floor<br> Woodbridge, New Jersey 08830<br> Attention: Rodrigo Sanchez, Esq.<br> Telephone: (732) 395-4417<br> Email: rsanchez@lucbro.com |

---

Either may change its information contained in this Article XII by delivering notice to the other party as set forth herein.

**Article XIII**<br> **MISCELLANEOUS**

**Section 13.01 Counterparts**. This Agreement may be executed in identical counterparts, both which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. Facsimile or other electronically scanned and delivered signatures, including by e-mail attachment, shall be deemed originals for all purposes of this Agreement.

**Section 13.02 Entire Agreement; Amendments**. This Agreement supersedes all other prior oral or written agreements between the Investor, the Company, their respective affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement contains the entire understanding of the parties with respect to the matters covered herein and, except as specifically set forth herein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the parties to this Agreement. The provisions of the existing confidentiality agreement between the Investor and the Company shall remain in force, except that all provisions therein dealing with the treatment of material non-public information are superseded by this Agreement.

**Section 13.03 Reporting Entity for the Common Stock**. The reporting entity relied upon for the determination of the trading price or trading volume of the Common Stock on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor thereto. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.

**Section 13.04 Expenses; Commitment Fee and Subscription Shares**.

&nbsp;&nbsp;&nbsp;&nbsp;a. Each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants,
appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby, except that the
Company shall be responsible for all of Investor's legal fees (and will provide proof of any retainer payments and engagement letters
to the extent requested), which shall not exceed $30,000 in the aggregate, and Investor acknowledges and agrees that the Company has already
paid $10,000 of such aggregate amount.

&nbsp;&nbsp;&nbsp;&nbsp;b. In consideration for the parties mutual covenants and agreements contained
herein and their respective execution and delivery of this Agreement, upon the execution and delivery of this Agreement, (A) the Company
shall issue or cause to be issued to the Investor on the date hereof, as a commitment fee, 3,869,969 shares of Common Stock (the " <u>Commitment Fee Shares</u> ") having an aggregate value of $1,750,000 based on the Closing Price, and (B) the Investor shall purchase from the
Company, and the Company shall sell to the Investor on the date hereof, 1,403,863 shares of Common Stock (the " <u>Subscription Shares</u> ")
for a purchase price equal to $500,000 in the aggregate at a purchase price per share of 80% of the VWAP of the Common Stock over the
10 Trading Days immediately preceding the date hereof, payable by the Investor to the Company via wire transfer of immediate available
funds to the wire instructions for the Lucosky Brookman LLP's trust account and to be distributed therefrom upon the joint direction
of the Company and the Investor in accordance with the instructions provided by the Company to Lucosky Brookman in conjunction with the
delivery of the Subscription Shares and Commitment Fee Shares to the Investor, and if applicable the executed Pre-Funded Warrant (as defined
below). For the avoidance of doubt, (i) the Commitment Fee Shares shall be fully earned as of the Execution Date, and the issuance of
the Commitment Fee Shares is not contingent upon any other event or condition, (ii) the Company shall include on the Registration Statement
filed with the SEC (to the extent that one is filed), all of the Commitment Fee Shares and the Subscription Shares, and (iii) no
cash payment is due by the Investor for the Commitment Fee Shares issued to it by the Company pursuant to the terms of this Agreement .
Within three (3) Trading Days of the Effective Date or the end of the Rule 144 Holding Period, whichever occurs first, the Company and
its counsel shall deliver an instruction letter and opinion of counsel allowing the Commitment Fee Shares and Subscription Shares to be
freely transferable. To the extent that the receipt by the Investor of Commitment Fee Shares or Subscription Shares pursuant to this Section
13.04(b) would cause the Investor to exceed the Ownership Limitation set forth in Section 2.04(a), the Company shall first issue to the
Investor in shares of Common Stock a number of Subscription Shares equal to the amount that would not cause the Investor to exceed the
Beneficial Ownership Limitation, and if such amount of shares of Common Stock equals all of the Subscription Shares owing to the Investor,
the Company shall further issue to the Investor in shares of Common Stock such number of Commitment Fee Shares as shall not cause the
Investor to exceed the Beneficial Ownership limitation. If there shall remain owing to the Investor any Subscription Shares or Commitment
Fee Shares following the issuances set forth in the foregoing sentence, the Company shall issue such to the investor a pre-funded warrant
(the " <u>Pre-Funded Warrant</u> ") in a form acceptable to the Investor entitling the Investor to purchase an amount of shares
of Common Stock for an exercise price per share of $0.0001 equal to such amount of remaining Subscription Shares or Commitment Fee Shares.

&nbsp;&nbsp;&nbsp;&nbsp;c. The Investor agrees that on any Trading Day during such period, it shall not sell Commitment Fee Shares
in an amount exceeding of 10% of average daily traded volume of the Common Stock on the Trading Day preceding such Trading Day.

**Section 13.05 Brokerage.** Each of the parties hereto represents that it has had no dealings in connection with this transaction with any finder or broker who will demand payment of any fee or commission from the other party. The Company on the one hand, and the Investor, on the other hand, agree to indemnify the other against and hold the other harmless from any and all liabilities to any person claiming brokerage commissions or finder's fees on account of services purported to have been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions contemplated hereby.

[***REMAINDER OF PAGE INTENTIONALLY LEFT BLANK***]

**IN WITNESS WHEREOF**, the parties hereto have caused this Purchase Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.

---

| | |
|:---|:---|
| **COMPANY**: | **COMPANY**: |
| **ScanTech AI Systems Inc.** | **ScanTech AI Systems Inc.** |
| By: | /s/ Dolan Falconer |
| Name: | Dolan Falconer |
| Title: | Chief Executive Officer |
| **INVESTOR**: | **INVESTOR**: |
| **Arc Group International Ltd.** | **Arc Group International Ltd.** |
| By: | /s/ Abraham Cinta |
| Name: | Abraham Cinta |
| Title: | Chief Executive Officer |

---

**<u>EXHIBIT A</u>**

**<br> ADVANCE NOTICE**

ScanTech AI Systems Inc.

Dated: ______________ Advance Notice Number: ____

The undersigned, _______________________, hereby certifies, with respect to the sale of the shares of Common Stock of ScanTech AI Systems Inc. (the "<u>Company</u>") issuable in connection with this Advance Notice, delivered pursuant to that certain Purchase Agreement, dated as of October 8, 2025 (the "<u>Agreement</u>"), as follows:

1 The undersigned is the duly elected ______________ of the Company.

2 There are no fundamental changes to the information set forth in the Registration Statement which would require the Company to file a post-effective amendment to the Registration Statement.

3 All conditions to the delivery of this Advance Notice are satisfied as of the date hereof.

---

| | |
|:---|:---|
| 4 | The amount of Shares issued in respect of such Advance is: |

---

5 The number of shares of Common Stock of the Company issued and outstanding as of the date hereof is ___________.

6 The Pricing Period shall be three (3) Trading Days.

The undersigned has executed this Advance Notice as of the date first set forth above.

---

| |
|:---|
| **ScanTech AI Systems Inc.** |
| By: |
| Name: |
| Title: |

---

**<u>EXHIBIT B</u>**

**<br> FORM OF SETTLEMENT DOCUMENT**

**VIA EMAIL**

SCANTECH AI SYSTEMS INC.

Attn:

Email:

Subject:

Below please find the settlement information with respect to the Advance Notice Date of:

&nbsp;&nbsp;&nbsp;&nbsp;1. Amount of Advance requested in the Advance Notice

2. Adjusted Advance (after taking into account any adjustments pursuant to Section 2.04):

3. [Average daily VWAP of the Common Stock during the applicable Pricing Period:][Average intraday sale price of the Common Stock:]

3. Purchase Price:

&nbsp;&nbsp;&nbsp;&nbsp;8. Number of Shares issued to Investor:

---

| |
|:---|
| Sincerely, |
| [**Arc Group International Ltd.** |
| By: |
| Name: |
| Title: |

---

---

| |
|:---|
| **Agreed and Approved**: |
| **ScanTech Ai Systems Inc.** |
| By: |
| Name: |
| Title: |

---

**<u>EXHIBIT C</u>**

**VIA EMAIL**

Email:

Subject: ELOC: ScanTech AI Systems Inc.

Advance Notice

Below please find the Advance Notice Date of:

&nbsp;&nbsp;&nbsp;&nbsp;1. Amount of Advance Shares:

&nbsp;&nbsp;&nbsp;&nbsp;2. Time of Advance:

**<u>SCHEDULE 1</u>**

**Authorized Representatives**

The following individuals may execute Advance Notices:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. James White

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Dolan Falconer

## Exhibit 99.1

**Exhibit 99.1**

For Immediate Release

**ARC Group Invests in ScanTech AI Systems, Backing Company's AI-Powered Security and Regulatory Alignment**

Atlanta, GA, October 10, 2025 **-** ScanTech AI Systems Inc. (the "Company" or "ScanTech AI") (Nasdaq: <u>STAI</u>), a developer of advanced AI-powered security screening and imaging systems, today announced it has entered into a Purchase Agreement establishing an equity line of credit ("ELOC") of up to $50 million with ARC Group International Ltd. ("ARC"), a global financial services firm.

The ELOC, following registration with the SEC of the shares to be issued under the ELOC, is expected to provide ScanTech AI with flexible, long-term growth capital to fund R&D, commercialization of its SENTINEL™ AI threat detection platform, and make continued progress towards regaining Nasdaq compliance. ARC has also committed to an initial $500,000 PIPE equity investment, signalling its immediate commitment to ScanTech AI's vision.

"This investment represents a powerful vote of confidence in ScanTech AI's technology and growth strategy," said Dolan Falconer, CEO of ScanTech AI. "The structure provides us with both immediate capital and the flexibility to access additional funding as we scale. It positions us to accelerate deployment of our AI-driven security platforms while continuing to advance toward our Nasdaq compliance goals in a disciplined and shareholder-focused manner.

"ARC Group Asset Management is proud to partner with ScanTech AI at a pivotal stage in its development," said Mac McDonald, Director of ARC Asset Management. "We see strong potential in ScanTech's AI, particularly in aviation, critical infrastructure, and logistics, where innovation and regulatory readiness go hand in hand."

**KEY HIGHLIGHTS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Total facility:** Up to $50 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Initial investment:** $500,000 PIPE

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Purpose:** Fuel AI-driven product development, regulatory compliance, market expansion, and general corporate purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Structure:** Company retains discretion over timing of drawdowns.

The financing positions ScanTech AI for its next phase of expansion, aiming to accelerate the deployment of its SENTINEL™ system across aviation and critical infrastructure security applications. It will also support the Company's advancements in AI-driven detection analytics and help achieve international certification milestones targeted for 2026. Through these initiatives, ScanTech AI aims to further strengthen its capital structure, compliance framework, and operational strategy and build a scalable, technology-driven enterprise with global impact.

**About ScanTech AI**

ScanTech AI Systems Inc. (Nasdaq: STAI) has developed one of the world's most advanced non-intrusive 'fixed-gantry' CT screening technologies. Utilizing proprietary artificial intelligence and machine learning capabilities, ScanTech AI's state-of-the-art scanners accurately and quickly detect hazardous materials and contraband. Engineered to automatically locate, discriminate, and identify threat materials and items of interest, ScanTech AI's solutions are designed for use in airports, seaports, borders, embassies, corporate headquarters, government and commercial buildings, factories, processing plants, and other facilities where security is a priority.

For more information, visit <u>www.scantechais.com</u> and <u>investor.scantechais.com</u>.

**About ARC Group International Ltd.**

ARC Group is a global investment management consultancy and asset management firm established in 2015. The firm specializes in capital markets, mergers & acquisitions, strategic advisory, and asset management, supporting clients through complex cross-border transactions and offering tailored financing solutions. ARC Group operates across twelve countries and three continents, providing expertise in sectors ranging from technology and digital assets to consumer goods and advanced industries.

**Forward-Looking Statements**

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on current expectations, estimates, forecasts, and projections, and the beliefs and assumptions of management. Words such as "expects," "intends," "plans," "believes," "seeks," "may," "will," "should," "anticipates," or the negative or plural of these words, and similar expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

These statements relate to, among other things, the Company's ability to draw funds under the equity line of credit, complete additional financings, maintain Nasdaq listing compliance, execute its growth strategy, and develop or commercialize its technologies. The Company cannot draw funds under the equity line of credit until the shares of common stock to be issued under the equity line of credit are registered with the SEC. Additionally, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the Company's control, that could cause actual results to differ materially from those expressed or implied herein.

These risks and uncertainties include, but are not limited to: market conditions; dilution and volatility associated with equity financings; the Company's ability to remain in compliance with Nasdaq listing standards; operational and regulatory risks in the artificial intelligence and security technology sectors; product and service acceptance; regulatory oversights; whether ScanTech AI will have sufficient capital to operate as anticipated; and other factors detailed in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"), including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Should one or more of these risks of uncertainties materialize, or should any of the assumptions of ScanTech AI prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this release and are based on the information available to ScanTech AI as of the date hereof. ScanTech AI assumes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as may otherwise be required under applicable law.

**Media Contact** 

ScanTech AI Systems Inc.

D. Williams Sr. VP Sales & Investor/Government Relations

jwhite@scantechibs.com

**Investor & Media Relations Contact:** 

International Elite Capital Inc.

Annabelle Zhang

+1(646) 866-7928

annabelle@iecapitalusa.com